Common use of Incurrence of Indebtedness and Issuance of Disqualified Equity Clause in Contracts

Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources Partners shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and Targa Resources Partners will not issue any Disqualified Equity and will not permit any of its Restricted Subsidiaries to issue any Disqualified Equity; provided, however, that Targa Resources Partners and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) and Targa Resources Partners and the Restricted Subsidiaries may issue Disqualified Equity, if the Fixed Charge Coverage Ratio for Targa Resources Partners’ most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter period. (b) The provisions of Section 4.09(a) hereof shall not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Equity described in clause (ii) below: (1) the incurrence by Targa Resources Partners and any Restricted Subsidiary of additional Indebtedness (including letters of credit) under Credit Facilities, provided that, after giving effect to such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Targa Resources Partners and its Restricted Subsidiaries thereunder) and then outstanding does not exceed the greater of (a) $2,000.0 million and (b) the sum of $1.5 billion and 20% of Targa Resources Partners’ Consolidated Net Tangible Assets; (2) the incurrence by Targa Resources Partners and its Restricted Subsidiaries of the Existing Indebtedness; (3) the incurrence by Targa Resources Partners, Finance Corp. and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and any Exchange Notes and the related Note Guarantees that may be issued pursuant to a Registration Rights Agreement; (4) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of Targa Resources Partners or any of its Restricted Subsidiaries, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), provided that after giving effect to such incurrence the aggregate principal amount of all Indebtedness incurred pursuant to this clause (4) and then outstanding does not exceed the greater of (a) $50.0 million and (b) 4.0% of Targa Resources Partners’ Consolidated Net Tangible Assets; (5) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clause (2) or (3) of this Section 4.09(b) or this clause (5); (6) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of any Permitted Receivables Financing in an aggregate principal amount at any time outstanding not to exceed $400.0 million; (7) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources Partners and any of its Restricted Subsidiaries; provided, however, that: (A) if Targa Resources Partners or any Guarantor is the obligor on such Indebtedness and the payee is not Targa Resources Partners or a Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of Targa Resources Partners, or the Note Guarantee, in the case of a Guarantor, and (B) (1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners and (2) any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners, will be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources Partners or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (7); (8) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of Hedging Obligations; (9) the guarantee by Targa Resources Partners or any of its Restricted Subsidiaries of Indebtedness of Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners that was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed; (10) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of obligations relating to net gas balancing positions arising in the ordinary course of business and consistent with past practice; (11) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of Acquired Debt in connection with a transaction meeting either one of the financial tests set forth in clause (4) under Section 5.01(a); (12) the issuance by any of Targa Resources Partners’ Restricted Subsidiaries to Targa Resources Partners or to any of its Restricted Subsidiaries of any Disqualified Equity; provided, however, that: (A) any subsequent issuance or transfer of Equity Interests that results in any such Disqualified Equity being held by a Person other than Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners; and (B) any sale or other transfer of any such Disqualified Equity to a Person that is not either Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners will be deemed, in each case, to constitute an issuance of such Disqualified Equity by such Restricted Subsidiary that was not permitted by this clause (12); and (13) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of additional Indebtedness; provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (13) and then outstanding does not exceed the greater of (a) $150.0 million and (b) 7.5% of Targa Resources Partners’ Consolidated Net Tangible Assets. Targa Resources Partners shall not incur, and shall not permit Finance Corp. or any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of Targa Resources Partners, Finance Corp. or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness of a Person shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of such Person solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. For purposes of determining compliance with this Section 4.09, if an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (13) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, Targa Resources Partners will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares of the same class of Disqualified Equity will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section 4.09; provided, however, in each such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges of Targa Resources Partners as accrued. Notwithstanding any other provision of this Section 4.09, (i) the maximum amount of Indebtedness that Targa Resources Partners or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. Further, the accounting reclassification of any obligation of Targa Resources Partners or any of its Restricted Subsidiaries as Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09.

Appears in 7 contracts

Samples: Indenture (Targa Resources Partners LP), Indenture (Targa Resources Partners LP), Indenture (Targa Resources Corp.)

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Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources Antero Midstream Partners shall will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and Targa Resources Antero Midstream Partners will not issue any Disqualified Equity and will not permit any of its Restricted Subsidiaries to issue any Disqualified Equity; provided, however, that Targa Resources Antero Midstream Partners and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) and Targa Resources Antero Midstream Partners and the Restricted Subsidiaries may issue Disqualified Equity, if the Fixed Charge Coverage Ratio for Targa Resources the Antero Midstream Partners’ most recently ended four full fiscal quarters for which internal financial statements are available Reference Period immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter periodReference Period. (b) The provisions of Section 4.09(a) hereof shall will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Equity described in clause (ii11) below: (1) the incurrence by Targa Resources Antero Midstream Partners and or any of its Restricted Subsidiary Subsidiaries of additional Indebtedness (including and letters of credit) credit and the Guarantees thereof under Credit Facilities, provided that, after giving effect to such incurrence, the Facilities in an aggregate principal amount of all Indebtedness incurred at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Targa Resources Antero Midstream Partners and its Restricted Subsidiaries thereunder) and then outstanding does not to exceed the greater of (a) $2,000.0 million 2.0 billion and (b) the sum of $1.5 1.4 billion and 2030% of Targa Resources Partners’ Consolidated Net Tangible AssetsAssets (determined as of the date of incurrence and after giving effect to the use of proceeds therefrom); (2) the incurrence by Targa Resources Antero Midstream Partners and its Restricted Subsidiaries of the any Existing Indebtedness; (3) the incurrence by Targa Resources Partners, Finance Corp. the Issuers and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and any Exchange Notes and the related Note Guarantees that may be issued pursuant to a Registration Rights AgreementIssue Date; (4) the incurrence by Targa Resources Antero Midstream Partners or any of its Restricted Subsidiaries of Indebtedness represented by Capital Finance Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of Targa Resources Antero Midstream Partners or any of its Restricted Subsidiaries, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), provided that after giving effect at any time outstanding not to such incurrence the aggregate principal amount of all Indebtedness incurred pursuant to this clause (4) and then outstanding does not exceed the greater of (a) $50.0 100.0 million and (b) 4.05.0% of Targa Resources Partners’ Consolidated Net Tangible AssetsAssets (determined as of the date of incurrence and after giving effect to the use of proceeds therefrom); (5) the incurrence by Targa Resources Antero Midstream Partners or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clause (2), (3), (4) or (310) of this Section 4.09(b) or this clause (5); (6) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of any Permitted Receivables Financing in an aggregate principal amount at any time outstanding not to exceed $400.0 million; (7) the incurrence by Targa Resources Antero Midstream Partners or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources Antero Midstream Partners and any of its Restricted Subsidiaries; provided, however, that: (A) if Targa Resources Antero Midstream Partners or any Guarantor is the obligor on such Indebtedness and the payee is not Targa Resources Antero Midstream Partners or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of Targa Resources Antero Midstream Partners, or the Note Guarantee, in the case of a Guarantor, ; and (B) (1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Targa Resources Antero Midstream Partners or a Restricted Subsidiary of Targa Resources Antero Midstream Partners and (2) any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources Antero Midstream Partners or a Restricted Subsidiary of Targa Resources Antero Midstream Partners, will be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources Antero Midstream Partners or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (76); (8) 7) the incurrence by Targa Resources Antero Midstream Partners or any of its Restricted Subsidiaries of Hedging ObligationsObligations or Indebtedness under Treasury Management Arrangements; (9) 8) the guarantee Guarantee by Targa Resources Partners Antero Midstream Partners, or any of its Restricted Subsidiaries of (a) Indebtedness of Targa Resources Antero Midstream Partners or a Restricted Subsidiary of Targa Resources Antero Midstream Partners that was permitted to be incurred by another provision of this Section 4.094.09 or (b) Indebtedness incurred by Joint Ventures, provided that such Guarantee constitutes a Permitted Investment; and provided further, in each case, that if the Indebtedness being guaranteed Guaranteed is subordinated to or pari passu with the NotesNotes or the Note Guarantees, then the Guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteedGuaranteed; (109) the incurrence by Targa Resources Antero Midstream Partners or any of its Restricted Subsidiaries of obligations relating to net gas balancing positions arising Indebtedness in respect of workers’ compensation claims, health or other types of social security benefits, unemployment or other insurance or self-insurance obligations, insurance contracts, reclamation, statutory obligations, bankers’ acceptances, and performance, payment, appeal and surety bonds in the ordinary course of business business, including Guarantees and consistent with past practice; obligations respecting standby letters of credit supporting such obligations, to the extent not drawn (11in each case other than an obligation for money borrowed) the incurrence by Targa Resources Partners or and replacements of any of its Restricted Subsidiaries of Acquired Debt in connection with a transaction meeting either one of the financial tests set forth in clause (4) under Section 5.01(a)foregoing; (12) the issuance by any of Targa Resources Partners’ Restricted Subsidiaries to Targa Resources Partners or to any of its Restricted Subsidiaries of any Disqualified Equity; provided, however, that: (A) any subsequent issuance or transfer of Equity Interests that results in any such Disqualified Equity being held by a Person other than Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners; and (B) any sale or other transfer of any such Disqualified Equity to a Person that is not either Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners will be deemed, in each case, to constitute an issuance of such Disqualified Equity by such Restricted Subsidiary that was not permitted by this clause (12); and (13) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of additional Indebtedness; provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (13) and then outstanding does not exceed the greater of (a) $150.0 million and (b) 7.5% of Targa Resources Partners’ Consolidated Net Tangible Assets. Targa Resources Partners shall not incur, and shall not permit Finance Corp. or any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of Targa Resources Partners, Finance Corp. or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness of a Person shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of such Person solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. For purposes of determining compliance with this Section 4.09, if an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (13) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, Targa Resources Partners will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares of the same class of Disqualified Equity will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section 4.09; provided, however, in each such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges of Targa Resources Partners as accrued. Notwithstanding any other provision of this Section 4.09, (i) the maximum amount of Indebtedness that Targa Resources Partners or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. Further, the accounting reclassification of any obligation of Targa Resources Partners or any of its Restricted Subsidiaries as Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09.

Appears in 3 contracts

Samples: Indenture (Antero Midstream Corp), Indenture (Antero Midstream Corp), Indenture (Antero Midstream Corp)

Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources Partners shall TLLP will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and Targa Resources Partners TLLP will not issue any Disqualified Equity and will not permit any of its Restricted Subsidiaries to issue any Disqualified Equity; provided, however, that Targa Resources Partners TLLP and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) and Targa Resources Partners TLLP and the any Restricted Subsidiaries Subsidiary may issue Disqualified Equity, if the Fixed Charge Coverage Ratio for Targa Resources Partners’ most recently ended four full fiscal quarters for which internal financial statements are available TLLP’s Reference Period immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, would have been at least 2.0 2.00 to 1.01.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter periodReference Period. (b) The provisions of Section 4.09(a) hereof shall will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Equity described in clause (ii) below:): (1) the incurrence by Targa Resources Partners TLLP and any Restricted Subsidiary of additional Indebtedness (including letters of credit) under pursuant to one or more Credit Facilities, provided that, after giving effect to such incurrence, the Facilities in an aggregate principal amount of all Indebtedness incurred at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Targa Resources Partners TLLP and its Restricted Subsidiaries thereunder) and then outstanding does not to exceed the greater of (a) $2,000.0 450.0 million and (b) the sum of $1.5 billion 330.0 million and 2020.0% of Targa Resources Partners’ Consolidated Net Tangible Assets; (2) the incurrence by Targa Resources Partners TLLP, Finance Corp. and its Restricted Subsidiaries of the Existing Indebtedness; (3) the incurrence by Targa Resources PartnersTLLP, Finance Corp. and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture Issue Date and any the Exchange Notes and the related Note Guarantees that may to be issued pursuant to a the Registration Rights AgreementAgreement in exchange therefor; (4) the incurrence by Targa Resources Partners TLLP or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, Synthetic Lease Obligations, mortgage financings or purchase money obligationsobligations (including any Acquired Debt), in each case, incurred in connection with the purchase of, or for the purpose of financing all or any part of the purchase price or cost of construction construction, improvement or improvement of development of, property, plant or equipment used or useful in the business of Targa Resources Partners TLLP or any of its Restricted SubsidiariesSubsidiaries and related financing costs, and Attributable Debt in respect of sale and leaseback transactions, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), provided that after giving effect at any time outstanding not to such incurrence the aggregate principal amount of all Indebtedness incurred pursuant to this clause (4) and then outstanding does not exceed the greater of (a) $50.0 30.0 million and (b) 4.05.0% of Targa Resources Partners’ TLLP’s Consolidated Net Tangible Assets; (5) the incurrence by Targa Resources Partners TLLP or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clause (2) ), (3), or (313) of this Section 4.09(b) or this clause (5); (6) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of any Permitted Receivables Financing in an aggregate principal amount at any time outstanding not to exceed $400.0 million; (7) the incurrence by Targa Resources Partners TLLP or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources Partners TLLP and any of its Restricted Subsidiaries; provided, however, that: (A) if Targa Resources Partners TLLP or any Guarantor is the obligor on such Indebtedness and the payee is not Targa Resources Partners TLLP or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of Targa Resources PartnersTLLP, or the Note Guarantee, in the case of a Guarantor, ; and (B) (1i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Targa Resources Partners TLLP or a Restricted Subsidiary of Targa Resources Partners TLLP and (2ii) any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources Partners TLLP or a Restricted Subsidiary of Targa Resources PartnersTLLP, will be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources Partners TLLP or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (76); (8) 7) the incurrence by Targa Resources Partners TLLP or any of its Restricted Subsidiaries of Hedging Obligations; (9) 8) the guarantee by Targa Resources Partners TLLP or any of its Restricted Subsidiaries the Guarantors of Indebtedness of Targa Resources Partners TLLP or a Restricted Subsidiary of Targa Resources Partners that was permitted to be TLLP or the Indebtedness incurred by another provision of this Section 4.09Joint Ventures constituting Permitted Investments; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the NotesNotes or Note Guarantees, then the Guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed; (109) the incurrence by Targa Resources Partners TLLP or any of its Restricted Subsidiaries of obligations relating to net gas balancing positions arising Indebtedness in respect of workers’ compensation or similar liabilities, health or other types of social security benefits, unemployment or other insurance or self-insurance obligations, insurance contracts, reclamation, statutory obligations, bankers’ acceptances, and bid, performance, advance, payment, deposit, appeal and surety bonds in the ordinary course of business business, including guarantees and consistent with past practiceobligations respecting standby letters of credit supporting such obligations, to the extent not drawn (in each case other than an obligation for money borrowed) and replacements of any of the foregoing; (1110) the incurrence by Targa Resources Partners TLLP or any of its Restricted Subsidiaries of Acquired Debt in connection with Indebtedness arising from the honoring by a transaction meeting either one bank or other financial institution of the financial tests set forth in clause (4) under Section 5.01(a)a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days; (1211) the issuance by any of Targa Resources Partners’ Restricted Subsidiaries to Targa Resources Partners TLLP or to any of its Restricted Subsidiaries of Disqualified Equity to TLLP or any Disqualified Equityof its Restricted Subsidiaries, as the case may be; provided, however, that: (Aa) any subsequent issuance or transfer of Equity Interests of a Restricted Subsidiary that results in any such Disqualified Equity being held held, directly or indirectly, by a Person other than Targa Resources Partners TLLP or a Restricted Subsidiary of Targa Resources PartnersTLLP; and (Bb) any sale or other transfer of any such Disqualified Equity to a Person that is not either Targa Resources Partners TLLP or a Restricted Subsidiary of Targa Resources Partners TLLP, will be deemed, in each case, to constitute an issuance of such Disqualified Equity by TLLP or such Restricted Subsidiary that was not permitted by this clause clause; (12); and) the incurrence by TLLP or any of its Restricted Subsidiaries of Permitted Acquisition Indebtedness; (13) the incurrence by Targa Resources Partners TLLP of Indebtedness in the ordinary course of business under documentary letters of credit, which are to be repaid in full not more than one year after the date on which such Indebtedness was originally incurred to finance the purchase of goods by TLLP or any of its Restricted Subsidiaries; (14) the incurrence of Indebtedness arising from agreements with TLLP or any of its Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earn-outs, or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or a Subsidiary in accordance with the terms of this Indenture, other than guarantees of Indebtedness incurred or assumed by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition; and (15) the incurrence by TLLP or any of its Restricted Subsidiaries of additional Indebtedness; provided that, after giving effect to any such incurrence, the Indebtedness in an aggregate principal amount of all Indebtedness incurred under this clause (13) and then outstanding does at any time outstanding, not to exceed the greater of (a) $150.0 30.0 million and (b) 7.55.0% of Targa Resources Partners’ Consolidated Net Tangible Assets. Targa Resources Partners shall TLLP will not incur, and shall will not permit Finance Corp. or any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of Targa Resources Partners, Finance Corp. TLLP or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness of a Person shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of such Person TLLP solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. For purposes of determining compliance with this Section 4.09, if in the event that an item of proposed Indebtedness (including Acquired Debt) meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (1315) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, Targa Resources Partners TLLP will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. ; provided that Indebtedness under the Credit Facilities Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture Issue Date will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. .” The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares of the same class of Disqualified Equity will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section 4.09; provided, however, in each such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges of Targa Resources Partners as accrued. Notwithstanding any other provision of this Section 4.09, (i) the maximum amount of Indebtedness that Targa Resources Partners TLLP or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. FurtherThe amount of any Indebtedness outstanding as of any date will be: (1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount; (2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and (3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the accounting reclassification lesser of: (A) the Fair Market Value of any obligation such assets at the date of Targa Resources Partners or any determination; and (B) the amount of its Restricted Subsidiaries as the Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09the other Person.

Appears in 2 contracts

Samples: Indenture (Tesoro Logistics Lp), Indenture (Tesoro Corp /New/)

Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources Partners Sunoco LP shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and Targa Resources Partners will not issue any Disqualified Equity Sunoco LP shall not, and will shall not permit any of its Restricted Subsidiaries to to, issue any Disqualified Equity; provided, however, that Targa Resources Partners Sunoco LP and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) and Targa Resources Partners Sunoco LP and the Restricted Subsidiaries may issue Disqualified Equity, if the Fixed Charge Coverage Ratio for Targa Resources Partners’ Sunoco LP’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter period. (b) The provisions of Section 4.09(a) hereof shall not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Equity described in clause (ii11) below: (1) the incurrence by Targa Resources Partners Sunoco LP and any Restricted Subsidiary of additional Indebtedness (including letters of credit) under one or more Credit Facilities, provided provided, that, after giving effect to such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Targa Resources Partners Sunoco LP and its Restricted Subsidiaries thereunder) and then outstanding does not exceed the greater of (a) $2,000.0 1,500.0 million and (b) the sum of $1.5 billion 1,200.0 million and 2025.0% of Targa Resources Partners’ Sunoco LP’s Consolidated Net Tangible Assets; (2) the incurrence by Targa Resources Partners Sunoco LP and its Restricted Subsidiaries of the Existing Indebtedness; (3) the incurrence by Targa Resources PartnersSunoco LP, Finance Corp. and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and Indenture, any Exchange Notes and the related Note Guarantees that may be issued in exchange for other Notes pursuant to the terms of a Registration Rights Agreement, and the Note Guarantees; (4) the incurrence by Targa Resources Partners Sunoco LP or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of Targa Resources Partners Sunoco LP or any of its Restricted Subsidiaries, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), provided that after giving effect to such incurrence the aggregate principal amount of all Indebtedness incurred pursuant to this clause (4) and then outstanding does not exceed the greater of (a) $50.0 45.0 million and (b) 4.03.5% of Targa Resources Partners’ Sunoco LP’s Consolidated Net Tangible Assets; (5) the incurrence by Targa Resources Partners Sunoco LP or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clause clauses (2) or (3) of this Section 4.09(b) or this clause (5); (6) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of any Permitted Receivables Financing in an aggregate principal amount at any time outstanding not to exceed $400.0 million; (7) the incurrence by Targa Resources Partners Sunoco LP or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources Partners Sunoco LP and any of its Restricted Subsidiaries; provided, however, that: (A) if Targa Resources Partners Sunoco LP or any Guarantor is the obligor on such Indebtedness and the payee is not Targa Resources Partners Sunoco LP or a Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of Targa Resources PartnersSunoco LP, or the Note Guarantee, in the case of a Guarantor, and (B) (1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Targa Resources Partners Sunoco LP or a Restricted Subsidiary of Targa Resources Partners Sunoco LP and (2) any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources Partners Sunoco LP or a Restricted Subsidiary of Targa Resources PartnersSunoco LP, will be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources Partners Sunoco LP or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (76); (8) 7) the incurrence by Targa Resources Partners Sunoco LP or any of its Restricted Subsidiaries of Hedging ObligationsObligations incurred in the ordinary course of business and not for speculative purposes; (9) 8) the guarantee by Targa Resources Partners Sunoco LP or any of its Restricted Subsidiaries of Indebtedness of Targa Resources Partners Sunoco LP or a Restricted Subsidiary of Targa Resources Partners Sunoco LP that was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed; (109) the incurrence by Targa Resources Partners Sunoco LP or any of its Restricted Subsidiaries of obligations relating to net gas balancing positions arising in the ordinary course of business and consistent with past practice; (1110) the incurrence by Targa Resources Partners Sunoco LP or any of its Restricted Subsidiaries of Acquired Debt in connection with a transaction meeting either one of the financial tests set forth in clause (4Section 5.01(a)(4) under Section 5.01(a)hereof; (1211) the issuance by any of Targa Resources Partners’ Sunoco LP’s Restricted Subsidiaries to Targa Resources Partners Sunoco LP or to any of its Restricted Subsidiaries of any Disqualified Equity; provided, however, that: (Aa) any subsequent issuance or transfer of Equity Interests that results in any such Disqualified Equity being held by a Person other than Targa Resources Partners Sunoco LP or a Restricted Subsidiary of Targa Resources PartnersSunoco LP; and (Bb) any sale or other transfer of any such Disqualified Equity to a Person that is not either Targa Resources Partners Sunoco LP or a Restricted Subsidiary of Targa Resources Partners Sunoco LP; will be deemed, in each case, to constitute an issuance of such Disqualified Equity by such Restricted Subsidiary that was not permitted by this clause (11); (12)) the incurrence by Sunoco LP or any of its Restricted Subsidiaries of liability in respect of the Indebtedness of any Unrestricted Subsidiary of Sunoco LP or any Joint Venture but only to the extent that such liability is the result of Sunoco LP’s or any such Restricted Subsidiary’s being a general partner of such Unrestricted Subsidiary or Joint Venture and not as guarantor of such Indebtedness and provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (12) and then outstanding does not exceed $50.0 million; and (13) the incurrence by Targa Resources Partners Sunoco LP or any of its Restricted Subsidiaries of additional Indebtedness; provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (13) and then outstanding does not exceed the greater of (a) $150.0 60.0 million and (b) 7.55.0% of Targa Resources Partners’ Sunoco LP’s Consolidated Net Tangible Assets. Targa Resources Partners Sunoco LP shall not incur, and shall not permit Finance Corp. or any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of Targa Resources PartnersSunoco LP, Finance Corp. or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness of a Person shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of such Person solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. For purposes of determining compliance with this Section 4.09, if an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (13) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, Targa Resources Partners Sunoco LP will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares of the same class of Disqualified Equity will shall not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section 4.09; provided, however, in each such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges of Targa Resources Partners Sunoco LP as accrued. Notwithstanding any other provision of this Section 4.09, (i) the maximum amount of Indebtedness that Targa Resources Partners Sunoco LP or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. Further, the accounting reclassification of any obligation of Targa Resources Partners or any of its Restricted Subsidiaries as Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09.

Appears in 2 contracts

Samples: Indenture (Sunoco LP), Indenture (Sunoco LP)

Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources Partners shall The Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) Incur any Indebtedness (including Acquired Debt), and Targa Resources Partners the Company will not issue any Disqualified Equity and will not permit any of its Restricted Subsidiaries to issue any Disqualified Equity; provided, however, that Targa Resources Partners and the Company or any Restricted Subsidiary may incur Incur Indebtedness (including Acquired Debt) and Targa Resources Partners ), and the Company or any Restricted Subsidiaries may issue Disqualified Equity, if the Fixed Charge Coverage Ratio for Targa Resources Partners’ the Company's four most recently ended four full recent fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred Incurred or such Disqualified Equity is issued, as the case may be, issued would have been at least 2.0 2.25 to 1.0, 1.0 determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred Incurred, or the Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter period. (b) The provisions . So long as no Default shall have occurred and be continuing or would be caused thereby, the first paragraph of this Section 4.09(a) hereof shall 5.12 will not prohibit the incurrence Incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Equity described in clause (ii) below:"PERMITTED DEBT"): (1) the incurrence Incurrence by Targa Resources Partners the Company and any Restricted Subsidiary of additional Indebtedness (including letters of credit) under Credit Facilities, Facilities and the guarantees thereof; provided that, after giving effect to such incurrence, that the aggregate principal amount of all Indebtedness incurred of the Company and the Restricted Subsidiaries Incurred under this clause (1) (with letters of credit being deemed outstanding under all Credit Facilities after giving effect to have a principal amount equal to the maximum potential liability of Targa Resources Partners and its Restricted Subsidiaries thereunder) and then outstanding such Incurrence does not exceed the greater of (a) $2,000.0 600 million less the aggregate amount of all repayments of Indebtedness under Credit Facilities that have been made by the Company and its Restricted Subsidiaries in respect of Asset Sales to the extent such repayments constitute a permanent reduction of commitments under such Credit Facilities and (b) the sum of $1.5 billion and 20% of Targa Resources Partners’ Consolidated Net Tangible AssetsBorrowing Base Amount; (2) the incurrence Incurrence by Targa Resources Partners the Company and its Restricted Subsidiaries of the Existing Indebtedness; (3) the incurrence Incurrence by Targa Resources Partners, Finance Corp. and the Guarantors Company of $104.0 million in aggregate principal amount of Indebtedness represented by the Notes (plus up to $10,660,000 in aggregate principal amount of PIK Notes), and the related Note Subsidiary Guarantees to be issued on thereof by the date of this Indenture and any Exchange Notes and the related Note Guarantees that may be issued pursuant to a Registration Rights AgreementSubsidiary Guarantors; (4) the incurrence Incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of Targa Resources Partners or any of its Restricted Subsidiaries, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), provided that after giving effect to such incurrence the aggregate principal amount of all Indebtedness incurred pursuant to this clause (4) and then outstanding does not exceed the greater of (a) $50.0 million and (b) 4.0% of Targa Resources Partners’ Consolidated Net Tangible Assets; (5) the incurrence by Targa Resources Partners Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, refinance or replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by Incurred pursuant to the first paragraph of this Indenture to be incurred under Section 4.09(a5.12 and clauses (1) hereof or clause and (2) or (3) of this Section 4.09(b) or this clause (5)above; (65) Indebtedness owed to and held by the incurrence by Targa Resources Partners Company or any of its a Restricted Subsidiaries of any Permitted Receivables Financing in an aggregate principal amount at any time outstanding not to exceed $400.0 million; (7) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources Partners and any of its Restricted SubsidiariesSubsidiary; provided, however, that: that (Aa) any subsequent issuance or transfer of any Equity Interests which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any subsequent transfer of such Indebtedness (other than to the Company or a Restricted Subsidiary) shall be deemed, in each case, to constitute the Incurrence of such Indebtedness by the obligor thereon and (b) if Targa Resources Partners or any Guarantor the Company is the obligor on such Indebtedness and the payee is not Targa Resources Partners or a GuarantorIndebtedness, such Indebtedness must be is expressly subordinated to the prior payment in full in cash of all Obligations then due obligations with respect to the Notes; (6) the Incurrence by the Company or any of its Restricted Subsidiaries of obligations under (a) Interest Rate Agreements that are Incurred for the purpose of fixing or hedging interest rate risk with respect to any floating rate Indebtedness that is permitted by the terms of this Indenture to be Incurred and (b) Currency Agreements that are Incurred for the purpose of hedging currency exchange rate risks with respect to any Indebtedness that is permitted by the terms of this Indenture to be Incurred, in either case that do not increase the case Indebtedness of Targa Resources Partnersthe Company and its Restricted Subsidiaries outstanding at any time other than as a result of fluctuations in foreign currency exchange rates or interest rates or by reason of fees, or the Note Guarantee, in the case of a Guarantor, andindemnities and compensation payable thereunder; (B7) (1) any subsequent issuance or transfer the Incurrence by the Company's Unrestricted Subsidiaries of Equity Interests that results in Non-Recourse Debt; provided, however, that, if any such Indebtedness being held ceases to be Non-Recourse Debt of an Unrestricted Subsidiary, such event shall be deemed to constitute an Incurrence of Indebtedness by a Person other than Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners and (2) any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners, will be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources Partners or such Restricted Subsidiary, as the case may be, Company that was not permitted by this clause (7);; or (8) the incurrence Incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of Hedging Obligations; (9) the guarantee by Targa Resources Partners or any of its Restricted Subsidiaries of Indebtedness of Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners that was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed; (10) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of obligations relating to net gas balancing positions arising in the ordinary course of business and consistent with past practice; (11) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of Acquired Debt in connection with a transaction meeting either one of the financial tests set forth in clause (4) under Section 5.01(a); (12) the issuance by any of Targa Resources Partners’ Restricted Subsidiaries to Targa Resources Partners or to any of its Restricted Subsidiaries of any Disqualified Equity; provided, however, that: (A) any subsequent issuance or transfer of Equity Interests that results in any such Disqualified Equity being held by a Person other than Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners; and (B) any sale or other transfer of any such Disqualified Equity to a Person that is not either Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners will be deemed, in each case, to constitute an issuance of such Disqualified Equity by such Restricted Subsidiary that was not permitted by this clause (12); and (13) the incurrence by Targa Resources Partners Company or any of its Restricted Subsidiaries of additional Indebtedness; provided that, after giving effect to any such incurrence, the Indebtedness in an aggregate principal amount of all Indebtedness incurred under this clause (13or accreted value, as applicable) and then at any time outstanding does not to exceed the greater of (a) $150.0 million and (b) 7.5% of Targa Resources Partners’ Consolidated Net Tangible Assets. Targa Resources Partners shall not incur, and shall not permit Finance Corp. or any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of Targa Resources Partners, Finance Corp. or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness of a Person shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of such Person solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis20.0 million. For purposes of determining compliance with this Section 4.095.12, if in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (13) 8) above, or is entitled to be incurred Incurred pursuant to the first paragraph of this Section 4.09(a) hereof5.12, Targa Resources Partners will the Company shall be permitted to classify (or later reclassify in whole or in part, in its sole discretion) such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.095.12. Any items of Indebtedness under Credit Facilities outstanding on may be divided and classified (or later reclassified in whole or in part, in the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date Company's sole discretion) in reliance on the exception provided by clause (1) one or more of the definition types of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares of the same class of Disqualified Equity will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section 4.09; provided, however, in each such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges of Targa Resources Partners as accrued. Notwithstanding any other provision of this Section 4.09, (i) the maximum amount of Indebtedness that Targa Resources Partners or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. Further, the accounting reclassification of any obligation of Targa Resources Partners or any of its Restricted Subsidiaries as Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09Indebtedness.

Appears in 2 contracts

Samples: Indenture (Eott Energy Finance Corp), Indenture (Eott Energy Finance Corp)

Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources Partners shall Sunoco LP will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and Targa Resources Partners Sunoco LP will not issue any Disqualified Equity not, and will not permit any of its Restricted Subsidiaries to to, issue any Disqualified Equity; provided, however, that Targa Resources Partners Sunoco LP and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) and Targa Resources Partners Sunoco LP and the Restricted Subsidiaries may issue Disqualified Equity, if the Fixed Charge Coverage Ratio for Targa Resources Partners’ Sunoco LP’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter period. (b) The provisions of Section 4.09(a) hereof shall not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Equity described in clause (ii11) below: (1) the incurrence by Targa Resources Partners Sunoco LP and any Restricted Subsidiary of additional Indebtedness (including letters of credit) under one or more Credit Facilities, ; provided that, after giving effect to such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Targa Resources Partners Sunoco LP and its Restricted Subsidiaries thereunder) and then outstanding does not exceed the greater of (a) $2,000.0 1,500.0 million and (b) the sum of $1.5 billion 1,200.0 million and 2025.0% of Targa Resources Partners’ Sunoco LP’s Consolidated Net Tangible Assets; (2) the incurrence by Targa Resources Partners Sunoco LP and its Restricted Subsidiaries of the Existing Indebtedness; (3) the incurrence by Targa Resources PartnersSunoco LP, Finance Corp. and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and Indenture, any Exchange Notes and the related Note Guarantees that may be issued in exchange for other Notes pursuant to the terms of a Registration Rights Agreement, and the Note Guarantees; (4) the incurrence by Targa Resources Partners Sunoco LP or any of its Restricted Subsidiaries of Indebtedness represented by Capital Finance Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of Targa Resources Partners Sunoco LP or any of its Restricted Subsidiaries, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), ; provided that after giving effect to such incurrence the aggregate principal amount of all Indebtedness incurred pursuant to this clause (4) and then outstanding does not exceed the greater of (a) $50.0 million and (b) 4.03.5% of Targa Resources Partners’ Sunoco LP’s Consolidated Net Tangible Assets; (5) the incurrence by Targa Resources Partners Sunoco LP or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge discharge, any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clause clauses (2) or (3) of this Section 4.09(b) or this clause (5); (6) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of any Permitted Receivables Financing in an aggregate principal amount at any time outstanding not to exceed $400.0 million; (7) the incurrence by Targa Resources Partners Sunoco LP or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources Partners Sunoco LP and any of its Restricted Subsidiaries; provided, however, that: (A) if Targa Resources Partners Sunoco LP or any Guarantor is the obligor on such Indebtedness and the payee is not Targa Resources Partners Sunoco LP or a Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of Targa Resources PartnersSunoco LP, or the Note Guarantee, in the case of a Guarantor, ; and (B) (1i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Targa Resources Partners Sunoco LP or a Restricted Subsidiary of Targa Resources Partners Sunoco LP and (2ii) any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources Partners Sunoco LP or a Restricted Subsidiary of Targa Resources PartnersSunoco LP, will be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources Partners Sunoco LP or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (76); (8) 7) the incurrence by Targa Resources Partners Sunoco LP or any of its Restricted Subsidiaries of Hedging ObligationsObligations incurred in the ordinary course of business and not for speculative purposes; (9) 8) the guarantee by Targa Resources Partners Sunoco LP or any of its Restricted Subsidiaries of Indebtedness of Targa Resources Partners Sunoco LP or a Restricted Subsidiary of Targa Resources Partners Sunoco LP that was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed; (109) the incurrence by Targa Resources Partners Sunoco LP or any of its Restricted Subsidiaries of obligations relating to net gas balancing positions arising in the ordinary course of business and consistent with past practice; (1110) the incurrence by Targa Resources Partners Sunoco LP or any of its Restricted Subsidiaries of Acquired Debt in connection with a transaction meeting either one of the financial tests set forth in clause (4Section 5.01(a)(4) under Section 5.01(a)hereof; (1211) the issuance by any of Targa Resources Partners’ Sunoco LP’s Restricted Subsidiaries to Targa Resources Partners Sunoco LP or to any of its Restricted Subsidiaries of any Disqualified Equity; provided, however, that: (A) any subsequent issuance or transfer of Equity Interests that results in any such Disqualified Equity being held by a Person other than Targa Resources Partners Sunoco LP or a Restricted Subsidiary of Targa Resources PartnersSunoco LP; and (B) any sale or other transfer of any such Disqualified Equity to a Person that is not either Targa Resources Partners Sunoco LP or a Restricted Subsidiary of Targa Resources Partners Sunoco LP; will be deemed, in each case, to constitute an issuance of such Disqualified Equity by such Restricted Subsidiary that was not permitted by this clause (11); (12)) the incurrence by Sunoco LP or any of its Restricted Subsidiaries of liability in respect of the Indebtedness of any Unrestricted Subsidiary of Sunoco LP or any Joint Venture, but only to the extent that such liability is the result of Sunoco LP’s or any such Restricted Subsidiary’s being a general partner of such Unrestricted Subsidiary or Joint Venture and not as guarantor of such Indebtedness; provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (12) and then outstanding does not exceed $100.0 million; and (13) the incurrence by Targa Resources Partners Sunoco LP or any of its Restricted Subsidiaries of additional Indebtedness; provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (13) and then outstanding does not exceed the greater of (a) $150.0 75.0 million and (b) 7.55.0% of Targa Resources Partners’ Sunoco LP’s Consolidated Net Tangible Assets. Targa Resources Partners shall Sunoco LP will not incur, and shall will not permit Finance Corp. or any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of Targa Resources PartnersSunoco LP, Finance Corp. or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness of a Person shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of such Person solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. For purposes of determining compliance with this Section 4.09, if an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (13) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, Targa Resources Partners Sunoco LP will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under the Credit Facilities Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares issuances of Disqualified Equity of the same class class, for purposes of Disqualified Equity will not this Section 4.09, shall not, in each case, be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section 4.09; provided, however, in each such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges of Targa Resources Partners as accruedEquity. Notwithstanding any other provision of this Section 4.09, (i) the maximum amount of Indebtedness that Targa Resources Partners Sunoco LP or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. Further, the accounting reclassification of any obligation of Targa Resources Partners or any of its Restricted Subsidiaries as Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09.

Appears in 2 contracts

Samples: Indenture (Sunoco LP), Indenture (Sunoco LP)

Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources Partners shall Sunoco LP will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and Targa Resources Partners Sunoco LP will not issue any Disqualified Equity not, and will not permit any of its Restricted Subsidiaries to to, issue any Disqualified Equity; provided, however, that Targa Resources Partners Sunoco LP and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) and Targa Resources Partners Sunoco LP and the Restricted Subsidiaries may issue Disqualified Equity, if the Fixed Charge Coverage Ratio for Targa Resources Partners’ Sunoco LP’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter period. (b) The provisions of Section 4.09(a) hereof shall not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Equity described in clause (ii11) below: (1) the incurrence by Targa Resources Partners Sunoco LP and any Restricted Subsidiary of additional Indebtedness (including letters of credit) under one or more Credit Facilities, ; provided that, after giving effect to such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Targa Resources Partners Sunoco LP and its Restricted Subsidiaries thereunder) and then outstanding does not exceed the greater of (a) $2,000.0 1,500.0 million and (b) the sum of $1.5 billion 1,200.0 million and 2025.0% of Targa Resources Partners’ Sunoco LP’s Consolidated Net Tangible Assets; (2) the incurrence by Targa Resources Partners Sunoco LP and its Restricted Subsidiaries of the Existing Indebtedness; (3) the incurrence by Targa Resources PartnersSunoco LP, Finance Corp. and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and Indenture, any Exchange Notes and the related Note Guarantees that may be issued in exchange for other Notes pursuant to the terms of a Registration Rights Agreement, and the Note Guarantees; (4) the incurrence by Targa Resources Partners Sunoco LP or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of Targa Resources Partners Sunoco LP or any of its Restricted Subsidiaries, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), ; provided that after giving effect to such incurrence the aggregate principal amount of all Indebtedness incurred pursuant to this clause (4) and then outstanding does not exceed the greater of (a) $50.0 million and (b) 4.03.5% of Targa Resources Partners’ Sunoco LP’s Consolidated Net Tangible Assets; (5) the incurrence by Targa Resources Partners Sunoco LP or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge discharge, any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clause clauses (2) or (3) of this Section 4.09(b) or this clause (5); (6) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of any Permitted Receivables Financing in an aggregate principal amount at any time outstanding not to exceed $400.0 million; (7) the incurrence by Targa Resources Partners Sunoco LP or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources Partners Sunoco LP and any of its Restricted Subsidiaries; provided, however, that: (A) if Targa Resources Partners Sunoco LP or any Guarantor is the obligor on such Indebtedness and the payee is not Targa Resources Partners Sunoco LP or a Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of Targa Resources PartnersSunoco LP, or the Note Guarantee, in the case of a Guarantor, ; and (B) (1i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Targa Resources Partners Sunoco LP or a Restricted Subsidiary of Targa Resources Partners Sunoco LP and (2ii) any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources Partners Sunoco LP or a Restricted Subsidiary of Targa Resources PartnersSunoco LP, will be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources Partners Sunoco LP or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (76); (8) 7) the incurrence by Targa Resources Partners Sunoco LP or any of its Restricted Subsidiaries of Hedging ObligationsObligations incurred in the ordinary course of business and not for speculative purposes; (9) 8) the guarantee by Targa Resources Partners Sunoco LP or any of its Restricted Subsidiaries of Indebtedness of Targa Resources Partners Sunoco LP or a Restricted Subsidiary of Targa Resources Partners Sunoco LP that was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed; (109) the incurrence by Targa Resources Partners Sunoco LP or any of its Restricted Subsidiaries of obligations relating to net gas balancing positions arising in the ordinary course of business and consistent with past practice; (1110) the incurrence by Targa Resources Partners Sunoco LP or any of its Restricted Subsidiaries of Acquired Debt in connection with a transaction meeting either one of the financial tests set forth in clause (4Section 5.01(a)(4) under Section 5.01(a)hereof; (1211) the issuance by any of Targa Resources Partners’ Sunoco LP’s Restricted Subsidiaries to Targa Resources Partners Sunoco LP or to any of its Restricted Subsidiaries of any Disqualified Equity; provided, however, that: (A) any subsequent issuance or transfer of Equity Interests that results in any such Disqualified Equity being held by a Person other than Targa Resources Partners Sunoco LP or a Restricted Subsidiary of Targa Resources PartnersSunoco LP; and (B) any sale or other transfer of any such Disqualified Equity to a Person that is not either Targa Resources Partners Sunoco LP or a Restricted Subsidiary of Targa Resources Partners Sunoco LP; will be deemed, in each case, to constitute an issuance of such Disqualified Equity by such Restricted Subsidiary that was not permitted by this clause (11); (12)) the incurrence by Sunoco LP or any of its Restricted Subsidiaries of liability in respect of the Indebtedness of any Unrestricted Subsidiary of Sunoco LP or any Joint Venture, but only to the extent that such liability is the result of Sunoco LP’s or any such Restricted Subsidiary’s being a general partner of such Unrestricted Subsidiary or Joint Venture and not as guarantor of such Indebtedness; provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (12) and then outstanding does not exceed $100.0 million; and (13) the incurrence by Targa Resources Partners Sunoco LP or any of its Restricted Subsidiaries of additional Indebtedness; provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (13) and then outstanding does not exceed the greater of (a) $150.0 75.0 million and (b) 7.55.0% of Targa Resources Partners’ Sunoco LP’s Consolidated Net Tangible Assets. Targa Resources Partners shall Sunoco LP will not incur, and shall will not permit Finance Corp. or any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of Targa Resources PartnersSunoco LP, Finance Corp. or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness of a Person shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of such Person solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. For purposes of determining compliance with this Section 4.09, if an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (13) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, Targa Resources Partners Sunoco LP will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under the Credit Facilities Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares of the same class of Disqualified Equity will shall not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section 4.09; provided, however, in each such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges of Targa Resources Partners Sunoco LP as accrued. Notwithstanding any other provision of this Section 4.09, (i) the maximum amount of Indebtedness that Targa Resources Partners Sunoco LP or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. Further, the accounting reclassification of any obligation of Targa Resources Partners or any of its Restricted Subsidiaries as Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09.

Appears in 2 contracts

Samples: Indenture (Sunoco LP), Indenture (Sunoco LP)

Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources Partners shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and Targa Resources Partners will not issue any Disqualified Equity and will not permit any of its Restricted Subsidiaries to issue any Disqualified Equity; provided, however, that Targa Resources Partners and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) and Targa Resources Partners and the Restricted Subsidiaries may issue Disqualified Equity, if the Fixed Charge Coverage Ratio for Targa Resources Partners’ most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter period. (b) The provisions of Section 4.09(a) hereof shall not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Equity described in clause (ii) below: (1) the incurrence by Targa Resources Partners and any Restricted Subsidiary of additional Indebtedness (including letters of credit) under Credit Facilities, provided that, after giving effect to such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Targa Resources Partners and its Restricted Subsidiaries thereunder) and then outstanding does not exceed the greater of (a) $2,000.0 million and (b) the sum of $1.5 billion and 20% of Targa Resources Partners’ Consolidated Net Tangible Assets; (2) the incurrence by Targa Resources Partners and its Restricted Subsidiaries of the Existing Indebtedness; (3) the incurrence by Targa Resources Partners, Finance Corp. and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and any Exchange Notes and the related Note Guarantees that may be issued pursuant to a Registration Rights Agreement; (4) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of Indebtedness represented by Capital Finance Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of Targa Resources Partners or any of its Restricted Subsidiaries, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), provided that after giving effect to such incurrence the aggregate principal amount of all Indebtedness incurred pursuant to this clause (4) and then outstanding does not exceed the greater of (a) $50.0 million and (b) 4.0% of Targa Resources Partners’ Consolidated Net Tangible Assets; (5) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clause (2) or (3) of this Section 4.09(b) or this clause (5); (6) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of any Permitted Receivables Financing in an aggregate principal amount at any time outstanding not to exceed $400.0 million; (7) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources Partners and any of its Restricted Subsidiaries; provided, however, that: (A) if Targa Resources Partners or any Guarantor is the obligor on such Indebtedness and the payee is not Targa Resources Partners or a Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of Targa Resources Partners, or the Note Guarantee, in the case of a Guarantor, and (B) (1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners and (2) any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners, will be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources Partners or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (7); (8) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of Hedging Obligations; (9) the guarantee by Targa Resources Partners or any of its Restricted Subsidiaries of Indebtedness of Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners that was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed; (10) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of obligations relating to net gas balancing positions arising in the ordinary course of business and consistent with past practice; (11) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of Acquired Debt in connection with a transaction meeting either one of the financial tests set forth in clause (4) under Section 5.01(a); (12) the issuance by any of Targa Resources Partners’ Restricted Subsidiaries to Targa Resources Partners or to any of its Restricted Subsidiaries of any Disqualified Equity; provided, however, that: (A) any subsequent issuance or transfer of Equity Interests that results in any such Disqualified Equity being held by a Person other than Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners; and (B) any sale or other transfer of any such Disqualified Equity to a Person that is not either Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners will be deemed, in each case, to constitute an issuance of such Disqualified Equity by such Restricted Subsidiary that was not permitted by this clause (12); and (13) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of additional Indebtedness; provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (13) and then outstanding does not exceed the greater of (a) $150.0 million and (b) 7.5% of Targa Resources Partners’ Consolidated Net Tangible Assets. Targa Resources Partners shall not incur, and shall not permit Finance Corp. or any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of Targa Resources Partners, Finance Corp. or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness of a Person shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of such Person solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. For purposes of determining compliance with this Section 4.09, if an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (13) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, Targa Resources Partners will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares or units of the same class of Disqualified Equity will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section 4.09; provided, however, in each such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges of Targa Resources Partners as accrued. Notwithstanding any other provision of this Section 4.09, (i) the maximum amount of Indebtedness that Targa Resources Partners or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. Further, the accounting reclassification of any obligation of Targa Resources Partners or any of its Restricted Subsidiaries as Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09.

Appears in 2 contracts

Samples: Indenture (Targa Resources Partners LP), Indenture (Targa Resources Partners LP)

Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources Partners The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and Targa Resources Partners the Company will not issue any Disqualified Equity and will not permit any of its Restricted Subsidiaries to issue any Disqualified Equity; provided, however, that Targa Resources Partners the Company and any Restricted Subsidiary Guarantor may incur Indebtedness (including Acquired Debt) and Targa Resources Partners ), and the Restricted Subsidiaries Company and the Subsidiary Guarantors may issue Disqualified Equity, if the Fixed Charge Coverage Ratio for Targa Resources Partners’ the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, issued would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred incurred, or the Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter period. (b) The provisions of So long as no Default shall have occurred and be continuing or would be caused thereby, Section 4.09(a) hereof shall will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Equity described in clause (ii) below:): (1i) the incurrence by Targa Resources Partners the Company and any Restricted Subsidiary Guarantor of additional Indebtedness (including letters of credit) under Credit Facilities, Facilities and the guarantees thereof; provided that, after giving effect to such incurrence, that the aggregate principal amount of all Indebtedness of the Company and the Restricted Subsidiaries incurred under pursuant to this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Targa Resources Partners and its Restricted Subsidiaries thereunderi) and then outstanding under all Credit Facilities after giving effect to such incurrence does not exceed the greater of (aA) $2,000.0 800.0 million and or (bB) the sum of $1.5 billion and 400.0 million plus 20% of Targa Resources Partners’ the Consolidated Net Tangible AssetsAssets of the Company, in each case less the aggregate amount of all repayments of Indebtedness under any Credit Facility that have been made by the Company or any of its Restricted Subsidiaries in respect of asset sales or casualty events to the extent such repayments constitute a permanent reduction of commitments under the terms of such Credit Facility; (2ii) the incurrence by Targa Resources Partners the Company and its Restricted Subsidiaries of Existing Indebtedness (other than under the Existing IndebtednessCredit Agreement); (3iii) the incurrence by Targa Resources Partners, Finance Corp. the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes issued and sold in the Offering and the related Note Guarantees to be issued on the date of this Indenture and any Exchange Notes and the related Note Guarantees that may be issued pursuant to a the Registration Rights Agreement; (4iv) the incurrence by Targa Resources Partners the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of Targa Resources Partners the Company or any of its such Restricted SubsidiariesSubsidiary, in an aggregate principal amount including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred pursuant to this clause (4), provided that after giving effect iv) not to such incurrence the aggregate principal amount of all Indebtedness incurred pursuant to this clause (4) and then outstanding does not exceed the greater of (a) $50.0 40.0 million and at any time outstanding or (b) 4.02.5% of Targa Resources Partners’ Consolidated Net Tangible AssetsAssets of the Company; (5v) the incurrence by Targa Resources Partners the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any discharge, Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clause (2ii) or (3iii) of this Section 4.09(b) or this clause (5v); (6vi) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of any Permitted Receivables Financing in an aggregate principal amount at any time outstanding not to exceed $400.0 million; (7) the incurrence by Targa Resources Partners Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources Partners the Company and any of its Restricted Subsidiaries; provided, however, that: (A) if Targa Resources Partners or any Guarantor the Company is the obligor on such Indebtedness and the payee a Subsidiary Guarantor is not Targa Resources Partners or a Guarantorthe obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, or if a Subsidiary Guarantor is the obligor on such Indebtedness and neither the Company nor another Subsidiary Guarantor is the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the case Guarantee of Targa Resources Partners, or the Note Guarantee, in the case of a such Subsidiary Guarantor, ; and (B) (1i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Targa Resources Partners the Company or a Restricted Subsidiary of Targa Resources Partners thereof and (2ii) any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources Partners the Company or a Restricted Subsidiary of Targa Resources Partnersthereof, will shall be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources Partners the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (7vi); (8) vii) the incurrence by Targa Resources Partners the Company or any of its Restricted Subsidiaries of Hedging ObligationsObligations that are incurred for the purpose of fixing or hedging (but not for speculative purposes) (A) foreign currency exchange rate risks of the Company or any Restricted Subsidiary, (B) interest rate risks with respect to any floating rate Indebtedness of the Company or any Restricted Subsidiary that is permitted by the terms of this Indenture to be outstanding or (C) commodities pricing risks of the Company or any Restricted Subsidiary in respect of Hydrocarbons used, produced, processed or sold by the Company or any of its Restricted Subsidiaries; (9viii) the guarantee by Targa Resources Partners the Company or any of its Restricted Subsidiaries of Indebtedness of Targa Resources Partners the Company or a any of its Restricted Subsidiary of Targa Resources Partners Subsidiaries that was permitted to be incurred by another provision of this Section 4.09; provided provided, that if in the event such Indebtedness that is being guaranteed is subordinated to a Subordinated Obligation or pari passu with the Notesa Guarantor Subordinated Obligation, then the Guarantee guarantee shall be subordinated in right of payment to the Notes or pari passuthe Guarantee, as applicable, to the same extent as the Indebtedness guaranteedcase may be; (10ix) the incurrence by Targa Resources Partners the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, payment obligations relating in connection with health or other types of social security benefits, unemployment or other insurance or self-insurance obligations, reclamation, statutory obligations, banks’ acceptances and bid, performance, surety and appeal bonds or other similar obligations incurred in the ordinary course of business, including guarantees and obligations respecting standby letters of credit supporting such obligations, to net gas balancing positions the extent not drawn (in each case other than an obligation for money borrowed); (x) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance of Disqualified Equity in an aggregate principal amount at any time outstanding not to exceed the greater of (a) $60.0 million at any time outstanding or (b) 5.0% of Consolidated Net Tangible Assets of the Company; (xi) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds; (xii) the incurrence of Indebtedness arising from agreements with the Company or any Restricted Subsidiary providing for indemnification, adjustment of purchase price, earn outs, or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or a Subsidiary in accordance with the terms of the Indenture, other than guarantees of Indebtedness incurred or assumed by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition; and (xiii) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness arising out of advances on trade receivables, factoring of receivables, customer prepayments and similar transactions in the ordinary course of business and consistent with past practice;. (11c) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of Acquired Debt in connection with a transaction meeting either one of the financial tests set forth in clause (4) under Section 5.01(a); (12) the issuance by any of Targa Resources Partners’ Restricted Subsidiaries to Targa Resources Partners or to any of its Restricted Subsidiaries of any Disqualified Equity; provided, however, that: (A) any subsequent issuance or transfer of Equity Interests that results in any such Disqualified Equity being held by a Person other than Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners; and (B) any sale or other transfer of any such Disqualified Equity to a Person that is not either Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners will be deemed, in each case, to constitute an issuance of such Disqualified Equity by such Restricted Subsidiary that was not permitted by this clause (12); and (13) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of additional Indebtedness; provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (13) and then outstanding does not exceed the greater of (a) $150.0 million and (b) 7.5% of Targa Resources Partners’ Consolidated Net Tangible Assets. Targa Resources Partners shall not incur, and shall not permit Finance Corp. or any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of Targa Resources Partners, Finance Corp. or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness of a Person shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of such Person solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. For purposes of determining compliance with this Section 4.09, if in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses paragraphs (1b)(i) through (13b)(xiii) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof), Targa Resources Partners will the Company shall be permitted to classify (or later reclassify in whole or in part) such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. An item of Indebtedness may be divided and classified in one or more of the types of Permitted Indebtedness. Any Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated Issue Date shall be considered incurred under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause Section 4.09(a). (1d) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares of the same class of Disqualified Equity will shall not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section 4.09; provided, however, in each such case, that the amount of any such accrual, accretion or payment thereof is included in Fixed Charges of Targa Resources Partners the Company as accrued. Notwithstanding any other provision of this Section 4.09, (i) the maximum amount of Indebtedness that Targa Resources Partners or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. Further, the accounting reclassification of any obligation of Targa Resources Partners or any of its Restricted Subsidiaries as Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09.

Appears in 2 contracts

Samples: Indenture (Atlas Pipeline Partners Lp), Indenture (Atlas Pipeline Partners Lp)

Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources Antero Midstream Partners shall will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and Targa Resources Antero Midstream Partners will not issue any Disqualified Equity and will not permit any of its Restricted Subsidiaries to issue any Disqualified Equity; provided, however, that Targa Resources Antero Midstream Partners and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) and Targa Resources Antero Midstream Partners and the Restricted Subsidiaries may issue Disqualified Equity, if the Fixed Charge Coverage Ratio for Targa Resources the Antero Midstream Partners’ most recently ended four full fiscal quarters for which internal financial statements are available Reference Period immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter periodReference Period. (b) The provisions of Section 4.09(a) hereof shall will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Equity described in clause (ii11) below: (1) the incurrence by Targa Resources Antero Midstream Partners and or any of its Restricted Subsidiary Subsidiaries of additional Indebtedness (including and letters of credit) credit and the Guarantees thereof under Credit Facilities, provided that, after giving effect to such incurrence, the Facilities in an aggregate principal amount of all Indebtedness incurred at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Targa Resources Antero Midstream Partners and its Restricted Subsidiaries thereunder) and then outstanding does not to exceed the greater of (a) $2,000.0 million 2.0 billion and (b) the sum of $1.5 1.4 billion and 2030% of Targa Resources Partners’ Consolidated Net Tangible AssetsAssets (determined as of the date of incurrence and after giving effect to the use of proceeds therefrom); (2) the incurrence by Targa Resources Antero Midstream Partners and its Restricted Subsidiaries of the any Existing Indebtedness; (3) the incurrence by Targa Resources Partners, Finance Corp. the Issuers and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and any Exchange Notes and the related Note Guarantees that may be issued pursuant to a Registration Rights AgreementIssue Date; (4) the incurrence by Targa Resources Antero Midstream Partners or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of Targa Resources Antero Midstream Partners or any of its Restricted Subsidiaries, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), provided that after giving effect at any time outstanding not to such incurrence the aggregate principal amount of all Indebtedness incurred pursuant to this clause (4) and then outstanding does not exceed the greater of (a) $50.0 100.0 million and (b) 4.05.0% of Targa Resources Partners’ Consolidated Net Tangible AssetsAssets (determined as of the date of incurrence and after giving effect to the use of proceeds therefrom); (5) the incurrence by Targa Resources Antero Midstream Partners or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clause (2), (3), (4) or (310) of this Section 4.09(b) or this clause (5); (6) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of any Permitted Receivables Financing in an aggregate principal amount at any time outstanding not to exceed $400.0 million; (7) the incurrence by Targa Resources Antero Midstream Partners or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources Antero Midstream Partners and any of its Restricted Subsidiaries; provided, however, that: (A) if Targa Resources Antero Midstream Partners or any Guarantor is the obligor on such Indebtedness and the payee is not Targa Resources Antero Midstream Partners or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of Targa Resources Antero Midstream Partners, or the Note Guarantee, in the case of a Guarantor, ; and (B) (1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Targa Resources Antero Midstream Partners or a Restricted Subsidiary of Targa Resources Antero Midstream Partners and (2) any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources Antero Midstream Partners or a Restricted Subsidiary of Targa Resources Antero Midstream Partners, will be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources Antero Midstream Partners or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (76); (8) 7) the incurrence by Targa Resources Antero Midstream Partners or any of its Restricted Subsidiaries of Hedging ObligationsObligations or Indebtedness under Treasury Management Arrangements; (9) 8) the guarantee Guarantee by Targa Resources Partners Antero Midstream Partners, or any of its Restricted Subsidiaries of (a) Indebtedness of Targa Resources Antero Midstream Partners or a Restricted Subsidiary of Targa Resources Antero Midstream Partners that was permitted to be incurred by another provision of this Section 4.094.09 or (b) Indebtedness incurred by Joint Ventures, provided that such Guarantee constitutes a Permitted Investment; and provided further, in each case, that if the Indebtedness being guaranteed Guaranteed is subordinated to or pari passu with the NotesNotes or the Note Guarantees, then the Guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteedGuaranteed; (9) the incurrence by Antero Midstream Partners or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, health or other types of social security benefits, unemployment or other insurance or self-insurance obligations, insurance contracts, reclamation, statutory obligations, bankers’ acceptances, and performance, payment, appeal and surety bonds in the ordinary course of business, including Guarantees and obligations respecting standby letters of credit supporting such obligations, to the extent not drawn (in each case other than an obligation for money borrowed) and replacements of any of the foregoing; (10) the incurrence by Targa Resources Antero Midstream Partners or any of its Restricted Subsidiaries of obligations relating to net gas balancing positions arising in the ordinary course of business and consistent with past practicePermitted Acquisition Indebtedness; (11) the incurrence issuance by Targa Resources Antero Midstream Partners or any of its Restricted Subsidiaries of Acquired Debt in connection with a transaction meeting either one of the financial tests set forth in clause (4) under Section 5.01(a); (12) the issuance by any of Targa Resources Partners’ Restricted Subsidiaries Disqualified Equity to Targa Resources Antero Midstream Partners or to any of its Restricted Subsidiaries of any Disqualified EquitySubsidiaries, as the case may be; provided, however, that: (A) any subsequent issuance or transfer of Equity Interests of a Restricted Subsidiary that results in any such Disqualified Equity being held held, directly or indirectly, by a Person other than Targa Resources Antero Midstream Partners or a Restricted Subsidiary of Targa Resources Antero Midstream Partners; and (B) any sale or other transfer of any such Disqualified Equity to a Person that is not either Targa Resources Antero Midstream Partners or a Restricted Subsidiary of Targa Resources Partners Antero Midstream Partners; will be deemed, in each case, to constitute an issuance of such Disqualified Equity by Antero Midstream Partners or such Restricted Subsidiary that was not permitted by this clause clause; (12); and (13) the incurrence in the ordinary course of business by Targa Resources Antero Midstream Partners or any of its Restricted Subsidiaries of additional Indebtedness; Indebtedness under letters of credit incurred pursuant to a Credit Facility, provided that such obligations are reimbursed within 10 days following the drawing of such letter of credit; (13) the incurrence by Antero Midstream Partners or any of its Restricted Subsidiaries of liability in respect of the Indebtedness of any Unrestricted Subsidiary of Antero Midstream Partners or any Joint Venture but only to the extent that such liability is the result of Antero Midstream Partners’ or any such Restricted Subsidiary’s being a general partner of such Unrestricted Subsidiary or Joint Venture and not as guarantor of such Indebtedness and provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (13) and then outstanding does not exceed $25.0 million; and (14) the incurrence by Antero Midstream Partners or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount at any time outstanding not to exceed the greater of (a) $150.0 100.0 million and (b) 7.55.0% of Targa Resources Partners’ Consolidated Net Tangible AssetsAssets (determined as of the date of incurrence and after giving effect to the use of proceeds therefrom). Targa Resources Antero Midstream Partners shall will not incur, and shall will not permit Finance Corp. or any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of Targa Resources Antero Midstream Partners, Finance Corp. or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness of a Person shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of Antero Midstream Partners, Finance Corp. or any such Person Subsidiary Guarantor solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. For purposes of determining compliance with this Section 4.09, if in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (1314) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, Targa Resources Antero Midstream Partners will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares or units of the same class of Disqualified Equity will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section 4.09; provided, however, in each such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges of Targa Resources Antero Midstream Partners as accruedaccrued to the extent required by the definition of such term. Notwithstanding any other provision of this Section 4.09, (i) the maximum amount of Indebtedness that Targa Resources Antero Midstream Partners or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. FurtherThe amount of any Indebtedness outstanding as of any date will be: (1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount; (2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and (3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the accounting reclassification lesser of: (A) the Fair Market Value of such assets at the date of determination; and (B) the amount of the Indebtedness of the other Person. For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed, in the case of revolving credit debt; 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 (i) the principal amount of such Indebtedness being refinanced plus (ii) the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses incurred in connection with such refinancing. The principal amount of any obligation Indebtedness incurred to refinance other Indebtedness, if incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Indebtedness is denominated that is in effect on the date of Targa Resources Partners or any of its Restricted Subsidiaries as Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09such refinancing.

Appears in 2 contracts

Samples: Indenture (Antero Midstream Corp), Indenture (Antero Midstream Partners LP)

Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources Partners shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and Targa Resources Partners will not issue any Disqualified Equity and will not permit any of its Restricted Subsidiaries to issue any Disqualified Equity; provided, however, that Targa Resources Partners and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) and Targa Resources Partners and the Restricted Subsidiaries may issue Disqualified Equity, if the Fixed Charge Coverage Ratio for Targa Resources Partners’ most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter period. (b) The provisions of Section 4.09(a) hereof shall not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Equity described in clause (ii) below: (1) the incurrence by Targa Resources Partners and any Restricted Subsidiary of additional Indebtedness (including letters of credit) under Credit Facilities, provided that, after giving effect to such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Targa Resources Partners and its Restricted Subsidiaries thereunder) and then outstanding does not exceed the greater of (a) $2,000.0 1,000.0 million and (b) the sum of $1.5 billion 750.0 million and 20% of Targa Resources Partners’ Consolidated Net Tangible Assets; (2) the incurrence by Targa Resources Partners and its Restricted Subsidiaries of the Existing Indebtedness; (3) the incurrence by Targa Resources Partners, Finance Corp. and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and any Exchange Notes and the related Note Guarantees that may be issued pursuant to a Registration Rights Agreement; (4) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of Targa Resources Partners or any of its Restricted Subsidiaries, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), provided that after giving effect to such incurrence the aggregate principal amount of all Indebtedness incurred pursuant to this clause (4) and then outstanding does not exceed the greater of (a) $50.0 million and (b) 4.0% of Targa Resources Partners’ Consolidated Net Tangible Assets; (5) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clause (2) or (3) of this Section 4.09(b) or this clause (5); (6) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of any Permitted Receivables Financing in an aggregate principal amount at any time outstanding not to exceed $400.0 million; (7) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources Partners and any of its Restricted Subsidiaries; provided, however, that: (A) if Targa Resources Partners or any Guarantor is the obligor on such Indebtedness and the payee is not Targa Resources Partners or a Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of Targa Resources Partners, or the Note Guarantee, in the case of a Guarantor, and (B) (1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners and (2) any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners, will be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources Partners or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (76); (8) 7) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of Hedging Obligations; (9) 8) the guarantee by Targa Resources Partners or any of its Restricted Subsidiaries of Indebtedness of Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners that was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed; (109) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of obligations relating to net gas balancing positions arising in the ordinary course of business and consistent with past practice; (1110) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of Acquired Debt in connection with a transaction meeting either one of the financial tests set forth in clause (4) under Section 5.01(a); (1211) the issuance by any of Targa Resources Partners’ Restricted Subsidiaries to Targa Resources Partners or to any of its Restricted Subsidiaries of any Disqualified Equity; provided, however, that: (A) any subsequent issuance or transfer of Equity Interests that results in any such Disqualified Equity being held by a Person other than Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners; and (B) any sale or other transfer of any such Disqualified Equity to a Person that is not either Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners will be deemed, in each case, to constitute an issuance of such Disqualified Equity by such Restricted Subsidiary that was not permitted by this clause (1211); and (1312) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of additional Indebtedness; provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (1312) and then outstanding does not exceed the greater of (a) $150.0 50.0 million and (b) 7.54.0% of Targa Resources Partners’ Consolidated Net Tangible Assets. Targa Resources Partners shall not incur, and shall not permit Finance Corp. or any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of Targa Resources Partners, Finance Corp. or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness of a Person shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of such Person solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. For purposes of determining compliance with this Section 4.09, if an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (1312) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, Targa Resources Partners will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares of the same class of Disqualified Equity will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section 4.09; provided, however, in each such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges of Targa Resources Partners as accrued. Notwithstanding any other provision of this Section 4.09, (i) the maximum amount of Indebtedness that Targa Resources Partners or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. Further, the accounting reclassification of any obligation of Targa Resources Partners or any of its Restricted Subsidiaries as Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09.

Appears in 2 contracts

Samples: Indenture (Targa Resources Partners LP), Indenture (Targa Resources Partners LP)

Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources Partners The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and Targa Resources Partners the Company will not issue any Disqualified Equity and will not permit any of its Restricted Subsidiaries to issue any Disqualified Equity; provided, however, that Targa Resources Partners the Company and any Restricted Subsidiary Guarantor may incur Indebtedness (including Acquired Debt) and Targa Resources Partners ), and the Restricted Subsidiaries Company and any Subsidiary Guarantor may issue Disqualified Equity, if the Fixed Charge Coverage Ratio for Targa Resources Partners’ the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, issued would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred incurred, or the Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter period. (b) The provisions of So long as no Default shall have occurred and be continuing or would be caused thereby, Section 4.09(a) hereof shall will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Equity described in clause (ii) below:): (1i) the incurrence by Targa Resources Partners the Company and any Restricted Subsidiary Guarantor of additional Indebtedness (including letters of credit) under Credit Facilities, Facilities and the guarantees thereof; provided that, after giving effect to such incurrence, that the aggregate principal amount of all Indebtedness of the Company and the Restricted Subsidiaries incurred under pursuant to this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Targa Resources Partners and its Restricted Subsidiaries thereunderi) and then outstanding under all Credit Facilities after giving effect to such incurrence does not exceed the greater of (aA) $2,000.0 225.0 million and or (bB) the sum of $1.5 billion and 2015% of Targa Resources Partners’ the Consolidated Net Tangible AssetsAssets of the Company, in each case less the aggregate amount of all repayments of Indebtedness under any Credit Facility that have been made by the Company or any of its Restricted Subsidiaries with Net Proceeds from Asset Sales to the extent such repayments constitute a permanent reduction of commitments under the terms of such Credit Facility; (2ii) the incurrence by Targa Resources Partners the Company and its Restricted Subsidiaries of Existing Indebtedness (other than under the Existing IndebtednessCredit Agreement); (3iii) the incurrence by Targa Resources Partners, Finance Corp. the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes issued and sold in the Offering and the related Note Guarantees to be issued on the date of this Indenture and any Exchange Notes and the related Note Guarantees that may be issued pursuant to a the Registration Rights Agreement; (4iv) the incurrence by Targa Resources Partners the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of Targa Resources Partners the Company or any of its such Restricted SubsidiariesSubsidiary, in an aggregate principal amount including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred pursuant to this clause (4), provided that after giving effect iv) not to such incurrence the aggregate principal amount of all Indebtedness incurred pursuant to this clause (4) and then outstanding does not exceed the greater of (a) $50.0 10.0 million and (b) 4.0% of Targa Resources Partners’ Consolidated Net Tangible Assetsat any time outstanding; (5v) the incurrence by Targa Resources Partners the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any discharge, Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clause (2ii) or (3iii) of this Section 4.09(b) or this clause (5v);; Back to Contents (6vi) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of any Permitted Receivables Financing in an aggregate principal amount at any time outstanding not to exceed $400.0 million; (7) the incurrence by Targa Resources Partners Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources Partners the Company and any of its Restricted Subsidiaries; provided, however, that: (A) if Targa Resources Partners or any Guarantor the Company is the obligor on such Indebtedness and the payee a Subsidiary Guarantor is not Targa Resources Partners or a Guarantorthe obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, or if a Subsidiary Guarantor is the obligor on such Indebtedness and neither the Company nor another Subsidiary Guarantor is the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the case Guarantee of Targa Resources Partners, or the Note Guarantee, in the case of a such Subsidiary Guarantor, ; and (B) (1i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Targa Resources Partners the Company or a Restricted Subsidiary of Targa Resources Partners thereof and (2ii) any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources Partners the Company or a Restricted Subsidiary of Targa Resources Partnersthereof, will shall be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources Partners the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (7vi); (8) vii) the incurrence by Targa Resources Partners the Company or any of its Restricted Subsidiaries of Hedging ObligationsObligations that are incurred for the purpose of fixing or hedging (but not for speculative purposes) (A) foreign currency exchange rate risks of the Company or any Restricted Subsidiary, (B) interest rate risks with respect to any floating rate Indebtedness of the Company or any Restricted Subsidiary that is permitted by the terms of this Indenture to be outstanding or (C) commodities pricing risks of the Company or any Restricted Subsidiary in respect of Hydrocarbons used, produced, processed or sold by the Company or any of its Restricted Subsidiaries; (9viii) the guarantee by Targa Resources Partners the Company or any of its Restricted Subsidiaries of Indebtedness of Targa Resources Partners the Company or a any of its Restricted Subsidiary of Targa Resources Partners Subsidiaries that was permitted to be incurred by another provision of this Section 4.09; provided provided, that if in the event such Indebtedness that is being guaranteed is subordinated to a Subordinated Obligation or pari passu with the Notesa Guarantor Subordinated Obligation, then the Guarantee guarantee shall be subordinated in right of payment to the Notes or pari passuthe Guarantee, as applicable, to the same extent as the Indebtedness guaranteedcase may be; (10ix) the incurrence by Targa Resources Partners the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, payment obligations relating in connection with health or other types of social security benefits, unemployment or other insurance or self-insurance obligations, reclamation, statutory obligations, banks’ acceptances and bid, performance, surety and appeal bonds or other similar obligations incurred in the ordinary course of business, including guarantees and obligations respecting standby letters of credit supporting such obligations, to net gas balancing positions the extent not drawn (in each case other than an obligation for money borrowed); (x) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance of Disqualified Equity in an aggregate principal amount at any time outstanding not to exceed $25.0 million; (xi) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds; (xii) the incurrence of Indebtedness arising from agreements with the Company or any Restricted Subsidiary providing for indemnification, adjustment of purchase price, earn outs, or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or a Subsidiary in accordance with the terms of the Indenture, other than guarantees of Indebtedness incurred or assumed by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition; and Back to Contents (xiii) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness arising out of advances on trade receivables, factoring of receivables, customer prepayments and similar transactions in the ordinary course of business and consistent with past practice; (11c) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of Acquired Debt in connection with a transaction meeting either one of the financial tests set forth in clause (4) under Section 5.01(a); (12) the issuance by any of Targa Resources Partners’ Restricted Subsidiaries to Targa Resources Partners or to any of its Restricted Subsidiaries of any Disqualified Equity; provided, however, that: (A) any subsequent issuance or transfer of Equity Interests that results in any such Disqualified Equity being held by a Person other than Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners; and (B) any sale or other transfer of any such Disqualified Equity to a Person that is not either Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners will be deemed, in each case, to constitute an issuance of such Disqualified Equity by such Restricted Subsidiary that was not permitted by this clause (12); and (13) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of additional Indebtedness; provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (13) and then outstanding does not exceed the greater of (a) $150.0 million and (b) 7.5% of Targa Resources Partners’ Consolidated Net Tangible Assets. Targa Resources Partners shall not incur, and shall not permit Finance Corp. or any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of Targa Resources Partners, Finance Corp. or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness of a Person shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of such Person solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. For purposes of determining compliance with this Section 4.09, if in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses paragraphs (1b)(i) through (13b)(xiii) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof), Targa Resources Partners will the Company shall be permitted to classify (or later reclassify in whole or in part) such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. An item of Indebtedness may be divided and classified in one or more of the types of Permitted Indebtedness. Any Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated Issue Date shall be considered incurred under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause Section 4.09(a). (1d) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares of the same class of Disqualified Equity will shall not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section 4.09; provided, however, in each such case, that the amount of any such accrual, accretion or payment thereof is included in Fixed Charges of Targa Resources Partners the Company as accrued. Notwithstanding any other provision of this Section 4.09, (i) the maximum amount of Indebtedness that Targa Resources Partners or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. Further, the accounting reclassification of any obligation of Targa Resources Partners or any of its Restricted Subsidiaries as Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09.

Appears in 2 contracts

Samples: Indenture (Atlas Pipeline Holdings, L.P.), Indenture (Atlas America Inc)

Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources Partners The Partnership shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt), and Targa Resources Partners the Partnership will not issue any Disqualified Equity and will not permit any of its Restricted Subsidiaries to issue any Disqualified Equity; provided, however, that Targa Resources Partners the Partnership and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) ), and Targa Resources Partners the Partnership and the Restricted Subsidiaries may issue Disqualified Equity, if the Fixed Charge Coverage Ratio for Targa Resources Partners’ the Partnership's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, issued would have been at least 2.0 2.25 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred incurred, or the Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter period. (b) The provisions Notwithstanding the prohibitions of Section 4.09(a) hereof ), so long as no Default or Event of Default shall not prohibit have occurred and be continuing or would be caused thereby, the incurrence of Partnership and its Restricted Subsidiaries may incur any of the following items of Indebtedness (collectively, "Permitted Debt”) or the issuance of any Disqualified Equity described in clause (ii) below:"): (1i) the incurrence by Targa Resources Partners the Partnership and any of its Restricted Subsidiary Subsidiaries of additional the Indebtedness (including letters of credit) under Credit Facilities, Facilities and the guarantees thereof; provided that, after giving effect to such incurrence, that the aggregate principal amount of all Indebtedness incurred of the Partnership and the Restricted Subsidiaries outstanding under this clause (1) (with letters all Credit Facilities after giving effect to such incurrence does not exceed $1.2 billion less the aggregate amount of credit being deemed to all repayments of Indebtedness under a Credit Facility that may have a principal amount equal to been made by the maximum potential liability Partnership or any of Targa Resources Partners and its Restricted Subsidiaries thereunder) and then outstanding does not exceed with Net Proceeds from Asset Sales to the greater extent such repayments constitute a permanent reduction of (a) $2,000.0 million and (b) the sum of $1.5 billion and 20% of Targa Resources Partners’ Consolidated Net Tangible Assetscommitments under such Credit Facility; (2ii) the incurrence by Targa Resources Partners the Partnership and its Restricted Subsidiaries of the Existing Indebtedness; (3iii) the incurrence by Targa Resources Partners, Finance Corp. the Partnership and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and any Exchange Notes and the related Note Guarantees that may be issued pursuant to a Registration Rights AgreementObligations; (4iv) the incurrence by Targa Resources Partners the Partnership or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligationsobligation, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of Targa Resources Partners the Partnership or any of its such Restricted SubsidiariesSubsidiary, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), provided that after giving effect to such incurrence the in an aggregate principal amount of all Indebtedness incurred pursuant not to this clause (4) and then outstanding does not exceed the greater of (a) $50.0 20.0 million and (b) 4.0% of Targa Resources Partners’ Consolidated Net Tangible Assetsat any time outstanding; (5v) the incurrence by Targa Resources Partners the Partnership or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, refinance or replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be not incurred under Section 4.09(a) hereof or clause (2) or (3) in violation of this Section 4.09(b) or this clause (5)Indenture; (6vi) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of any Permitted Receivables Financing in an aggregate principal amount at any time outstanding not to exceed $400.0 million; (7) the incurrence by Targa Resources Partners Partnership or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources Partners the Partnership and any of its Restricted Subsidiaries; provided, however, that: (A) if Targa Resources Partners the Partnership or any Subsidiary Guarantor is the obligor on such Indebtedness and the payee is not Targa Resources Partners or a GuarantorIndebtedness, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of Targa Resources Partnersthe Partnership, or the Note GuaranteeGuarantee of such Subsidiary Guarantor, in the case of a Subsidiary Guarantor, ; and (B) (1i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Targa Resources Partners the Partnership or a Restricted Subsidiary of Targa Resources Partners thereof and (2ii) any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources Partners the Partnership or a Restricted Subsidiary of Targa Resources Partnersthereof, will shall be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources Partners the Partnership or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (7vi);; 65 (8) vii) the incurrence by Targa Resources Partners the Partnership or any of its Restricted Subsidiaries of Hedging ObligationsObligations that are incurred for the purpose of fixing or hedging foreign currency exchange rate risk of the Partnership or any Restricted Subsidiary or interest rate risk with respect to any floating rate Indebtedness of the Partnership or any Restricted Subsidiary that is permitted by the terms of this Indenture to be outstanding or commodities pricing risks of the Partnership or any Restricted Subsidiary in respect of hydrocarbon production from properties in which the Partnership or any of its Restricted Subsidiaries owns an interest; (9viii) the guarantee by Targa Resources Partners the Partnership or any of its Restricted Subsidiaries of Indebtedness of Targa Resources Partners the Partnership or a Restricted Subsidiary of Targa Resources Partners the Partnership that was permitted to be incurred by another provision of this Section 4.09; provided that if covenant; (ix) bid, performance, surety and appeal bonds incurred in the Indebtedness being guaranteed is subordinated to or pari passu with the Notesordinary course of business, then the Guarantee shall be subordinated or pari passu, as applicableincluding guarantees and standby letters of credit supporting such obligations, to the same extent as the Indebtedness guaranteednot drawn; (10x) the incurrence by Targa Resources Partners the Partnership or any of its Restricted Subsidiaries of obligations relating additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to net gas balancing positions arising in the ordinary course of business and consistent with past practicerefund, refinance or replace any Indebtedness incurred pursuant to this clause (x), not to exceed $20.0 million; (11xi) the incurrence by Targa Resources Partners or any of its Restricted the Partnership's Unrestricted Subsidiaries of Acquired Debt in connection with a transaction meeting either one of the financial tests set forth in clause (4) under Section 5.01(a); (12) the issuance by any of Targa Resources Partners’ Restricted Subsidiaries to Targa Resources Partners or to any of its Restricted Subsidiaries of any Disqualified EquityNon-Recourse Debt; provided, however, that: (A) any subsequent issuance or transfer of Equity Interests that results in if any such Disqualified Equity being held Indebtedness ceases to be Non-Recourse Debt of an Unrestricted Subsidiary, such event shall be deemed to constitute an incurrence of Indebtedness by a Person other than Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners; and (B) any sale or other transfer of any such Disqualified Equity to a Person that is not either Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners will be deemed, in each case, to constitute an issuance of such Disqualified Equity by such Restricted Subsidiary the Partnership that was not permitted by this clause (12xi); (xii) the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on Disqualified Equity, in the form of additional shares of the same class of Disqualified Equity, provided, in each such case, that the amount thereof is included in Fixed Charges of the Partnership as so accrued, accredited or amortized; and (13xiii) Indebtedness incurred by the incurrence by Targa Resources Partners Partnership or any of its Restricted Subsidiaries arising from agreements or their respective bylaws providing for indemnification, adjustment of additional Indebtedness; provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause purchase price or similar obligations. (13c) and then outstanding does not exceed the greater of (a) $150.0 million and (b) 7.5% of Targa Resources Partners’ Consolidated Net Tangible Assets. Targa Resources Partners shall not incur, and shall not permit Finance Corp. or any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of Targa Resources Partners, Finance Corp. or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness of a Person shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of such Person solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. For purposes of determining compliance with this Section 4.09, if in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses paragraphs (1b)(i) through (13b)(xiii) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof), Targa Resources Partners will the Partnership shall be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, incurrence in any manner that complies with this Section 4.09. An 66 item of Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued may be divided and authenticated under this Indenture will initially be deemed to have been incurred on such date classified in reliance on the exception provided by clause (1) one or more of the definition types of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares of the same class of Disqualified Equity will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section 4.09; provided, however, in each such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges of Targa Resources Partners as accrued. Notwithstanding any other provision of this Section 4.09, (i) the maximum amount of Indebtedness that Targa Resources Partners or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. Further, the accounting reclassification of any obligation of Targa Resources Partners or any of its Restricted Subsidiaries as Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09Indebtedness.

Appears in 2 contracts

Samples: Indenture (First Reserve Gas LLC), Indenture (El Paso Energy Partners Lp)

Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources Partners The Partnership shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and Targa Resources Partners the Partnership will not issue any Disqualified Equity and will not permit any of its Restricted Subsidiaries to issue any Disqualified Equity; provided, however, that Targa Resources Partners the Partnership and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) ), and Targa Resources Partners the Partnership and the Restricted Subsidiaries may issue Disqualified Equity, if the Fixed Charge Coverage Ratio for Targa Resources Partners’ the Partnership’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, issued would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred incurred, or the Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter period. (b) The provisions Notwithstanding the prohibitions of Section 4.09(a) hereof shall not prohibit 5.09(a), the incurrence of Partnership and its Restricted Subsidiaries may incur any of the following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Equity described in clause (ii) below:): (1i) the incurrence by Targa Resources Partners the Partnership and any Restricted Subsidiary of additional Indebtedness (including letters of credit) under Credit Facilities, Facilities and the guarantees thereof; provided that, after giving effect to such incurrence, that the aggregate principal amount of all Indebtedness of the Partnership and the Restricted Subsidiaries incurred under pursuant to this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Targa Resources Partners and its Restricted Subsidiaries thereunderi) and then outstanding under all Credit Facilities after giving effect to such incurrence does not exceed the greater of (aA) $2,000.0 1.8 billion or (B) $500.0 million and (b) the sum of $1.5 billion and 20plus 25.0% of Targa Resources Partners’ the Consolidated Net Tangible AssetsAssets of the Partnership; (2ii) the incurrence by Targa Resources Partners the Partnership and its Restricted Subsidiaries of Existing Indebtedness (other than under the Existing IndebtednessCredit Facilities); (3iii) the incurrence by Targa Resources Partners, Finance Corp. the Issuers and the Subsidiary Guarantors of Indebtedness represented by the Notes issued and sold in the offering of the Initial Notes, and the related Note Guarantees to be issued on the date of this Indenture and any Exchange Notes and the related Note Guarantees that may be issued pursuant to a Registration Rights AgreementGuarantees; (4iv) the incurrence by Targa Resources Partners the Partnership or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of Targa Resources Partners the Partnership or any of its such Restricted SubsidiariesSubsidiary, including all Permitted Refinancing Indebtedness incurred to renew, refundextend, refinance, renew, replace, defease or discharge refund any Indebtedness incurred pursuant to this clause (4iv), provided that after giving effect to any such incurrence incurrence, the aggregate principal amount of all Indebtedness incurred pursuant to this clause (4iv) and then outstanding does shall not exceed the greater of (a) $50.0 125.0 million and or (b) 4.02.5% of Targa Resources Partners’ the Consolidated Net Tangible AssetsAssets of the Partnership at such time; (5v) the incurrence by Targa Resources Partners the Partnership or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refundextend, refinance, renew, replace, defease or discharge any refund, Indebtedness (other than intercompany Indebtedness) that was permitted by this the Indenture to be incurred under Section 4.09(a5.09(a) hereof or clause (2ii) or (3iii) of this Section 4.09(b5.09(b) or this clause (5v); (6vi) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of any Permitted Receivables Financing in an aggregate principal amount at any time outstanding not to exceed $400.0 million; (7) the incurrence by Targa Resources Partners Partnership or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources Partners the Partnership and any of its Restricted Subsidiaries; provided, however, that: (A) if Targa Resources Partners or any Guarantor the Partnership is the obligor on such Indebtedness and the payee a Subsidiary Guarantor is not Targa Resources Partners or a Guarantorthe obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, or if a Subsidiary Guarantor is the obligor on such Indebtedness and neither the Partnership nor another Subsidiary Guarantor is the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the case Guarantee of Targa Resources Partners, or the Note Guarantee, in the case of a such Subsidiary Guarantor, ; and (B) (1i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Targa Resources Partners the Partnership or a Restricted Subsidiary of Targa Resources Partners thereof and (2ii) any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources Partners or neither the Partnership nor a Restricted Subsidiary of Targa Resources Partnersthereof, will shall be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources Partners the Partnership or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (7vi); (8) vii) the incurrence by Targa Resources Partners the Partnership or any of its Restricted Subsidiaries of Hedging ObligationsObligations that are incurred for the purpose of fixing or hedging (but not for speculative purposes) (A) foreign currency exchange rate risks of the Partnership or any Restricted Subsidiary, (B) interest rate risks with respect to any floating rate Indebtedness of the Partnership or any Restricted Subsidiary that is permitted by the terms of the Indenture to be outstanding or (C) commodities pricing risks of the Partnership or any Restricted Subsidiary in respect of Hydrocarbons used, produced, processed or sold by the Partnership or any of its Restricted Subsidiaries; (9viii) the guarantee by Targa Resources Partners the Partnership or any of its Restricted Subsidiaries of Indebtedness of Targa Resources Partners the Partnership or a any of its Restricted Subsidiary of Targa Resources Partners Subsidiaries that was permitted to be incurred by another provision of this Section 4.095.09; provided provided, that if in the event such Indebtedness that is being guaranteed is subordinated to a Subordinated Obligation or pari passu with the Notesa Guarantor Subordinated Obligation, then the Guarantee guarantee shall be subordinated in right of payment to the Notes or pari passuthe Guarantee, as applicablethe case may be; (ix) bid, performance, surety and appeal bonds incurred in the ordinary course of business, including guarantees and obligations respecting standby letters of credit supporting such obligations, to the same extent as the Indebtedness guaranteednot drawn (in each case other than an obligation for money borrowed); (10x) the incurrence by Targa Resources Partners the Partnership or any of its Restricted Subsidiaries of obligations relating to net gas balancing positions arising liability in respect of the ordinary course Indebtedness of business and consistent with past practice; (11) any Unrestricted Subsidiary of the incurrence by Targa Resources Partners Partnership or any of its Restricted Subsidiaries of Acquired Debt in connection with a transaction meeting either one Joint Venture but only to the extent that such liability is the result of the financial tests set forth in clause (4) under Section 5.01(a); (12) the issuance by any of Targa Resources Partners’ Restricted Subsidiaries to Targa Resources Partners Partnership’s or to any of its Restricted Subsidiaries of any Disqualified Equity; provided, however, that: (A) any subsequent issuance or transfer of Equity Interests that results in any such Disqualified Equity Restricted Subsidiary’s being held by a Person other than Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners; and (B) any sale or other transfer of any such Disqualified Equity to a Person that is not either Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners will be deemed, in each case, to constitute an issuance general partner of such Disqualified Equity by Unrestricted Subsidiary or Joint Venture and not as guarantor of such Restricted Subsidiary that was not permitted by this clause (12); and (13) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of additional Indebtedness; Indebtedness and provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (13x) and then outstanding does not exceed $25.0 million; (xi) the incurrence by the Partnership or any of its Restricted Subsidiaries of Acquired Debt in connection with a merger or consolidation meeting either one of the financial tests set forth in clause (iv) of Section 6.01(a); and (xii) the incurrence by the Partnership or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount at any time outstanding not to exceed the greater of (a) $150.0 250.0 million and or (b) 7.55.0% of Targa Resources Partners’ the Consolidated Net Tangible Assets. Targa Resources Partners shall not incur, and shall not permit Finance Corp. or any Guarantor to incur, any Indebtedness Assets of the Partnership. (including Permitted Debtc) that is contractually subordinated in right of payment to any other Indebtedness of Targa Resources Partners, Finance Corp. or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness of a Person shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of such Person solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. For purposes of determining compliance with this Section 4.095.09, if in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses paragraphs (1b)(i) through (13b)(xii) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof5.09(a), Targa Resources Partners will the Partnership shall be permitted to classify (or later reclassify in whole or in part) such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, incurrence in any manner that complies with this Section 4.095.09. An item of Indebtedness may be divided and classified in one or more of the types of Permitted Indebtedness. Any Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated Issue Date shall be considered incurred under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause Section 5.09(a). (1d) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares of the same class of Disqualified Equity will shall not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section 4.095.09; provided, however, in each such case, that the amount of any such accrual, accretion or payment thereof is included in Fixed Charges of Targa Resources Partners the Partnership as accrued. Notwithstanding any other provision of this Section 4.095.09, (i) the maximum amount of Indebtedness that Targa Resources Partners the Partnership or any Restricted Subsidiary may incur pursuant to this Section 4.09 covenant shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. Further, the accounting reclassification of any obligation of Targa Resources Partners the Partnership or any of its Restricted Subsidiaries as Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.095.09.

Appears in 2 contracts

Samples: Fifteenth Supplemental Indenture (Markwest Energy Partners L P), Thirteenth Supplemental Indenture (Markwest Energy Partners L P)

Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources Regency Energy Partners shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and Targa Resources Regency Energy Partners will not issue any Disqualified Equity and will not permit any of its Restricted Subsidiaries to issue any Disqualified Equity; provided, however, that Targa Resources Regency Energy Partners and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) and Targa Resources Regency Energy Partners and the Restricted Subsidiaries may issue Disqualified Equity, if the Fixed Charge Coverage Ratio for Targa Resources Regency Energy Partners’ most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter period. (b) The provisions of Section 4.09(a) hereof shall not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Equity preferred securities described in clause (ii11) below: (1) the incurrence by Targa Resources Regency Energy Partners and any Restricted Subsidiary of additional Indebtedness (including any letters of credit) under one or more Credit Facilities, provided that, after giving effect to such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Targa Resources Regency Energy Partners and its Restricted Subsidiaries thereunder) and then outstanding does not exceed the greater of (a) $2,000.0 900.0 million and (b) the sum of $1.5 billion 500.0 million and 2020.0% of Targa Resources Regency Energy Partners’ Consolidated Net Tangible Assets; (2) the incurrence by Targa Resources Regency Energy Partners and its Restricted Subsidiaries of the Existing Indebtedness; (3) the incurrence by Targa Resources Regency Energy Partners, Finance Corp. and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and any Exchange Notes and the related Note Guarantees that may be issued pursuant to a Registration Rights AgreementIndenture; (4) the incurrence by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), provided that after giving effect to such incurrence the aggregate principal amount of all Indebtedness incurred pursuant to this clause (4) and then outstanding does not exceed the greater of (a) $50.0 20.0 million and (b) 4.02.0% of Targa Resources Regency Energy Partners’ Consolidated Net Tangible Assets; (5) the incurrence by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge discharge, any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clause clauses (2) or (3) of this Section 4.09(b) or this clause (5); (6) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of any Permitted Receivables Financing in an aggregate principal amount at any time outstanding not to exceed $400.0 million; (7) the incurrence by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources Regency Energy Partners and any of its Restricted Subsidiaries; provided, however, that: (A) if Targa Resources Regency Energy Partners or any Guarantor is the obligor on such Indebtedness and the payee is not Targa Resources Regency Energy Partners or a Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of Targa Resources Regency Energy Partners, or the Note Guarantee, in the case of a Guarantor, and (B) (1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Targa Resources Regency Energy Partners or a Restricted Subsidiary of Targa Resources Regency Energy Partners and (2) any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources Regency Energy Partners or a Restricted Subsidiary of Targa Resources Regency Energy Partners, will be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources Regency Energy Partners or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (76); (8) 7) the incurrence by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of Hedging Obligations; (9) 8) the guarantee by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of Indebtedness of Targa Resources Regency Energy Partners or a Restricted Subsidiary of Targa Resources Regency Energy Partners that was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed; (109) the incurrence by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of obligations relating to net gas balancing positions arising in the ordinary course of business and consistent with past practice; (1110) the incurrence by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of Acquired Debt in connection with a transaction meeting either one of the financial tests set forth in clause (4) under this Section 5.01(a)4.09; (1211) the issuance by any of Targa Resources Regency Energy Partners’ Restricted Subsidiaries to Targa Resources Regency Energy Partners or to any of its Restricted Subsidiaries of any Disqualified Equitypreferred securities; provided, however, that: (Aa) any subsequent issuance or transfer of Equity Interests that results in any such Disqualified Equity preferred securities being held by a Person other than Targa Resources Regency Energy Partners or a Restricted Subsidiary of Targa Resources Regency Energy Partners; and (Bb) any sale or other transfer of any such Disqualified Equity preferred securities to a Person that is not either Targa Resources Regency Energy Partners or a Restricted Subsidiary of Targa Resources Regency Energy Partners will be deemed, in each case, to constitute an issuance of such Disqualified Equity preferred securities by such Restricted Subsidiary that was not permitted by this clause (1211); and (1312) the incurrence by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of additional Indebtedness; provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (1312) and then outstanding does not exceed the greater of (a) $150.0 25.0 million and (b) 7.52.5% of Targa Resources Regency Energy Partners’ Consolidated Net Tangible Assets. Targa Resources Regency Energy Partners shall not incur, and shall not permit Finance Corp. or any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of Targa Resources Regency Energy Partners, Finance Corp. or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness of a Person shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of such Person solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. For purposes of determining compliance with this Section 4.09, if an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (1312) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, Targa Resources Regency Energy Partners will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares of the same class of Disqualified Equity will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section 4.09; provided, however, in each such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges of Targa Resources Regency Energy Partners as accrued. Notwithstanding any other provision of this Section 4.09, (i) the maximum amount of Indebtedness that Targa Resources Regency Energy Partners or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. Further, the accounting reclassification of any obligation of Targa Resources Partners or any of its Restricted Subsidiaries as Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09.

Appears in 1 contract

Samples: First Supplemental Indenture (Regency Energy Partners LP)

Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources Partners The Partnership shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt), and Targa Resources Partners the Partnership will not issue any Disqualified Equity and will not permit any of its Restricted Subsidiaries to issue any Disqualified Equity; provided, however, that Targa Resources Partners the Partnership and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) ), and Targa Resources Partners the Partnership and the Restricted Subsidiaries may issue Disqualified Equity, if the Fixed Charge Coverage Ratio for Targa Resources Partners’ the Partnership's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, issued would have been at least 2.0 2.25 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred incurred, or the Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter period. (b) The provisions Notwithstanding the prohibitions of Section 4.09(a) hereof ), so long as no Default or Event of Default shall not prohibit have occurred and be continuing or would be caused thereby, the incurrence of Partnership and its Restricted Subsidiaries may incur any of the following items of Indebtedness (collectively, "Permitted Debt”) or the issuance of any Disqualified Equity described in clause (ii) below:"): (1i) the incurrence by Targa Resources Partners the Partnership and any of its Restricted Subsidiary Subsidiaries of additional the Indebtedness (including letters of credit) under Credit Facilities, Facilities and the guarantees thereof; provided that, after giving effect to such incurrence, that the aggregate principal amount of all Indebtedness incurred of the Partnership and the Restricted Subsidiaries outstanding under this clause (1) (with letters all Credit Facilities after giving effect to such incurrence does not exceed $1.2 billion less the aggregate amount of credit being deemed to all repayments of principal of Indebtedness under a Credit Facility that have a principal amount equal to been made by the maximum potential liability Partnership or any of Targa Resources Partners and its Restricted Subsidiaries thereunder) and then outstanding does not exceed with Net Proceeds from Asset Sales to the greater extent such repayments constitute a permanent reduction of (a) $2,000.0 million and (b) the sum of $1.5 billion and 20% of Targa Resources Partners’ Consolidated Net Tangible Assetscommitments under such Credit Facility; (2ii) the incurrence by Targa Resources Partners the Partnership and its Restricted Subsidiaries of the Existing Indebtedness; (3iii) the incurrence by Targa Resources Partners, Finance Corp. the Partnership and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and any Exchange Notes and the related Note Guarantees that may be issued pursuant to a Registration Rights AgreementObligations; (4iv) the incurrence by Targa Resources Partners the Partnership or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of Targa Resources Partners the Partnership or any of its such Restricted SubsidiariesSubsidiary, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), provided that after giving effect to such incurrence the in an aggregate principal amount of all Indebtedness incurred pursuant not to this clause (4) and then outstanding does not exceed the greater of (a) $50.0 40.0 million and (b) 4.0% of Targa Resources Partners’ Consolidated Net Tangible Assetsat any time outstanding; (5v) the incurrence by Targa Resources Partners the Partnership or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, refinance or replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be not incurred under Section 4.09(a) hereof or clause (2) or (3) in violation of this Section 4.09(b) or this clause (5)Indenture; (6vi) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of any Permitted Receivables Financing in an aggregate principal amount at any time outstanding not to exceed $400.0 million; (7) the incurrence by Targa Resources Partners Partnership or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources Partners the Partnership and any of its Restricted Subsidiaries; provided, however, that: (A) if Targa Resources Partners the Partnership or any Subsidiary Guarantor is the obligor on such Indebtedness and the payee is not Targa Resources Partners or a GuarantorIndebtedness, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of Targa Resources Partnersthe Partnership, or the Note GuaranteeGuarantee of such Subsidiary Guarantor, in the case of a Subsidiary Guarantor, ; and (B) (1i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Targa Resources Partners the Partnership or a Restricted Subsidiary of Targa Resources Partners thereof and (2ii) any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources Partners the Partnership or a Restricted Subsidiary of Targa Resources Partnersthereof, will shall be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources Partners the Partnership or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (7vi); (8) vii) the incurrence by Targa Resources Partners the Partnership or any of its Restricted Subsidiaries of Hedging ObligationsObligations that are incurred for the purpose of fixing or hedging foreign currency exchange rate risk of the Partnership or any Restricted Subsidiary or interest rate risk with respect to any floating rate Indebtedness of the Partnership or any Restricted Subsidiary that is permitted by the terms of this Indenture to be outstanding or commodities pricing risks of the Partnership or any Restricted Subsidiary in respect of hydrocarbon production from properties in which the Partnership or any of its Restricted Subsidiaries owns an interest; (9viii) the guarantee by Targa Resources Partners the Partnership or any of its Restricted Subsidiaries of Indebtedness of Targa Resources Partners the Partnership or a Restricted Subsidiary of Targa Resources Partners the Partnership that was permitted to be incurred by another provision of this Section 4.09covenant; provided provided, that if in the event such Indebtedness that is being guaranteed is subordinated to a Subordinated Obligation or pari passu with the Notesa Guarantor Subordinated Obligation, then the Guarantee guarantee shall be subordinated in right of payment to the Notes or pari passuthe Guarantee, as applicablethe case may be; (ix) bid, performance, surety and appeal bonds incurred in the ordinary course of business, including guarantees and standby letters of credit supporting such Obligations, to the same extent as the Indebtedness guaranteednot drawn; (10x) the incurrence by Targa Resources Partners the Partnership or any of its Restricted Subsidiaries of obligations relating additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to net gas balancing positions arising in the ordinary course of business and consistent with past practicerefund, refinance or replace any Indebtedness incurred pursuant to this clause (x), not to exceed $20.0 million; (11xi) the incurrence by Targa Resources Partners or any of its Restricted the Partnership's Unrestricted Subsidiaries of Acquired Debt in connection with a transaction meeting either one of the financial tests set forth in clause (4) under Section 5.01(a); (12) the issuance by any of Targa Resources Partners’ Restricted Subsidiaries to Targa Resources Partners or to any of its Restricted Subsidiaries of any Disqualified EquityNon-Recourse Debt; provided, however, that: (A) any subsequent issuance or transfer of Equity Interests that results in if any such Disqualified Equity being held Indebtedness ceases to be Non-Recourse Debt of an Unrestricted Subsidiary, such event shall be deemed to constitute an incurrence of Indebtedness by a Person other than Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners; and (B) any sale or other transfer of any such Disqualified Equity to a Person that is not either Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners will be deemed, in each case, to constitute an issuance of such Disqualified Equity by such Restricted Subsidiary the Partnership that was not permitted by this clause (12xi); (xii) the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on Disqualified Equity, in the form of additional shares of the same class of Disqualified Equity, provided, in each such case, that the amount thereof is included in Fixed Charges of the Partnership as so accrued, accredited or amortized; and (13xiii) Indebtedness incurred by the incurrence by Targa Resources Partners Partnership or any of its Restricted Subsidiaries arising from agreements or their respective bylaws providing for indemnification, adjustment of additional Indebtedness; provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause purchase price or similar obligations. (13c) and then outstanding does not exceed the greater of (a) $150.0 million and (b) 7.5% of Targa Resources Partners’ Consolidated Net Tangible Assets. Targa Resources Partners shall not incur, and shall not permit Finance Corp. or any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of Targa Resources Partners, Finance Corp. or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness of a Person shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of such Person solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. For purposes of determining compliance with this Section 4.09, if in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses paragraphs (1b)(i) through (13b)(xiii) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof), Targa Resources Partners will the Partnership shall be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, incurrence in any manner that complies with this Section 4.09. An item of Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued may be divided and authenticated under this Indenture will initially be deemed to have been incurred on such date classified in reliance on the exception provided by clause (1) one or more of the definition types of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares of the same class of Disqualified Equity will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section 4.09; provided, however, in each such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges of Targa Resources Partners as accrued. Notwithstanding any other provision of this Section 4.09, (i) the maximum amount of Indebtedness that Targa Resources Partners or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. Further, the accounting reclassification of any obligation of Targa Resources Partners or any of its Restricted Subsidiaries as Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09Indebtedness.

Appears in 1 contract

Samples: Indenture (Gulfterra Energy Partners L P)

Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources Partners shall The Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and Targa Resources Partners the Company will not issue any Disqualified Equity and will not permit any of its Restricted Subsidiaries to issue any Disqualified Equity; provided, however, that Targa Resources Partners the Company and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) and Targa Resources Partners the Company and the Restricted Subsidiaries may issue Disqualified Equity, if 45 the Fixed Charge Coverage Ratio for Targa Resources Partners’ the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter period. (b) . The provisions first paragraph of Section 4.09(a) hereof shall this ‎Section 4.09 will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Equity described in clause (ii11), (12) or (16) below: (1) the incurrence by Targa Resources Partners the Company and any Restricted Subsidiary of additional Indebtedness (including letters of credit) under Credit Facilities, provided that, after giving effect to such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Targa Resources Partners the Company and its Restricted Subsidiaries thereunder) and then outstanding does not exceed the greater of (a) $2,000.0 800.0 million and (b) the sum of $1.5 billion 600.0 million and 2025.0% of Targa Resources Partners’ Consolidated Net Tangible Assets; (2) the incurrence by Targa Resources Partners the Company and its Restricted Subsidiaries of the Existing Indebtedness; (3) the incurrence by Targa Resources Partnersthe Company, Finance Corp. and the Guarantors of Indebtedness represented by the Notes and the related Note Subsidiary Guarantees to be issued on the date of this Indenture Issue Date and any the Exchange Notes and the related Note Subsidiary Guarantees that may to be issued pursuant to a Registration Rights Agreement; (4) the incurrence by Targa Resources Partners the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, Attributable Debt, mortgage financings or purchase money obligationsobligations (including any Acquired Debt), in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction design, development, construction, installation or improvement of propertyproperty (real or personal and including Capital Stock), plant or equipment used in the business of Targa Resources Partners the Company or any of its Restricted SubsidiariesSubsidiaries (in each case, whether through the direct purchase of such assets or the Equity Interests of any Person owning such assets), including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), provided that after giving effect to such incurrence incurrence, the aggregate principal amount of all Indebtedness incurred pursuant to this clause (4) and then outstanding does not exceed the greater of (a) $50.0 35.0 million and (b) 4.010.0% of Targa Resources Partners’ Consolidated Net Tangible Assets; (5) the incurrence by Targa Resources Partners the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge discharge, any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.09(a) hereof the first paragraph of this ‎Section 4.09 or clause (2), (3) or (311) of this Section 4.09(b) paragraph or this clause (5); (6) the incurrence by Targa Resources Partners the Company or any of its Restricted Subsidiaries of any Permitted Receivables Financing liability in an respect of the Indebtedness of any Unrestricted Subsidiary of the Company or any Joint Venture but only to the extent that such liability (x) is the result of the Company’s or any such Restricted Subsidiary’s being a general partner of such Unrestricted Subsidiary or Joint Venture and not as guarantor of such Indebtedness and provided that, after giving effect to any such incurrence, the aggregate principal amount at any time of all Indebtedness incurred under this subclause (x) and then outstanding does not to exceed $400.0 million25.0 million or (y) consists of Liens permitted pursuant to clause (10) of the definition of “Permitted Liens” and any guarantee given solely to support such Liens, which guarantee is not recourse to the Company or any Restricted Subsidiary; (7) the incurrence by Targa Resources Partners the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources Partners the Company and any of its Restricted Subsidiaries; provided, however, that: (A) if Targa Resources Partners the Company or any Guarantor is the obligor on such Indebtedness and the payee is not Targa Resources Partners the Company or a Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of Targa Resources Partnersthe Company, or the Note Subsidiary Guarantee, in the case of a Guarantor, ; and (B) (1i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Targa Resources Partners the Company or a Restricted Subsidiary of Targa Resources Partners the Company and (2ii) any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources Partners the Company or a Restricted Subsidiary of Targa Resources Partnersthe Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources Partners the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (7); (8) the incurrence by Targa Resources Partners the Company or any of its Restricted Subsidiaries of Hedging Obligations; (9) the guarantee by Targa Resources Partners the Company or any of its Restricted Subsidiaries of Indebtedness of Targa Resources Partners the Company or a Restricted Subsidiary of Targa Resources Partners the Company that was permitted to be incurred by another provision of this Section ‎Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed; (10) the incurrence by Targa Resources Partners the Company or any of its Restricted Subsidiaries of obligations relating to net gas Hydrocarbon balancing positions arising in the ordinary course of business and consistent with past practice; (11) the incurrence or issuance by Targa Resources Partners the Company or any of its Restricted Subsidiaries of (i) Indebtedness or Disqualified Equity of the Company or a Restricted Subsidiary incurred to finance an acquisition and (ii) Acquired Debt in connection with Debt; provided, that after giving effect to such transaction on a transaction meeting pro forma basis, the Company meets either one of the financial tests set forth in clause (4) under Section of ‎Section 5.01(a); (12) the issuance by any of Targa Resources Partners’ the Company’s Restricted Subsidiaries to Targa Resources Partners the Company or to any of its Restricted Subsidiaries of any Disqualified Equity; provided, however, that: (A) any subsequent issuance or transfer of Equity Interests that results in any such Disqualified Equity being held by a Person other than Targa Resources Partners the Company or a Restricted Subsidiary of Targa Resources Partnersthe Company; and (B) any sale or other transfer of any such Disqualified Equity to a Person that is not either Targa Resources Partners the Company or a Restricted Subsidiary of Targa Resources Partners the Company will be deemed, in each case, to constitute an issuance of such Disqualified Equity by such Restricted Subsidiary that was not permitted by this clause (12); and; (13) the incurrence by Targa Resources Partners the Company of Indebtedness in the ordinary course of business under documentary letters of credit, which are to be repaid or terminated in full not more than one year after the date on which such Indebtedness was originally incurred to finance the purchase of goods by the Company or any of its Restricted Subsidiaries; (14) the incurrence of Indebtedness of the Company or any of its Restricted Subsidiaries consisting of the financing of insurance premiums; (15) the incurrence by the Company or any of its Restricted Subsidiaries of obligations in respect of Treasury Management Arrangements; and (16) the incurrence by the Company or any of its Restricted Subsidiaries of additional IndebtednessIndebtedness or the issuance by the Company or any of its Restricted Subsidiaries of Disqualified Equity; provided that, after giving effect to any such incurrenceincurrence or issuance, the aggregate principal amount of all Indebtedness incurred and Disqualified Equity issued under this clause (1316) and then outstanding does not exceed the greater of (a) $150.0 50.0 million and (b) 7.510.0% of Targa Resources Partners’ Consolidated Net Tangible Assets. Targa Resources Partners shall not incur, and shall not permit Finance Corp. or any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of Targa Resources Partners, Finance Corp. or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness of a Person shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of such Person solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. For purposes of determining compliance with this Section ‎Section 4.09, if an item of proposed Indebtedness or Disqualified Equity meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (1316) above, or is entitled to be incurred pursuant to Section 4.09(a) hereofthe first paragraph of this ‎Section 4.09, Targa Resources Partners the Company will be permitted to classify such item of Indebtedness or Disqualified Equity on the date of its incurrenceincurrence or issuance, or later reclassify all or a portion of such item of IndebtednessIndebtedness or Disqualified Equity, in any manner that complies with this Section ‎Section 4.09. Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture Indenture, after giving effect to the application of the proceeds of the offering of the Initial Notes, will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares shares, units or the like of the same class of Disqualified Equity will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section ‎Section 4.09; provided, however, in each such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges of Targa Resources Partners as accruedthe Company to the extent required by the definition of that term. Notwithstanding any other provision of this Section ‎Section 4.09, (i) the maximum amount of Indebtedness that Targa Resources Partners the Company or any Restricted Subsidiary may incur pursuant to this Section ‎Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. Further, the accounting reclassification of any obligation of Targa Resources Partners the Company or any of its Restricted Subsidiaries as Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section ‎Section 4.09. For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed, in the case of revolving credit debt; 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 (i) the principal amount of such Indebtedness being refinanced plus (ii) the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses incurred in connection with such refinancing. The principal amount of any Indebtedness incurred to refinance other Indebtedness, if incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Indebtedness is denominated that is in effect on the date of such refinancing.

Appears in 1 contract

Samples: Indenture (Delek Logistics Partners, LP)

Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources TransMontaigne Partners shall will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and Targa Resources TransMontaigne Partners will not issue any Disqualified Equity and will not permit any of its Restricted Subsidiaries to issue any Disqualified Equity; provided, however, that Targa Resources TransMontaigne Partners and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) and Targa Resources TransMontaigne Partners and the Restricted Subsidiaries may issue Disqualified Equity, if the Fixed Charge Coverage Ratio for Targa Resources the TransMontaigne Partners’ most recently ended four full fiscal quarters for which internal financial statements are available Reference Period immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter periodReference Period. (b) The provisions of Section 4.09(a5.09(a) hereof shall will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Equity described in clause (ii) below:): (1) the incurrence by Targa Resources Partners TransMontaigne Partners, Finance Corp. and any Restricted Subsidiary Guarantor of additional Indebtedness (including and letters of credit) credit and the Guarantees thereof under Credit Facilities, provided that, after giving effect to such incurrence, the Facilities in an aggregate principal amount of all Indebtedness incurred at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Targa Resources TransMontaigne Partners and its Restricted Subsidiaries thereunder) and then outstanding does not to exceed the greater of (a) $2,000.0 million 1.0 billion and (b) the sum of $1.5 billion 750.0 million and 2030.0% of Targa Resources Partners’ Consolidated Net Tangible AssetsAssets (determined as of the date of incurrence and after giving effect to the use of proceeds therefrom); (2) the incurrence by Targa Resources Finance Corp., TransMontaigne Partners and its Restricted Subsidiaries of the Existing Indebtedness; (3) the incurrence by Targa Resources Partners, Finance Corp. the Issuers and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and any Exchange Notes and the related Note Guarantees that may be issued pursuant to a Registration Rights AgreementIssue Date; (4) the incurrence by Targa Resources TransMontaigne Partners or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of Targa Resources TransMontaigne Partners or any of its Restricted Subsidiaries, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), provided that after giving effect at any time outstanding not to such incurrence the aggregate principal amount of all Indebtedness incurred pursuant to this clause (4) and then outstanding does not exceed the greater of (a) $50.0 million and (b) 4.05.0% of Targa Resources Partners’ Consolidated Net Tangible AssetsAssets (determined as of the date of incurrence and after giving effect to the use of proceeds therefrom); (5) the incurrence by Targa Resources TransMontaigne Partners or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.09(a5.09(a) hereof or clause clauses (2), (3) or (39) of this Section 4.09(b5.09(b) or this clause (5); (6) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of any Permitted Receivables Financing in an aggregate principal amount at any time outstanding not to exceed $400.0 million; (7) the incurrence by Targa Resources TransMontaigne Partners or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources TransMontaigne Partners and any of its Restricted Subsidiaries; provided, however, that: (A) if Targa Resources TransMontaigne Partners or any Guarantor is the obligor on such Indebtedness and the payee is not Targa Resources TransMontaigne Partners or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of Targa Resources TransMontaigne Partners, or the Note Guarantee, in the case of a Guarantor, ; and (B) (1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Targa Resources TransMontaigne Partners or a Restricted Subsidiary of Targa Resources TransMontaigne Partners and (2) any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources TransMontaigne Partners or a Restricted Subsidiary of Targa Resources TransMontaigne Partners, will be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources TransMontaigne Partners or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (76); (8) 7) the incurrence by Targa Resources TransMontaigne Partners or any of its Restricted Subsidiaries of Hedging Obligations; (9) 8) the guarantee Guarantee by Targa Resources TransMontaigne Partners or any of its Restricted Subsidiaries of (a) Indebtedness of Targa Resources TransMontaigne Partners or a Restricted Subsidiary of Targa Resources TransMontaigne Partners that was permitted to be incurred by another provision of this Section 4.095.09 or (b) Indebtedness incurred by Joint Ventures, provided that such Guarantee constitutes a Permitted Investment; and provided further, in each case, that if the Indebtedness being guaranteed Guaranteed is subordinated to or pari passu with the NotesNotes or the Note Guarantees, then the Guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteedGuaranteed; (9) the incurrence by TransMontaigne Partners or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, health or other types of social security benefits, unemployment or other insurance or self-insurance obligations, insurance contracts, reclamation, statutory obligations, bankers’ acceptances, and performance, payment, appeal and surety bonds in the ordinary course of business, including Guarantees and obligations respecting standby letters of credit supporting such obligations, to the extent not drawn (in each case other than an obligation for money borrowed) and replacements of any of the foregoing; (10) the incurrence by Targa Resources TransMontaigne Partners or any of its Restricted Subsidiaries of obligations relating to net gas balancing positions arising in the ordinary course of business and consistent with past practicePermitted Acquisition Indebtedness; (11) the incurrence issuance by Targa Resources TransMontaigne Partners or any of its Restricted Subsidiaries of Acquired Debt in connection with a transaction meeting either one of the financial tests set forth in clause (4) under Section 5.01(a); (12) the issuance by any of Targa Resources Partners’ Restricted Subsidiaries Disqualified Equity to Targa Resources TransMontaigne Partners or to any of its Restricted Subsidiaries of any Disqualified EquitySubsidiaries, as the case may be; provided, however, that: (A) any subsequent issuance or transfer of Equity Interests of a Restricted Subsidiary that results in any such Disqualified Equity being held held, directly or indirectly, by a Person other than Targa Resources TransMontaigne Partners or a Restricted Subsidiary of Targa Resources TransMontaigne Partners; and (B) any sale or other transfer of any such Disqualified Equity to a Person that is not either Targa Resources TransMontaigne Partners or a Restricted Subsidiary of Targa Resources Partners TransMontaigne Partners; will be deemed, in each case, to constitute an issuance of such Disqualified Equity by TransMontaigne Partners or such Restricted Subsidiary that was not permitted by this clause (11): (12)) the incurrence by TransMontaigne Partners of Indebtedness in the ordinary course of business under documentary letters of credit which are to be repaid in full not more than one year after the date on which such Indebtedness was originally incurred to finance the purchase of goods by TransMontaigne Partners or any of its Restricted Subsidiaries; and (13) the incurrence by Targa Resources TransMontaigne Partners or any of its Restricted Subsidiaries of additional Indebtedness; provided that, after giving effect to any such incurrence, the Indebtedness in an aggregate principal amount of all Indebtedness incurred under this clause (13) and then at any time outstanding does not to exceed the greater of (a) $150.0 50.0 million and (b) 7.55.0 % of Targa Resources Partners’ Consolidated Net Tangible AssetsAssets (determined as of the date of incurrence and after giving effect to the use of proceeds therefrom). Targa Resources TransMontaigne Partners shall will not incur, and shall will not permit Finance Corp. or any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of Targa Resources TransMontaigne Partners, Finance Corp. or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness of a Person shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of TransMontaigne Partners, Finance Corp. or any such Person Guarantor solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. For purposes of determining compliance with this Section 4.095.09, if in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (13) above, or is entitled to be incurred pursuant to Section 4.09(a5.09(a) hereof, Targa Resources TransMontaigne Partners will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.095.09. Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares or units of the same class of Disqualified Equity will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section 4.095.09; provided, however, in each such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges of Targa Resources TransMontaigne Partners as accruedaccrued to the extent required by the definition of such term. Notwithstanding any other provision of this Section 4.095.09, (i) the maximum amount of Indebtedness that Targa Resources TransMontaigne Partners or any Restricted Subsidiary may incur pursuant to this Section 4.09 5.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. FurtherThe amount of any Indebtedness outstanding as of any date will be: (1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount; (2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and (3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the accounting reclassification lesser of: (A) the Fair Market Value of such assets at the date of determination; and (B) the amount of the Indebtedness of the other Person. For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed, in the case of revolving credit debt; 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 (i) the principal amount of such Indebtedness being refinanced plus (ii) the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses incurred in connection with such refinancing. The principal amount of any obligation Indebtedness incurred to refinance other Indebtedness, if incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Indebtedness is denominated that is in effect on the date of Targa Resources Partners or any of its Restricted Subsidiaries as Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09such refinancing.

Appears in 1 contract

Samples: First Supplemental Indenture (TransMontaigne Partners L.P.)

Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources Partners shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and Targa Resources Partners will not issue any Disqualified Equity and will not permit any of its Restricted Subsidiaries to issue any Disqualified Equity; provided, however, that Targa Resources Partners and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) and Targa Resources Partners and the Restricted Subsidiaries may issue Disqualified Equity, if the Fixed Charge Coverage Ratio for Targa Resources Partners’ most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter period. (b) The provisions of Section 4.09(a) hereof shall not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Equity described in clause (ii) below: (1) the incurrence by Targa Resources Partners and any Restricted Subsidiary of additional Indebtedness (including letters of credit) under Credit Facilities, provided that, after giving effect to such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Targa Resources Partners and its Restricted Subsidiaries thereunder) and then outstanding does not exceed the greater of (a) $2,000.0 1,000.0 million and (b) the sum of $1.5 billion 750.0 million and 20% of Targa Resources Partners’ Consolidated Net Tangible Assets; (2) the incurrence by Targa Resources Partners and its Restricted Subsidiaries of the Existing Indebtedness; (3) the incurrence by Targa Resources Partners, Finance Corp. and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and any Exchange Notes and the related Note Guarantees that may be issued pursuant to a Registration Rights Agreement; (4) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of Targa Resources Partners or any of its Restricted Subsidiaries, including all Permitted Refinancing Ref (5) nancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), provided that after giving effect to such incurrence the aggregate principal amount of all Indebtedness incurred pursuant to this clause (4) and then outstanding does not exceed the greater of (a) $50.0 million and (b) 4.0% of Targa Resources Partners’ Consolidated Net Tangible Assets; (56) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clause (2) or (3) of this Section 4.09(b) or this clause (5); (6) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of any Permitted Receivables Financing in an aggregate principal amount at any time outstanding not to exceed $400.0 million; (7) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources Partners and any of its Restricted Subsidiaries; provided, however, that: (A) if Targa Resources Partners or any Guarantor is the obligor on such Indebtedness and the payee is not Targa Resources Partners or a Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of Targa Resources Partners, or the Note Guarantee, in the case of a Guarantor, and (B) (1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners and (2) any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners, will be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources Partners or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (76); (8) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of Hedging Obligations; (9) the guarantee by Targa Resources Partners or any of its Restricted Subsidiaries of Indebtedness of Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners that was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed; (10) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of obligations relating to net gas balancing positions arising in the ordinary course of business and consistent with past practice; (11) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of Acquired Debt in connection with a transaction meeting either one of the financial tests set forth in clause (4) under Section 5.01(a); (12) the issuance by any of Targa Resources Partners’ Restricted Subsidiaries to Targa Resources Partners or to any of its Restricted Subsidiaries of any Disqualified Equity; provided, however, that: (A13) any subsequent issuance or transfer of Equity Interests that results in any such Disqualified Equity being held by a Person other than Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners; and (BA) any sale or other transfer of any such Disqualified Equity to a Person that is not either Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners will be deemed, in each case, to constitute an issuance of such Disqualified Equity by such Restricted Subsidiary that was not permitted by this clause (1211); and (1314) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of additional Indebtedness; provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (1312) and then outstanding does not exceed the greater of (a) $150.0 50.0 million and (b) 7.54.0% of Targa Resources Partners’ Consolidated Net Tangible Assets. Targa Resources Partners shall not incur, and shall not permit Finance Corp. or any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of Targa Resources Partners, Finance Corp. or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness of a Person shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of such Person solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. For purposes of determining compliance with this Section 4.09, if an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (1312) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, Targa Resources Partners will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares of the same class of Disqualified Equity will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section 4.09; provided, however, in each such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges of Targa Resources Partners as accrued. Notwithstanding any other provision of this Section 4.09, (i) the maximum amount of Indebtedness that Targa Resources Partners or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. Further, the accounting reclassification of any obligation of Targa Resources Partners or any of its Restricted Subsidiaries as Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09.

Appears in 1 contract

Samples: Indenture (Targa Resources, Inc.)

Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources Partners The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and Targa Resources Partners will the Company shall not issue any Disqualified Equity and will shall not permit any of its Restricted Subsidiaries to issue any Disqualified Equity; provided, however, provided that Targa Resources Partners the Company and any the Restricted Subsidiary Subsidiaries may incur Indebtedness (including Acquired Debt) ), and Targa Resources Partners the Company and the Restricted Subsidiaries may issue Disqualified Equity, if the Fixed Charge Coverage Ratio for Targa Resources Partners’ the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, issued would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred incurred, or the Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter period. (b) The provisions of So long as no Default shall have occurred and be continuing or would be caused thereby, Section 4.09(a) hereof shall will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Equity described in clause (ii) below:): (1i) the incurrence by Targa Resources Partners the Company and any Restricted Subsidiary Guarantor of additional Indebtedness (including letters of credit) under Credit Facilities, Facilities and the guarantees thereof; provided that, after giving effect to such incurrence, that the aggregate principal amount of all Indebtedness incurred under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Targa Resources Partners Company and its the Restricted Subsidiaries thereunderincurred pursuant to this Section 4.09(b)(i) and then outstanding under all Credit Facilities after giving effect to such incurrence does not exceed the greater of (a) $2,000.0 million and 1.2 billion or (b) the sum of $1.5 billion and 875.0 million plus 20% of Targa Resources Partners’ the Consolidated Net Tangible AssetsAssets of the Company; (2ii) the incurrence by Targa Resources Partners the Company and its Restricted Subsidiaries of Existing Indebtedness (other than under the Existing IndebtednessCredit Agreement); (3iii) the incurrence by Targa Resources Partners, Finance Corp. the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued and sold in this offering on the date of this Indenture Issue Date and any the Exchange Notes and the related Note Guarantees that may to be issued pursuant to a the Registration Rights Agreement; (4iv) the incurrence by Targa Resources Partners the Company or any of its Restricted Subsidiaries Subsidiary Guarantor of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of Targa Resources Partners the Company or any of its such Restricted SubsidiariesSubsidiary, in an aggregate principal amount including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), provided that after giving effect Section 4.09(b)(iv) not to such incurrence the aggregate principal amount of all Indebtedness incurred pursuant to this clause (4) and then outstanding does not exceed the greater of (a) $50.0 40.0 million and at any time outstanding or (b) 4.02.5% of Targa Resources Partners’ the Consolidated Net Tangible AssetsAssets of the Company; (5v) the incurrence by Targa Resources Partners the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any discharge, Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clause (24.09(b)(ii) or (3) of this Section 4.09(biii) or this clause (5Section 4.09(b)(v); (6vi) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of any Permitted Receivables Financing in an aggregate principal amount at any time outstanding not to exceed $400.0 million; (7) the incurrence by Targa Resources Partners Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources Partners the Company and any of its Restricted Subsidiaries; provided, however, provided that: (A) if Targa Resources Partners or any Guarantor the Company is the obligor on such Indebtedness and the payee a Subsidiary Guarantor is not Targa Resources Partners or a Guarantorthe obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, or if a Subsidiary Guarantor is the obligor on such Indebtedness and neither the Company nor another Subsidiary Guarantor is the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the case Guarantee of Targa Resources Partners, or the Note Guarantee, in the case of a such Subsidiary Guarantor, ; and (B) (1i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Targa Resources Partners the Company or a Restricted Subsidiary of Targa Resources Partners thereof and (2ii) any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources Partners the Company or a Restricted Subsidiary of Targa Resources Partnersthereof, will shall be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources Partners the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (7Section 4.09(b)(vi); (8) vii) the incurrence by Targa Resources Partners the Company or any of its Restricted Subsidiaries of Hedging Obligations; (9viii) the guarantee by Targa Resources Partners the Company or any of its Restricted Subsidiaries of Indebtedness of Targa Resources Partners the Company or a any of its Restricted Subsidiary of Targa Resources Partners Subsidiaries that was permitted to be incurred by another provision of this Section 4.09; provided that if in the event such Indebtedness that is being guaranteed is subordinated to Subordinated Indebtedness or pari passu with the NotesGuarantor Subordinated Indebtedness, then the Guarantee guarantee shall be subordinated in right of payment to the Notes or pari passuthe Guarantee, as applicable, to the same extent as the Indebtedness guaranteedcase may be; (10ix) the incurrence by Targa Resources Partners the Company or any Subsidiary Guarantor of its Restricted Subsidiaries of obligations relating to net gas balancing positions arising in the ordinary course of business and consistent with past practice; (11) the incurrence by Targa Resources Partners additional Indebtedness or any of its Restricted Subsidiaries of Acquired Debt in connection with a transaction meeting either one of the financial tests set forth in clause (4) under Section 5.01(a); (12) the issuance by any of Targa Resources Partners’ Restricted Subsidiaries to Targa Resources Partners or to any of its Restricted Subsidiaries of any Disqualified Equity; provided, however, that: (A) any subsequent issuance or transfer of Equity Interests that results in any such Disqualified Equity being held by a Person other than Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners; and (B) any sale or other transfer of any such Disqualified Equity to a Person that is not either Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners will be deemed, in each case, to constitute an issuance of such Disqualified Equity by such Restricted Subsidiary that was not permitted by this clause (12); and (13) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of additional Indebtedness; provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (13) and then at any time outstanding does not to exceed the greater of (a) $150.0 50.0 million and at any time outstanding or (b) 7.53.0% of Targa Resources Partners’ the Consolidated Net Tangible Assets. Targa Resources Partners shall not incur, and shall not permit Finance Corp. Assets of the Company; and (x) the incurrence by the Company or any Guarantor to incur, any of its Restricted Subsidiaries of Indebtedness (including Permitted Debt) that is contractually subordinated in right arising from Guarantees of payment to any other Indebtedness of Targa Resources Partners, Finance Corp. Joint Ventures at any time outstanding not to exceed the greater of $15.0 million or such Guarantor unless such Indebtedness is also contractually subordinated in right 1.0% of payment to the Notes and Consolidated Net Tangible Assets of the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness of a Person shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of such Person solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. Company. (c) For purposes of determining compliance with this Section 4.09, if in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1Sections 4.09(b)(i) through (13) abovex), or is entitled to be incurred pursuant to Section 4.09(a) hereof), Targa Resources Partners the Company will be permitted to classify (or later reclassify in whole or in part) such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. An item of Indebtedness may be divided and classified in one or more of the types of Permitted Indebtedness. Any outstanding Indebtedness under the Credit Facilities outstanding on the date on which Notes are first issued Issue Date shall be considered incurred under Section 4.09(b)(i) and authenticated under this Indenture will initially may not be deemed to have been incurred on such date in reliance on the exception provided by clause reclassified. (1d) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares of the same class of Disqualified Equity will shall not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section 4.09; provided, however, in each such case, that the amount of any such accrual, accretion or payment thereof is included in Fixed Charges of Targa Resources Partners the Company as accrued. . (e) Notwithstanding any other provision of this Section 4.09, (i) the maximum amount of Indebtedness or Disqualified Equity that Targa Resources Partners 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 the fluctuations in exchange rates or currency values. Further, the accounting reclassification of any obligation of Targa Resources Partners or any of its Restricted Subsidiaries as Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09.

Appears in 1 contract

Samples: Second Supplemental Indenture (Penn Virginia Resource Partners L P)

Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources Xxxxx Energy Partners shall will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and Targa Resources Xxxxx Energy Partners will not issue any Disqualified Equity and will not permit any of its Restricted Subsidiaries to issue any Disqualified Equity; provided, however, that Targa Resources Xxxxx Energy Partners and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) and Targa Resources Xxxxx Energy Partners and the Restricted Subsidiaries may issue Disqualified Equity, if the Fixed Charge Coverage Ratio for Targa Resources the Xxxxx Energy Partners’ most recently ended four full fiscal quarters for which internal financial statements are available Reference Period immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, would have been at least 2.0 2.00 to 1.01.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter periodReference Period. (b) The provisions of Section 4.09(a) hereof shall will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Equity described in clause (ii) below:): (1) the incurrence by Targa Resources Partners Xxxxx Energy Partners, Finance Corp. and any Restricted Subsidiary Guarantor of additional Indebtedness (including and letters of credit) credit and the guarantees thereof under Credit Facilities, provided that, after giving effect to such incurrence, the Facilities in an aggregate principal amount of all Indebtedness incurred at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Targa Resources Xxxxx Energy Partners and its Restricted Subsidiaries thereunder) and then outstanding does not to exceed the greater of (a) $2,000.0 million 1.2 billion and (b) the sum of $1.5 billion 850.0 million and 2030% of Targa Resources Partners’ Consolidated Net Tangible AssetsAssets (determined as of the date of incurrence and after giving effect to the use of proceeds therefrom); (2) the incurrence by Targa Resources Finance Corp., Xxxxx Energy Partners and its Restricted Subsidiaries of the Existing Indebtedness; (3) the incurrence by Targa Resources Partners, Finance Corp. the Issuers and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and any Exchange Notes and the related Note Guarantees that may be issued pursuant to a Registration Rights AgreementIssue Date; (4) the incurrence by Targa Resources Xxxxx Energy Partners or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of Targa Resources Xxxxx Energy Partners or any of its Restricted Subsidiaries, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), provided that after giving effect at any time outstanding not to such incurrence the aggregate principal amount of all Indebtedness incurred pursuant to this clause (4) and then outstanding does not exceed the greater of (a) $50.0 75.0 million and (b) 4.05.0% of Targa Resources Partners’ Consolidated Net Tangible AssetsAssets (determined as of the date of incurrence and after giving effect to the use of proceeds therefrom); (5) the incurrence by Targa Resources Xxxxx Energy Partners or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clause clauses (2), (3), (4) or (310) of this Section 4.09(b) or this clause (5); (6) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of any Permitted Receivables Financing in an aggregate principal amount at any time outstanding not to exceed $400.0 million; (7) the incurrence by Targa Resources Xxxxx Energy Partners or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources Xxxxx Energy Partners and any of its Restricted Subsidiaries; provided, however, that: (A) if Targa Resources Xxxxx Energy Partners or any Guarantor is the obligor on such Indebtedness and the payee is not Targa Resources Xxxxx Energy Partners or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of Targa Resources Xxxxx Energy Partners, or the Note Guarantee, in the case of a Guarantor, ; and (B) (1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Targa Resources Xxxxx Energy Partners or a Restricted Subsidiary of Targa Resources Xxxxx Energy Partners and (2) any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources Xxxxx Energy Partners or a Restricted Subsidiary of Targa Resources Xxxxx Energy Partners, will be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources Xxxxx Energy Partners or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (76); (8) 7) the incurrence by Targa Resources Xxxxx Energy Partners or any of its Restricted Subsidiaries of Hedging Obligations; (9) 8) the guarantee Guarantee by Targa Resources Partners Xxxxx Energy Partners, or any of its Restricted Subsidiaries the Guarantors of (a) Indebtedness of Targa Resources Partners Xxxxx Energy Partners, or a Restricted Subsidiary of Targa Resources Xxxxx Energy Partners that was permitted to be incurred by another provision of this Section 4.094.09 or (b) Indebtedness incurred by Joint Ventures, provided that such Guarantee constitutes a Permitted Investment; and provided further, in each case, that if the Indebtedness being guaranteed Guaranteed is subordinated to or pari passu with the NotesNotes or the Note Guarantees, then the Guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteedGuaranteed; (9) the incurrence by Xxxxx Energy Partners or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, health or other types of social security benefits, unemployment or other insurance or self-insurance obligations, insurance contracts, reclamation, statutory obligations, bankers’ acceptances, and performance, payment, appeal and surety bonds in the ordinary course of business, including Guarantees and obligations respecting standby letters of credit supporting such obligations, to the extent not drawn (in each case other than an obligation for money borrowed) and replacements of any of the foregoing; (10) the incurrence by Targa Resources Xxxxx Energy Partners or any of its Restricted Subsidiaries of obligations relating to net gas balancing positions arising in the ordinary course of business and consistent with past practicePermitted Acquisition Indebtedness; (11) the incurrence issuance by Targa Resources Xxxxx Energy Partners or any of its Restricted Subsidiaries of Acquired Debt in connection with a transaction meeting either one of the financial tests set forth in clause (4) under Section 5.01(a); (12) the issuance by any of Targa Resources Partners’ Restricted Subsidiaries Disqualified Equity to Targa Resources Xxxxx Energy Partners or to any of its Restricted Subsidiaries of any Disqualified EquitySubsidiaries, as the case may be; provided, however, that: (A) any subsequent issuance or transfer of Equity Interests of a Restricted Subsidiary that results in any such Disqualified Equity being held held, directly or indirectly, by a Person other than Targa Resources Xxxxx Energy Partners or a Restricted Subsidiary of Targa Resources Xxxxx Energy Partners; and (B) any sale or other transfer of any such Disqualified Equity to a Person that is not either Targa Resources Xxxxx Energy Partners or a Restricted Subsidiary of Targa Resources Partners Xxxxx Energy Partners; will be deemed, in each case, to constitute an issuance of such Disqualified Equity by Xxxxx Energy Partners or such Restricted Subsidiary that was not permitted by this clause clause: (12)) the incurrence by Xxxxx Energy Partners or any of its Restricted Subsidiaries of Indebtedness in the ordinary course of business under documentary letters of credit which are to be repaid in full not more than one year after the date on which such Indebtedness was originally incurred to finance the purchase of goods by Xxxxx Energy Partners or any of its Restricted Subsidiaries; and (13) the incurrence by Targa Resources Xxxxx Energy Partners or any of its Restricted Subsidiaries of additional Indebtedness; provided that, after giving effect to any such incurrence, the Indebtedness in an aggregate principal amount of all Indebtedness incurred under this clause (13) and then outstanding does at any time outstanding, not to exceed the greater of (a) $150.0 75.0 million and (b) 7.55.0 % of Targa Resources Partners’ Consolidated Net Tangible AssetsAssets (determined as of the date of incurrence and after giving effect to the use of proceeds therefrom). Targa Resources Xxxxx Energy Partners shall will not incur, and shall will not permit Finance Corp. or any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of Targa Resources Xxxxx Energy Partners, Finance Corp. or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness of a Person shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of Xxxxx Energy Partners, Finance Corp. or any such Person Guarantor solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. For purposes of determining compliance with this Section 4.09, if in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (13) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, Targa Resources Xxxxx Energy Partners will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares or units of the same class of Disqualified Equity will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section 4.09; provided, however, in each such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges of Targa Resources Xxxxx Energy Partners as accruedaccrued to the extent required by the definition of such term. Notwithstanding any other provision of this Section 4.09, (i) the maximum amount of Indebtedness that Targa Resources Xxxxx Energy Partners or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. FurtherThe amount of any Indebtedness outstanding as of any date will be: (1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount; (2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and (3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the accounting reclassification lesser of: (A) the Fair Market Value of such assets at the date of determination; and (B) the amount of the Indebtedness of the other Person. For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed, in the case of revolving credit debt; 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 (i) the principal amount of such Indebtedness being refinanced plus (ii) the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses incurred in connection with such refinancing. The principal amount of any obligation Indebtedness incurred to refinance other Indebtedness, if incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Indebtedness is denominated that is in effect on the date of Targa Resources Partners or any of its Restricted Subsidiaries as Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09such refinancing.

Appears in 1 contract

Samples: Indenture (Holly Energy Partners Lp)

Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources Regency Energy Partners shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and Targa Resources Regency Energy Partners will shall not issue any Disqualified Equity and will shall not permit any of its Restricted Subsidiaries to issue any Disqualified Equity; provided, however, that Targa Resources Regency Energy Partners and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) and Targa Resources Regency Energy Partners and the Restricted Subsidiaries may issue Disqualified Equity, if the Fixed Charge Coverage Ratio for Targa Resources Regency Energy Partners’ most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter period. (b) The provisions of Section 4.09(a) hereof shall not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Equity preferred securities described in clause (ii11) below: (1) the incurrence by Targa Resources Regency Energy Partners and any Restricted Subsidiary of additional Indebtedness (including letters of credit) under one or more Credit Facilities, provided provided, that, after giving effect to such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Targa Resources Regency Energy Partners and its Restricted Subsidiaries thereunder) and then outstanding does not exceed the greater of (a) $2,000.0 1,500.0 million and (b) the sum of $1.5 billion 500.0 million and 2025.0% of Targa Resources Regency Energy Partners’ Consolidated Net Tangible Assets; (2) the incurrence by Targa Resources Regency Energy Partners and its Restricted Subsidiaries of the Existing Indebtedness; (3) the incurrence by Targa Resources Regency Energy Partners, Finance Corp. and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and any (including, for the avoidance of doubt, the Exchange Notes and the related Note Guarantees that may to be issued pursuant to a Registration Rights Agreement); (4) the incurrence by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), provided that after giving effect to such incurrence the aggregate principal amount of all Indebtedness incurred pursuant to this clause (4) and then outstanding does not exceed the greater of (a) $50.0 million and (b) 4.02.0% of Targa Resources Regency Energy Partners’ Consolidated Net Tangible Assets; (5) the incurrence by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clause clauses (2) or (3) of this Section 4.09(b) or this clause (5); (6) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of any Permitted Receivables Financing in an aggregate principal amount at any time outstanding not to exceed $400.0 million; (7) the incurrence by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources Regency Energy Partners and any of its Restricted Subsidiaries; provided, however, that: (A) if Targa Resources Regency Energy Partners or any Guarantor is the obligor on such Indebtedness and the payee is not Targa Resources Regency Energy Partners or a Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of Targa Resources Regency Energy Partners, or the Note Guarantee, in the case of a Guarantor, and (B) (1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Targa Resources Regency Energy Partners or a Restricted Subsidiary of Targa Resources Regency Energy Partners and (2) any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources Regency Energy Partners or a Restricted Subsidiary of Targa Resources Regency Energy Partners, will be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources Regency Energy Partners or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (76); (8) 7) the incurrence by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of Hedging Obligations; (9) 8) the guarantee by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of Indebtedness of Targa Resources Regency Energy Partners or a Restricted Subsidiary of Targa Resources Regency Energy Partners that was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed; (109) the incurrence by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of obligations relating to net gas balancing positions arising in the ordinary course of business and consistent with past practice; (1110) the incurrence by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of Acquired Debt in connection with a transaction meeting either one of the financial tests set forth in clause (4) under Section 5.01(a); (1211) the issuance by any of Targa Resources Regency Energy Partners’ Restricted Subsidiaries to Targa Resources Regency Energy Partners or to any of its Restricted Subsidiaries of any Disqualified Equitypreferred securities; provided, however, that: (Aa) any subsequent issuance or transfer of Equity Interests that results in any such Disqualified Equity preferred securities being held by a Person other than Targa Resources Regency Energy Partners or a Restricted Subsidiary of Targa Resources Regency Energy Partners; and (Bb) any sale or other transfer of any such Disqualified Equity preferred securities to a Person that is not either Targa Resources Regency Energy Partners or a Restricted Subsidiary of Targa Resources Partners Regency Energy Partners; will be deemed, in each case, to constitute an issuance of such Disqualified Equity preferred securities by such Restricted Subsidiary that was not permitted by this clause (11); (12)) the incurrence by Regency Energy Partners or any of its Restricted Subsidiaries of liability in respect of the Indebtedness of any Unrestricted Subsidiary of Regency Energy Partners or any Joint Venture but only to the extent that such liability is the result of Regency Energy Partners’ or any such Restricted Subsidiary’s being a general partner of such Unrestricted Subsidiary or Joint Venture and not as guarantor of such Indebtedness and provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (12) and then outstanding does not exceed $50.0 million; and (13) the incurrence by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of additional Indebtedness; provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (13) and then outstanding does not exceed the greater of (a) $150.0 100.0 million and (b) 7.55.0% of Targa Resources Regency Energy Partners’ Consolidated Net Tangible Assets. Targa Resources Regency Energy Partners shall not incur, and shall not permit Finance Corp. or any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of Targa Resources Regency Energy Partners, Finance Corp. or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness of a Person shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of such Person solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. For purposes of determining compliance with this Section 4.09, if an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (13) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, Targa Resources Regency Energy Partners will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares of the same class of Disqualified Equity will shall not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section 4.09; provided, however, in each such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges of Targa Resources Regency Energy Partners as accrued. Notwithstanding any other provision of this Section 4.09, (i) the maximum amount of Indebtedness that Targa Resources Regency Energy Partners or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. Further, the accounting reclassification of any obligation of Targa Resources Partners or any of its Restricted Subsidiaries as Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09.

Appears in 1 contract

Samples: Indenture (Regency Energy Partners LP)

Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources Regency Energy Partners shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and Targa Resources Regency Energy Partners will not issue any Disqualified Equity and will not permit any of its Restricted Subsidiaries to issue any Disqualified Equity; provided, however, that Targa Resources Regency Energy Partners and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) and Targa Resources Regency Energy Partners and the Restricted Subsidiaries may issue Disqualified Equity, if the Fixed Charge Coverage Ratio for Targa Resources Regency Energy Partners’ most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter period. (b) The provisions of Section 4.09(a) hereof shall not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Equity preferred securities described in clause (ii11) below: (1) the incurrence by Targa Resources Regency Energy Partners and any Restricted Subsidiary of additional Indebtedness (including any letters of credit) under one or more Credit Facilities, provided provided, that, after giving effect to such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Targa Resources Regency Energy Partners and its Restricted Subsidiaries thereunder) and then outstanding does not exceed the greater of (a) $2,000.0 900.0 million and (b) the sum of $1.5 billion 500.0 million and 2020.0% of Targa Resources Regency Energy Partners’ Consolidated Net Tangible Assets; (2) the incurrence by Targa Resources Regency Energy Partners and its Restricted Subsidiaries of the Existing Indebtedness; (3) the incurrence by Targa Resources Regency Energy Partners, Finance Corp. and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and any Exchange Notes and the related Note Guarantees that may be issued pursuant to a Registration Rights AgreementIndenture; (4) the incurrence by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), provided that after giving effect to such incurrence the aggregate principal amount of all Indebtedness incurred pursuant to this clause (4) and then outstanding does not exceed the greater of (a) $50.0 20.0 million and (b) 4.02.0% of Targa Resources Regency Energy Partners’ Consolidated Net Tangible Assets; (5) the incurrence by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clause clauses (2) or (3) of this Section 4.09(b) or this clause (5); (6) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of any Permitted Receivables Financing in an aggregate principal amount at any time outstanding not to exceed $400.0 million; (7) the incurrence by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources Regency Energy Partners and any of its Restricted Subsidiaries; provided, however, that: (A) if Targa Resources Regency Energy Partners or any Guarantor is the obligor on such Indebtedness and the payee is not Targa Resources Regency Energy Partners or a Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of Targa Resources Regency Energy Partners, or the Note Guarantee, in the case of a Guarantor, and (B) (1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Targa Resources Regency Energy Partners or a Restricted Subsidiary of Targa Resources Regency Energy Partners and (2) any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources Regency Energy Partners or a Restricted Subsidiary of Targa Resources Regency Energy Partners, will be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources Regency Energy Partners or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (76); (8) 7) the incurrence by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of Hedging Obligations; (9) 8) the guarantee by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of Indebtedness of Targa Resources Regency Energy Partners or a Restricted Subsidiary of Targa Resources Regency Energy Partners that was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed; (109) the incurrence by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of obligations relating to net gas balancing positions arising in the ordinary course of business and consistent with past practice; (1110) the incurrence by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of Acquired Debt in connection with a transaction meeting either one of the financial tests set forth in clause (4) under Section 5.01(a)10.01(a) hereof; (1211) the issuance by any of Targa Resources Regency Energy Partners’ Restricted Subsidiaries to Targa Resources Regency Energy Partners or to any of its Restricted Subsidiaries of any Disqualified Equitypreferred securities; provided, however, that: (Aa) any subsequent issuance or transfer of Equity Interests that results in any such Disqualified Equity preferred securities being held by a Person other than Targa Resources Regency Energy Partners or a Restricted Subsidiary of Targa Resources Regency Energy Partners; and (Bb) any sale or other transfer of any such Disqualified Equity preferred securities to a Person that is not either Targa Resources Regency Energy Partners or a Restricted Subsidiary of Targa Resources Regency Energy Partners will be deemed, in each case, to constitute an issuance of such Disqualified Equity preferred securities by such Restricted Subsidiary that was not permitted by this clause (1211); and (1312) the incurrence by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of additional Indebtedness; provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (1312) and then outstanding does not exceed the greater of (a) $150.0 25.0 million and (b) 7.52.5% of Targa Resources Regency Energy Partners’ Consolidated Net Tangible Assets. Targa Resources Regency Energy Partners shall not incur, and shall not permit Finance Corp. or any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of Targa Resources Regency Energy Partners, Finance Corp. or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness of a Person shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of such Person solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. For purposes of determining compliance with this Section 4.09, if an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (1312) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, Targa Resources Regency Energy Partners will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares of the same class of Disqualified Equity will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section 4.09; provided, however, in each such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges of Targa Resources Regency Energy Partners as accrued. Notwithstanding any other provision of this Section 4.09, (i) the maximum amount of Indebtedness that Targa Resources Regency Energy Partners or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. Further, the accounting reclassification of any obligation of Targa Resources Partners or any of its Restricted Subsidiaries as Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09.

Appears in 1 contract

Samples: First Supplemental Indenture (Regency Energy Partners LP)

Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources Partners shall The Partnership will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and Targa Resources Partners the Partnership will not issue any Disqualified Equity and will not permit any of its Restricted Subsidiaries to issue any Disqualified Equityshares of Preferred Stock; provided, however, that Targa Resources Partners the Partnership and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) and Targa Resources Partners and ), the Restricted Subsidiaries Partnership may issue Disqualified Equity, and the Restricted Subsidiaries of the Partnership may issue Preferred Stock if the Fixed Charge Coverage Ratio for Targa Resources Partners’ the Partnership’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity or such Preferred Stock is issued, as the case may be, would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Equity or such Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period. (b) The provisions of restrictions in Section 4.09(a) hereof shall will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Equity described in clause (ii) below:): (1) the incurrence by Targa Resources Partners the Partnership and any Restricted Subsidiary of additional revolving credit Indebtedness (including and letters of credit) credit under Credit Facilities, provided that, after giving effect to such incurrence, the Facilities in an aggregate principal amount of all Indebtedness incurred at any one time outstanding under this clause (1Section 4.09(b)(1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Targa Resources Partners the Partnership and its Restricted Subsidiaries thereunder) and then outstanding does not to exceed the greater of (a) $2,000.0 300.0 million and (b) the sum of $1.5 billion and 20b)30.0% of Targa Resources Partners’ the Partnership’s Consolidated Net Tangible Assets; provided that (I) in the event the Partnership or any Restricted Subsidiary consummates an Asset Sale after the date of the indenture, subclause (a) of this Section 4.09(b)(1) shall be reduced by 30.0% of the Fair Market Value of the Net Proceeds and any non-cash consideration (other than any non-cash consideration described in Section 4.10(a)(2)(C) hereof) received from such Asset Sale (provided, that in the event the Partnership or any Restricted Subsidiary uses the Net Proceeds or non-cash consideration received from an Asset Sale for any of the uses set forth in Sections Section 4.10(b)(2) through Section 4.10(b)(4) hereof, subclause (a) of this Section 4.09(b)(1) hereof shall be increased by 30.0% of the purchase price thereof or capital expenditure therefor, as applicable, up to a maximum amount of $300.0 million) and (II) the foregoing reduction to subclause (a) of this Section 4.09(b)(1) hereof shall only apply to the amount by which the aggregate Fair Market Value of the Net Proceeds and non-cash consideration received from Asset Sales consummated since the date of the indenture exceeds $20.0 million; (2) the incurrence by Targa Resources Partners the Partnership and its Restricted Subsidiaries of the Existing Indebtedness; (3) the incurrence by Targa Resources Partners, Finance Corp. the Partnership and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and any Exchange Notes and the related Note Guarantees that may be issued pursuant to a Registration Rights AgreementIndenture; (4) the incurrence by Targa Resources Partners the Partnership or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction design, construction, installation or improvement of property, plant or equipment used in the business of Targa Resources Partners the Partnership or any of its Restricted Subsidiaries, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4Section 4.09(b)(4), ; provided that after giving effect to such incurrence the aggregate principal amount of all Indebtedness incurred pursuant to this clause (4Section 4.09(b)(4) and then outstanding does not exceed the greater of (a) $50.0 35.0 million and (b) 4.03.5% of Targa Resources Partners’ the Partnership’s Consolidated Net Tangible Assets; (5) the incurrence by Targa Resources Partners the Partnership or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clause Sections (2), 4.09(b)(3), 4.09(b)(4), 4.09(b)(5) or (3) of this Section 4.09(b) or this clause (54.09(b)(12); (6) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of any Permitted Receivables Financing in an aggregate principal amount at any time outstanding not to exceed $400.0 million; (7) the incurrence by Targa Resources Partners Partnership or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources Partners the Partnership and any of its Restricted Subsidiaries; provided, however, that: (A) if Targa Resources Partners the Partnership or any Guarantor is the obligor on such Indebtedness and the payee is not Targa Resources Partners the Partnership or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of Targa Resources Partnersthe Partnership, or the Note Guarantee, in the case of a Guarantor, ; and (B) (1i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Targa Resources Partners the Partnership or a Restricted Subsidiary of Targa Resources Partners the Partnership and (2ii) any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources Partners the Partnership or a Restricted Subsidiary of Targa Resources Partnersthe Partnership, will be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources Partners the Partnership or such Restricted Subsidiary, as the case may be, that was not permitted by this clause Section 4.09(b)(6); (7) the issuance by any of the Partnership’s Restricted Subsidiaries to the Partnership or to any of its Restricted Subsidiaries of shares of Preferred Stock; provided, however, that: (A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Partnership or a Restricted Subsidiary of the Partnership; and (B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Partnership or a Restricted Subsidiary of the Partnership, will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this Section 4.09(b)(7); (8) the incurrence by Targa Resources Partners the Partnership or any of its Restricted Subsidiaries of Hedging ObligationsObligations in the ordinary course of business; (9) the guarantee by Targa Resources Partners the Partnership or any of its Restricted Subsidiaries the Guarantors of Indebtedness of Targa Resources Partners the Partnership or a Restricted Subsidiary of Targa Resources Partners the Partnership to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09covenant; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee shall guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed; (10) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of obligations relating to net gas balancing positions arising in the ordinary course of business and consistent with past practice; (11) the incurrence by Targa Resources Partners Partnership or any of its Restricted Subsidiaries of Acquired Debt in connection with a transaction meeting merger or consolidation satisfying either one of the financial tests set forth in clause (4) under Section 5.01(a5.01(a)(4); (1211) the issuance incurrence by any of Targa Resources Partners’ Restricted Subsidiaries to Targa Resources Partners the Partnership or to any of its Restricted Subsidiaries of any Disqualified Equity; providedIndebtedness in respect of workers’ compensation claims, howeverself-insurance obligations, that:bankers’ acceptances, performance and surety bonds in the ordinary course of business; (A12) any subsequent issuance obligation arising from agreements of the Partnership or transfer any of Equity Interests that results in any such Disqualified Equity being held by a Person other than Targa Resources Partners its Restricted Subsidiaries Parent providing for indemnification, adjustment of purchase price, earn outs or a Restricted Subsidiary of Targa Resources Partners; and (B) any sale or other transfer of any such Disqualified Equity to a Person that is not either Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners will be deemedsimilar obligations, in each case, to constitute an issuance incurred or assumed in connection with the disposition or acquisition of such Disqualified Equity by such any business, assets or Capital Stock of a Restricted Subsidiary that was not in a transaction permitted by this clause (12)Indenture; andprovided that such obligation is not reflected as a liability on the face of the balance sheet of the Partnership or any Restricted Subsidiary; (13) the incurrence by Targa Resources Partners the Partnership or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days; and (14) the incurrence by the Partnership or any of its Restricted Subsidiaries of additional Indebtedness; provided that, after giving effect to any such incurrence, the Indebtedness in an aggregate principal amount of (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred under to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (13) and then outstanding does Section 4.09(b)(14), not to exceed the greater of (a) $150.0 50.0 million and (b) 7.55.0% of Targa Resources Partners’ the Partnership’s Consolidated Net Tangible Assets. Targa Resources Partners shall . (c) The Partnership will not incur, and shall will not permit Finance Corp. or any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of Targa Resources Partners, Finance Corp. the Partnership or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness of a Person shall will be deemed to be contractually subordinated in right of payment to any other Indebtedness of such Person the Partnership solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien priority basis. . (d) For purposes of determining compliance with this Section 4.09, if in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1Sections 4.09(b)(2) through (13) above4.09(b)(14), or is entitled to be incurred pursuant to Section 4.09(a) hereof, Targa Resources Partners the Partnership will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09covenant. Indebtedness under the Credit Facilities Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (14.08(b)(1) of the definition of Permitted DebtDebt and any Indebtedness incurred thereunder may not be reclassified. The accrual of interestinterest or Preferred Stock or Disqualified Equity dividends, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock Preferred Stock or Disqualified Equity as Indebtedness due to a change in accounting principles, and the payment of dividends on Preferred Stock or Disqualified Equity in the form of additional shares or units of the same class of Preferred Stock or Disqualified Equity will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Equity for purposes of this Section 4.09covenant; provided, however, in each such case, that the amount of any such accrual, accretion or payment thereof is included in Fixed Charges of Targa Resources Partners the Partnership as accruedaccrued to the extent required by the definition of such term. For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be utilized, calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred. Notwithstanding any other provision of this Section 4.09covenant, (i) the maximum amount of Indebtedness that Targa Resources Partners the Partnership or any Restricted Subsidiary may incur pursuant to this Section 4.09 covenant shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. FurtherThe amount of any Indebtedness outstanding as of any date will be: (1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount; (2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and (3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the accounting reclassification lesser of: (A) the Fair Market Value of any obligation such assets at the date of Targa Resources Partners or any determination; and (B) the amount of its Restricted Subsidiaries as the Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09the other Person.

Appears in 1 contract

Samples: Indenture (Hi-Crush Partners LP)

Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources Partners The Partnership shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt), and Targa Resources Partners the Partnership will not issue any Disqualified Equity and will not permit any of its Restricted Subsidiaries to issue any Disqualified Equity; provided, however, that Targa Resources Partners the Partnership and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) ), and Targa Resources Partners the Partnership and the Restricted Subsidiaries may issue Disqualified Equity, if the Fixed Charge Coverage Ratio for Targa Resources Partners’ the Partnership's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, issued would have been at least 2.0 2.25 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred incurred, or the Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter period. (b) The provisions Notwithstanding the prohibitions of Section 4.09(a) hereof ), so long as no Default or Event of Default shall not prohibit have occurred and be continuing or would be caused thereby, the incurrence of Partnership and its Restricted Subsidiaries may incur any of the following items of Indebtedness (collectively, "Permitted Debt”) or the issuance of any Disqualified Equity described in clause (ii) below:"): (1i) the incurrence by Targa Resources Partners the Partnership and any Restricted Subsidiary of additional Indebtedness (including letters of credit) under Credit Facilities, provided that, after giving effect to such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Targa Resources Partners and its Restricted Subsidiaries thereunder) of the Indebtedness under Credit Facilities and then outstanding does not exceed the greater of (a) $2,000.0 million and (b) guarantees thereof; provided that the sum of $1.5 billion and 20% of Targa Resources Partners’ Consolidated Net Tangible Assets;aggregate principal (2ii) the incurrence by Targa Resources Partners the Partnership and its Restricted Subsidiaries of the Existing Indebtedness; (3iii) the incurrence by Targa Resources Partners, Finance Corp. the Partnership and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and any Exchange Notes and the related Note Guarantees that may be issued pursuant to a Registration Rights AgreementObligations; (4iv) the incurrence by Targa Resources Partners the Partnership or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligationsobligation, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of Targa Resources Partners the Partnership or any of its such Restricted SubsidiariesSubsidiary, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), provided that after giving effect to such incurrence the in an aggregate principal amount of all Indebtedness incurred pursuant not to this clause (4) and then outstanding does not exceed the greater of (a) $50.0 20.0 million and (b) 4.0% of Targa Resources Partners’ Consolidated Net Tangible Assetsat any time outstanding; (5v) the incurrence by Targa Resources Partners the Partnership or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, refinance or replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be not incurred under Section 4.09(a) hereof or clause (2) or (3) in violation of this Section 4.09(b) or this clause (5)Indenture; (6vi) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of any Permitted Receivables Financing in an aggregate principal amount at any time outstanding not to exceed $400.0 million; (7) the incurrence by Targa Resources Partners Partnership or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources Partners the Partnership and any of its Restricted Subsidiaries; provided, however, that: (A) if Targa Resources Partners the Partnership or any Subsidiary Guarantor is the obligor on such Indebtedness and the payee is not Targa Resources Partners or a GuarantorIndebtedness, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of Targa Resources Partnersthe Partnership, or the Note GuaranteeGuarantee of such Subsidiary Guarantor, in the case of a Subsidiary Guarantor, ; and (B) (1i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Targa Resources Partners the Partnership or a Restricted Subsidiary of Targa Resources Partners thereof and (2ii) any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources Partners the Partnership or a Restricted Subsidiary of Targa Resources Partnersthereof, will shall be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources Partners the Partnership or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (7vi); (8) vii) the incurrence by Targa Resources Partners the Partnership or any of its Restricted Subsidiaries of Hedging ObligationsObligations that are incurred for the purpose of fixing or hedging foreign currency exchange rate risk of the Partnership or any Restricted Subsidiary or interest rate risk with respect to any floating rate Indebtedness of the Partnership or any Restricted Subsidiary that is permitted by the terms of this Indenture to be outstanding or commodities pricing risks of the Partnership or any Restricted Subsidiary in respect of hydrocarbon production from properties in which the Partnership or any of its Restricted Subsidiaries owns an interest; (9viii) the guarantee by Targa Resources Partners the Partnership or any of its Restricted Subsidiaries of Indebtedness of Targa Resources Partners the Partnership or a Restricted Subsidiary of Targa Resources Partners the Partnership that was permitted to be incurred by another provision of this Section 4.09; provided that if covenant; (ix) bid, performance, surety and appeal bonds incurred in the Indebtedness being guaranteed is subordinated to or pari passu with the Notesordinary course of business, then the Guarantee shall be subordinated or pari passu, as applicableincluding guarantees and standby letters of credit supporting such obligations, to the same extent as the Indebtedness guaranteednot drawn; (10x) the incurrence by Targa Resources Partners the Partnership or any of its Restricted Subsidiaries of obligations relating additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to net gas balancing positions arising in the ordinary course of business and consistent with past practicerefund, refinance or replace any Indebtedness incurred pursuant to this clause (x), not to exceed $20.0 million; (11xi) the incurrence by Targa Resources Partners or any of its Restricted the Partnership's Unrestricted Subsidiaries of Acquired Debt in connection with a transaction meeting either one of the financial tests set forth in clause (4) under Section 5.01(a); (12) the issuance by any of Targa Resources Partners’ Restricted Subsidiaries to Targa Resources Partners or to any of its Restricted Subsidiaries of any Disqualified EquityNon-Recourse Debt; provided, however, that: (A) any subsequent issuance or transfer of Equity Interests that results in if any such Disqualified Equity being held Indebtedness ceases to be Non-Recourse Debt of an Unrestricted Subsidiary, such event shall be deemed to constitute an incurrence of Indebtedness by a Person other than Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners; and (B) any sale or other transfer of any such Disqualified Equity to a Person that is not either Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners will be deemed, in each case, to constitute an issuance of such Disqualified Equity by such Restricted Subsidiary the Partnership that was not permitted by this clause (12xi); (xii) the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on Disqualified Equity, in the form of additional shares of the same class of Disqualified Equity, provided, in each such case, that the amount thereof is included in Fixed Charges of the Partnership as so accrued, accredited or amortized; and (13xiii) Indebtedness incurred by the incurrence by Targa Resources Partners Partnership or any of its Restricted Subsidiaries arising from agreements or their respective bylaws providing for indemnification, adjustment of additional Indebtedness; provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause purchase price or similar obligations. (13c) and then outstanding does not exceed the greater of (a) $150.0 million and (b) 7.5% of Targa Resources Partners’ Consolidated Net Tangible Assets. Targa Resources Partners shall not incur, and shall not permit Finance Corp. or any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of Targa Resources Partners, Finance Corp. or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness of a Person shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of such Person solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. For purposes of determining compliance with this Section 4.09, if in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses paragraphs (1b)(i) through (13b)(xiii) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof), Targa Resources Partners will the Partnership shall be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, incurrence in any manner that complies with this Section 4.09. An item of Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued may be divided and authenticated under this Indenture will initially be deemed to have been incurred on such date classified in reliance on the exception provided by clause (1) one or more of the definition types of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares of the same class of Disqualified Equity will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section 4.09; provided, however, in each such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges of Targa Resources Partners as accrued. Notwithstanding any other provision of this Section 4.09, (i) the maximum amount of Indebtedness that Targa Resources Partners or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. Further, the accounting reclassification of any obligation of Targa Resources Partners or any of its Restricted Subsidiaries as Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09Indebtedness.

Appears in 1 contract

Samples: Indenture (El Paso Energy Partners Deepwater LLC)

Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources Xxxxx Energy Partners shall will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and Targa Resources Xxxxx Energy Partners will not issue any Disqualified Equity and will not permit any of its Restricted Subsidiaries to issue any Disqualified Equity; provided, however, that Targa Resources Xxxxx Energy Partners and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) and Targa Resources Xxxxx Energy Partners and the Restricted Subsidiaries may issue Disqualified Equity, if the Fixed Charge Coverage Ratio for Targa Resources the Xxxxx Energy Partners’ most recently ended four full fiscal quarters for which internal financial statements are available Reference Period immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, would have been at least 2.0 2.00 to 1.01.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter periodReference Period. (b) The provisions of Section 4.09(a) hereof shall will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Equity described in clause (ii) below:): (1) the incurrence by Targa Resources Xxxxx Energy Partners and any Restricted Subsidiary Guarantor of additional Indebtedness (including and letters of credit) credit and the guarantees thereof under Credit Facilities, provided that, after giving effect to such incurrence, the Facilities in an aggregate principal amount of all Indebtedness incurred at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Targa Resources Xxxxx Energy Partners and its Restricted Subsidiaries thereunder) and then outstanding does not to exceed the greater of (a) $2,000.0 370.0 million and (b) the sum of $1.5 billion 300.0 million and 2015% of Targa Resources Partners’ Consolidated Net Tangible Assets, in each case, less the aggregate amount of all Net Proceeds of Asset Sales or casualty events applied by Xxxxx Energy Partners or any of its Restricted Subsidiaries since the Issue Date to repay any term Indebtedness under a Credit Facility or to repay any revolving credit Indebtedness under a Credit Facility and effect a corresponding commitment reduction thereunder pursuant to Section 4.10 hereof; (2) the incurrence by Targa Resources Xxxxx Energy Partners and its Restricted Subsidiaries of the Existing Indebtedness; (3) the incurrence by Targa Resources Partners, Finance Corp. the Issuers and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture Issue Date and any the Exchange Notes and the related Note Guarantees that may to be issued pursuant to a the Registration Rights Agreement; (4) the incurrence by Targa Resources Xxxxx Energy Partners or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of Targa Resources Xxxxx Energy Partners or any of its Restricted Subsidiaries, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), provided that after giving effect at any time outstanding not to such incurrence the aggregate principal amount of all Indebtedness incurred pursuant to this clause (4) and then outstanding does not exceed the greater of (a) $50.0 20.0 million and (b) 4.05.0% of Targa Resources Partners’ Consolidated Net Tangible Assets; (5) the incurrence by Targa Resources Xxxxx Energy Partners or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clause clauses (2), (3) or (34) of this Section 4.09(b) or this clause (5); (6) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of any Permitted Receivables Financing in an aggregate principal amount at any time outstanding not to exceed $400.0 million; (7) the incurrence by Targa Resources Xxxxx Energy Partners or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources Xxxxx Energy Partners and any of its Restricted Subsidiaries; provided, however, that: (A) if Targa Resources Xxxxx Energy Partners or any Guarantor is the obligor on such Indebtedness and the payee is not Targa Resources Xxxxx Energy Partners or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of Targa Resources Xxxxx Energy Partners, or the Note Guarantee, in the case of a Guarantor, ; and (B) (1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Targa Resources Xxxxx Energy Partners or a Restricted Subsidiary of Targa Resources Xxxxx Energy Partners and (2) any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources Xxxxx Energy Partners or a Restricted Subsidiary of Targa Resources Xxxxx Energy Partners, will be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources Xxxxx Energy Partners or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (76); (8) 7) the incurrence by Targa Resources Xxxxx Energy Partners or any of its Restricted Subsidiaries of Hedging Obligations; (9) 8) the guarantee by Targa Resources Partners Xxxxx Energy Partners, or any of its Restricted Subsidiaries the Guarantors of Indebtedness of Targa Resources Partners Xxxxx Energy Partners, or a Restricted Subsidiary of Targa Resources Xxxxx Energy Partners that was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed; (109) the incurrence by Targa Resources Xxxxx Energy Partners or any of its Restricted Subsidiaries of obligations relating to net gas balancing positions arising Indebtedness in respect of workers’ compensation claims, health or other types of social security benefits, unemployment or other insurance or self-insurance obligations, insurance contracts, reclamation, statutory obligations, bankers’ acceptances, and performance, payment, appeal and surety bonds in the ordinary course of business business, including guarantees and consistent with past practiceobligations respecting standby letters of credit supporting such obligations, to the extent not drawn (in each case other than an obligation for money borrowed) and replacements of any of the foregoing; (1110) the incurrence by Targa Resources Xxxxx Energy Partners or any of its Restricted Subsidiaries of Acquired Debt in connection with Indebtedness arising from the honoring by a transaction meeting either one bank or other financial institution of the financial tests set forth in clause (4) under Section 5.01(a)a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five business days; (1211) the issuance by any of Targa Resources Partners’ Restricted Subsidiaries to Targa Resources Xxxxx Energy Partners or to any of its Restricted Subsidiaries of Disqualified Equity to Xxxxx Energy Partners or any Disqualified Equityof its Restricted Subsidiaries; provided, however, that: (Aa) any subsequent issuance or transfer of Equity Interests of a Restricted Subsidiary that results in any such Disqualified Equity being held held, directly or indirectly, by a Person other than Targa Resources Xxxxx Energy Partners or a Restricted Subsidiary of Targa Resources Xxxxx Energy Partners; and (Bb) any sale or other transfer of any such Disqualified Equity to a Person that is not either Targa Resources Xxxxx Energy Partners or a Restricted Subsidiary of Targa Resources Partners will Xxxxx Energy Partners; Will be deemed, in each case, to constitute an issuance of such Disqualified Equity by Xxxxx Equity Partners or such Restricted Subsidiary that was not permitted by this clause clause: (12); and) the incurrence by Xxxxx Energy Partners or any of its Restricted Subsidiaries of Indebtedness in the ordinary course of business under documentary letters of credit which are to be repaid in full not more than one year after the date on which such Indebtedness was originally incurred to finance the purchase of goods by Xxxxx Energy Partners or any of its Restricted Subsidiaries; (13) the incurrence of Indebtedness arising from agreements with Xxxxx Energy Partners or any of its Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earn-outs, or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or a Subsidiary in accordance with the terms of the indenture, other than guarantees of Indebtedness incurred or assumed by Targa Resources any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition; and (14) the incurrence by Xxxxx Energy Partners or any of its Restricted Subsidiaries of additional Indebtedness; provided that, after giving effect to any such incurrence, the Indebtedness in an aggregate principal amount of all Indebtedness incurred under this clause (13) and then outstanding does at any time outstanding, not to exceed the greater of (a) $150.0 40.0 million and (b) 7.55.0% of Targa Resources Partners’ Consolidated Net Tangible Assets. Targa Resources Xxxxx Energy Partners shall will not incur, and shall will not permit Finance Corp. or any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of Targa Resources Partners, Finance Corp. Xxxxx Energy Partners or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness of a Person shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of such Person Xxxxx Energy Partners solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. For purposes of determining compliance with this Section 4.09, if in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (1314) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, Targa Resources Xxxxx Energy Partners will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares of the same class of Disqualified Equity will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section 4.09; provided, however, in each such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges of Targa Resources Xxxxx Energy Partners as accrued. Notwithstanding any other provision of this Section 4.09, (i) the maximum amount of Indebtedness that Targa Resources Xxxxx Energy Partners or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. FurtherThe amount of any Indebtedness outstanding as of any date will be: (1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount; (2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and (3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the accounting reclassification lesser of: (A) the Fair Market Value of any obligation such assets at the date of Targa Resources Partners or any determination; and (B) the amount of its Restricted Subsidiaries as the Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09the other Person.

Appears in 1 contract

Samples: Indenture (Holly Energy Partners Lp)

Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources Partners The Borrower shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), other than Permitted Debt, and Targa Resources Partners will the Borrower shall not issue any Disqualified Equity issue, and will shall not permit any of its Restricted Subsidiaries to issue issue, any Disqualified Equity; provided, however, that Targa Resources Partners and the Borrower or any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) and Targa Resources Partners and the Restricted Subsidiaries may or issue shares of Disqualified Equity, Equity if the Borrower’s Fixed Charge Coverage Ratio for Targa Resources Partners’ the Borrower’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, issued would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the such additional Indebtedness had been incurred incurred, or the such Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter period. (b) . The provisions of the first paragraph of this Section 4.09(a) hereof 8.3 shall not prohibit apply to the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”) . Notwithstanding anything to the contrary contained in this Section 8.3, accrual of interest, the accretion of accreted value or the issuance amortization of any Disqualified Equity described original issue discount and the payment of interest or dividends in clause (ii) below: (1) the incurrence by Targa Resources Partners and any Restricted Subsidiary form of additional Indebtedness (including letters of credit) under Credit Facilities, provided that, after giving effect to such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (1) (with letters of credit being shall not be deemed to have a principal amount equal to the maximum potential liability of Targa Resources Partners and its Restricted Subsidiaries thereunder) and then outstanding does not exceed the greater of (a) $2,000.0 million and (b) the sum of $1.5 billion and 20% of Targa Resources Partners’ Consolidated Net Tangible Assets; (2) the be an incurrence by Targa Resources Partners and its Restricted Subsidiaries of the Existing Indebtedness; (3) the incurrence by Targa Resources Partners, Finance Corp. and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and any Exchange Notes and the related Note Guarantees that may be issued pursuant to a Registration Rights Agreement; (4) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of Targa Resources Partners or any of its Restricted Subsidiaries, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), provided that after giving effect to such incurrence the aggregate principal amount of all Indebtedness incurred pursuant to this clause (4) and then outstanding does not exceed the greater of (a) $50.0 million and (b) 4.0% of Targa Resources Partners’ Consolidated Net Tangible Assets; (5) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clause (2) or (3) purposes of this Section 4.09(b) or this clause (5); (6) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of any Permitted Receivables Financing in an aggregate principal amount at any time outstanding not to exceed $400.0 million; (7) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources Partners and any of its Restricted Subsidiaries; provided, however, that: (A) if Targa Resources Partners or any Guarantor is the obligor on such Indebtedness and the payee is not Targa Resources Partners or a Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of Targa Resources Partners, or the Note Guarantee, in the case of a Guarantor, and (B) (1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners and (2) any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners, will be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources Partners or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (7); (8) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of Hedging Obligations; (9) the guarantee by Targa Resources Partners or any of its Restricted Subsidiaries of Indebtedness of Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners that was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed; (10) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of obligations relating to net gas balancing positions arising in the ordinary course of business and consistent with past practice; (11) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of Acquired Debt in connection with a transaction meeting either one of the financial tests set forth in clause (4) under Section 5.01(a); (12) the issuance by any of Targa Resources Partners’ Restricted Subsidiaries to Targa Resources Partners or to any of its Restricted Subsidiaries of any Disqualified Equity; provided, however, that: (A) any subsequent issuance or transfer of Equity Interests that results in any such Disqualified Equity being held by a Person other than Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners; and (B) any sale or other transfer of any such Disqualified Equity to a Person that is not either Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners will be deemed, in each case, to constitute an issuance of such Disqualified Equity by such Restricted Subsidiary that was not permitted by this clause (12); and (13) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of additional Indebtedness; provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (13) and then outstanding does not exceed the greater of (a) $150.0 million and (b) 7.5% of Targa Resources Partners’ Consolidated Net Tangible Assets8.3. Targa Resources Partners The Borrower shall not incur, and shall not permit Finance Corp. or any Guarantor to incur, incur any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of Targa Resources Partners, Finance Corp. or such Guarantor the Borrower unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee Loans on substantially identical terms; provided, however, that no Indebtedness of a Person the Borrower shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of such Person the Borrower solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. For purposes of determining compliance with this Section 4.098.3, if in the event that an item of proposed Indebtedness (including Acquired Debt) meets the criteria of more than one of the categories of Permitted Debt described in clauses (1i) through (13xvi) above, of the definition of “Permitted Debt” or is entitled to be incurred pursuant to the first paragraph of this Section 4.09(a8.3, the Borrower shall, in its sole discretion, classify (or later classify or reclassify) hereof, Targa Resources Partners will be permitted to classify in whole or in part such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. 8.3 and such item of Indebtedness or a portion thereof may be classified (or later classified or reclassified) in whole or in part as having been incurred under more than one of the applicable clauses or pursuant to the first paragraph of this Section 8.3; provided that all Indebtedness outstanding under the ABL Credit Facilities outstanding Facility on the date on which Notes are first issued and authenticated under this Indenture will initially Effective Date shall be deemed to have been treated as incurred on such date in reliance on the exception provided by Effective Date under clause (1i) of the definition of Permitted Debt. The accrual For purposes of interestdetermining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the accretion or amortization U.S. dollar-equivalent principal amount of original issue discountIndebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, the payment of interest on any Indebtedness in the form case of additional term Indebtedness, or first committed, in the case of revolving credit Indebtedness; provided that if such Indebtedness with the same terms, the reclassification of preferred stock as is incurred to refinance other Indebtedness due to denominated in a change in accounting principlesforeign currency, and such refinancing would cause the payment applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of dividends on Disqualified Equity in the form of additional shares of the same class of Disqualified Equity will not such refinancing, such U.S. dollar-denominated restriction shall be deemed not to be an incurrence have been exceeded so long as the principal amount of such refinancing Indebtedness or an issuance does not exceed the principal amount of Disqualified Equity for purposes of this Section 4.09; providedsuch Indebtedness being refinanced, however, in each such case, that plus the amount of any reasonable premium (including reasonable tender premiums), defeasance costs and any reasonable fees and expenses incurred in connection with the incurrence of such accrualnew Indebtedness. The principal amount of any Indebtedness incurred to refinance other Indebtedness, accretion or payment if incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Indebtedness is included denominated that is in Fixed Charges effect on the date of Targa Resources Partners such refinancing. The amount of any Indebtedness outstanding as accrued. Notwithstanding of any other provision of this Section 4.09, date shall be: (i) the maximum accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue dis- count; (ii) the principal amount of the Indebtedness, in the case of any other Indebtedness; and (iii) in respect of Indebtedness that Targa Resources Partners or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as of another Person secured by a result Lien on the assets of fluctuations in exchange rates or currency values. Furtherthe specified Person, the accounting reclassification lesser of: (a) the Fair Market Value of any obligation such assets at the date of Targa Resources Partners or any determination; and (b) the amount of its Restricted Subsidiaries as the Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09the other Person.

Appears in 1 contract

Samples: Term Loan Credit Agreement (Tesoro Corp /New/)

Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources Antero Midstream Partners shall will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and Targa Resources Antero Midstream Partners will not issue any Disqualified Equity and will not permit any of its Restricted Subsidiaries to issue any Disqualified Equity; provided, however, that Targa Resources Antero Midstream Partners and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) and Targa Resources Antero Midstream Partners and the Restricted Subsidiaries may issue Disqualified Equity, if the Fixed Charge Coverage Ratio for Targa Resources the Antero Midstream Partners’ most recently ended four full fiscal quarters for which internal financial statements are available Reference Period immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter periodReference Period. (b) The provisions of Section 4.09(a) hereof shall will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Equity described in clause (ii11) below: (1) the incurrence by Targa Resources Antero Midstream Partners and or any of its Restricted Subsidiary Subsidiaries of additional Indebtedness (including and letters of credit) credit and the Guarantees thereof under Credit Facilities, provided that, after giving effect to such incurrence, the Facilities in an aggregate principal amount of all Indebtedness incurred at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Targa Resources Antero Midstream Partners and its Restricted Subsidiaries thereunder) and then outstanding does not to exceed the greater of (a) $2,000.0 million 2.0 billion and (b) the sum of $1.5 1.4 billion and 2030% of Targa Resources Partners’ Consolidated Net Tangible AssetsAssets (determined as of the date of incurrence and after giving effect to the use of proceeds therefrom); (2) the incurrence by Targa Resources Antero Midstream Partners and its Restricted Subsidiaries of the any Existing Indebtedness; (3) the incurrence by Targa Resources Partners, Finance Corp. the Issuers and the Guarantors of Indebtedness represented by (a) the Notes and the related Note Guarantees to be issued on the date of this Indenture Issue Date and (b) any Exchange Notes and the related Note Guarantees that may be issued pursuant to a Registration Rights Agreementthereafter; (4) the incurrence by Targa Resources Antero Midstream Partners or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of Targa Resources Antero Midstream Partners or any of its Restricted Subsidiaries, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), provided that after giving effect at any time outstanding not to such incurrence the aggregate principal amount of all Indebtedness incurred pursuant to this clause (4) and then outstanding does not exceed the greater of (a) $50.0 100.0 million and (b) 4.05.0% of Targa Resources Partners’ Consolidated Net Tangible AssetsAssets (determined as of the date of incurrence and after giving effect to the use of proceeds therefrom); (5) the incurrence by Targa Resources Antero Midstream Partners or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clause (2), (3), (4) or (310) of this Section 4.09(b) or this clause (5); (6) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of any Permitted Receivables Financing in an aggregate principal amount at any time outstanding not to exceed $400.0 million; (7) the incurrence by Targa Resources Antero Midstream Partners or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources Antero Midstream Partners and any of its Restricted Subsidiaries; provided, however, that: (A) if Targa Resources Antero Midstream Partners or any Guarantor is the obligor on such Indebtedness and the payee is not Targa Resources Antero Midstream Partners or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of Targa Resources Antero Midstream Partners, or the Note Guarantee, in the case of a Guarantor, ; and (B) (1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Targa Resources Antero Midstream Partners or a Restricted Subsidiary of Targa Resources Antero Midstream Partners and (2) any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources Antero Midstream Partners or a Restricted Subsidiary of Targa Resources Antero Midstream Partners, will be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources Antero Midstream Partners or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (76); (8) 7) the incurrence by Targa Resources Antero Midstream Partners or any of its Restricted Subsidiaries of Hedging ObligationsObligations or Indebtedness under Treasury Management Arrangements; (9) 8) the guarantee Guarantee by Targa Resources Partners Antero Midstream Partners, or any of its Restricted Subsidiaries of (a) Indebtedness of Targa Resources Antero Midstream Partners or a Restricted Subsidiary of Targa Resources Antero Midstream Partners that was permitted to be incurred by another provision of this Section 4.094.09 or (b) Indebtedness incurred by Joint Ventures, provided that such Guarantee constitutes a Permitted Investment; and provided further, in each case, that if the Indebtedness being guaranteed Guaranteed is subordinated to or pari passu with the NotesNotes or the Note Guarantees, then the Guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteedGuaranteed; (9) the incurrence by Antero Midstream Partners or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, health or other types of social security benefits, unemployment or other insurance or self-insurance obligations, insurance contracts, reclamation, statutory obligations, bankers’ acceptances, and performance, payment, appeal and surety bonds in the ordinary course of business, including Guarantees and obligations respecting standby letters of credit supporting such obligations, to the extent not drawn (in each case other than an obligation for money borrowed) and replacements of any of the foregoing; (10) the incurrence by Targa Resources Antero Midstream Partners or any of its Restricted Subsidiaries of obligations relating to net gas balancing positions arising in the ordinary course of business and consistent with past practicePermitted Acquisition Indebtedness; (11) the incurrence issuance by Targa Resources Antero Midstream Partners or any of its Restricted Subsidiaries of Acquired Debt in connection with a transaction meeting either one of the financial tests set forth in clause (4) under Section 5.01(a); (12) the issuance by any of Targa Resources Partners’ Restricted Subsidiaries Disqualified Equity to Targa Resources Antero Midstream Partners or to any of its Restricted Subsidiaries of any Disqualified EquitySubsidiaries, as the case may be; provided, however, that: (A) any subsequent issuance or transfer of Equity Interests of a Restricted Subsidiary that results in any such Disqualified Equity being held held, directly or indirectly, by a Person other than Targa Resources Antero Midstream Partners or a Restricted Subsidiary of Targa Resources Antero Midstream Partners; and (B) any sale or other transfer of any such Disqualified Equity to a Person that is not either Targa Resources Antero Midstream Partners or a Restricted Subsidiary of Targa Resources Partners Antero Midstream Partners; will be deemed, in each case, to constitute an issuance of such Disqualified Equity by Antero Midstream Partners or such Restricted Subsidiary that was not permitted by this clause clause; (12); and (13) the incurrence in the ordinary course of business by Targa Resources Antero Midstream Partners or any of its Restricted Subsidiaries of additional Indebtedness; Indebtedness under letters of credit incurred pursuant to a Credit Facility, provided that such obligations are reimbursed within 10 days following the drawing of such letter of credit; (13) the incurrence by Antero Midstream Partners or any of its Restricted Subsidiaries of liability in respect of the Indebtedness of any Unrestricted Subsidiary of Antero Midstream Partners or any Joint Venture but only to the extent that such liability is the result of Antero Midstream Partners’ or any such Restricted Subsidiary’s being a general partner of such Unrestricted Subsidiary or Joint Venture and not as guarantor of such Indebtedness and provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (13) and then outstanding does not exceed $25.0 million; and (14) the incurrence by Antero Midstream Partners or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount at any time outstanding not to exceed the greater of (a) $150.0 100.0 million and (b) 7.55.0% of Targa Resources Partners’ Consolidated Net Tangible AssetsAssets (determined as of the date of incurrence and after giving effect to the use of proceeds therefrom). Targa Resources Antero Midstream Partners shall will not incur, and shall will not permit Finance Corp. or any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of Targa Resources Antero Midstream Partners, Finance Corp. or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness of a Person shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of Antero Midstream Partners, Finance Corp. or any such Person Guarantor solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. For purposes of determining compliance with this Section 4.09, if in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (1314) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, Targa Resources Antero Midstream Partners will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares or units of the same class of Disqualified Equity will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section 4.09; provided, however, in each such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges of Targa Resources Antero Midstream Partners as accruedaccrued to the extent required by the definition of such term. Notwithstanding any other provision of this Section 4.09, (i) the maximum amount of Indebtedness that Targa Resources Antero Midstream Partners or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. FurtherThe amount of any Indebtedness outstanding as of any date will be: (1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount; (2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and (3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the accounting reclassification lesser of: (A) the Fair Market Value of such assets at the date of determination; and (B) the amount of the Indebtedness of the other Person. For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed, in the case of revolving credit debt; 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 (i) the principal amount of such Indebtedness being refinanced plus (ii) the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses incurred in connection with such refinancing. The principal amount of any obligation Indebtedness incurred to refinance other Indebtedness, if incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Indebtedness is denominated that is in effect on the date of Targa Resources Partners or any of its Restricted Subsidiaries as Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09such refinancing.

Appears in 1 contract

Samples: Indenture (Antero Midstream Partners LP)

Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources Partners The Partnership shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and Targa Resources Partners the Partnership will not issue any Disqualified Equity and will not permit any of its Restricted Subsidiaries to issue any Disqualified Equity; provided, however, that Targa Resources Partners the Partnership and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) ), and Targa Resources Partners the Partnership and the Restricted Subsidiaries may issue Disqualified Equity, if the Fixed Charge Coverage Ratio for Targa Resources Partners’ the Partnership’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, issued would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred incurred, or the Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter period. (b) The provisions Notwithstanding the prohibitions of Section 4.09(a) hereof shall not prohibit 5.09(a), the incurrence of Partnership and its Restricted Subsidiaries may incur any of the following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Equity described in clause (ii) below:): (1i) the incurrence by Targa Resources Partners the Partnership and any Restricted Subsidiary of additional Indebtedness (including letters of credit) under Credit Facilities, Facilities and the guarantees thereof; provided that, after giving effect to such incurrence, that the aggregate principal amount of all Indebtedness of the Partnership and the Restricted Subsidiaries incurred under pursuant to this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Targa Resources Partners and its Restricted Subsidiaries thereunderi) and then outstanding under all Credit Facilities after giving effect to such incurrence does not exceed the greater of (aA) $2,000.0 1.2 billion or (B) $500.0 million and (b) the sum of $1.5 billion and 20plus 25.0% of Targa Resources Partners’ the Consolidated Net Tangible AssetsAssets of the Partnership; (2ii) the incurrence by Targa Resources Partners the Partnership and its Restricted Subsidiaries of Existing Indebtedness (other than under the Existing IndebtednessCredit Facilities); (3iii) the incurrence by Targa Resources Partners, Finance Corp. the Issuers and the Subsidiary Guarantors of Indebtedness represented by the Notes issued and sold in the offering of the Initial Notes, and the related Note Guarantees to be issued on the date of this Indenture and any Exchange Notes and the related Note Guarantees that may be issued pursuant to a Registration Rights AgreementGuarantees; (4iv) the incurrence by Targa Resources Partners the Partnership or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of Targa Resources Partners the Partnership or any of its such Restricted SubsidiariesSubsidiary, including all Permitted Refinancing Indebtedness incurred to renew, refundextend, refinance, renew, replace, defease or discharge refund any Indebtedness incurred pursuant to this clause (4iv), provided that after giving effect to any such incurrence incurrence, the aggregate principal amount of all Indebtedness incurred pursuant to this clause (4iv) and then outstanding does shall not exceed the greater of (a) $50.0 75.0 million and or (b) 4.02.5% of Targa Resources Partners’ the Consolidated Net Tangible AssetsAssets of the Partnership at such time; (5v) the incurrence by Targa Resources Partners the Partnership or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refundextend, refinance, renew, replace, defease or discharge any refund, Indebtedness (other than intercompany Indebtedness) that was permitted by this the Indenture to be incurred under Section 4.09(a5.09(a) hereof or clause (2ii) or (3iii) of this Section 4.09(b5.09(b) or this clause (5v); (6vi) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of any Permitted Receivables Financing in an aggregate principal amount at any time outstanding not to exceed $400.0 million; (7) the incurrence by Targa Resources Partners Partnership or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources Partners the Partnership and any of its Restricted Subsidiaries; provided, however, that: (A) if Targa Resources Partners or any Guarantor the Partnership is the obligor on such Indebtedness and the payee a Subsidiary Guarantor is not Targa Resources Partners or a Guarantorthe obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, or if a Subsidiary Guarantor is the obligor on such Indebtedness and neither the Partnership nor another Subsidiary Guarantor is the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the case Guarantee of Targa Resources Partners, or the Note Guarantee, in the case of a such Subsidiary Guarantor, ; and (B) (1i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Targa Resources Partners the Partnership or a Restricted Subsidiary of Targa Resources Partners thereof and (2ii) any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources Partners or neither the Partnership nor a Restricted Subsidiary of Targa Resources Partnersthereof, will shall be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources Partners the Partnership or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (7vi); (8) vii) the incurrence by Targa Resources Partners the Partnership or any of its Restricted Subsidiaries of Hedging ObligationsObligations that are incurred for the purpose of fixing or hedging (but not for speculative purposes) (A) foreign currency exchange rate risks of the Partnership or any Restricted Subsidiary, (B) interest rate risks with respect to any floating rate Indebtedness of the Partnership or any Restricted Subsidiary that is permitted by the terms of the Indenture to be outstanding or (C) commodities pricing risks of the Partnership or any Restricted Subsidiary in respect of Hydrocarbons used, produced, processed or sold by the Partnership or any of its Restricted Subsidiaries; (9viii) the guarantee by Targa Resources Partners the Partnership or any of its Restricted Subsidiaries of Indebtedness of Targa Resources Partners the Partnership or a any of its Restricted Subsidiary of Targa Resources Partners Subsidiaries that was permitted to be incurred by another provision of this Section 4.095.09; provided provided, that if in the event such Indebtedness that is being guaranteed is subordinated to a Subordinated Obligation or pari passu with the Notesa Guarantor Subordinated Obligation, then the Guarantee guarantee shall be subordinated in right of payment to the Notes or pari passuthe Guarantee, as applicablethe case may be; (ix) bid, performance, surety and appeal bonds incurred in the ordinary course of business, including guarantees and obligations respecting standby letters of credit supporting such obligations, to the same extent as the Indebtedness guaranteednot drawn (in each case other than an obligation for money borrowed); (10x) the incurrence by Targa Resources Partners the Partnership or any of its Restricted Subsidiaries of obligations relating to net gas balancing positions arising liability in respect of the ordinary course Indebtedness of business and consistent with past practice; (11) any Unrestricted Subsidiary of the incurrence by Targa Resources Partners Partnership or any of its Restricted Subsidiaries of Acquired Debt in connection with a transaction meeting either one Joint Venture but only to the extent that such liability is the result of the financial tests set forth in clause (4) under Section 5.01(a); (12) the issuance by any of Targa Resources Partners’ Restricted Subsidiaries to Targa Resources Partners Partnership’s or to any of its Restricted Subsidiaries of any Disqualified Equity; provided, however, that: (A) any subsequent issuance or transfer of Equity Interests that results in any such Disqualified Equity Restricted Subsidiary’s being held by a Person other than Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners; and (B) any sale or other transfer of any such Disqualified Equity to a Person that is not either Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners will be deemed, in each case, to constitute an issuance general partner of such Disqualified Equity by Unrestricted Subsidiary or Joint Venture and not as guarantor of such Restricted Subsidiary that was not permitted by this clause (12); and (13) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of additional Indebtedness; Indebtedness and provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (13x) and then outstanding does not exceed $25.0 million; (xi) the incurrence by the Partnership or any of its Restricted Subsidiaries of Acquired Debt in connection with a merger or consolidation meeting either one of the financial tests set forth in clause (iv) of Section 6.01(a); and (xii) the incurrence by the Partnership or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount at any time outstanding not to exceed the greater of (a) $150.0 million and or (b) 7.54.0% of Targa Resources Partners’ the Consolidated Net Tangible Assets. Targa Resources Partners shall not incur, and shall not permit Finance Corp. or any Guarantor to incur, any Indebtedness Assets of the Partnership. (including Permitted Debtc) that is contractually subordinated in right of payment to any other Indebtedness of Targa Resources Partners, Finance Corp. or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness of a Person shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of such Person solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. For purposes of determining compliance with this Section 4.095.09, if in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses paragraphs (1b)(i) through (13b)(xii) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof5.09(a), Targa Resources Partners will the Partnership shall be permitted to classify (or later reclassify in whole or in part) such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, incurrence in any manner that complies with this Section 4.095.09. An item of Indebtedness may be divided and classified in one or more of the types of Permitted Indebtedness. Any Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated Issue Date shall be considered incurred under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause Section 5.09(a). (1d) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares of the same class of Disqualified Equity will shall not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section 4.095.09; provided, however, in each such case, that the amount of any such accrual, accretion or payment thereof is included in Fixed Charges of Targa Resources Partners the Partnership as accrued. Notwithstanding any other provision of this Section 4.095.09, (i) the maximum amount of Indebtedness that Targa Resources Partners the Partnership or any Restricted Subsidiary may incur pursuant to this Section 4.09 covenant shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. Further, the accounting reclassification of any obligation of Targa Resources Partners the Partnership or any of its Restricted Subsidiaries as Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.095.09.

Appears in 1 contract

Samples: Eighth Supplemental Indenture (Markwest Energy Partners L P)

Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources Partners The Partnership shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and Targa Resources Partners the Partnership will not issue any Disqualified Equity and will not permit any of its Restricted Subsidiaries to issue any Disqualified Equity; provided, however, that Targa Resources Partners the Partnership and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) ), and Targa Resources Partners the Partnership and the Restricted Subsidiaries may issue Disqualified Equity, if the Fixed Charge Coverage Ratio for Targa Resources Partners’ the Partnership’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, issued would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred incurred, or the Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter period. (b) The provisions Notwithstanding the prohibitions of Section 4.09(a) hereof shall not prohibit 5.09(a), the incurrence of Partnership and its Restricted Subsidiaries may incur any of the following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Equity described in clause (ii) below:): (1i) the incurrence by Targa Resources Partners the Partnership and any Restricted Subsidiary of additional Indebtedness (including letters of credit) under Credit Facilities, Facilities and the guarantees thereof; provided that, after giving effect to such incurrence, that the aggregate principal amount of all Indebtedness of the Partnership and the Restricted Subsidiaries incurred under pursuant to this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Targa Resources Partners and its Restricted Subsidiaries thereunderi) and then outstanding under all Credit Facilities after giving effect to such incurrence does not exceed the greater of (aA) $2,000.0 1.0 billion or (B) $500.0 million and (b) the sum of $1.5 billion and 20plus 15.0% of Targa Resources Partners’ the Consolidated Net Tangible AssetsAssets of the Partnership; (2ii) the incurrence by Targa Resources Partners the Partnership and its Restricted Subsidiaries of Existing Indebtedness (other than under the Existing IndebtednessCredit Facilities); (3iii) the incurrence by Targa Resources Partners, Finance Corp. the Issuers and the Subsidiary Guarantors of Indebtedness represented by the Notes issued and sold in the offering of the Initial Notes, and the related Note Guarantees to be issued on the date of this Indenture and any Exchange Notes and the related Note Guarantees that may be issued pursuant to a Registration Rights AgreementGuarantees; (4iv) the incurrence by Targa Resources Partners the Partnership or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of Targa Resources Partners the Partnership or any of its such Restricted SubsidiariesSubsidiary, including all Permitted Refinancing Indebtedness incurred to renew, refundextend, refinance, renew, replace, defease or discharge refund any Indebtedness incurred pursuant to this clause (4iv), provided that after giving effect to any such incurrence incurrence, the aggregate principal amount of all Indebtedness incurred pursuant to this clause (4iv) and then outstanding does shall not exceed the greater of (a) $50.0 25.0 million and or (b) 4.01.0% of Targa Resources Partners’ the Consolidated Net Tangible AssetsAssets of the Partnership at such time; (5v) the incurrence by Targa Resources Partners the Partnership or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refundextend, refinance, renew, replace, defease or discharge any refund, Indebtedness (other than intercompany Indebtedness) that was permitted by this the Indenture to be incurred under Section 4.09(a5.09(a) hereof or clause (2ii) or (3iii) of this Section 4.09(b5.09(b) or this clause (5v); (6vi) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of any Permitted Receivables Financing in an aggregate principal amount at any time outstanding not to exceed $400.0 million; (7) the incurrence by Targa Resources Partners Partnership or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources Partners the Partnership and any of its Restricted Subsidiaries; provided, however, that: (A) if Targa Resources Partners or any Guarantor the Partnership is the obligor on such Indebtedness and the payee a Subsidiary Guarantor is not Targa Resources Partners or a Guarantorthe obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, or if a Subsidiary Guarantor is the obligor on such Indebtedness and neither the Partnership nor another Subsidiary Guarantor is the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the case Guarantee of Targa Resources Partners, or the Note Guarantee, in the case of a such Subsidiary Guarantor, ; and (B) (1i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Targa Resources Partners the Partnership or a Restricted Subsidiary of Targa Resources Partners thereof and (2ii) any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources Partners or neither the Partnership nor a Restricted Subsidiary of Targa Resources Partnersthereof, will shall be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources Partners the Partnership or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (7vi); (8) vii) the incurrence by Targa Resources Partners the Partnership or any of its Restricted Subsidiaries of Hedging ObligationsObligations that are incurred for the purpose of fixing or hedging (but not for speculative purposes) (A) foreign currency exchange rate risks of the Partnership or any Restricted Subsidiary, (B) interest rate risks with respect to any floating rate Indebtedness of the Partnership or any Restricted Subsidiary that is permitted by the terms of the Indenture to be outstanding or (C) commodities pricing risks of the Partnership or any Restricted Subsidiary in respect of Hydrocarbons used, produced, processed or sold by the Partnership or any of its Restricted Subsidiaries; (9viii) the guarantee by Targa Resources Partners the Partnership or any of its Restricted Subsidiaries of Indebtedness of Targa Resources Partners the Partnership or a any of its Restricted Subsidiary of Targa Resources Partners Subsidiaries that was permitted to be incurred by another provision of this Section 4.095.09; provided provided, that if in the event such Indebtedness that is being guaranteed is subordinated to a Subordinated Obligation or pari passu with the Notesa Guarantor Subordinated Obligation, then the Guarantee guarantee shall be subordinated in right of payment to the Notes or pari passuthe Guarantee, as applicablethe case may be; (ix) bid, performance, surety and appeal bonds incurred in the ordinary course of business, including guarantees and obligations respecting standby letters of credit supporting such obligations, to the same extent as the Indebtedness guaranteednot drawn (in each case other than an obligation for money borrowed); (10x) the incurrence by Targa Resources Partners the Partnership or any of its Restricted Subsidiaries of obligations relating to net gas balancing positions arising liability in respect of the ordinary course Indebtedness of business and consistent with past practice; (11) any Unrestricted Subsidiary of the incurrence by Targa Resources Partners Partnership or any of its Restricted Subsidiaries of Acquired Debt in connection with a transaction meeting either one Joint Venture but only to the extent that such liability is the result of the financial tests set forth in clause (4) under Section 5.01(a); (12) the issuance by any of Targa Resources Partners’ Restricted Subsidiaries to Targa Resources Partners Partnership’s or to any of its Restricted Subsidiaries of any Disqualified Equity; provided, however, that: (A) any subsequent issuance or transfer of Equity Interests that results in any such Disqualified Equity Restricted Subsidiary’s being held by a Person other than Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners; and (B) any sale or other transfer of any such Disqualified Equity to a Person that is not either Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners will be deemed, in each case, to constitute an issuance general partner of such Disqualified Equity by Unrestricted Subsidiary or Joint Venture and not as guarantor of such Restricted Subsidiary that was not permitted by this clause (12); and (13) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of additional Indebtedness; Indebtedness and provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (13x) and then outstanding does not exceed $25.0 million; (xi) the incurrence by the Partnership or any of its Restricted Subsidiaries of Acquired Debt in connection with a merger or consolidation meeting either one of the financial tests set forth in clause (iv) of Section 6.01(a); and (xii) the incurrence by the Partnership or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount at any time outstanding not to exceed the greater of (a) $150.0 100.0 million and or (b) 7.54.0% of Targa Resources Partners’ the Consolidated Net Tangible Assets. Targa Resources Partners shall not incur, and shall not permit Finance Corp. or any Guarantor to incur, any Indebtedness Assets of the Partnership. (including Permitted Debtc) that is contractually subordinated in right of payment to any other Indebtedness of Targa Resources Partners, Finance Corp. or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness of a Person shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of such Person solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. For purposes of determining compliance with this Section 4.095.09, if in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses paragraphs (1b)(i) through (13b)(xii) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof5.09(a), Targa Resources Partners will the Partnership shall be permitted to classify (or later reclassify in whole or in part) such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, incurrence in any manner that complies with this Section 4.095.09. An item of Indebtedness may be divided and classified in one or more of the types of Permitted Indebtedness. Any Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated Issue Date shall be considered incurred under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause Section 5.09(a). (1d) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares of the same class of Disqualified Equity will shall not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section 4.095.09; provided, however, in each such case, that the amount of any such accrual, accretion or payment thereof is included in Fixed Charges of Targa Resources Partners the Partnership as accrued. Notwithstanding any other provision of this Section 4.095.09, (i) the maximum amount of Indebtedness that Targa Resources Partners the Partnership or any Restricted Subsidiary may incur pursuant to this Section 4.09 covenant shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. Further, the accounting reclassification of any obligation of Targa Resources Partners the Partnership or any of its Restricted Subsidiaries as Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.095.09.

Appears in 1 contract

Samples: Fifth Supplemental Indenture (Markwest Energy Partners L P)

Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources Regency Energy Partners shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and Targa Resources Regency Energy Partners will not issue any Disqualified Equity and will not permit any of its Restricted Subsidiaries to issue any Disqualified Equity; provided, however, that Targa Resources Regency Energy Partners and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) and Targa Resources Regency Energy Partners and the Restricted Subsidiaries may issue Disqualified Equity, if the Fixed Charge Coverage Ratio for Targa Resources Regency Energy Partners’ most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter period. (b) The provisions of Section 4.09(a) hereof shall not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Equity preferred securities described in clause (ii11) below: (1) the incurrence by Targa Resources Regency Energy Partners and any Restricted Subsidiary of additional Indebtedness (including any letters of credit) under one or more Credit Facilities, provided that, after giving effect to such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Targa Resources Regency Energy Partners and its Restricted Subsidiaries thereunder) and then outstanding does not exceed the greater of (a) $2,000.0 1,500.0 million and (b) the sum of $1.5 billion 500.0 million and 2025.0% of Targa Resources Regency Energy Partners’ Consolidated Net Tangible Assets; (2) the incurrence by Targa Resources Regency Energy Partners and its Restricted Subsidiaries of the Existing Indebtedness; (3) the incurrence by Targa Resources Regency Energy Partners, Finance Corp. and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and any Exchange Notes and the related Note Guarantees that may be issued pursuant to a Registration Rights AgreementIndenture; (4) the incurrence by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), provided that after giving effect to such incurrence the aggregate principal amount of all Indebtedness incurred pursuant to this clause (4) and then outstanding does not exceed the greater of (a) $50.0 million and (b) 4.02.0% of Targa Resources Regency Energy Partners’ Consolidated Net Tangible Assets; (5) the incurrence by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge discharge, any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clause clauses (2) or (3) of this Section 4.09(b) or this clause (5); (6) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of any Permitted Receivables Financing in an aggregate principal amount at any time outstanding not to exceed $400.0 million; (7) the incurrence by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources Regency Energy Partners and any of its Restricted Subsidiaries; provided, however, that: (A) if Targa Resources Regency Energy Partners or any Guarantor is the obligor on such Indebtedness and the payee is not Targa Resources Regency Energy Partners or a Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of Targa Resources Regency Energy Partners, or the Note Guarantee, in the case of a Guarantor, and (B) (1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Targa Resources Regency Energy Partners or a Restricted Subsidiary of Targa Resources Regency Energy Partners and (2) any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources Regency Energy Partners or a Restricted Subsidiary of Targa Resources Regency Energy Partners, will be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources Regency Energy Partners or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (76); (8) 7) the incurrence by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of Hedging Obligations; (9) 8) the guarantee by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of Indebtedness of Targa Resources Regency Energy Partners or a Restricted Subsidiary of Targa Resources Regency Energy Partners that was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed; (109) the incurrence by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of obligations relating to net gas balancing positions arising in the ordinary course of business and consistent with past practice; (1110) the incurrence by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of Acquired Debt in connection with a transaction meeting either one of the financial tests set forth in clause (4) under this Section 5.01(a)4.09; (1211) the issuance by any of Targa Resources Regency Energy Partners’ Restricted Subsidiaries to Targa Resources Regency Energy Partners or to any of its Restricted Subsidiaries of any Disqualified Equitypreferred securities; provided, however, that: (Aa) any subsequent issuance or transfer of Equity Interests that results in any such Disqualified Equity preferred securities being held by a Person other than Targa Resources Regency Energy Partners or a Restricted Subsidiary of Targa Resources Regency Energy Partners; and (Bb) any sale or other transfer of any such Disqualified Equity preferred securities to a Person that is not either Targa Resources Regency Energy Partners or a Restricted Subsidiary of Targa Resources Regency Energy Partners will be deemed, in each case, to constitute an issuance of such Disqualified Equity preferred securities by such Restricted Subsidiary that was not permitted by this clause (11); (12)) the incurrence by Regency Energy Partners or any of its Restricted Subsidiaries of liability in respect of the Indebtedness of any Unrestricted Subsidiary of Regency Energy Partners or any Joint Venture but only to the extent that such liability is the result of Regency Energy Partners’ or any such Restricted Subsidiary’s being a general partner of such Unrestricted Subsidiary or Joint Venture and not as guarantor of such Indebtedness and provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (12) and then outstanding does not exceed $50.0 million; and (13) the incurrence by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of additional Indebtedness; provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (13) and then outstanding does not exceed the greater of (a) $150.0 100.0 million and (b) 7.55.0% of Targa Resources Regency Energy Partners’ Consolidated Net Tangible Assets. Targa Resources Regency Energy Partners shall not incur, and shall not permit Finance Corp. or any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of Targa Resources Regency Energy Partners, Finance Corp. or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness of a Person shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of such Person solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. For purposes of determining compliance with this Section 4.09, if an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (13) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, Targa Resources Regency Energy Partners will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares of the same class of Disqualified Equity will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section 4.09; provided, however, in each such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges of Targa Resources Regency Energy Partners as accrued. Notwithstanding any other provision of this Section 4.09, (i) the maximum amount of Indebtedness that Targa Resources Regency Energy Partners or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. Further, the accounting reclassification of any obligation of Targa Resources Partners or any of its Restricted Subsidiaries as Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09.

Appears in 1 contract

Samples: Third Supplemental Indenture (Regency Energy Partners LP)

Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources Partners shall The Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and Targa Resources Partners the Company will not issue any Disqualified Equity Equity, and the Company will not permit any of its Restricted Subsidiaries (other than a Guarantor) to issue any Disqualified Equity; provided, however, that Targa Resources Partners the Company and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) and Targa Resources Partners the Company and the any Restricted Subsidiaries Subsidiary may issue Disqualified Equity, if if, for the Fixed Charge Coverage Ratio for Targa Resources Partners’ Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, Fixed Charge Coverage Ratio would have been at least 2.0 1.75 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter period. (b) The provisions of Section 4.09(a) hereof shall will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Equity described in clause (ii) below: (1) the incurrence by Targa Resources Partners and the Company or any of its Restricted Subsidiary Subsidiaries of additional Indebtedness (including guarantees and letters of credit) under one or more Credit Facilities, provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Targa Resources Partners the Company and its Restricted Subsidiaries thereunder) and then outstanding does not exceed the greater of (a) $2,000.0 800.0 million and (b) the sum of $1.5 billion and 20(i) 90% of Targa Resources Partnersthe book value of the Company’s and its Restricted SubsidiariesConsolidated Net Tangible Assetsaccounts receivable and (ii) 85% of the Company’s and its Restricted Subsidiaries’ inventory, calculated on a consolidated basis and in accordance with GAAP, in each case based on the Company’s balance sheet as of the end of the latest quarter for which the Company has internal financial statements available (and after giving pro forma effect to any acquisitions made subsequent to such balance sheet date; provided that any such adjustments shall be calculated in the manner provided in the definition of Fixed Charge Coverage Ratio); (2) the incurrence by Targa Resources Partners and the Company or its Restricted Subsidiaries of the Existing Indebtedness; (3) the incurrence by Targa Resources Partners, Finance Corp. the Company and the Guarantors of Indebtedness represented by the Notes issued and sold in this offering and the related Note Guarantees to be issued on the date of this Indenture and any Exchange Notes and the related Note Guarantees that may be issued pursuant to a Registration Rights AgreementIndenture; (4) the incurrence by Targa Resources Partners the Company or any of its Restricted Subsidiaries of Indebtedness (including Indebtedness represented by Capital Finance Lease Obligations, Attributable Debt, mortgage financings or purchase money obligations) or the issuance by the Company or any of its Restricted Subsidiaries of Disqualified Equity, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction design, construction, installation, repair or improvement of propertyproperty (real or personal), plant or equipment or other assets used in the business of Targa Resources Partners the Company or such Restricted Subsidiary (whether through the direct purchase of assets or the Capital Stock of any of its Restricted SubsidiariesPerson owning such assets), including all Permitted Refinancing Indebtedness incurred to renew, refundextend, refinance, renew, replace, defease or discharge refund any Indebtedness incurred pursuant to this clause (4), ; provided that after giving effect to any such incurrence incurrence, the aggregate principal amount of all Indebtedness incurred pursuant to this clause (4) and then outstanding does not exceed the greater of (a) $50.0 100.0 million and (b) 4.04.5% of Targa Resources Partners’ the Company’s Consolidated Net Tangible AssetsAssets at such time; (5) the incurrence by Targa Resources Partners the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renewto, refundextend, refinance, renew, replace, defease or discharge any refund Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred or Disqualified Equity to be issued under Section 4.09(a) hereof or clause subclause (2), (3) or (312) of this Section 4.09(b) or this clause (5); (6) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of any Permitted Receivables Financing in an aggregate principal amount at any time outstanding not to exceed $400.0 million; (7) the incurrence by Targa Resources Partners Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources Partners the Company and any of its Restricted Subsidiaries; provided, however, that: (Aa) if Targa Resources Partners or any Guarantor the Company is the obligor on such Indebtedness and the payee a Guarantor is not Targa Resources Partners or a Guarantorthe obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, or if a Guarantor is the obligor on such Indebtedness and neither the Company nor another Guarantor is the obligee, such Indebtedness must be expressly subordinated to the prior payment in the case full in cash of Targa Resources Partners, or all Obligations with respect to the Note Guarantee, in the case Guarantee of a such Guarantor, ; and (Bb) (1i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Targa Resources Partners the Company or a Restricted Subsidiary of Targa Resources Partners the Company and (2ii) 58 any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources Partners or neither the Company nor a Restricted Subsidiary of Targa Resources Partners, the Company will be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources Partners the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (76); (8) 7) the incurrence by Targa Resources Partners the Company or any of its Restricted Subsidiaries of obligations under Hedging ObligationsContracts in the ordinary course of business and not for speculative purposes, including any obligations with respect to letters of credit issued in connection therewith; (9) 8) the guarantee by Targa Resources Partners the Company or any of its Restricted Subsidiaries of Indebtedness of Targa Resources Partners the Company or a any of its Restricted Subsidiary of Targa Resources Partners Subsidiaries that was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed; (109) the incurrence by Targa Resources Partners the Company or any of its Restricted Subsidiaries of obligations relating to net gas Hydrocarbon balancing positions arising in the ordinary course of business and consistent with past practicebusiness; (1110) the incurrence by Targa Resources Partners the Company or any of its Restricted Subsidiaries of Acquired Debt Indebtedness in connection with a transaction meeting either one respect of bid, performance, surety and similar bonds issued for the account of the financial tests set forth Company and any of its Restricted Subsidiaries in clause the ordinary course of business, including guarantees and obligations of the Company or any of its Restricted Subsidiaries with respect to letters of credit supporting such obligations (4) under Section 5.01(ain each case other than an obligation for money borrowed); (1211) the issuance by any of Targa Resources Partners’ the Company’s Restricted Subsidiaries to Targa Resources Partners the Company or to any of its Restricted Subsidiaries of any Disqualified Equity; provided, however, that: (Aa) any subsequent issuance or transfer of Equity Interests that results in any such Disqualified Equity being held by a Person other than Targa Resources Partners the Company or a Restricted Subsidiary of Targa Resources Partnersthe Company; and (Bb) any sale or other transfer of any such Disqualified Equity to a Person that is not either Targa Resources Partners the Company or a Restricted Subsidiary of Targa Resources Partners will the Company shall be deemed, in each case, to constitute an issuance of such Disqualified Equity preferred securities by such Restricted Subsidiary that was not permitted by this clause (11); (12); and) the incurrence or issuance by the Company or any of its Restricted Subsidiaries of (a) Indebtedness or Disqualified Equity of the Company or a Restricted Subsidiary incurred to finance an acquisition and (b) Acquired Debt, provided that, after giving effect to the related merger or acquisition transaction, on a pro forma basis, either (i) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.09(a) hereof or (ii) the Fixed Charge Coverage ratio for the Company would not be less than immediately prior to such transactions; (13) the incurrence by Targa Resources Partners the Company or any of its Restricted Subsidiaries of additional IndebtednessIndebtedness or the issuance by the Company or any of its Restricted Subsidiaries of Disqualified Equity; provided that, after giving effect to any such incurrenceincurrence or issuance, the aggregate principal amount of all Indebtedness, including all Permitted Refinancing Indebtedness incurred to extend, refinance, renew, replace, defease or refund any Indebtedness incurred or Disqualified Equity issued under this clause (13) and then outstanding ), does not exceed the greater of (a) $150.0 100.0 million and (b) 7.54.5% of Targa Resources Partners’ the Company’s Consolidated Net Tangible Assets. Targa Resources Partners shall not incur; (14) Indebtedness incurred by the Company or any Restricted Subsidiary of the Company to the extent that the net proceeds thereof are promptly deposited to defease or to satisfy and discharge the Notes; (15) Indebtedness of the Company or any Restricted Subsidiary of the Company consisting of obligations to pay insurance premiums or take-or-pay obligations contained in supply arrangements incurred in the ordinary course of business; (16) Indebtedness in respect of any bankers’ acceptance, bank guarantees, letter of credit, warehouse receipt or similar facilities, and shall reinvestment obligations related thereto, entered into in the ordinary course of business; (17) Guarantees (a) incurred in the ordinary course of business in respect of obligations of (or to) suppliers, customers, franchisees, lessors and licensees that, in each case, are non-Affiliates or (b) otherwise constituting Investments permitted under this Indenture; (18) Indebtedness of Foreign Subsidiaries incurred in an aggregate principal amount at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, refinance, renew, replace, defease or refund any Indebtedness incurred under this clause (18), not permit Finance Corp. to exceed as of any date of incurrence $40.0 million; (19) Indebtedness issued by the Company or any Guarantor of its Restricted Subsidiaries to incurany current, future or former director, officer, consultant or employee of the Company, the direct or indirect parent of the Company or any Restricted Subsidiary of the Company (or any of their Affiliates), or their estates or the beneficiaries of such estates to finance the purchase, redemption, acquisition or retirement for value of Equity Interests permitted by Section 4.07(b)(5) hereof, in an aggregate principal amount at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, refinance, renew, replace, defease or refund any Indebtedness incurred under this clause (including Permitted Debt19), not to exceed $10.0 million as of any date of incurrence; (20) that is contractually subordinated Indebtedness in right respect of payment Treasury Management Arrangements; (21) Contribution Indebtedness; (22) (a) Indebtedness incurred in connection with any Sale and Leaseback Transaction and any refinancing, refunding, renewal or extension of any such Indebtedness, provided that, except to the extent otherwise permitted hereunder, the principal amount of any other Indebtedness of Targa Resources Partners, Finance Corp. or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment not increased above the principal amount thereof outstanding immediately prior to the Notes such refinancing, refunding, renewal or extension and the applicable Note Guarantee on substantially identical termsdirect and contingent obligors with respect to such Indebtedness are not changed; provided(b) Indebtedness in respect of overdraft facilities, however, that no employee credit card programs and other cash management arrangements in the ordinary course of business; and (c) Indebtedness representing deferred compensation to employees of a Person shall be deemed to be contractually subordinated the Company (or any direct or indirect parent of the Company) and its Restricted Subsidiaries incurred in right the ordinary course of payment to any business; and (23) cash management obligations and other Indebtedness in respect of such Person solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basisnetting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case in connection with deposit accounts. For purposes of determining compliance with this Section 4.09, if in the event that an item of proposed Indebtedness (including Acquired Debt) or Disqualified Equity meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (1323) aboveof Section 4.09(b), or is entitled to be incurred pursuant to Section 4.09(a) hereof, Targa Resources Partners the Company will be permitted to divide and classify (or later divide, classify or reclassify in whole or in part in its sole discretion) such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, Disqualified Equity in any manner that complies with this Section 4.094.09 (including in part pursuant to one or more clauses and/or in part pursuant to Section 4.09(a) hereof). Any Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially Existing ABL Facility shall be deemed to have been incurred on such date in reliance on the exception provided by clause under Section 4.09(b)(1) hereof and may not be later classified or reclassified pursuant to Section 4.09(a) hereof. (1c) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of 60 dividends on Disqualified Equity in the form of additional shares of the same class of Disqualified Equity will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section 4.09; , provided, however, in each such case, that the amount of any such accrual, accretion or payment thereof is included in Fixed Charges of Targa Resources Partners the Company as accrued. Notwithstanding any other provision accrued to the extent required by the definition of this Section 4.09, (i) the maximum amount of Indebtedness that Targa Resources Partners or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency valuesterm. Further, the accounting reclassification of any obligation of Targa Resources Partners the Company or any of its Restricted Subsidiaries as Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09. (d) For purposes of determining any particular amount of Indebtedness, any Guarantees, Liens or obligations with respect to letters of credit, in each case, supporting Indebtedness otherwise included in the determination of such particular amount, will not be included. In addition, notwithstanding any other provision of this Section 4.09, the maximum amount of Indebtedness that may be incurred pursuant to this Section 4.09 will not be deemed to be exceeded, with respect to any outstanding Indebtedness, due solely to the result of fluctuations in the exchange rates of currencies. The principal amount of any Indebtedness incurred to refinance other Indebtedness, if incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Indebtedness is denominated that is in effect on the date of such refinancing.

Appears in 1 contract

Samples: Indenture (CVR Energy Inc)

Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources Hxxxx Energy Partners shall will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and Targa Resources Hxxxx Energy Partners will not issue any Disqualified Equity and will not permit any of its Restricted Subsidiaries to issue any Disqualified Equity; provided, however, that Targa Resources Hxxxx Energy Partners and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) and Targa Resources Hxxxx Energy Partners and the Restricted Subsidiaries may issue Disqualified Equity, if the Fixed Charge Coverage Ratio for Targa Resources the Hxxxx Energy Partners’ most recently ended four full fiscal quarters for which internal financial statements are available Reference Period immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, would have been at least 2.0 to 1.01, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter periodReference Period. (b) The provisions of Section 4.09(a) hereof shall will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Equity described in clause (ii) below:): (1) the incurrence by Targa Resources Hxxxx Energy Partners and any Restricted Subsidiary Guarantor of additional Indebtedness (including and letters of credit) credit under Credit Facilities, provided that, after giving effect to such incurrence, the Facilities in an aggregate principal amount of all Indebtedness incurred at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Targa Resources Hxxxx Energy Partners and its Restricted Subsidiaries thereunder) and then outstanding does not to exceed the greater of (a) $2,000.0 200.0 million and (b) the sum of $1.5 billion 25 million and 2015% of Targa Resources Partners’ Consolidated Net Tangible Assets, in each case, less the aggregate amount of all Net Proceeds of Asset Sales applied by Hxxxx Energy Partners or any of its Restricted Subsidiaries since the date of this Indenture to repay any term Indebtedness under a Credit Facility or to repay any revolving credit Indebtedness under a Credit Facility and effect a corresponding commitment reduction thereunder pursuant to Section 4.10 hereof; (2) the incurrence by Targa Resources Hxxxx Energy Partners and its Restricted Subsidiaries of the Existing Indebtedness; (3) the incurrence by Targa Resources Hxxxx Energy Partners, Finance Corp. and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and any the Exchange Notes and the related Note Guarantees that may to be issued pursuant to a the Registration Rights Agreement; (4) the incurrence by Targa Resources Hxxxx Energy Partners or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of Targa Resources Hxxxx Energy Partners or any of its Restricted Subsidiaries, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), provided that after giving effect not to such incurrence the aggregate principal amount of all Indebtedness incurred pursuant to this clause (4) and then outstanding does not exceed the greater of (a) $50.0 20.0 million and (b) 4.0% of Targa Resources Partners’ Consolidated Net Tangible Assetsat any time outstanding; (5) the incurrence by Targa Resources Hxxxx Energy Partners or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clause clauses (2), (3) or (34) of this Section 4.09(b) or this clause (5); (6) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of any Permitted Receivables Financing in an aggregate principal amount at any time outstanding not to exceed $400.0 million; (7) the incurrence by Targa Resources Hxxxx Energy Partners or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources Hxxxx Energy Partners and any of its Restricted Subsidiaries; provided, however, that: (A) if Targa Resources Hxxxx Energy Partners or any Guarantor is the obligor on such Indebtedness and the payee is not Targa Resources Hxxxx Energy Partners or a Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of Targa Resources Hxxxx Energy Partners, or the Note Guarantee, in the case of a Guarantor, ; and (B) (1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Targa Resources Hxxxx Energy Partners or a Restricted Subsidiary of Targa Resources Hxxxx Energy Partners and (2) any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources Hxxxx Energy Partners or a Restricted Subsidiary of Targa Resources Hxxxx Energy Partners, will be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources Hxxxx Energy Partners or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (76); (8) 7) the incurrence by Targa Resources Hxxxx Energy Partners or any of its Restricted Subsidiaries of Hedging Obligations; (9) 8) the guarantee by Targa Resources Partners Hxxxx Energy Partners, Finance Corp. or any of its Restricted Subsidiaries the Guarantors of Indebtedness of Targa Resources Partners Hxxxx Energy Partners, Finance Corp. or a Restricted Subsidiary of Targa Resources Hxxxx Energy Partners that was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;; and (109) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of obligations relating to net gas balancing positions arising in the ordinary course of business and consistent with past practice; (11) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of Acquired Debt in connection with a transaction meeting either one of the financial tests set forth in clause (4) under Section 5.01(a); (12) the issuance by any of Targa Resources Partners’ Restricted Subsidiaries to Targa Resources Partners or to any of its Restricted Subsidiaries of any Disqualified Equity; provided, however, that: (A) any subsequent issuance or transfer of Equity Interests that results in any such Disqualified Equity being held by a Person other than Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners; and (B) any sale or other transfer of any such Disqualified Equity to a Person that is not either Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners will be deemed, in each case, to constitute an issuance of such Disqualified Equity by such Restricted Subsidiary that was not permitted by this clause (12); and (13) the incurrence by Targa Resources Hxxxx Energy Partners or any of its Restricted Subsidiaries of additional Indebtedness; provided that, after giving effect to any such incurrence, the Indebtedness in an aggregate principal amount of all Indebtedness incurred under this clause (13) and then outstanding does at any time outstanding, not to exceed the greater of (a) $150.0 million and (b) 7.5% of Targa Resources Partners’ Consolidated Net Tangible Assets40.0 million. Targa Resources Hxxxx Energy Partners shall will not incur, and shall will not permit Finance Corp. or any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of Targa Resources Hxxxx Energy Partners, Finance Corp. or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness of a Person shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of such Person Hxxxx Energy Partners solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. For purposes of determining compliance with this Section 4.09, if in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (139) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, Targa Resources Hxxxx Energy Partners will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares of the same class of Disqualified Equity will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section 4.09; provided, however, in each such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges of Targa Resources Hxxxx Energy Partners as accrued. Notwithstanding any other provision of this Section 4.09, (i) the maximum amount of Indebtedness that Targa Resources Hxxxx Energy Partners or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. Further, the accounting reclassification of any obligation of Targa Resources Partners or any of its Restricted Subsidiaries as Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09.

Appears in 1 contract

Samples: Indenture (Holly Energy Partners Lp)

Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources Partners shall TLLP will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and Targa Resources Partners TLLP will not issue any Disqualified Equity and will not permit any of its Restricted Subsidiaries to issue any Disqualified Equity; provided, however, that Targa Resources Partners TLLP and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) and Targa Resources Partners TLLP and the any Restricted Subsidiaries Subsidiary may issue Disqualified Equity, if the Fixed Charge Coverage Ratio for Targa Resources Partners’ most recently ended four full fiscal quarters for which internal financial statements are available TLLP’s Reference Period immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, would have been at least 2.0 2.00 to 1.01.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter periodReference Period. (b) The provisions of Section 4.09(a) hereof shall will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Equity described in clause (ii) below:): (1) the incurrence by Targa Resources Partners TLLP and any Restricted Subsidiary of additional Indebtedness (including letters of credit) under pursuant to one or more Credit Facilities, provided that, after giving effect to such incurrence, the Facilities in an aggregate principal amount of all Indebtedness incurred at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Targa Resources Partners TLLP and its Restricted Subsidiaries thereunder) and then outstanding does not to exceed the greater of (a) $2,000.0 900.0 million and (b) the sum of $1.5 billion 600.0 million and 2020.0% of Targa Resources Partners’ Consolidated Net Tangible AssetsAssets (determined as of the date of incurrence and after giving effect to the use of proceeds therefrom); (2) the incurrence by Targa Resources Partners TLLP, Finance Corp. and its Restricted Subsidiaries of the Existing Indebtedness; (3) the incurrence by Targa Resources PartnersTLLP, Finance Corp. and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture Issue Date and any the Exchange Notes and the related Note Guarantees that may to be issued pursuant to a the Registration Rights AgreementAgreement in exchange therefor; (4) the incurrence by Targa Resources Partners TLLP or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, Synthetic Lease Obligations, mortgage financings or purchase money obligationsobligations (including any Acquired Debt), in each case, incurred in connection with the purchase of, or for the purpose of financing all or any part of the purchase price or cost of construction construction, improvement or improvement of development of, property, plant or equipment used or useful in the business of Targa Resources Partners TLLP or any of its Restricted SubsidiariesSubsidiaries and related financing costs, and Attributable Debt in respect of sale and leaseback transactions, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), provided that after giving effect at any time outstanding not to such incurrence the aggregate principal amount of all Indebtedness incurred pursuant to this clause (4) and then outstanding does not exceed the greater of (a) $50.0 200.0 million and (b) 4.05.0% of Targa Resources Partners’ TLLP’s Consolidated Net Tangible AssetsAssets (determined as of the date of incurrence and after giving effect to the use of proceeds therefrom); (5) the incurrence by Targa Resources Partners TLLP or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clause (2), (3), (12) or (313) of this Section 4.09(b) or this clause (5); (6) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of any Permitted Receivables Financing in an aggregate principal amount at any time outstanding not to exceed $400.0 million; (7) the incurrence by Targa Resources Partners TLLP or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources Partners TLLP and any of its Restricted Subsidiaries; provided, however, that:: 001214-0006-16616731.1 (A) if Targa Resources Partners TLLP or any Guarantor is the obligor on such Indebtedness and the payee is not Targa Resources Partners TLLP or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of Targa Resources PartnersTLLP, or the Note Guarantee, in the case of a Guarantor, ; and (B) (1i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Targa Resources Partners TLLP or a Restricted Subsidiary of Targa Resources Partners TLLP and (2ii) any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources Partners TLLP or a Restricted Subsidiary of Targa Resources PartnersTLLP, will be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources Partners TLLP or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (76); (8) 7) the incurrence by Targa Resources Partners TLLP or any of its Restricted Subsidiaries of Hedging Obligations; (9) 8) the guarantee by Targa Resources Partners TLLP or any of its Restricted Subsidiaries the Guarantors of Indebtedness of Targa Resources Partners TLLP or a Restricted Subsidiary of Targa Resources Partners that was permitted to be TLLP or the Indebtedness incurred by another provision of this Section 4.09Joint Ventures constituting Permitted Investments; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the NotesNotes or Note Guarantees, then the Guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed; (109) the incurrence by Targa Resources Partners TLLP or any of its Restricted Subsidiaries of obligations relating to net gas balancing positions arising Indebtedness in respect of workers’ compensation or similar liabilities, health or other types of social security benefits, unemployment or other insurance or self-insurance obligations, insurance contracts, reclamation, statutory obligations, bankers’ acceptances, and bid, performance, advance, payment, deposit, appeal and surety bonds in the ordinary course of business business, including guarantees and consistent with past practiceobligations respecting standby letters of credit supporting such obligations, to the extent not drawn (in each case other than an obligation for money borrowed) and replacements of any of the foregoing; (1110) the incurrence by Targa Resources Partners TLLP or any of its Restricted Subsidiaries of Acquired Debt in connection with Indebtedness arising from the honoring by a transaction meeting either one bank or other financial institution of the financial tests set forth in clause (4) under Section 5.01(a)a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days; (1211) the issuance by any of Targa Resources Partners’ Restricted Subsidiaries to Targa Resources Partners TLLP or to any of its Restricted Subsidiaries of Disqualified Equity to TLLP or any Disqualified Equityof its Restricted Subsidiaries, as the case may be; provided, however, that: (Aa) any subsequent issuance or transfer of Equity Interests of a Restricted Subsidiary that results in any such Disqualified Equity being held held, directly or indirectly, by a Person other than Targa Resources Partners TLLP or a Restricted Subsidiary of Targa Resources PartnersTLLP; and (Bb) any sale or other transfer of any such Disqualified Equity to a Person that is not either Targa Resources Partners TLLP or a Restricted Subsidiary of Targa Resources Partners TLLP, will be deemed, in each case, to constitute an issuance of such Disqualified Equity by TLLP or such Restricted Subsidiary that was not permitted by this clause clause; (12); and) the incurrence by TLLP or any of its Restricted Subsidiaries of Permitted Acquisition Indebtedness; (13) the incurrence by Targa Resources Partners TLLP of Indebtedness in the ordinary course of business under documentary letters of credit, which are to be repaid in full not more than one year after the date on which such Indebtedness was originally incurred to finance the purchase of goods by TLLP or any of its Restricted Subsidiaries; (14) the incurrence of Indebtedness arising from agreements with TLLP or any of its Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earn-outs, or similar obliga 001214-0006-16616731.1 tions, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or a Subsidiary in accordance with the terms of this Indenture, other than guarantees of Indebtedness incurred or assumed by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition; and (15) the incurrence by TLLP or any of its Restricted Subsidiaries of additional Indebtedness; provided that, after giving effect to any such incurrence, the Indebtedness in an aggregate principal amount of all Indebtedness incurred under this clause (13) and then outstanding does at any time outstanding, not to exceed the greater of (a) $150.0 200.0 million and (b) 7.55.0% of Targa Resources Partners’ Consolidated Net Tangible AssetsAssets (determined as of the date of incurrence and after giving effect to the use of proceeds therefrom). Targa Resources Partners shall TLLP will not incur, and shall will not permit Finance Corp. or any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of Targa Resources Partners, Finance Corp. TLLP or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness of a Person shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of such Person TLLP solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. For purposes of determining compliance with this Section 4.09, if in the event that an item of proposed Indebtedness (including Acquired Debt) meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (1315) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, Targa Resources Partners TLLP will be permitted to classify all or a portion of such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. ; provided that Indebtedness under the Credit Facilities Agreement outstanding on each of the date on which Notes are first issued Issue Date and authenticated under this Indenture the Escrow Release Date will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. .” The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares of the same class of Disqualified Equity will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section 4.09; provided, however, in each such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges of Targa Resources Partners as accrued. Notwithstanding any other provision of this Section 4.09, (i) the maximum amount of Indebtedness that Targa Resources Partners TLLP or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. FurtherThe amount of any Indebtedness outstanding as of any date will be: (1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount; (2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and (3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the accounting reclassification lesser of: (A) the Fair Market Value of such assets at the date of determination; and (B) the amount of the Indebtedness of the other Person. For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed, in the case of revolving credit debt; 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 001214-0006-16616731.1 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 (i) the principal amount of such Indebtedness being refinanced plus (ii) the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses incurred in connection with such refinancing. The principal amount of any obligation Indebtedness incurred to refinance other Indebtedness, if incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Indebtedness is denominated that is in effect on the date of Targa Resources Partners or any of its Restricted Subsidiaries as Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09such refinancing.

Appears in 1 contract

Samples: Indenture (Tesoro Corp /New/)

Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources Partners shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and Targa Resources Partners will not issue any Disqualified Equity and will not permit any of its Restricted Subsidiaries to issue any Disqualified Equity; provided, however, that Targa Resources Partners and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) and Targa Resources Partners and the Restricted Subsidiaries may issue Disqualified Equity, if the Fixed Charge Coverage Ratio for Targa Resources Partners’ most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter period. (b) The provisions of Section 4.09(a) hereof shall not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Equity described in clause (ii) below: (1) the incurrence by Targa Resources Partners and any Restricted Subsidiary of additional Indebtedness (including letters of credit) under Credit Facilities, provided that, after giving effect to such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Targa Resources Partners and its Restricted Subsidiaries thereunder) and then outstanding does not exceed the greater of (a) $2,000.0 1,500.0 million and (b) the sum of $1.5 1.0 billion and 20% of Targa Resources Partners’ Consolidated Net Tangible Assets; (2) the incurrence by Targa Resources Partners and its Restricted Subsidiaries of the Existing Indebtedness; (3) the incurrence by Targa Resources Partners, Finance Corp. and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and any Exchange Notes and the related Note Guarantees that may be issued pursuant to a Registration Rights Agreement; (4) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of Targa Resources Partners or any of its Restricted Subsidiaries, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), provided that after giving effect to such incurrence the aggregate principal amount of all Indebtedness incurred pursuant to this clause (4) and then outstanding does not exceed the greater of (a) $50.0 million and (b) 4.0% of Targa Resources Partners’ Consolidated Net Tangible Assets; (5) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clause (2) or (3) of this Section 4.09(b) or this clause (5); (6) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of any Permitted Receivables Financing in an aggregate principal amount at any time outstanding not to exceed $400.0 million; (7) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources Partners and any of its Restricted Subsidiaries; provided, however, that: (A) if Targa Resources Partners or any Guarantor is the obligor on such Indebtedness and the payee is not Targa Resources Partners or a Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of Targa Resources Partners, or the Note Guarantee, in the case of a Guarantor, and (B) (1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners and (2) any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners, will be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources Partners or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (7); (8) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of Hedging Obligations; (9) the guarantee by Targa Resources Partners or any of its Restricted Subsidiaries of Indebtedness of Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners that was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed; (10) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of obligations relating to net gas balancing positions arising in the ordinary course of business and consistent with past practice; (11) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of Acquired Debt in connection with a transaction meeting either one of the financial tests set forth in clause (4) under Section 5.01(a); (12) the issuance by any of Targa Resources Partners’ Restricted Subsidiaries to Targa Resources Partners or to any of its Restricted Subsidiaries of any Disqualified Equity; provided, however, that: (A) any subsequent issuance or transfer of Equity Interests that results in any such Disqualified Equity being held by a Person other than Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners; and (B) any sale or other transfer of any such Disqualified Equity to a Person that is not either Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners will be deemed, in each case, to constitute an issuance of such Disqualified Equity by such Restricted Subsidiary that was not permitted by this clause (12); and (13) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of additional Indebtedness; provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (13) and then outstanding does not exceed the greater of (a) $150.0 50.0 million and (b) 7.54.0% of Targa Resources Partners’ Consolidated Net Tangible Assets. Targa Resources Partners shall not incur, and shall not permit Finance Corp. or any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of Targa Resources Partners, Finance Corp. or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness of a Person shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of such Person solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. For purposes of determining compliance with this Section 4.09, if an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (13) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, Targa Resources Partners will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares of the same class of Disqualified Equity will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section 4.09; provided, however, in each such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges of Targa Resources Partners as accrued. Notwithstanding any other provision of this Section 4.09, (i) the maximum amount of Indebtedness that Targa Resources Partners or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. Further, the accounting reclassification of any obligation of Targa Resources Partners or any of its Restricted Subsidiaries as Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09.

Appears in 1 contract

Samples: Indenture (Targa Resources Partners LP)

Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources Partners shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and Targa Resources Partners will not issue any Disqualified Equity and will not permit any of its Restricted Subsidiaries to issue any Disqualified Equity; provided, however, that Targa Resources Partners and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) and Targa Resources Partners and the Restricted Subsidiaries may issue Disqualified Equity, if the Fixed Charge Coverage Ratio for Targa Resources Partners’ most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter period. (b) The provisions of Section 4.09(a) hereof shall not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Equity described in clause (ii) below: (1) the incurrence by Targa Resources Partners and any Restricted Subsidiary of additional Indebtedness (including letters of credit) under Credit Facilities, provided that, after giving effect to such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Targa Resources Partners and its Restricted Subsidiaries thereunder) and then outstanding does not exceed the greater of (a) $2,000.0 1,200.0 million and (b) the sum of $1.5 billion 750.0 million and 20% of Targa Resources Partners’ Consolidated Net Tangible Assets; (2) the incurrence by Targa Resources Partners and its Restricted Subsidiaries of the Existing Indebtedness; (3) the incurrence by Targa Resources Partners, Finance Corp. and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and any Exchange Notes and the related Note Guarantees that may be issued pursuant to a Registration Rights Agreement; (4) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of Targa Resources Partners or any of its Restricted Subsidiaries, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), provided that after giving effect to such incurrence the aggregate principal amount of all Indebtedness incurred pursuant to this clause (4) and then outstanding does not exceed the greater of (a) $50.0 million and (b) 4.0% of Targa Resources Partners’ Consolidated Net Tangible Assets; (5) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clause (2) or (3) of this Section 4.09(b) or this clause (5); (6) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of any Permitted Receivables Financing in an aggregate principal amount at any time outstanding not to exceed $400.0 million; (7) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources Partners and any of its Restricted Subsidiaries; provided, however, that: (A) if Targa Resources Partners or any Guarantor is the obligor on such Indebtedness and the payee is not Targa Resources Partners or a Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of Targa Resources Partners, or the Note Guarantee, in the case of a Guarantor, and (B) (1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners and (2) any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners, will be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources Partners or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (76); (8) 7) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of Hedging Obligations; (9) 8) the guarantee by Targa Resources Partners or any of its Restricted Subsidiaries of Indebtedness of Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners that was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed; (109) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of obligations relating to net gas balancing positions arising in the ordinary course of business and consistent with past practice; (1110) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of Acquired Debt in connection with a transaction meeting either one of the financial tests set forth in clause (4) under Section 5.01(a); (1211) the issuance by any of Targa Resources Partners’ Restricted Subsidiaries to Targa Resources Partners or to any of its Restricted Subsidiaries of any Disqualified Equity; provided, however, that: (A) any subsequent issuance or transfer of Equity Interests that results in any such Disqualified Equity being held by a Person other than Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners; and (B) any sale or other transfer of any such Disqualified Equity to a Person that is not either Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners will be deemed, in each case, to constitute an issuance of such Disqualified Equity by such Restricted Subsidiary that was not permitted by this clause (1211); and (1312) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of additional Indebtedness; provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (1312) and then outstanding does not exceed the greater of (a) $150.0 50.0 million and (b) 7.54.0% of Targa Resources Partners’ Consolidated Net Tangible Assets. Targa Resources Partners shall not incur, and shall not permit Finance Corp. or any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of Targa Resources Partners, Finance Corp. or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness of a Person shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of such Person solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. For purposes of determining compliance with this Section 4.09, if an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (1312) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, Targa Resources Partners will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares of the same class of Disqualified Equity will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section 4.09; provided, however, in each such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges of Targa Resources Partners as accrued. Notwithstanding any other provision of this Section 4.09, (i) the maximum amount of Indebtedness that Targa Resources Partners or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. Further, the accounting reclassification of any obligation of Targa Resources Partners or any of its Restricted Subsidiaries as Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09.

Appears in 1 contract

Samples: Indenture (Targa Resources Partners LP)

Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources Partners The Partnership shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt), and Targa Resources Partners the Partnership will not issue any Disqualified Equity and will not permit any of its Restricted Subsidiaries to issue any Disqualified Equity; provided, however, that Targa Resources Partners the Partnership and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) ), and Targa Resources Partners the Partnership and the Restricted Subsidiaries may issue Disqualified Equity, if the Fixed Charge Coverage Ratio for Targa Resources Partners’ the Partnership's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, issued would have been at least 2.0 2.25 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred incurred, or the Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter period. (b) The provisions Notwithstanding the prohibitions of Section 4.09(a) hereof ), so long as no Default or Event of Default shall not prohibit have occurred and be continuing or would be caused thereby, the incurrence of Partnership and its Restricted Subsidiaries may incur any of the following items of Indebtedness (collectively, "Permitted Debt”) or the issuance of any Disqualified Equity described in clause (ii) below:"): 64 (1i) the incurrence by Targa Resources Partners the Partnership and any of its Restricted Subsidiary Subsidiaries of additional the Indebtedness (including letters of credit) under Credit Facilities, Facilities and the guarantees thereof; provided that, after giving effect to such incurrence, that the aggregate principal amount of all Indebtedness incurred of the Partnership and the Restricted Subsidiaries outstanding under this clause (1) (with letters all Credit Facilities after giving effect to such incurrence does not exceed $1.2 billion less the aggregate amount of credit being deemed to all repayments of Indebtedness under a Credit Facility that have a principal amount equal to been made by the maximum potential liability Partnership or any of Targa Resources Partners and its Restricted Subsidiaries thereunder) and then outstanding does not exceed with Net Proceeds from Asset Sales to the greater extent such repayments constitute a permanent reduction of (a) $2,000.0 million and (b) the sum of $1.5 billion and 20% of Targa Resources Partners’ Consolidated Net Tangible Assetscommitments under such Credit Facility; (2ii) the incurrence by Targa Resources Partners the Partnership and its Restricted Subsidiaries of the Existing Indebtedness; (3iii) the incurrence by Targa Resources Partners, Finance Corp. the Partnership and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and any Exchange Notes and the related Note Guarantees that may be issued pursuant to a Registration Rights AgreementObligations; (4iv) the incurrence by Targa Resources Partners the Partnership or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of Targa Resources Partners the Partnership or any of its such Restricted SubsidiariesSubsidiary, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), provided that after giving effect to such incurrence the in an aggregate principal amount of all Indebtedness incurred pursuant not to this clause (4) and then outstanding does not exceed the greater of (a) $50.0 20.0 million and (b) 4.0% of Targa Resources Partners’ Consolidated Net Tangible Assetsat any time outstanding; (5v) the incurrence by Targa Resources Partners the Partnership or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, refinance or replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be not incurred under Section 4.09(a) hereof or clause (2) or (3) in violation of this Section 4.09(b) or this clause (5)Indenture; (6vi) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of any Permitted Receivables Financing in an aggregate principal amount at any time outstanding not to exceed $400.0 million; (7) the incurrence by Targa Resources Partners Partnership or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources Partners the Partnership and any of its Restricted Subsidiaries; provided, however, that: (A) if Targa Resources Partners the Partnership or any Subsidiary Guarantor is the obligor on such Indebtedness and the payee is not Targa Resources Partners or a GuarantorIndebtedness, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of Targa Resources Partnersthe Partnership, or the Note GuaranteeGuarantee of such Subsidiary Guarantor, in the case of a Subsidiary Guarantor, ; and (B) (1i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Targa Resources Partners the Partnership or a Restricted Subsidiary of Targa Resources Partners thereof and (2ii) any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources Partners the Partnership or a Restricted Subsidiary of Targa Resources Partnersthereof, will shall be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources Partners the Partnership or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (7vi); (8) vii) the incurrence by Targa Resources Partners the Partnership or any of its Restricted Subsidiaries of Hedging ObligationsObligations that are incurred for the purpose of fixing or hedging foreign currency exchange rate risk of the Partnership or any Restricted Subsidiary or interest rate risk with respect to any floating rate Indebtedness of the Partnership or any Restricted Subsidiary that is permitted by the terms of this Indenture to be outstanding or commodities pricing risks of the Partnership or any Restricted Subsidiary in respect of hydrocarbon production from properties in which the Partnership or any of its Restricted Subsidiaries owns an interest; (9viii) the guarantee by Targa Resources Partners the Partnership or any of its Restricted Subsidiaries of Indebtedness of Targa Resources Partners the Partnership or a Restricted Subsidiary of Targa Resources Partners the Partnership that was permitted to be incurred by another provision of this Section 4.09; provided that if covenant; (ix) bid, performance, surety and appeal bonds incurred in the Indebtedness being guaranteed is subordinated to or pari passu with the Notesordinary course of business, then the Guarantee shall be subordinated or pari passu, as applicableincluding guarantees and standby letters of credit supporting such obligations, to the same extent as the Indebtedness guaranteednot drawn; (10x) the incurrence by Targa Resources Partners the Partnership or any of its Restricted Subsidiaries of obligations relating additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to net gas balancing positions arising in the ordinary course of business and consistent with past practicerefund, refinance or replace any Indebtedness incurred pursuant to this clause (x), not to exceed $20.0 million; (11xi) the incurrence by Targa Resources Partners or any of its Restricted the Partnership's Unrestricted Subsidiaries of Acquired Debt in connection with a transaction meeting either one of the financial tests set forth in clause (4) under Section 5.01(a); (12) the issuance by any of Targa Resources Partners’ Restricted Subsidiaries to Targa Resources Partners or to any of its Restricted Subsidiaries of any Disqualified EquityNon-Recourse Debt; provided, however, that: (A) any subsequent issuance or transfer of Equity Interests that results in if any such Disqualified Equity being held Indebtedness ceases to be Non-Recourse Debt of an Unrestricted Subsidiary, such event shall be deemed to constitute an incurrence of Indebtedness by a Person other than Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners; and (B) any sale or other transfer of any such Disqualified Equity to a Person that is not either Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners will be deemed, in each case, to constitute an issuance of such Disqualified Equity by such Restricted Subsidiary the Partnership that was not permitted by this clause (12xi); (xii) the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on Disqualified Equity, in the form of additional shares of the same class of Disqualified Equity, provided, in each such case, that the amount thereof is included in Fixed Charges of the Partnership as so accrued, accredited or amortized; and (13xiii) Indebtedness incurred by the incurrence by Targa Resources Partners Partnership or any of its Restricted Subsidiaries arising from agreements or their respective bylaws providing for indemnification, adjustment of additional Indebtedness; provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause purchase price or similar obligations. (13c) and then outstanding does not exceed the greater of (a) $150.0 million and (b) 7.5% of Targa Resources Partners’ Consolidated Net Tangible Assets. Targa Resources Partners shall not incur, and shall not permit Finance Corp. or any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of Targa Resources Partners, Finance Corp. or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness of a Person shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of such Person solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. For purposes of determining compliance with this Section 4.09, if in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses paragraphs (1b)(i) through (13b)(xiii) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof), Targa Resources Partners will the Partnership shall be permitted to classify such item of 66 Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, incurrence in any manner that complies with this Section 4.09. An item of Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued may be divided and authenticated under this Indenture will initially be deemed to have been incurred on such date classified in reliance on the exception provided by clause (1) one or more of the definition types of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares of the same class of Disqualified Equity will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section 4.09; provided, however, in each such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges of Targa Resources Partners as accrued. Notwithstanding any other provision of this Section 4.09, (i) the maximum amount of Indebtedness that Targa Resources Partners or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. Further, the accounting reclassification of any obligation of Targa Resources Partners or any of its Restricted Subsidiaries as Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09Indebtedness.

Appears in 1 contract

Samples: Indenture (Gulfterra Energy Partners L P)

Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources Regency Energy Partners shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and Targa Resources Regency Energy Partners will not issue any Disqualified Equity and will not permit any of its Restricted Subsidiaries to issue any Disqualified Equity; provided, however, that Targa Resources Regency Energy Partners and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) and Targa Resources Regency Energy Partners and the Restricted Subsidiaries may issue Disqualified Equity, if the Fixed Charge Coverage Ratio for Targa Resources Regency Energy Partners’ most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter period. (b) The provisions of Section 4.09(a) hereof shall not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Equity preferred securities described in clause (ii11) below: (1) the incurrence by Targa Resources Regency Energy Partners and any Restricted Subsidiary of additional Indebtedness (including any letters of credit) under one or more Credit Facilities, provided provided, that, after giving effect to such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Targa Resources Regency Energy Partners and its Restricted Subsidiaries thereunder) and then outstanding does not exceed the greater of (a) $2,000.0 900.0 million and (b) the sum of $1.5 billion 500.0 million and 2020.0% of Targa Resources Regency Energy Partners’ Consolidated Net Tangible Assets; (2) the incurrence by Targa Resources Regency Energy Partners and its Restricted Subsidiaries of the Existing Indebtedness; (3) the incurrence by Targa Resources Regency Energy Partners, Finance Corp. and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and any Exchange Notes and the related Note Guarantees that may be issued pursuant to a Registration Rights AgreementIndenture; (4) the incurrence by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), provided that after giving effect to such incurrence the aggregate principal amount of all Indebtedness incurred pursuant to this clause (4) and then outstanding does not exceed the greater of (a) $50.0 20.0 million and (b) 4.02.0% of Targa Resources Regency Energy Partners’ Consolidated Net Tangible Assets; (5) the incurrence by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge discharge, any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clause clauses (2) or (3) of this Section 4.09(b) or this clause (5); (6) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of any Permitted Receivables Financing in an aggregate principal amount at any time outstanding not to exceed $400.0 million; (7) the incurrence by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources Regency Energy Partners and any of its Restricted Subsidiaries; provided, however, that: (A) if Targa Resources Regency Energy Partners or any Guarantor is the obligor on such Indebtedness and the payee is not Targa Resources Regency Energy Partners or a Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of Targa Resources Regency Energy Partners, or the Note Guarantee, in the case of a Guarantor, and (B) (1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Targa Resources Regency Energy Partners or a Restricted Subsidiary of Targa Resources Regency Energy Partners and (2) any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources Regency Energy Partners or a Restricted Subsidiary of Targa Resources Regency Energy Partners, will be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources Regency Energy Partners or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (76); (8) 7) the incurrence by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of Hedging Obligations; (9) 8) the guarantee by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of Indebtedness of Targa Resources Regency Energy Partners or a Restricted Subsidiary of Targa Resources Regency Energy Partners that was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed; (109) the incurrence by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of obligations relating to net gas balancing positions arising in the ordinary course of business and consistent with past practice; (1110) the incurrence by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of Acquired Debt in connection with a transaction meeting either one of the financial tests set forth in clause (4) under Section 5.01(a)10.01(a) hereof; (1211) the issuance by any of Targa Resources Regency Energy Partners’ Restricted Subsidiaries to Targa Resources Regency Energy Partners or to any of its Restricted Subsidiaries of any Disqualified Equitypreferred securities; provided, however, that: (Aa) any subsequent issuance or transfer of Equity Interests that results in any such Disqualified Equity preferred securities being held by a Person other than Targa Resources Regency Energy Partners or a Restricted Subsidiary of Targa Resources Regency Energy Partners; and (Bb) any sale or other transfer of any such Disqualified Equity preferred securities to a Person that is not either Targa Resources Regency Energy Partners or a Restricted Subsidiary of Targa Resources Regency Energy Partners will be deemed, in each case, to constitute an issuance of such Disqualified Equity preferred securities by such Restricted Subsidiary that was not permitted by this clause (1211); and (1312) the incurrence by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of additional Indebtedness; provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (1312) and then outstanding does not exceed the greater of (a) $150.0 25.0 million and (b) 7.52.5% of Targa Resources Regency Energy Partners’ Consolidated Net Tangible Assets. Targa Resources Regency Energy Partners shall not incur, and shall not permit Finance Corp. or any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of Targa Resources Regency Energy Partners, Finance Corp. or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness of a Person shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of such Person solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. For purposes of determining compliance with this Section 4.09, if an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (1312) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, Targa Resources Regency Energy Partners will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness Indeb- tedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares of the same class of Disqualified Equity will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section 4.09; provided, however, in each such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges of Targa Resources Regency Energy Partners as accrued. Notwithstanding any other provision of this Section 4.09, (i) the maximum amount of Indebtedness that Targa Resources Regency Energy Partners or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. Further, the accounting reclassification of any obligation of Targa Resources Partners or any of its Restricted Subsidiaries as Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09.

Appears in 1 contract

Samples: Third Supplemental Indenture (Regency Energy Partners LP)

Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources Regency Energy Partners shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and Targa Resources Regency Energy Partners will not issue any Disqualified Equity and will not permit any of its Restricted Subsidiaries to issue any Disqualified Equity; provided, however, that Targa Resources Regency Energy Partners and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) and Targa Resources Regency Energy Partners and the Restricted Subsidiaries may issue Disqualified Equity, if the Fixed Charge Coverage Ratio for Targa Resources Regency Energy Partners’ most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter period. (b) The provisions of Section 4.09(a) hereof shall not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Equity preferred securities described in clause (ii11) below: (1) the incurrence by Targa Resources Regency Energy Partners and any Restricted Subsidiary of additional Indebtedness (including any letters of credit) under one or more Credit Facilities, provided that, after giving effect to such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Targa Resources Regency Energy Partners and its Restricted Subsidiaries thereunder) and then outstanding does not exceed the greater of (a) $2,000.0 1,500.0 million and (b) the sum of $1.5 billion 500.0 million and 2025.0% of Targa Resources Regency Energy Partners’ Consolidated Net Tangible Assets; (2) the incurrence by Targa Resources Regency Energy Partners and its Restricted Subsidiaries of the Existing Indebtedness; (3) the incurrence by Targa Resources Regency Energy Partners, Finance Corp. and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and any Exchange Notes and the related Note Guarantees that may be issued pursuant to a Registration Rights AgreementIndenture; (4) the incurrence by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), provided that after giving effect to such incurrence the aggregate principal amount of all Indebtedness incurred pursuant to this clause (4) and then outstanding does not exceed the greater of (a) $50.0 million and (b) 4.02.0% of Targa Resources Regency Energy Partners’ Consolidated Net Tangible Assets; (5) the incurrence by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge discharge, any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clause clauses (2) or (3) of this Section 4.09(b) or this clause (5); (6) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of any Permitted Receivables Financing in an aggregate principal amount at any time outstanding not to exceed $400.0 million; (7) the incurrence by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources Regency Energy Partners and any of its Restricted Subsidiaries; provided, however, that: (A) if Targa Resources Regency Energy Partners or any Guarantor is the obligor on such Indebtedness and the payee is not Targa Resources Regency Energy Partners or a Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of Targa Resources Regency Energy Partners, or the Note Guarantee, in the case of a Guarantor, and (B) (1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Targa Resources Regency Energy Partners or a Restricted Subsidiary of Targa Resources Regency Energy Partners and (2) any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources Regency Energy Partners or a Restricted Subsidiary of Targa Resources Regency Energy Partners, will be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources Regency Energy Partners or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (76); (8) 7) the incurrence by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of Hedging Obligations; (9) 8) the guarantee by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of Indebtedness of Targa Resources Regency Energy Partners or a Restricted Subsidiary of Targa Resources Regency Energy Partners that was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed; (109) the incurrence by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of obligations relating to net gas balancing positions arising in the ordinary course of business and consistent with past practice; (1110) the incurrence by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of Acquired Debt in connection with a transaction meeting either one of the financial tests set forth in clause (4) under Section 5.01(a); (1211) the issuance by any of Targa Resources Regency Energy Partners’ Restricted Subsidiaries to Targa Resources Regency Energy Partners or to any of its Restricted Subsidiaries of any Disqualified Equitypreferred securities; provided, however, that: (Aa) any subsequent issuance or transfer of Equity Interests that results in any such Disqualified Equity preferred securities being held by a Person other than Targa Resources Regency Energy Partners or a Restricted Subsidiary of Targa Resources Regency Energy Partners; and (Bb) any sale or other transfer of any such Disqualified Equity preferred securities to a Person that is not either Targa Resources Regency Energy Partners or a Restricted Subsidiary of Targa Resources Regency Energy Partners will be deemed, in each case, to constitute an issuance of such Disqualified Equity preferred securities by such Restricted Subsidiary that was not permitted by this clause (11); (12)) the incurrence by Regency Energy Partners or any of its Restricted Subsidiaries of liability in respect of the Indebtedness of any Unrestricted Subsidiary of Regency Energy Partners or any Joint Venture but only to the extent that such liability is the result of Regency Energy Partners’ or any such Restricted Subsidiary’s being a general partner of such Unrestricted Subsidiary or Joint Venture and not as guarantor of such Indebtedness and provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (12) and then outstanding does not exceed $50.0 million; and (13) the incurrence by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of additional Indebtedness; provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (13) and then outstanding does not exceed the greater of (a) $150.0 100.0 million and (b) 7.55.0% of Targa Resources Regency Energy Partners’ Consolidated Net Tangible Assets. Targa Resources Regency Energy Partners shall not incur, and shall not permit Finance Corp. or any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of Targa Resources Regency Energy Partners, Finance Corp. or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness of a Person shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of such Person solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. For purposes of determining compliance with this Section 4.09, if an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (13) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, Targa Resources Regency Energy Partners will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares of the same class of Disqualified Equity will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section 4.09; provided, however, in each such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges of Targa Resources Regency Energy Partners as accrued. Notwithstanding any other provision of this Section 4.09, (i) the maximum amount of Indebtedness that Targa Resources Regency Energy Partners or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. Further, the accounting reclassification of any obligation of Targa Resources Partners or any of its Restricted Subsidiaries as Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09.

Appears in 1 contract

Samples: Supplemental Indenture (Regency Energy Partners LP)

Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources Partners The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and Targa Resources Partners the Company will not issue any Disqualified Equity and will not permit any of its Restricted Subsidiaries to issue any Disqualified Equity; provided, however, that Targa Resources Partners the Company and any Restricted Subsidiary Guarantor may incur Indebtedness (including Acquired Debt) and Targa Resources Partners ), and the Restricted Subsidiaries Company and any Subsidiary Guarantor may issue Disqualified Equity, if the Fixed Charge Coverage Ratio for Targa Resources Partners’ the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, issued would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred incurred, or the Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter period. (b) The provisions of So long as no Default shall have occurred and be continuing or would be caused thereby, Section 4.09(a) hereof shall will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Equity described in clause (ii) below:): (1i) the incurrence by Targa Resources Partners the Company and any Restricted Subsidiary Guarantor of additional Indebtedness (including letters of credit) under Credit Facilities, Facilities and the guarantees thereof; provided that, after giving effect to such incurrence, that the aggregate principal amount of all Indebtedness of the Company and the Restricted Subsidiaries incurred under pursuant to this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Targa Resources Partners and its Restricted Subsidiaries thereunderi) and then outstanding under all Credit Facilities after giving effect to such incurrence does not exceed the greater of (aA) $2,000.0 680.0 million and or (bB) the sum of $1.5 billion and 320.0 million plus 20% of Targa Resources Partners’ the Consolidated Net Tangible AssetsAssets of the Company, in each case less the aggregate amount of all repayments of Indebtedness under any Credit Facility that have been made by the Company or any of its Restricted Subsidiaries in respect of Asset Sales or casualty events to the extent such repayments constitute a permanent reduction of commitments under the terms of such Credit Facility; (2ii) the incurrence by Targa Resources Partners the Company and its Restricted Subsidiaries of Existing Indebtedness (other than under the Existing IndebtednessCredit Agreement); (3iii) the incurrence by Targa Resources Partners, Finance Corp. the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes issued and sold in the Offering and the related Note Guarantees to be issued on the date of this Indenture and any Exchange Notes and the related Note Guarantees that may be issued pursuant to a the Registration Rights Agreement; (4iv) the incurrence by Targa Resources Partners the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of Targa Resources Partners the Company or any of its such Restricted SubsidiariesSubsidiary, in an aggregate principal amount including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred pursuant to this clause (4), provided that after giving effect iv) not to such incurrence the aggregate principal amount of all Indebtedness incurred pursuant to this clause (4) and then outstanding does not exceed the greater of (a) $50.0 40.0 million and at any time outstanding of (b) 4.02.5% of Targa Resources Partners’ Consolidated Consolidate Net Tangible AssetsAssets of the Company; (5v) the incurrence by Targa Resources Partners the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any discharge, Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clause (2ii) or (3iii) of this Section 4.09(b) or this clause (5v); (6vi) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of any Permitted Receivables Financing in an aggregate principal amount at any time outstanding not to exceed $400.0 million; (7) the incurrence by Targa Resources Partners Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources Partners the Company and any of its Restricted Subsidiaries; provided, however, that: (A) if Targa Resources Partners or any Guarantor the Company is the obligor on such Indebtedness and the payee a Subsidiary Guarantor is not Targa Resources Partners or a Guarantorthe obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, or if a Subsidiary Guarantor is the obligor on such Indebtedness and neither the Company nor another Subsidiary Guarantor is the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the case Guarantee of Targa Resources Partners, or the Note Guarantee, in the case of a such Subsidiary Guarantor, ; and (B) (1i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Targa Resources Partners the Company or a Restricted Subsidiary of Targa Resources Partners thereof and (2ii) any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources Partners the Company or a Restricted Subsidiary of Targa Resources Partnersthereof, will shall be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources Partners the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (7vi); (8) vii) the incurrence by Targa Resources Partners the Company or any of its Restricted Subsidiaries of Hedging ObligationsObligations that are incurred for the purpose of fixing or hedging (but not for speculative purposes) (A) foreign currency exchange rate risks of the Company or any Restricted Subsidiary, (B) interest rate risks with respect to any floating rate Indebtedness of the Company or any Restricted Subsidiary that is permitted by the terms of this Indenture to be outstanding or (C) commodities pricing risks of the Company or any Restricted Subsidiary in respect of Hydrocarbons used, produced, processed or sold by the Company or any of its Restricted Subsidiaries; (9viii) the guarantee by Targa Resources Partners the Company or any of its Restricted Subsidiaries of Indebtedness of Targa Resources Partners the Company or a any of its Restricted Subsidiary of Targa Resources Partners Subsidiaries that was permitted to be incurred by another provision of this Section 4.09; provided provided, that if in the event such Indebtedness that is being guaranteed is subordinated to a Subordinated Obligation or pari passu with the Notesa Guarantor Subordinated Obligation, then the Guarantee guarantee shall be subordinated in right of payment to the Notes or pari passuthe Guarantee, as applicable, to the same extent as the Indebtedness guaranteedcase may be; (10ix) the incurrence by Targa Resources Partners the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, payment obligations relating in connection with health or other types of social security benefits, unemployment or other insurance or self-insurance obligations, reclamation, statutory obligations, banks’ acceptances and bid, performance, surety and appeal bonds or other similar obligations incurred in the ordinary course of business, including guarantees and obligations respecting standby letters of credit supporting such obligations, to net gas balancing positions the extent not drawn (in each case other than an obligation for money borrowed); (x) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance of Disqualified Equity in an aggregate principal amount at any time outstanding not to exceed the greater of (a) $60.0 million at any time outstanding or (b) 3.0% of Consolidated Net Tangible Assets of the Company; (xi) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds; (xii) the incurrence of Indebtedness arising from agreements with the Company or any Restricted Subsidiary providing for indemnification, adjustment of purchase price, earn outs, or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or a Subsidiary in accordance with the terms of the Indenture, other than guarantees of Indebtedness incurred or assumed by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition; and (xiii) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness arising out of advances on trade receivables, factoring of receivables, customer prepayments and similar transactions in the ordinary course of business and consistent with past practice; (11) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of Acquired Debt in connection with a transaction meeting either one of the financial tests set forth in clause (4) under Section 5.01(a); (12) the issuance by any of Targa Resources Partners’ Restricted Subsidiaries to Targa Resources Partners or to any of its Restricted Subsidiaries of any Disqualified Equity; provided, however, that: (A) any subsequent issuance or transfer of Equity Interests that results in any such Disqualified Equity being held by a Person other than Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners; and (B) any sale or other transfer of any such Disqualified Equity to a Person that is not either Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners will be deemed, in each case, to constitute an issuance of such Disqualified Equity by such Restricted Subsidiary that was not permitted by this clause (12); and (13) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of additional Indebtedness; provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (13) and then outstanding does not exceed the greater of (a) $150.0 million and (b) 7.5% of Targa Resources Partners’ Consolidated Net Tangible Assets. Targa Resources Partners shall not incur, and shall not permit Finance Corp. or any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of Targa Resources Partners, Finance Corp. or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness of a Person shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of such Person solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. For purposes of determining compliance with this Section 4.09, if an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (13) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, Targa Resources Partners will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares of the same class of Disqualified Equity will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section 4.09; provided, however, in each such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges of Targa Resources Partners as accrued. Notwithstanding any other provision of this Section 4.09, (i) the maximum amount of Indebtedness that Targa Resources Partners or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. Further, the accounting reclassification of any obligation of Targa Resources Partners or any of its Restricted Subsidiaries as Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09.

Appears in 1 contract

Samples: Indenture (Atlas Pipeline Partners Lp)

Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources Partners shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and Targa Resources Partners will not issue any Disqualified Equity and will not permit any of its Restricted Subsidiaries to issue any Disqualified Equity; provided, however, that Targa Resources Partners and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) and Targa Resources Partners and the Restricted Subsidiaries may issue Disqualified Equity, if the Fixed Charge Coverage Ratio for Targa Resources Partners’ most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter period. (b) The provisions of Section 4.09(a) hereof shall not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Equity described in clause (ii) below: (1) the incurrence by Targa Resources Partners and any Restricted Subsidiary of additional Indebtedness (including letters of credit) under Credit Facilities, provided that, after giving effect to such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Targa Resources Partners and its Restricted Subsidiaries thereunder) and then outstanding does not exceed the greater of (a) $2,000.0 million and (b) the sum of $1.5 billion and 20% of Targa Resources Partners’ Consolidated Net Tangible Assets; (2) the incurrence by Targa Resources Partners and its Restricted Subsidiaries of the Existing Indebtedness; (3) the incurrence by Targa Resources Partners, Finance Corp. and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and any Exchange Notes and the related Note Guarantees that may be issued pursuant to a Registration Rights Agreement; (4) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of Targa Resources Partners or any of its Restricted Subsidiaries, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), provided that after giving effect to such incurrence the aggregate principal amount of all Indebtedness incurred pursuant to this clause (4) and then outstanding does not exceed the greater of (a) $50.0 million and (b) 4.0% of Targa Resources Partners’ Consolidated Net Tangible Assets; (5) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clause (2) or (3) of this Section 4.09(b) or this clause (5); (6) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of any Permitted Receivables Financing in an aggregate principal amount at any time outstanding not to exceed $400.0 million; (7) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources Partners and any of its Restricted Subsidiaries; provided, however, that: (A) if Targa Resources Partners or any Guarantor is the obligor on such Indebtedness and the payee is not Targa Resources Partners or a Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of Targa Resources Partners, or the Note Guarantee, in the case of a Guarantor, and (B) (1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners and (2) any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners, will be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources Partners or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (7); (8) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of Hedging Obligations; (9) the guarantee by Targa Resources Partners or any of its Restricted Subsidiaries of Indebtedness of Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners that was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed; (10) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of obligations relating to net gas balancing positions arising in the ordinary course of business and consistent with past practice; (11) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of Acquired Debt in connection with a transaction meeting either one of the financial tests set forth in clause (4) under Section 5.01(a); (12) the issuance by any of Targa Resources Partners’ Restricted Subsidiaries to Targa Resources Partners or to any of its Restricted Subsidiaries of any Disqualified Equity; provided, however, that: (A) any subsequent issuance or transfer of Equity Interests that results in any such Disqualified Equity being held by a Person other than Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners; and (B) any sale or other transfer of any such Disqualified Equity to a Person that is not either Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners will be deemed, in each case, to constitute an issuance of such Disqualified Equity by such Restricted Subsidiary that was not permitted by this clause (12); and (13) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of additional Indebtedness; provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (13) and then outstanding does not exceed the greater of (a) $150.0 million and (b) 7.5% of Targa Resources Partners’ Consolidated Net Tangible Assets. Targa Resources Partners shall not incur, and shall not permit Finance Corp. or any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of Targa Resources Partners, Finance Corp. or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness of a Person shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of such Person solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. For purposes of determining compliance with this Section 4.09, if an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (13) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, Targa Resources Partners will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares or units of the same class of Disqualified Equity will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section 4.09; provided, however, in each such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges of Targa Resources Partners as accrued. Notwithstanding any other provision of this Section 4.09, (i) the maximum amount of Indebtedness that Targa Resources Partners or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. Further, the accounting reclassification of any obligation of Targa Resources Partners or any of its Restricted Subsidiaries as Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09.

Appears in 1 contract

Samples: Indenture (Targa Resources Partners LP)

Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources Partners The Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and Targa Resources Partners the Issuer will not issue any Disqualified Equity and will not permit any of its Restricted Subsidiaries to issue any Disqualified Equity; provided, however, that Targa Resources Partners the Issuer and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) and Targa Resources Partners the Issuer and the Restricted Subsidiaries may issue Disqualified Equity, if the Fixed Charge Coverage Ratio for Targa Resources Partners’ the Issuer’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter period. (b) The provisions of Section 4.09(a) hereof shall not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Equity described in clause (ii12) below: (1) the incurrence by Targa Resources Partners the Issuer and any Restricted Subsidiary of additional Indebtedness (including letters of credit) under Credit Facilities, provided that, after giving effect to such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Targa Resources Partners the Issuer and its Restricted Subsidiaries thereunder) ), together with all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (1), and then outstanding does not exceed the greater of (a) $2,000.0 million 1.75 billion and (b) the sum of $1.5 1.35 billion and 2020.0% of Targa Resources Partners’ the Issuer’s Consolidated Net Tangible Assets; (2) the incurrence by Targa Resources Partners the Issuer and its Restricted Subsidiaries of the Existing Indebtedness; (3) the incurrence by Targa Resources Partners, Finance Corp. the Issuer and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and any Exchange Notes and the related Note Guarantees that may be issued pursuant to a Registration Rights AgreementIndenture; (4) the incurrence by Targa Resources Partners the Issuer or any of its Restricted Subsidiaries of Indebtedness represented by Capital Finance Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of Targa Resources Partners the Issuer or any of its Restricted Subsidiaries, including together with all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), provided that after giving effect to such incurrence the aggregate principal amount of all Indebtedness incurred pursuant to this clause (4) and then outstanding does not exceed the greater of (a) $50.0 275.0 million and (b) 4.05.0% of Targa Resources Partners’ the Issuer’s Consolidated Net Tangible Assets; (5) the incurrence by Targa Resources Partners the Issuer or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clause (1), (2), (3), (4), (11) or (316) of this Section 4.09(b) or this clause (5); (6) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of any Permitted Receivables Financing in an aggregate principal amount at any time outstanding not to exceed $400.0 million[reserved]; (7) the incurrence by Targa Resources Partners the Issuer or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources Partners the Issuer and any of its Restricted Subsidiaries; provided, however, that: (A) if Targa Resources Partners the Issuer or any Guarantor is the obligor on such Indebtedness and the payee is not Targa Resources Partners the Issuer or a Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of Targa Resources Partnersthe Issuer, or the Note Guarantee, in the case of a Guarantor, ; and (B) (1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Targa Resources Partners the Issuer or a Restricted Subsidiary of Targa Resources Partners the Issuer and (2) any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources Partners the Issuer or a Restricted Subsidiary of Targa Resources Partnersthe Issuer, will be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources Partners the Issuer or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (7); (8) the incurrence by Targa Resources Partners the Issuer or any of its Restricted Subsidiaries of Hedging ObligationsObligations or Indebtedness under Treasury Management Arrangements; (9) the guarantee Guarantee by Targa Resources Partners the Issuer or any of its Restricted Subsidiaries of Indebtedness of Targa Resources Partners the Issuer or a Restricted Subsidiary of Targa Resources Partners the Issuer that was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed Guaranteed is subordinated to or pari passu with the applicable series of Notes, then the Guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteedGuaranteed; (10) the incurrence by Targa Resources Partners the Issuer or any of its Restricted Subsidiaries of obligations relating to net gas balancing positions arising in the ordinary course of business and consistent with past practice; (11) the incurrence by Targa Resources Partners the Issuer or any of its Restricted Subsidiaries of Acquired Debt in connection with a transaction meeting either one of the financial tests set forth in clause (4) under Section 5.01(a5.01(a)(4); (12) the issuance by any of Targa Resources Partners’ the Issuer’s Restricted Subsidiaries to Targa Resources Partners the Issuer or to any of its Restricted Subsidiaries of any Disqualified Equity; provided, however, that: (A) any subsequent issuance or transfer of Equity Interests that results in any such Disqualified Equity being held by a Person other than Targa Resources Partners the Issuer or a Restricted Subsidiary of Targa Resources Partnersthe Issuer; and (B) any sale or other transfer of any such Disqualified Equity to a Person that is not either Targa Resources Partners the Issuer or a Restricted Subsidiary of Targa Resources Partners the Issuer will be deemed, in each case, to constitute an issuance of such Disqualified Equity by such Restricted Subsidiary that was not permitted by this clause (12); and; (13) the incurrence by Targa Resources Partners the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, health or other types of social security benefits, unemployment or other insurance or self-insurance obligations, insurance contracts, reclamation, statutory obligations, bankers’ acceptances, and performance, payment, appeal and surety bonds in the ordinary course of business, including guarantees and obligations respecting standby letters of credit supporting such obligations, to the extent not drawn (in each case other than an obligation for money borrowed) and replacements of any of the foregoing; (14) the incurrence in the ordinary course of business by the Issuer or any of its Restricted Subsidiaries of Indebtedness under letters of credit incurred pursuant to a Credit Facility, provided that such obligations are reimbursed within ten days following the drawing of such letter of credit; (15) the incurrence by the Issuer or any of its Restricted Subsidiaries of liability in respect of the Indebtedness of any Unrestricted Subsidiary or any joint venture but only to the extent that such liability is the result of the Issuer’s or any such Restricted Subsidiary’s being a general partner of such Unrestricted Subsidiary or joint venture and not as guarantor of such Indebtedness and provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (15) and then outstanding does not exceed $25.0 million; and (16) the incurrence by the Issuer or any of its Restricted Subsidiaries of additional Indebtedness; provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (13) 16), together with all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (16), and then outstanding does not exceed the greater of (a) $150.0 275.0 million and (b) 7.55.0% of Targa Resources Partners’ the Issuer’s Consolidated Net Tangible Assets. Targa Resources Partners . (c) The Issuer shall not incur, and shall not permit Finance Corp. or any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of Targa Resources Partners, Finance Corp. the Issuer or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness of a Person shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of such Person solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. . (d) For purposes of determining compliance with this Section 4.09, if an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (1316) aboveof Section 4.09(b), or is entitled to be incurred pursuant to Section 4.09(a) hereof, Targa Resources Partners the Issuer will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under the New Senior Secured Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture of the Spin-Off will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. .” (e) The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares or units of the same class of Disqualified Equity will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section 4.09; provided, however, in each such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges of Targa Resources Partners the Issuer as accrued. Notwithstanding any other provision of this Section 4.09, (i) the maximum amount of Indebtedness that Targa Resources Partners the Issuer or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. Further, the accounting reclassification of any obligation of Targa Resources Partners the Issuer or any of its Restricted Subsidiaries as Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09.

Appears in 1 contract

Samples: Indenture (Dte Energy Co)

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Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources Partners shall TLLP will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and Targa Resources Partners TLLP will not issue any Disqualified Equity and will not permit any of its Restricted Subsidiaries to issue any Disqualified Equity; provided, however, that Targa Resources Partners TLLP and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) and Targa Resources Partners TLLP and the any Restricted Subsidiaries Subsidiary may issue Disqualified Equity, if the Fixed Charge Coverage Ratio for Targa Resources Partners’ most recently ended four full fiscal quarters for which internal financial statements are available TLLP’s Reference Period immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, would have been at least 2.0 2.00 to 1.01.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter periodReference Period. (b) The provisions of Section 4.09(a) hereof shall will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Equity described in clause (ii) below:): (1) the incurrence by Targa Resources Partners TLLP and any Restricted Subsidiary of additional Indebtedness (including letters of credit) under pursuant to one or more Credit Facilities, provided that, after giving effect to such incurrence, the Facilities in an aggregate principal amount of all Indebtedness incurred at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Targa Resources Partners TLLP and its Restricted Subsidiaries thereunder) and then outstanding does not to exceed the greater of (a) $2,000.0 900.0 million and (b) the sum of $1.5 billion 600.0 million and 2020.0% of Targa Resources Partners’ Consolidated Net Tangible AssetsAssets (determined as of the date of incurrence and after giving effect to the use of proceeds therefrom); (2) the incurrence by Targa Resources Partners TLLP, Finance Corp. and its Restricted Subsidiaries of the Existing Indebtedness; (3) the incurrence by Targa Resources PartnersTLLP, Finance Corp. and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture Issue Date and any the Exchange Notes and the related Note Guarantees that may to be issued pursuant to a the Registration Rights AgreementAgreement in exchange therefor; (4) the incurrence by Targa Resources Partners TLLP or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, Synthetic Lease Obligations, mortgage financings or purchase money obligationsobligations (including any Acquired Debt), in each case, incurred in connection with the purchase of, or for the purpose of financing all or any part of the purchase price or cost of construction construction, improvement or improvement of development of, property, plant or equipment used or useful in the business of Targa Resources Partners TLLP or any of its Restricted SubsidiariesSubsidiaries and related financing costs, and Attributable Debt in respect of sale and leaseback transactions, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), provided that after giving effect at any time outstanding not to such incurrence the aggregate principal amount of all Indebtedness incurred pursuant to this clause (4) and then outstanding does not exceed the greater of (a) $50.0 200.0 million and (b) 4.05.0% of Targa Resources Partners’ TLLP’s Consolidated Net Tangible AssetsAssets (determined as of the date of incurrence and after giving effect to the use of proceeds therefrom); (5) the incurrence by Targa Resources Partners TLLP or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clause (2), (3), (12) or (313) of this Section 4.09(b) or this clause (5); (6) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of any Permitted Receivables Financing in an aggregate principal amount at any time outstanding not to exceed $400.0 million; (7) the incurrence by Targa Resources Partners TLLP or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources Partners TLLP and any of its Restricted Subsidiaries; provided, however, that: (A) if Targa Resources Partners TLLP or any Guarantor is the obligor on such Indebtedness and the payee is not Targa Resources Partners TLLP or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of Targa Resources PartnersTLLP, or the Note Guarantee, in the case of a Guarantor, ; and (B) (1i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Targa Resources Partners TLLP or a Restricted Subsidiary of Targa Resources Partners TLLP and (2ii) any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources Partners TLLP or a Restricted Subsidiary of Targa Resources PartnersTLLP, will be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources Partners TLLP or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (76); (8) 7) the incurrence by Targa Resources Partners TLLP or any of its Restricted Subsidiaries of Hedging Obligations; (9) 8) the guarantee by Targa Resources Partners TLLP or any of its Restricted Subsidiaries the Guarantors of Indebtedness of Targa Resources Partners TLLP or a Restricted Subsidiary of Targa Resources Partners that was permitted to be TLLP or the Indebtedness incurred by another provision of this Section 4.09Joint Ventures constituting Permitted Investments; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the NotesNotes or Note Guarantees, then the Guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed; (109) the incurrence by Targa Resources Partners TLLP or any of its Restricted Subsidiaries of obligations relating to net gas balancing positions arising Indebtedness in respect of workers’ compensation or similar liabilities, health or other types of social security benefits, unemployment or other insurance or self-insurance obligations, insurance contracts, reclamation, statutory obligations, bankers’ acceptances, and bid, performance, advance, payment, deposit, appeal and surety bonds in the ordinary course of business business, including guarantees and consistent with past practiceobligations respecting standby letters of credit supporting such obligations, to the extent not drawn (in each case other than an obligation for money borrowed) and replacements of any of the foregoing; (1110) the incurrence by Targa Resources Partners TLLP or any of its Restricted Subsidiaries of Acquired Debt in connection with Indebtedness arising from the honoring by a transaction meeting either one bank or other financial institution of the financial tests set forth in clause (4) under Section 5.01(a)a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days; (1211) the issuance by any of Targa Resources Partners’ Restricted Subsidiaries to Targa Resources Partners TLLP or to any of its Restricted Subsidiaries of Disqualified Equity to TLLP or any Disqualified Equityof its Restricted Subsidiaries, as the case may be; provided, however, that: (Aa) any subsequent issuance or transfer of Equity Interests of a Restricted Subsidiary that results in any such Disqualified Equity being held held, directly or indirectly, by a Person other than Targa Resources Partners TLLP or a Restricted Subsidiary of Targa Resources PartnersTLLP; and (Bb) any sale or other transfer of any such Disqualified Equity to a Person that is not either Targa Resources Partners TLLP or a Restricted Subsidiary of Targa Resources Partners TLLP, will be deemed, in each case, to constitute an issuance of such Disqualified Equity by TLLP or such Restricted Subsidiary that was not permitted by this clause clause; (12); and) the incurrence by TLLP or any of its Restricted Subsidiaries of Permitted Acquisition Indebtedness; (13) the incurrence by Targa Resources Partners TLLP of Indebtedness in the ordinary course of business under documentary letters of credit, which are to be repaid in full not more than one year after the date on which such Indebtedness was originally incurred to finance the purchase of goods by TLLP or any of its Restricted Subsidiaries; (14) the incurrence of Indebtedness arising from agreements with TLLP or any of its Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earn-outs, or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or a Subsidiary in accordance with the terms of this Indenture, other than guarantees of Indebtedness incurred or assumed by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition; and (15) the incurrence by TLLP or any of its Restricted Subsidiaries of additional Indebtedness; provided that, after giving effect to any such incurrence, the Indebtedness in an aggregate principal amount of all Indebtedness incurred under this clause (13) and then outstanding does at any time outstanding, not to exceed the greater of (a) $150.0 200.0 million and (b) 7.55.0% of Targa Resources Partners’ Consolidated Net Tangible AssetsAssets (determined as of the date of incurrence and after giving effect to the use of proceeds therefrom). Targa Resources Partners shall TLLP will not incur, and shall will not permit Finance Corp. or any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of Targa Resources Partners, Finance Corp. TLLP or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness of a Person shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of such Person TLLP solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. For purposes of determining compliance with this Section 4.09, if in the event that an item of proposed Indebtedness (including Acquired Debt) meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (1315) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, Targa Resources Partners TLLP will be permitted to classify all or a portion of such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. ; provided that Indebtedness under the Credit Facilities Agreement outstanding on each of the date on which Notes are first issued Issue Date and authenticated under this Indenture the Escrow Release Date will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. .” The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares of the same class of Disqualified Equity will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section 4.09; provided, however, in each such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges of Targa Resources Partners as accrued. Notwithstanding any other provision of this Section 4.09, (i) the maximum amount of Indebtedness that Targa Resources Partners TLLP or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. FurtherThe amount of any Indebtedness outstanding as of any date will be: (1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount; (2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and (3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the accounting reclassification lesser of: (A) the Fair Market Value of such assets at the date of determination; and (B) the amount of the Indebtedness of the other Person. For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed, in the case of revolving credit debt; 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 (i) the principal amount of such Indebtedness being refinanced plus (ii) the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses incurred in connection with such refinancing. The principal amount of any obligation Indebtedness incurred to refinance other Indebtedness, if incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Indebtedness is denominated that is in effect on the date of Targa Resources Partners or any of its Restricted Subsidiaries as Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09such refinancing.

Appears in 1 contract

Samples: Indenture (Tesoro Logistics Lp)

Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources Xxxxx Energy Partners shall will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and Targa Resources Xxxxx Energy Partners will not issue any Disqualified Equity and will not permit any of its Restricted Subsidiaries to issue any Disqualified Equity; provided, however, that Targa Resources Xxxxx Energy Partners and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) and Targa Resources Xxxxx Energy Partners and the Restricted Subsidiaries may issue Disqualified Equity, if the Fixed Charge Coverage Ratio for Targa Resources Partners’ most recently ended four full fiscal quarters for which internal financial statements are available the Reference Period immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, would have been at least 2.0 2.00 to 1.01.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter periodReference Period. (b) The provisions of Section 4.09(a) hereof shall will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Equity described in clause (ii) below:): (1) the incurrence by Targa Resources Partners Xxxxx Energy Partners, Finance Corp. and any Restricted Subsidiary of additional Indebtedness (including and letters of credit) credit and the Guarantees thereof under Credit Facilities, provided that, after giving effect to such incurrence, the Facilities in an aggregate principal amount of all Indebtedness incurred at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Targa Resources Xxxxx Energy Partners and its Restricted Subsidiaries thereunder) and then outstanding does not to exceed the greater of (a) $2,000.0 million 1.4 billion and (b) the sum of $1.5 1.0 billion and 2030% of Targa Resources Partners’ Consolidated Net Tangible AssetsAssets of Xxxxx Energy Partners (determined as of the date of incurrence and after giving effect to the use of proceeds therefrom); (2) the incurrence by Targa Resources Finance Corp., Xxxxx Energy Partners and its Restricted Subsidiaries of the Existing Indebtedness; (3) the incurrence by Targa Resources Partners, Finance Corp. the Issuers and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and any Exchange Notes and the related Note Guarantees that may be issued pursuant to a Registration Rights AgreementIssue Date; (4) the incurrence by Targa Resources Xxxxx Energy Partners or any of its Restricted Subsidiaries of Indebtedness represented by Capital Finance Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of Targa Resources Xxxxx Energy Partners or any of its Restricted Subsidiaries, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), provided that after giving effect at any time outstanding not to such incurrence the aggregate principal amount of all Indebtedness incurred pursuant to this clause (4) and then outstanding does not exceed the greater of (a) $50.0 100.0 million and (b) 4.05.0% of Targa Resources Partners’ Consolidated Net Tangible AssetsAssets of Xxxxx Energy Partners (determined as of the date of incurrence and after giving effect to the use of proceeds therefrom); (5) the incurrence by Targa Resources Xxxxx Energy Partners or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clause clauses (2), (3), (4) or (310) of this Section 4.09(b) or this clause (5); (6) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of any Permitted Receivables Financing in an aggregate principal amount at any time outstanding not to exceed $400.0 million; (7) the incurrence by Targa Resources Xxxxx Energy Partners or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources Xxxxx Energy Partners and any of its Restricted Subsidiaries; provided, however, that: (A) if Targa Resources Xxxxx Energy Partners or any Guarantor is the obligor on such Indebtedness and the payee is not Targa Resources Xxxxx Energy Partners or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of Targa Resources Xxxxx Energy Partners, or the Note Guarantee, in the case of a Guarantor, ; and (B) (1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Targa Resources Xxxxx Energy Partners or a Restricted Subsidiary of Targa Resources Xxxxx Energy Partners and (2) any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources Xxxxx Energy Partners or a Restricted Subsidiary of Targa Resources Xxxxx Energy Partners, will be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources Xxxxx Energy Partners or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (76); (8) 7) the incurrence by Targa Resources Xxxxx Energy Partners or any of its Restricted Subsidiaries of Hedging Obligations; (9) 8) the guarantee Guarantee by Targa Resources Xxxxx Energy Partners or any Restricted Subsidiary of its Restricted Subsidiaries of (a) Indebtedness of Targa Resources Xxxxx Energy Partners or a Restricted Subsidiary of Targa Resources Xxxxx Energy Partners that was permitted to be incurred by another provision of this Section 4.094.09 or (b) Indebtedness incurred by Joint Ventures, provided that such Guarantee constitutes a Permitted Investment; and provided further, in each case, that if the Indebtedness being guaranteed Guaranteed is subordinated to or pari passu with the NotesNotes or the Note Guarantees, then the Guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteedGuaranteed; (9) the incurrence by Xxxxx Energy Partners or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, health or other types of social security benefits, unemployment or other insurance or self-insurance obligations, insurance contracts, reclamation, statutory obligations, bankers’ acceptances, and performance, payment, appeal and surety bonds in the ordinary course of business, including Guarantees and obligations respecting standby letters of credit supporting such obligations, to the extent not drawn (in each case other than an obligation for money borrowed) and replacements of any of the foregoing; (10) the incurrence by Targa Resources Xxxxx Energy Partners or any of its Restricted Subsidiaries of obligations relating to net gas balancing positions arising in the ordinary course of business and consistent with past practicePermitted Acquisition Indebtedness; (11) the incurrence issuance by Targa Resources Xxxxx Energy Partners or any of its Restricted Subsidiaries of Acquired Debt in connection with a transaction meeting either one of the financial tests set forth in clause (4) under Section 5.01(a); (12) the issuance by any of Targa Resources Partners’ Restricted Subsidiaries Disqualified Equity to Targa Resources Xxxxx Energy Partners or to any of its Restricted Subsidiaries of any Disqualified EquitySubsidiaries, as the case may be; provided, however, that: (A) any subsequent issuance or transfer of Equity Interests of a Restricted Subsidiary that results in any such Disqualified Equity being held held, directly or indirectly, by a Person other than Targa Resources Xxxxx Energy Partners or a Restricted Subsidiary of Targa Resources Xxxxx Energy Partners; and (B) any sale or other transfer of any such Disqualified Equity to a Person that is not either Targa Resources Xxxxx Energy Partners or a Restricted Subsidiary of Targa Resources Partners Xxxxx Energy Partners; will be deemed, in each case, to constitute an issuance of such Disqualified Equity by Xxxxx Energy Partners or such Restricted Subsidiary that was not permitted by this clause clause: (12)) the incurrence by Xxxxx Energy Partners or any of its Restricted Subsidiaries of Indebtedness in the ordinary course of business under documentary letters of credit which are to be repaid in full not more than one year after the date on which such Indebtedness was originally incurred to finance the purchase of goods by Xxxxx Energy Partners or any of its Restricted Subsidiaries; and (13) the incurrence by Targa Resources Xxxxx Energy Partners or any of its Restricted Subsidiaries of additional Indebtedness; provided that, after giving effect to any such incurrence, the Indebtedness in an aggregate principal amount of all Indebtedness incurred under this clause (13) and then outstanding does at any time outstanding, not to exceed the greater of (a) $150.0 100.0 million and (b) 7.55.0 % of Targa Resources Partners’ Consolidated Net Tangible AssetsAssets of Xxxxx Energy Partners (determined as of the date of incurrence and after giving effect to the use of proceeds therefrom). Targa Resources Xxxxx Energy Partners shall will not incur, and shall will not permit Finance Corp. or any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of Targa Resources Xxxxx Energy Partners, Finance Corp. or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness of a Person shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of Xxxxx Energy Partners, Finance Corp. or any such Person Guarantor solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. For purposes of determining compliance with this Section 4.09, if in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (13) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, Targa Resources Xxxxx Energy Partners will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares or units of the same class of Disqualified Equity will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section 4.09; provided, however, in each such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges of Targa Resources Xxxxx Energy Partners as accruedaccrued to the extent required by the definition of such term. Notwithstanding any other provision of this Section 4.09, (i) the maximum amount of Indebtedness that Targa Resources Xxxxx Energy Partners or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. FurtherThe amount of any Indebtedness outstanding as of any date will be: (1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount; (2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and (3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the accounting reclassification lesser of: (A) the Fair Market Value of such assets at the date of determination; and (B) the amount of the Indebtedness of the other Person. For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed, in the case of revolving credit debt; 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 (i) the principal amount of such Indebtedness being refinanced plus (ii) the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses incurred in connection with such refinancing. The principal amount of any obligation Indebtedness incurred to refinance other Indebtedness, if incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Indebtedness is denominated that is in effect on the date of Targa Resources Partners or any of its Restricted Subsidiaries as Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09such refinancing.

Appears in 1 contract

Samples: Indenture (Holly Energy Partners Lp)

Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources Partners shall The Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and Targa Resources Partners the Company will not issue any Disqualified Equity and will not permit any of its Restricted Subsidiaries to issue any Disqualified Equity; provided, however, that Targa Resources Partners the Company and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) and Targa Resources Partners the Company and the Restricted Subsidiaries may issue Disqualified Equity, if the Fixed Charge Coverage Ratio for Targa Resources Partners’ the Company’s most recently ended four full fiscal quarters for which internal quarterly or annual financial statements are available have been delivered as provided in Section 4.03 immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter period. (b) . The provisions first paragraph of this Section 4.09(a) hereof shall 4.09 will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Equity described in clause (ii11), (12) or (16) below: (1) the incurrence by Targa Resources Partners the Company and any Restricted Subsidiary of additional Indebtedness (including letters of credit) under Credit Facilities, provided that, after giving effect to such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Targa Resources Partners the Company and its Restricted Subsidiaries thereunder) and then outstanding does not exceed the greater of (a) $2,000.0 850.0 million and (b) the sum of $1.5 billion 670.0 million and 2025.0% of Targa Resources Partners’ Consolidated Net Tangible Assets; (2) the incurrence by Targa Resources Partners the Company and its Restricted Subsidiaries of the Existing Indebtedness; (3) the incurrence by Targa Resources Partnersthe Company, Finance Corp. and the Guarantors of Indebtedness represented by the Notes and the related Note Subsidiary Guarantees to be issued on the date of this Indenture and any Exchange Notes and the related Note Guarantees that may be issued pursuant to a Registration Rights AgreementIssue Date; (4) the incurrence by Targa Resources Partners the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, Attributable Debt, mortgage financings or purchase money obligationsobligations (including any Acquired Debt), in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction design, development, construction, installation or improvement of propertyproperty (real or personal and including Capital Stock), plant or equipment used in the business of Targa Resources Partners the Company or any of its Restricted SubsidiariesSubsidiaries (in each case, whether through the direct purchase of such assets or the Equity Interests of any Person owning such assets), including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), provided that after giving effect to such incurrence incurrence, the aggregate principal amount of all Indebtedness incurred pursuant to this clause (4) and then outstanding does not exceed the greater of (a) $50.0 70.0 million and (b) 4.010.0% of Targa Resources Partners’ Consolidated Net Tangible Assets; (5) the incurrence by Targa Resources Partners the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge discharge, any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under the first paragraph of this Section 4.09(a) hereof 4.09 or clause (2), (3) or (311) of this Section 4.09(b) paragraph or this clause (5); (6) the incurrence by Targa Resources Partners the Company or any of its Restricted Subsidiaries of any Permitted Receivables Financing liability in an respect of the Indebtedness of any Unrestricted Subsidiary of the Company or any Joint Venture but only to the extent that such liability (x) is the result of the Company’s or any such Restricted Subsidiary’s being a general partner of such Unrestricted Subsidiary or Joint Venture and not as guarantor of such Indebtedness and provided that, after giving effect to any such incurrence, the aggregate principal amount at any time of all Indebtedness incurred under this subclause (x) and then outstanding does not to exceed $400.0 million25.0 million or (y) consists of Liens permitted pursuant to clause (10) of the definition of “Permitted Liens” and any guarantee given solely to support such Liens, which guarantee is not recourse to the Company or any Restricted Subsidiary; (7) the incurrence by Targa Resources Partners the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources Partners the Company and any of its Restricted Subsidiaries; provided, however, that: (A) if Targa Resources Partners the Company or any Guarantor is the obligor on such Indebtedness and the payee is not Targa Resources Partners the Company or a Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of Targa Resources Partnersthe Company, or the Note Subsidiary Guarantee, in the case of a Guarantor, ; and (B) (1i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Targa Resources Partners the Company or a Restricted Subsidiary of Targa Resources Partners the Company and (2ii) any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources Partners the Company or a Restricted Subsidiary of Targa Resources Partnersthe Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources Partners the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (7); (8) the incurrence by Targa Resources Partners the Company or any of its Restricted Subsidiaries of Hedging Obligations; (9) the guarantee by Targa Resources Partners the Company or any of its Restricted Subsidiaries of Indebtedness of Targa Resources Partners the Company or a Restricted Subsidiary of Targa Resources Partners the Company that was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed; (10) the incurrence by Targa Resources Partners the Company or any of its Restricted Subsidiaries of obligations relating to net gas Hydrocarbon balancing positions arising in the ordinary course of business and consistent with past practice; (11) the incurrence or issuance by Targa Resources Partners the Company or any of its Restricted Subsidiaries of (i) Indebtedness or Disqualified Equity of the Company or a Restricted Subsidiary incurred to finance an acquisition and (ii) Acquired Debt in connection with Debt; provided, that after giving effect to such transaction on a transaction meeting pro forma basis, the Company meets either one of the financial tests set forth in clause (4) under of Section 5.01(a); (12) the issuance by any of Targa Resources Partners’ the Company’s Restricted Subsidiaries to Targa Resources Partners the Company or to any of its Restricted Subsidiaries of any Disqualified Equity; provided, however, that: (A) any subsequent issuance or transfer of Equity Interests that results in any such Disqualified Equity being held by a Person other than Targa Resources Partners the Company or a Restricted Subsidiary of Targa Resources Partnersthe Company; and (B) any sale or other transfer of any such Disqualified Equity to a Person that is not either Targa Resources Partners the Company or a Restricted Subsidiary of Targa Resources Partners the Company will be deemed, in each case, to constitute an issuance of such Disqualified Equity by such Restricted Subsidiary that was not permitted by this clause (12); and; (13) the incurrence by Targa Resources Partners the Company of Indebtedness in the ordinary course of business under documentary letters of credit, which are to be repaid or terminated in full not more than one year after the date on which such Indebtedness was originally incurred to finance the purchase of goods by the Company or any of its Restricted Subsidiaries; (14) the incurrence of Indebtedness of the Company or any of its Restricted Subsidiaries consisting of the financing of insurance premiums; (15) the incurrence by the Company or any of its Restricted Subsidiaries of obligations in respect of Treasury Management Arrangements; and (16) the incurrence by the Company or any of its Restricted Subsidiaries of additional IndebtednessIndebtedness or the issuance by the Company or any of its Restricted Subsidiaries of Disqualified Equity; provided that, after giving effect to any such incurrenceincurrence or issuance, the aggregate principal amount of all Indebtedness incurred and Disqualified Equity issued under this clause (1316) and then outstanding does not exceed the greater of (a) $150.0 70.0 million and (b) 7.510.0% of Targa Resources Partners’ Consolidated Net Tangible Assets. Targa Resources Partners shall not incur, and shall not permit Finance Corp. or any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of Targa Resources Partners, Finance Corp. or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness of a Person shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of such Person solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. For purposes of determining compliance with this Section 4.09, if an item of proposed Indebtedness or Disqualified Equity meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (1316) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.09(a) hereof4.09, Targa Resources Partners the Company will be permitted to classify such item of Indebtedness or Disqualified Equity on the date of its incurrenceincurrence or issuance, or later reclassify all or a portion of such item of IndebtednessIndebtedness or Disqualified Equity, in any manner that complies with this Section 4.09. Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture Indenture, after giving effect to the application of the proceeds of the offering of the Initial Notes, will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares shares, units or the like of the same class of Disqualified Equity will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section 4.09; provided, however, in each such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges of Targa Resources Partners as accruedthe Company to the extent required by the definition of that term. Notwithstanding any other provision of this Section 4.09, (i) the maximum amount of Indebtedness that Targa Resources Partners the Company or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. Further, the accounting reclassification of any obligation of Targa Resources Partners the Company or any of its Restricted Subsidiaries as Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09. For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed, in the case of revolving credit debt; 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 (i) the principal amount of such Indebtedness being refinanced plus (ii) the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses incurred in connection with such refinancing. The principal amount of any Indebtedness incurred to refinance other Indebtedness, if incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Indebtedness is denominated that is in effect on the date of such refinancing.

Appears in 1 contract

Samples: Indenture (Delek Logistics Partners, LP)

Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources Partners The Partnership shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and Targa Resources Partners the Partnership will not issue any Disqualified Equity and will not permit any of its Restricted Subsidiaries to issue any Disqualified Equity; provided, however, that Targa Resources Partners the Partnership and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) ), and Targa Resources Partners the Partnership and the Restricted Subsidiaries may issue Disqualified Equity, if the Fixed Charge Coverage Ratio for Targa Resources Partners’ the Partnership’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, issued would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred incurred, or the Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter period. (b) The provisions Notwithstanding the prohibitions of Section 4.09(a) hereof shall not prohibit 5.09(a), the incurrence of Partnership and its Restricted Subsidiaries may incur any of the following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Equity described in clause (ii) below:): (1i) the incurrence by Targa Resources Partners the Partnership and any Restricted Subsidiary of additional Indebtedness (including letters of credit) under Credit Facilities, Facilities and the guarantees thereof; provided that, after giving effect to such incurrence, that the aggregate principal amount of all Indebtedness of the Partnership and the Restricted Subsidiaries incurred under pursuant to this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Targa Resources Partners and its Restricted Subsidiaries thereunderi) and then outstanding under all Credit Facilities after giving effect to such incurrence does not exceed the greater of (aA) $2,000.0 1.2 billion or (B) $500.0 million and (b) the sum of $1.5 billion and 20plus 25.0% of Targa Resources Partners’ the Consolidated Net Tangible AssetsAssets of the Partnership; (2ii) the incurrence by Targa Resources Partners the Partnership and its Restricted Subsidiaries of Existing Indebtedness (other than under the Existing IndebtednessCredit Facilities); (3iii) the incurrence by Targa Resources Partners, Finance Corp. the Issuers and the Subsidiary Guarantors of Indebtedness represented by the Notes issued and sold in the offering of the Initial Notes, and the related Note Guarantees to be issued on the date of this Indenture and any Exchange Notes and the related Note Guarantees that may be issued pursuant to a Registration Rights AgreementGuarantees; (4iv) the incurrence by Targa Resources Partners the Partnership or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of Targa Resources Partners the Partnership or any of its such Restricted SubsidiariesSubsidiary, including all Permitted Refinancing Indebtedness incurred to renew, refundextend, refinance, renew, replace, defease or discharge refund any Indebtedness incurred pursuant to this clause (4iv), provided that after giving effect to any such incurrence incurrence, the aggregate principal amount of all Indebtedness incurred pursuant to this clause (4iv) and then outstanding does shall not exceed the greater of (a) $50.0 75.0 million and or (b) 4.02.5% of Targa Resources Partners’ the Consolidated Net Tangible AssetsAssets of the Partnership at such time; (5v) the incurrence by Targa Resources Partners the Partnership or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refundextend, refinance, renew, replace, defease or discharge any refund, Indebtedness (other than intercompany Indebtedness) that was permitted by this the Indenture to be incurred under Section 4.09(a5.09(a) hereof or clause (2ii) or (3iii) of this Section 4.09(b5.09(b) or this clause (5v); (6vi) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of any Permitted Receivables Financing in an aggregate principal amount at any time outstanding not to exceed $400.0 million; (7) the incurrence by Targa Resources Partners Partnership or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources Partners the Partnership and any of its Restricted Subsidiaries; provided, however, that: (A) if Targa Resources Partners or any Guarantor the Partnership is the obligor on such Indebtedness and the payee a Subsidiary Guarantor is not Targa Resources Partners or a Guarantorthe obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, or if a Subsidiary Guarantor is the obligor on such Indebtedness and neither the Partnership nor another Subsidiary Guarantor is the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the case Guarantee of Targa Resources Partners, or the Note Guarantee, in the case of a such Subsidiary Guarantor, ; and (B) (1i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Targa Resources Partners the Partnership or a Restricted Subsidiary of Targa Resources Partners thereof and (2ii) any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources Partners or neither the Partnership nor a Restricted Subsidiary of Targa Resources Partnersthereof, will shall be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources Partners the Partnership or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (7vi); (8) vii) the incurrence by Targa Resources Partners the Partnership or any of its Restricted Subsidiaries of Hedging ObligationsObligations that are incurred for the purpose of fixing or hedging (but not for speculative purposes) (A) foreign currency exchange rate risks of the Partnership or any Restricted Subsidiary, (B) interest rate risks with respect to any floating rate Indebtedness of the Partnership or any Restricted Subsidiary that is permitted by the terms of the Indenture to be outstanding or (C) commodities pricing risks of the Partnership or any Restricted Subsidiary in respect of Hydrocarbons used, produced, processed or sold by the Partnership or any of its Restricted Subsidiaries; (9viii) the guarantee by Targa Resources Partners the Partnership or any of its Restricted Subsidiaries of Indebtedness of Targa Resources Partners the Partnership or a any of its Restricted Subsidiary of Targa Resources Partners Subsidiaries that was permitted to be incurred by another provision of this Section 4.095.09; provided provided, that if in the event such Indebtedness that is being guaranteed is subordinated to a Subordinated Obligation or pari passu with the Notesa Guarantor Subordinated Obligation, then the Guarantee guarantee shall be subordinated in right of payment to the Notes or pari passuthe Guarantee, as applicablethe case may be; (ix) bid, performance, surety and appeal bonds incurred in the ordinary course of business, including guarantees and obligations respecting standby letters of credit supporting such obligations, to the same extent as the Indebtedness guaranteednot drawn (in each case other than an obligation for money borrowed); (10x) the incurrence by Targa Resources Partners the Partnership or any of its Restricted Subsidiaries of obligations relating to net gas balancing positions arising liability in respect of the ordinary course Indebtedness of business and consistent with past practice; (11) any Unrestricted Subsidiary of the incurrence by Targa Resources Partners Partnership or any of its Restricted Subsidiaries of Acquired Debt in connection with a transaction meeting either one Joint Venture but only to the extent that such liability is the result of the financial tests set forth in clause (4) under Section 5.01(a); (12) the issuance by any of Targa Resources Partners’ Restricted Subsidiaries to Targa Resources Partners Partnership’s or to any of its Restricted Subsidiaries of any Disqualified Equity; provided, however, that: (A) any subsequent issuance or transfer of Equity Interests that results in any such Disqualified Equity Restricted Subsidiary’s being held by a Person other than Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners; and (B) any sale or other transfer of any such Disqualified Equity to a Person that is not either Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners will be deemed, in each case, to constitute an issuance general partner of such Disqualified Equity by Unrestricted Subsidiary or Joint Venture and not as guarantor of such Restricted Subsidiary that was not permitted by this clause (12); and (13) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of additional Indebtedness; Indebtedness and provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (13x) and then outstanding does not exceed $25.0 million; (xi) the incurrence by the Partnership or any of its Restricted Subsidiaries of Acquired Debt in connection with a merger or consolidation meeting either one of the financial tests set forth in clause (iv) of Section 6.01(a); and (xii) the incurrence by the Partnership or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount at any time outstanding not to exceed the greater of (a) $150.0 million and or (b) 7.55.0% of Targa Resources Partners’ the Consolidated Net Tangible Assets. Targa Resources Partners shall not incur, and shall not permit Finance Corp. or any Guarantor to incur, any Indebtedness Assets of the Partnership. (including Permitted Debtc) that is contractually subordinated in right of payment to any other Indebtedness of Targa Resources Partners, Finance Corp. or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness of a Person shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of such Person solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. For purposes of determining compliance with this Section 4.095.09, if in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses paragraphs (1b)(i) through (13b)(xii) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof5.09(a), Targa Resources Partners will the Partnership shall be permitted to classify (or later reclassify in whole or in part) such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, incurrence in any manner that complies with this Section 4.095.09. An item of Indebtedness may be divided and classified in one or more of the types of Permitted Indebtedness. Any Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated Issue Date shall be considered incurred under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause Section 5.09(a). (1d) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares of the same class of Disqualified Equity will shall not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section 4.09; provided, however, in each such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges of Targa Resources Partners as accrued. Notwithstanding any other provision of this Section 4.09, (i) the maximum amount of Indebtedness that Targa Resources Partners or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. Further, the accounting reclassification of any obligation of Targa Resources Partners or any of its Restricted Subsidiaries as Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09.Section

Appears in 1 contract

Samples: Tenth Supplemental Indenture (Markwest Energy Partners L P)

Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources Partners shall The Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and Targa Resources Partners the Company will not issue any Disqualified Equity and will not permit any of its Restricted Subsidiaries to issue any Disqualified Equity; provided, however, that Targa Resources Partners the Company and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) and Targa Resources Partners the Company and the Restricted Subsidiaries may issue Disqualified Equity, if the Fixed Charge Coverage Ratio for Targa Resources Partners’ the Company’s most recently ended four full fiscal quarters for which internal quarterly or annual financial statements are available have been delivered as provided in Section 4.03 immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter period. (b) . The provisions first paragraph of this Section 4.09(a) hereof shall 4.09 will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Equity described in clause (ii11), (12) or (16) below: (1) the incurrence by Targa Resources Partners the Company and any Restricted Subsidiary of additional Indebtedness (including letters of credit) under Credit Facilities, provided that, after giving effect to such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Targa Resources Partners the Company and its Restricted Subsidiaries thereunder) and then outstanding does not exceed the greater of (a) $2,000.0 million 1.05 billion and (b) the sum of $1.5 billion 870.0 million and 2025.0% of Targa Resources Partners’ Consolidated Net Tangible Assets; (2) the incurrence by Targa Resources Partners the Company and its Restricted Subsidiaries of the Existing Indebtedness; (3) the incurrence by Targa Resources Partnersthe Company, Finance Corp. and the Guarantors of Indebtedness represented by the Notes and the related Note Subsidiary Guarantees to be issued on the date of this Indenture and any Exchange Notes and the related Note Guarantees that may be issued pursuant to a Registration Rights AgreementIssue Date; (4) the incurrence by Targa Resources Partners the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, Attributable Debt, mortgage financings or purchase money obligationsobligations (including any Acquired Debt), in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction design, development, construction, installation or improvement of propertyproperty (real or personal and including Capital Stock), plant or equipment used in the business of Targa Resources Partners the Company or any of its Restricted SubsidiariesSubsidiaries (in each case, whether through the direct purchase of such assets or the Equity Interests of any Person owning such assets), including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), provided that after giving effect to such incurrence incurrence, the aggregate principal amount of all Indebtedness incurred pursuant to this clause (4) and then outstanding does not exceed the greater of (a) $50.0 100.0 million and (b) 4.010.0% of Targa Resources Partners’ Consolidated Net Tangible Assets; (5) the incurrence by Targa Resources Partners the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge discharge, any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under the first paragraph of this Section 4.09(a) hereof 4.09 or clause (2), (3) or (311) of this Section 4.09(b) paragraph or this clause (5); (6) the incurrence by Targa Resources Partners the Company or any of its Restricted Subsidiaries of any Permitted Receivables Financing liability in an respect of the Indebtedness of any Unrestricted Subsidiary of the Company or any Joint Venture but only to the extent that such liability (x) is the result of the Company’s or any such Restricted Subsidiary’s being a general partner of such Unrestricted Subsidiary or Joint Venture and not as guarantor of such Indebtedness and provided that, after giving effect to any such incurrence, the aggregate principal amount at any time of all Indebtedness incurred under this subclause (x) and then outstanding does not to exceed $400.0 million25.0 million or (y) consists of Liens permitted pursuant to clause (10) of the definition of “Permitted Liens” and any guarantee given solely to support such Liens, which guarantee is not recourse to the Company or any Restricted Subsidiary; (7) the incurrence by Targa Resources Partners the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources Partners the Company and any of its Restricted Subsidiaries; provided, however, that: (A) if Targa Resources Partners the Company or any Guarantor is the obligor on such Indebtedness and the payee is not Targa Resources Partners the Company or a Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of Targa Resources Partnersthe Company, or the Note Subsidiary Guarantee, in the case of a Guarantor, ; and (B) (1i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Targa Resources Partners the Company or a Restricted Subsidiary of Targa Resources Partners the Company and (2ii) any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources Partners the Company or a Restricted Subsidiary of Targa Resources Partnersthe Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources Partners the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (7); (8) the incurrence by Targa Resources Partners the Company or any of its Restricted Subsidiaries of Hedging Obligations; (9) the guarantee by Targa Resources Partners the Company or any of its Restricted Subsidiaries of Indebtedness of Targa Resources Partners the Company or a Restricted Subsidiary of Targa Resources Partners the Company that was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed; (10) the incurrence by Targa Resources Partners the Company or any of its Restricted Subsidiaries of obligations relating to net gas Hydrocarbon balancing positions arising in the ordinary course of business and consistent with past practice; (11) the incurrence or issuance by Targa Resources Partners the Company or any of its Restricted Subsidiaries of (i) Indebtedness or Disqualified Equity of the Company or a Restricted Subsidiary incurred to finance an acquisition and (ii) Acquired Debt in connection with Debt; provided, that after giving effect to such transaction on a transaction meeting pro forma basis, the Company meets either one of the financial tests set forth in clause (4) under of Section 5.01(a); (12) the issuance by any of Targa Resources Partners’ the Company’s Restricted Subsidiaries to Targa Resources Partners the Company or to any of its Restricted Subsidiaries of any Disqualified Equity; provided, however, that: (A) any subsequent issuance or transfer of Equity Interests that results in any such Disqualified Equity being held by a Person other than Targa Resources Partners the Company or a Restricted Subsidiary of Targa Resources Partnersthe Company; and (B) any sale or other transfer of any such Disqualified Equity to a Person that is not either Targa Resources Partners the Company or a Restricted Subsidiary of Targa Resources Partners the Company will be deemed, in each case, to constitute an issuance of such Disqualified Equity by such Restricted Subsidiary that was not permitted by this clause (12); and; (13) the incurrence by Targa Resources Partners the Company of Indebtedness in the ordinary course of business under documentary letters of credit, which are to be repaid or terminated in full not more than one year after the date on which such Indebtedness was originally incurred to finance the purchase of goods by the Company or any of its Restricted Subsidiaries; (14) the incurrence of Indebtedness of the Company or any of its Restricted Subsidiaries consisting of the financing of insurance premiums; (15) the incurrence by the Company or any of its Restricted Subsidiaries of obligations in respect of Treasury Management Arrangements; and (16) the incurrence by the Company or any of its Restricted Subsidiaries of additional IndebtednessIndebtedness or the issuance by the Company or any of its Restricted Subsidiaries of Disqualified Equity; provided that, after giving effect to any such incurrenceincurrence or issuance, the aggregate principal amount of all Indebtedness incurred and Disqualified Equity issued under this clause (1316) and then outstanding does not exceed the greater of (a) $150.0 100.0 million and (b) 7.510.0% of Targa Resources Partners’ Consolidated Net Tangible Assets. Targa Resources Partners shall not incur, and shall not permit Finance Corp. or any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of Targa Resources Partners, Finance Corp. or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness of a Person shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of such Person solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. For purposes of determining compliance with this Section 4.09, if an item of proposed Indebtedness or Disqualified Equity meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (1316) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.09(a) hereof4.09, Targa Resources Partners the Company will be permitted to classify such item of Indebtedness or Disqualified Equity on the date of its incurrenceincurrence or issuance, or later reclassify all or a portion of such item of IndebtednessIndebtedness or Disqualified Equity, in any manner that complies with this Section 4.09. Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture Indenture, after giving effect to the application of the proceeds of the offering of the Initial Notes, will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares shares, units or the like of the same class of Disqualified Equity will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section 4.09; provided, however, in each such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges of Targa Resources Partners as accruedthe Company to the extent required by the definition of that term. Notwithstanding any other provision of this Section 4.09, (i) the maximum amount of Indebtedness that Targa Resources Partners the Company or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. Further, the accounting reclassification of any obligation of Targa Resources Partners the Company or any of its Restricted Subsidiaries as Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09. For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed, in the case of revolving credit debt; 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 (i) the principal amount of such Indebtedness being refinanced plus (ii) the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses incurred in connection with such refinancing. The principal amount of any Indebtedness incurred to refinance other Indebtedness, if incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Indebtedness is denominated that is in effect on the date of such refinancing.

Appears in 1 contract

Samples: Indenture (Delek Logistics Partners, LP)

Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources Partners shall The Issuer will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and Targa Resources Partners the Issuer will not issue any Disqualified Equity and will not permit any of its Restricted Subsidiaries to issue any Disqualified EquityPreferred Stock; provided, however, that Targa Resources Partners the Issuer and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) and Targa Resources Partners ), the Issuer may issue Disqualified Equity, and the Restricted Subsidiaries of the Issuer may incur Indebtedness (including Acquired Debt) or issue Disqualified EquityPreferred Stock, if the Fixed Charge Coverage Ratio for Targa Resources Partners’ the Issuer’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity or such Preferred Stock is issued, as the case may be, would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Equity or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period. (b) The provisions of Section 4.09(a) hereof shall will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Equity described Preferred Stock referred to in clause (iiviii) below: (1i) the incurrence by Targa Resources Partners the Issuer and any Restricted Subsidiary Subsidiaries of additional Indebtedness (including letters of credit) under one or more Credit Facilities, provided that, after giving effect to such incurrence, the Facilities in an aggregate principal amount of all Indebtedness incurred at any one time outstanding under this clause (1i) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Targa Resources Partners the Issuer and its Restricted Subsidiaries thereunder) and then outstanding does not to exceed the greater of (aA) $2,000.0 850.0 million and (bB) the sum of $1.5 billion 450.0 million and 2035.0% of Targa Resources Partners’ the Issuer’s Consolidated Net Tangible Assets; (2ii) the incurrence by Targa Resources Partners the Issuer and its Restricted Subsidiaries of the Existing Indebtedness; (3iii) the incurrence by Targa Resources Partners, Finance Corp. the Issuer and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and any Exchange Notes and the related Note Guarantees that may be issued pursuant to a Registration Rights AgreementIndenture; (4iv) the incurrence by Targa Resources Partners the Issuer or any of its Restricted Subsidiaries of Indebtedness represented by Capital Finance Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction design, construction, installation or improvement of property, plant or equipment used in the business of Targa Resources Partners the Issuer or any of its Restricted Subsidiaries, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4iv), ; provided that after giving effect to such incurrence the aggregate principal amount of all Indebtedness incurred pursuant to this clause (4iv) and then outstanding does not exceed the greater of (aA) $50.0 100.0 million and (bB) 4.010.0% of Targa Resources Partners’ the Issuer’s Consolidated Net Tangible Assets; (5v) the incurrence by Targa Resources Partners the Issuer or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, extend, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clause clauses (2ii), (iii), (iv), (xi) or (3xii) of this Section 4.09(b) or this clause (5v); (6vi) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of any Permitted Receivables Financing in an aggregate principal amount at any time outstanding not to exceed $400.0 million; (7) the incurrence by Targa Resources Partners Issuer or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources Partners the Issuer and any of its Restricted Subsidiaries; provided, however, that: (A) if Targa Resources Partners the Issuer or any Guarantor is the obligor on such Indebtedness and the payee is not Targa Resources Partners the Issuer or a Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of Targa Resources Partnersthe Issuer, or the Note Guarantee, in the case of a Guarantor, ; and (B) (1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Targa Resources Partners the Issuer or a Restricted Subsidiary of Targa Resources Partners the Issuer and (2) any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources Partners the Issuer or a Restricted Subsidiary of Targa Resources Partnersthe Issuer, will be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources Partners the Issuer or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (7vi); (8) vii) the incurrence by Targa Resources Partners the Issuer 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)(iv) hereof; (viii) the issuance by any of the Issuer’s Restricted Subsidiaries to the Issuer or to any of its Restricted Subsidiaries of Preferred Stock; provided, however, that: (A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Issuer or a Restricted Subsidiary of the Issuer; and (B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Issuer or a Restricted Subsidiary of the Issuer, will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (viii); (ix) the incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging ObligationsObligations in the ordinary course of business; (9x) the guarantee by Targa Resources Partners the Issuer or any of its Restricted Subsidiaries of Indebtedness of Targa Resources Partners the Issuer or a Restricted Subsidiary of Targa Resources Partners the Issuer to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee shall guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed; (10xi) the incurrence by Targa Resources Partners the Issuer or any of its Restricted Subsidiaries of obligations relating to net gas balancing positions arising in the ordinary course of business and consistent with past practice;Permitted Acquisition Indebtedness; and (11xii) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of Acquired Debt in connection with a transaction meeting either one of the financial tests set forth in clause (4) under Section 5.01(a); (12) the issuance by any of Targa Resources Partners’ Restricted Subsidiaries to Targa Resources Partners or to any of its Restricted Subsidiaries of any Disqualified Equity; provided, however, that: (A) any subsequent issuance or transfer of Equity Interests that results in any such Disqualified Equity being held by a Person other than Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners; and (B) any sale or other transfer of any such Disqualified Equity to a Person that is not either Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners will be deemed, in each case, to constitute an issuance of such Disqualified Equity by such Restricted Subsidiary that was not permitted by this clause (12); and (13) the incurrence by Targa Resources Partners Issuer or any of its Restricted Subsidiaries of additional Indebtedness; provided that, after giving effect to any such incurrence, the Indebtedness in aggregate principal amount of at any time outstanding, including all Permitted Refinancing Indebtedness incurred under this clause (13) and then outstanding to renew, refund, extend, refinance, replace, defease or discharge such Indebtedness, does not exceed the greater of (aA) $150.0 175.0 million and (bB) 7.515.0% of Targa Resources Partners’ the Issuer’s Consolidated Net Tangible Assets. Targa Resources Partners shall . (c) The Issuer will not incur, and shall will not permit Finance Corp. or any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of Targa Resources Partners, Finance Corp. the Issuer or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness of a Person shall will be deemed to be contractually subordinated in right of payment to any other Indebtedness of such Person the Issuer solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien priority basis. . (d) For purposes of determining compliance with this Section 4.09, if in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1i) through (13xii) of Section 4.09(b) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, Targa Resources Partners the Issuer will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under the Credit Facilities Agreement outstanding on the date on which Notes notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interestinterest or Preferred Stock or Disqualified Equity dividends, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock Preferred Stock or Disqualified Equity as Indebtedness due to a change in accounting principles, and the payment of dividends on Preferred Stock or Disqualified Equity in the form of additional shares or units of the same class of Preferred Stock or Disqualified Equity will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Equity for purposes of this Section 4.09; provided, however, in each such case, that the amount of any such accrual, accretion or payment thereof is included in Fixed Charges of Targa Resources Partners the Issuer as accrued. Notwithstanding any other provision of this Section 4.09, (i) the maximum amount of Indebtedness that Targa Resources Partners the Issuer or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. Further, the accounting reclassification of any obligation of Targa Resources Partners or any of its Restricted Subsidiaries as Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09.

Appears in 1 contract

Samples: Indenture (CNX Resources Corp)

Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources Partners shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and Targa Resources Partners will not issue any Disqualified Equity and will not permit any of its Restricted Subsidiaries to issue any Disqualified Equity; provided, however, that Targa Resources Partners and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) and Targa Resources Partners and the Restricted Subsidiaries may issue Disqualified Equity, if the Fixed Charge Coverage Ratio for Targa Resources Partners’ most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter period. (b) The provisions of Section 4.09(a) hereof shall not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Equity described in clause (ii) below: (1) the incurrence by Targa Resources Partners and any Restricted Subsidiary of additional Indebtedness (including letters of credit) under Credit Facilities, provided that, after giving effect to such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Targa Resources Partners and its Restricted Subsidiaries thereunder) and then outstanding does not exceed the greater of (a) $2,000.0 million and (b) the sum of $1.5 billion and 20% of Targa Resources Partners’ Consolidated Net Tangible Assets; (2) the incurrence by Targa Resources Partners and its Restricted Subsidiaries of the Existing Indebtedness; (3) the incurrence by Targa Resources Partners, Finance Corp. and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and any Exchange Notes and the related Note Guarantees that may be issued pursuant to a Registration Rights Agreement; (4) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of Targa Resources Partners or any of its Restricted Subsidiaries, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), provided that after giving effect to such incurrence the aggregate principal amount of all Indebtedness incurred pursuant to this clause (4) and then outstanding does not exceed the greater of (a) $50.0 million and (b) 4.0% of Targa Resources Partners’ Consolidated Net Tangible Assets; (5) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clause (2) or (3) of this Section 4.09(b) or this clause (5); (6) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of any Permitted Receivables Financing in an aggregate principal amount at any time outstanding not to exceed $400.0 million; (7) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources Partners and any of its Restricted Subsidiaries; provided, however, that: (A) if Targa Resources Partners or any Guarantor is the obligor on such Indebtedness and the payee is not Targa Resources Partners or a Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of Targa Resources Partners, or the Note Guarantee, in the case of a Guarantor, and (B) (1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners and (2) any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners, will be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources Partners or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (7); (8) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of Hedging Obligations; (9) the guarantee by Targa Resources Partners or any of its Restricted Subsidiaries of Indebtedness of Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners that was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed; (10) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of obligations relating to net gas balancing positions arising in the ordinary course of business and consistent with past practice; (11) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of Acquired Debt in connection with a transaction meeting either one of the financial tests set forth in clause (4) under Section 5.01(a); (12) the issuance by any of Targa Resources Partners’ Restricted Subsidiaries to Targa Resources Partners or to any of its Restricted Subsidiaries of any Disqualified Equity; provided, however, that: (A) any subsequent issuance or transfer of Equity Interests that results in any such Disqualified Equity being held by a Person other than Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners; and (B) any sale or other transfer of any such Disqualified Equity to a Person that is not either Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners will be deemed, in each case, to constitute an issuance of such Disqualified Equity by such Restricted Subsidiary that was not permitted by this clause (12); and (13) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of additional Indebtedness; provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (13) and then outstanding does not exceed the greater of (a) $150.0 million and (b) 7.5% of Targa Resources Partners’ Consolidated Net Tangible Assets. Targa Resources Partners shall not incur, and shall not permit Finance Corp. or any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of Targa Resources Partners, Finance Corp. or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness of a Person shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of such Person solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. For purposes of determining compliance with this Section 4.09, if an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (13) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, Targa Resources Partners will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares of the same class of Disqualified Equity will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section 4.09; provided, however, in each such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges of Targa Resources Partners as accrued. Notwithstanding any other provision of this Section 4.09, (i) the maximum amount of Indebtedness that Targa Resources Partners or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. Further, the accounting reclassification of any obligation of Targa Resources Partners or any of its Restricted Subsidiaries as Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09.Section

Appears in 1 contract

Samples: Indenture (Targa Resources Partners LP)

Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources Regency Energy Partners shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and Targa Resources Regency Energy Partners will not issue any Disqualified Equity and will not permit any of its Restricted Subsidiaries to issue any Disqualified Equity; provided, however, that Targa Resources Regency Energy Partners and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) and Targa Resources Regency Energy Partners and the Restricted Subsidiaries may issue Disqualified Equity, if the Fixed Charge Coverage Ratio for Targa Resources Regency Energy Partners’ most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter period. (b) The provisions of Section 4.09(a) hereof shall not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Equity preferred securities described in clause (ii) below: (1) the incurrence by Targa Resources Regency Energy Partners and any Restricted Subsidiary of additional Indebtedness (including any letters of credit) under one or more Credit Facilities, provided provided, that, after giving effect to such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Targa Resources Regency Energy Partners and its Restricted Subsidiaries thereunder) and then outstanding does not exceed the greater of (a) $2,000.0 900.0 million and (b) the sum of $1.5 billion 500.0 million and 2020.0% of Targa Resources Regency Energy Partners’ Consolidated Net Tangible Assets; (2) the incurrence by Targa Resources Regency Energy Partners and its Restricted Subsidiaries of the Existing Indebtedness; (3) the incurrence by Targa Resources Regency Energy Partners, Finance Corp. and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and any the Exchange Notes and the related Note Guarantees that may to be issued pursuant to a Registration Rights Agreement; (4) the incurrence by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), provided that after giving effect to such incurrence the aggregate principal amount of all Indebtedness incurred pursuant to this clause (4) and then outstanding does not exceed the greater of (a) $50.0 20.0 million and (b) 4.02.0% of Targa Resources Regency Energy Partners’ Consolidated Net Tangible Assets; (5) the incurrence by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clause clauses (2) or (3) of this Section 4.09(b) or this clause (5); (6) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of any Permitted Receivables Financing in an aggregate principal amount at any time outstanding not to exceed $400.0 million; (7) the incurrence by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources Regency Energy Partners and any of its Restricted Subsidiaries; provided, however, that: : (A) if Targa Resources Regency Energy Partners or any Guarantor is the obligor on such Indebtedness and the payee is not Targa Resources Regency Energy Partners or a Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of Targa Resources Regency Energy Partners, or the Note Guarantee, in the case of a Guarantor, and (B) (1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners and (2) any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners, will be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources Partners or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (7); (8) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of Hedging Obligations; (9) the guarantee by Targa Resources Partners or any of its Restricted Subsidiaries of Indebtedness of Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners that was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed; (10) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of obligations relating to net gas balancing positions arising in the ordinary course of business and consistent with past practice; (11) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of Acquired Debt in connection with a transaction meeting either one of the financial tests set forth in clause (4) under Section 5.01(a); (12) the issuance by any of Targa Resources Partners’ Restricted Subsidiaries to Targa Resources Partners or to any of its Restricted Subsidiaries of any Disqualified Equity; provided, however, that: (A) any subsequent issuance or transfer of Equity Interests that results in any such Disqualified Equity being held by a Person other than Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners; and (B) any sale or other transfer of any such Disqualified Equity to a Person that is not either Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners will be deemed, in each case, to constitute an issuance of such Disqualified Equity by such Restricted Subsidiary that was not permitted by this clause (12); and (13) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of additional Indebtedness; provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (13) and then outstanding does not exceed the greater of (a) $150.0 million and (b) 7.5% of Targa Resources Partners’ Consolidated Net Tangible Assets. Targa Resources Partners shall not incur, and shall not permit Finance Corp. or any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of Targa Resources Partners, Finance Corp. or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness of a Person shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of such Person solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. For purposes of determining compliance with this Section 4.09, if an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (13) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, Targa Resources Partners will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares of the same class of Disqualified Equity will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section 4.09; provided, however, in each such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges of Targa Resources Partners as accrued. Notwithstanding any other provision of this Section 4.09, (i) the maximum amount of Indebtedness that Targa Resources Partners or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. Further, the accounting reclassification of any obligation of Targa Resources Partners or any of its Restricted Subsidiaries as Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09.

Appears in 1 contract

Samples: Indenture (Regency Energy Partners LP)

Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources Regency Energy Partners shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and Targa Resources Regency Energy Partners will shall not issue any Disqualified Equity and will shall not permit any of its Restricted Subsidiaries to issue any Disqualified Equity; provided, however, that Targa Resources Regency Energy Partners and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) and Targa Resources Regency Energy Partners and the Restricted Subsidiaries may issue Disqualified Equity, if the Fixed Charge Coverage Ratio for Targa Resources Regency Energy Partners’ most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter period. (b) The provisions of Section 4.09(a) hereof shall not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Equity preferred securities described in clause (ii11) below: (1) the incurrence by Targa Resources Regency Energy Partners and any Restricted Subsidiary of additional Indebtedness (including letters of credit) under one or more Credit Facilities, provided provided, that, after giving effect to such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Targa Resources Regency Energy Partners and its Restricted Subsidiaries thereunder) and then outstanding does not exceed the greater of (a) $2,000.0 900.0 million and (b) the sum of $1.5 billion 500.0 million and 2020.0% of Targa Resources Regency Energy Partners’ Consolidated Net Tangible Assets; (2) the incurrence by Targa Resources Regency Energy Partners and its Restricted Subsidiaries of the Existing Indebtedness; (3) the incurrence by Targa Resources Regency Energy Partners, Finance Corp. and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and any (including, for the avoidance of doubt, the Exchange Notes and the related Note Guarantees that may to be issued pursuant to a Registration Rights Agreement); (4) the incurrence by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), provided that after giving effect to such incurrence the aggregate principal amount of all Indebtedness incurred pursuant to this clause (4) and then outstanding does not exceed the greater of (a) $50.0 20.0 million and (b) 4.02.0% of Targa Resources Regency Energy Partners’ Consolidated Net Tangible Assets; (5) the incurrence by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clause clauses (2) or (3) of this Section 4.09(b) or this clause (5); (6) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of any Permitted Receivables Financing in an aggregate principal amount at any time outstanding not to exceed $400.0 million; (7) the incurrence by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources Regency Energy Partners and any of its Restricted Subsidiaries; provided, however, that: (A) if Targa Resources Regency Energy Partners or any Guarantor is the obligor on such Indebtedness and the payee is not Targa Resources Regency Energy Partners or a Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of Targa Resources Regency Energy Partners, or the Note Guarantee, in the case of a Guarantor, and (B) (1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Targa Resources Regency Energy Partners or a Restricted Subsidiary of Targa Resources Regency Energy Partners and (2) any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources Regency Energy Partners or a Restricted Subsidiary of Targa Resources Regency Energy Partners, will be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources Regency Energy Partners or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (76); (8) 7) the incurrence by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of Hedging Obligations; (9) 8) the guarantee by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of Indebtedness of Targa Resources Regency Energy Partners or a Restricted Subsidiary of Targa Resources Regency Energy Partners that was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed; (109) the incurrence by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of obligations relating to net gas balancing positions arising in the ordinary course of business and consistent with past practice; (1110) the incurrence by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of Acquired Debt in connection with a transaction meeting either one of the financial tests set forth in clause (4) under Section 5.01(a); (1211) the issuance by any of Targa Resources Regency Energy Partners’ Restricted Subsidiaries to Targa Resources Regency Energy Partners or to any of its Restricted Subsidiaries of any Disqualified Equitypreferred securities; provided, however, that: (Aa) any subsequent issuance or transfer of Equity Interests that results in any such Disqualified Equity preferred securities being held by a Person other than Targa Resources Regency Energy Partners or a Restricted Subsidiary of Targa Resources Regency Energy Partners; and (Bb) any sale or other transfer of any such Disqualified Equity preferred securities to a Person that is not either Targa Resources Regency Energy Partners or a Restricted Subsidiary of Targa Resources Partners Regency Energy Partners; will be deemed, in each case, to constitute an issuance of such Disqualified Equity preferred securities by such Restricted Subsidiary that was not permitted by this clause (1211); and (1312) the incurrence by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of additional Indebtedness; provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (1312) and then outstanding does not exceed the greater of (a) $150.0 25.0 million and (b) 7.52.5% of Targa Resources Regency Energy Partners’ Consolidated Net Tangible Assets. Targa Resources Regency Energy Partners shall not incur, and shall not permit Finance Corp. or any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of Targa Resources Regency Energy Partners, Finance Corp. or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness of a Person shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of such Person solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. For purposes of determining compliance with this Section 4.09, if an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (1312) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, Targa Resources Regency Energy Partners will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares of the same class of Disqualified Equity will shall not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section 4.09; provided, however, in each such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges of Targa Resources Regency Energy Partners as accrued. Notwithstanding any other provision of this Section 4.09, (i) the maximum amount of Indebtedness that Targa Resources Regency Energy Partners or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. Further, the accounting reclassification of any obligation of Targa Resources Partners or any of its Restricted Subsidiaries as Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09.

Appears in 1 contract

Samples: Indenture (Regency Energy Partners LP)

Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources Partners shall TLLP will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and Targa Resources Partners TLLP will not issue any Disqualified Equity and will not permit any of its Restricted Subsidiaries to issue any Disqualified Equity; provided, however, that Targa Resources Partners TLLP and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) and Targa Resources Partners TLLP and the any Restricted Subsidiaries Subsidiary may issue Disqualified Equity, if the Fixed Charge Coverage Ratio for Targa Resources Partners’ most recently ended four full fiscal quarters for which internal financial statements are available TLLP’s Reference Period immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, would have been at least 2.0 2.00 to 1.01.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter periodReference Period. (b) The provisions of Section 4.09(a) hereof shall will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Equity described in clause (ii) below:): (1) the incurrence by Targa Resources Partners TLLP and any Restricted Subsidiary of additional Indebtedness (including letters of credit) under pursuant to one or more Credit Facilities, provided that, after giving effect to such incurrence, the Facilities in an aggregate principal amount of all Indebtedness incurred at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Targa Resources Partners TLLP and its Restricted Subsidiaries thereunder) and then outstanding does not to exceed the greater of (a) $2,000.0 650.0 million and (b) the sum of $1.5 billion 330.0 million and 2020.0% of Targa Resources Partners’ Consolidated Net Tangible Assets; (2) the incurrence by Targa Resources Partners TLLP, Finance Corp. and its Restricted Subsidiaries of the Existing Indebtedness; (3) the incurrence by Targa Resources PartnersTLLP, Finance Corp. and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture Issue Date and any the Exchange Notes and the related Note Guarantees that may to be issued pursuant to a the Registration Rights AgreementAgreement in exchange therefor; (4) the incurrence by Targa Resources Partners TLLP or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, Synthetic Lease Obligations, mortgage financings or purchase money obligationsobligations (including any Acquired Debt), in each case, incurred in connection with the purchase of, or for the purpose of financing all or any part of the purchase price or cost of construction construction, improvement or improvement of development of, property, plant or equipment used or useful in the business of Targa Resources Partners TLLP or any of its Restricted SubsidiariesSubsidiaries and related financing costs, and Attributable Debt in respect of sale and leaseback transactions, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), provided that after giving effect at any time outstanding not to such incurrence the aggregate principal amount of all Indebtedness incurred pursuant to this clause (4) and then outstanding does not exceed the greater of (a) $50.0 100.0 million and (b) 4.05.0% of Targa Resources Partners’ TLLP’s Consolidated Net Tangible Assets; (5) the incurrence by Targa Resources Partners TLLP or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clause (2) ), (3), or (313) of this Section 4.09(b) or this clause (5); (6) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of any Permitted Receivables Financing in an aggregate principal amount at any time outstanding not to exceed $400.0 million; (7) the incurrence by Targa Resources Partners TLLP or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources Partners TLLP and any of its Restricted Subsidiaries; provided, however, that: (A) if Targa Resources Partners TLLP or any Guarantor is the obligor on such Indebtedness and the payee is not Targa Resources Partners TLLP or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of Targa Resources PartnersTLLP, or the Note Guarantee, in the case of a Guarantor, ; and (B) (1i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Targa Resources Partners TLLP or a Restricted Subsidiary of Targa Resources Partners TLLP and (2ii) any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources Partners TLLP or a Restricted Subsidiary of Targa Resources PartnersTLLP, will be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources Partners TLLP or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (76); (8) 7) the incurrence by Targa Resources Partners TLLP or any of its Restricted Subsidiaries of Hedging Obligations; (9) 8) the guarantee by Targa Resources Partners TLLP or any of its Restricted Subsidiaries the Guarantors of Indebtedness of Targa Resources Partners TLLP or a Restricted Subsidiary of Targa Resources Partners that was permitted to be TLLP or the Indebtedness incurred by another provision of this Section 4.09Joint Ventures constituting Permitted Investments; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the NotesNotes or Note Guarantees, then the Guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed; (109) the incurrence by Targa Resources Partners TLLP or any of its Restricted Subsidiaries of obligations relating to net gas balancing positions arising Indebtedness in respect of workers’ compensation or similar liabilities, health or other types of social security benefits, unemployment or other insurance or self-insurance obligations, insurance contracts, reclamation, statutory obligations, bankers’ acceptances, and bid, performance, advance, payment, deposit, appeal and surety bonds in the ordinary course of business business, including guarantees and consistent with past practiceobligations respecting standby letters of credit supporting such obligations, to the extent not drawn (in each case other than an obligation for money borrowed) and replacements of any of the foregoing; (1110) the incurrence by Targa Resources Partners TLLP or any of its Restricted Subsidiaries of Acquired Debt in connection with Indebtedness arising from the honoring by a transaction meeting either one bank or other financial institution of the financial tests set forth in clause (4) under Section 5.01(a)a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days; (1211) the issuance by any of Targa Resources Partners’ Restricted Subsidiaries to Targa Resources Partners TLLP or to any of its Restricted Subsidiaries of Disqualified Equity to TLLP or any Disqualified Equityof its Restricted Subsidiaries, as the case may be; provided, however, that: (Aa) any subsequent issuance or transfer of Equity Interests of a Restricted Subsidiary that results in any such Disqualified Equity being held held, directly or indirectly, by a Person other than Targa Resources Partners TLLP or a Restricted Subsidiary of Targa Resources PartnersTLLP; and (Bb) any sale or other transfer of any such Disqualified Equity to a Person that is not either Targa Resources Partners TLLP or a Restricted Subsidiary of Targa Resources Partners TLLP, will be deemed, in each case, to constitute an issuance of such Disqualified Equity by TLLP or such Restricted Subsidiary that was not permitted by this clause clause; (12); and) the incurrence by TLLP or any of its Restricted Subsidiaries of Permitted Acquisition Indebtedness; (13) the incurrence by Targa Resources Partners TLLP of Indebtedness in the ordinary course of business under documentary letters of credit, which are to be repaid in full not more than one year after the date on which such Indebtedness was originally incurred to finance the purchase of goods by TLLP or any of its Restricted Subsidiaries; (14) the incurrence of Indebtedness arising from agreements with TLLP or any of its Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earn-outs, or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or a Subsidiary in accordance with the terms of this Indenture, other than guarantees of Indebtedness incurred or assumed by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition; and (15) the incurrence by TLLP or any of its Restricted Subsidiaries of additional Indebtedness; provided that, after giving effect to any such incurrence, the Indebtedness in an aggregate principal amount of all Indebtedness incurred under this clause (13) and then outstanding does at any time outstanding, not to exceed the greater of (a) $150.0 100.0 million and (b) 7.55.0% of Targa Resources Partners’ Consolidated Net Tangible Assets. Targa Resources Partners shall TLLP will not incur, and shall will not permit Finance Corp. or any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of Targa Resources Partners, Finance Corp. TLLP or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness of a Person shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of such Person TLLP solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. For purposes of determining compliance with this Section 4.09, if in the event that an item of proposed Indebtedness (including Acquired Debt) meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (1315) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, Targa Resources Partners TLLP will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. ; provided that Indebtedness under the Credit Facilities Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture Issue Date will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. .” The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares of the same class of Disqualified Equity will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section 4.09; provided, however, in each such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges of Targa Resources Partners as accrued. Notwithstanding any other provision of this Section 4.09, (i) the maximum amount of Indebtedness that Targa Resources Partners TLLP or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. FurtherThe amount of any Indebtedness outstanding as of any date will be: (1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount; (2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and (3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the accounting reclassification lesser of: (A) the Fair Market Value of any obligation such assets at the date of Targa Resources Partners or any determination; and (B) the amount of its Restricted Subsidiaries as the Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09the other Person.

Appears in 1 contract

Samples: Indenture (Tesoro Logistics Lp)

Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources Xxxxx Energy Partners shall will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and Targa Resources Xxxxx Energy Partners will not issue any Disqualified Equity and will not permit any of its Restricted Subsidiaries to issue any Disqualified Equity; provided, however, that Targa Resources Xxxxx Energy Partners and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) and Targa Resources Xxxxx Energy Partners and the Restricted Subsidiaries may issue Disqualified Equity, if the Fixed Charge Coverage Ratio for Targa Resources the Xxxxx Energy Partners’ most recently ended four full fiscal quarters for which internal financial statements are available Reference Period immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, would have been at least 2.0 2.00 to 1.01.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter periodReference Period. (b) The provisions of Section 4.09(a) hereof shall will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Equity described in clause (ii) below:): (1) the incurrence by Targa Resources Xxxxx Energy Partners and any Restricted Subsidiary Guarantor of additional Indebtedness (including and letters of credit) credit and the guarantees thereof under Credit Facilities, provided that, after giving effect to such incurrence, the Facilities in an aggregate principal amount of all Indebtedness incurred at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Targa Resources Xxxxx Energy Partners and its Restricted Subsidiaries thereunder) and then outstanding does not to exceed the greater of (a) $2,000.0 575.0 million and (b) the sum of $1.5 billion 460.0 million and 20% of Targa Resources Partners’ Consolidated Net Tangible Assets, in each case, less the aggregate amount of all Net Proceeds of Asset Sales or casualty events applied by Xxxxx Energy Partners or any of its Restricted Subsidiaries since the Issue Date to repay any term Indebtedness under a Credit Facility; (2) the incurrence by Targa Resources Finance Corp., Xxxxx Energy Partners and its Restricted Subsidiaries of the Existing Indebtedness; (3) the incurrence by Targa Resources Partners, Finance Corp. the Issuers and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture Issue Date and any the Exchange Notes and the related Note Guarantees that may to be issued pursuant to a the Registration Rights Agreement; (4) the incurrence by Targa Resources Xxxxx Energy Partners or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of Targa Resources Xxxxx Energy Partners or any of its Restricted Subsidiaries, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), provided that after giving effect at any time outstanding not to such incurrence the aggregate principal amount of all Indebtedness incurred pursuant to this clause (4) and then outstanding does not exceed the greater of (a) $50.0 million and (b) 4.05.0% of Targa Resources Partners’ Consolidated Net Tangible Assets; (5) the incurrence by Targa Resources Xxxxx Energy Partners or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clause clauses (2), (3) or (34) of this Section 4.09(b) or this clause (5); (6) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of any Permitted Receivables Financing in an aggregate principal amount at any time outstanding not to exceed $400.0 million; (7) the incurrence by Targa Resources Xxxxx Energy Partners or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources Xxxxx Energy Partners and any of its Restricted Subsidiaries; provided, however, that: (A) if Targa Resources Xxxxx Energy Partners or any Guarantor is the obligor on such Indebtedness and the payee is not Targa Resources Xxxxx Energy Partners or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of Targa Resources Xxxxx Energy Partners, or the Note Guarantee, in the case of a Guarantor, ; and (B) (1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Targa Resources Xxxxx Energy Partners or a Restricted Subsidiary of Targa Resources Xxxxx Energy Partners and (2) any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources Xxxxx Energy Partners or a Restricted Subsidiary of Targa Resources Xxxxx Energy Partners, will be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources Xxxxx Energy Partners or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (76); (8) 7) the incurrence by Targa Resources Xxxxx Energy Partners or any of its Restricted Subsidiaries of Hedging Obligations; (9) 8) the guarantee by Targa Resources Partners Xxxxx Energy Partners, or any of its Restricted Subsidiaries the Guarantors of Indebtedness of Targa Resources Partners Xxxxx Energy Partners, or a Restricted Subsidiary of Targa Resources Xxxxx Energy Partners that was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed; (109) the incurrence by Targa Resources Xxxxx Energy Partners or any of its Restricted Subsidiaries of obligations relating to net gas balancing positions arising Indebtedness in respect of workers’ compensation claims, health or other types of social security benefits, unemployment or other insurance or self-insurance obligations, insurance contracts, reclamation, statutory obligations, bankers’ acceptances, and performance, payment, appeal and surety bonds in the ordinary course of business business, including guarantees and consistent with past practiceobligations respecting standby letters of credit supporting such obligations, to the extent not drawn (in each case other than an obligation for money borrowed) and replacements of any of the foregoing; (1110) the incurrence by Targa Resources Xxxxx Energy Partners or any of its Restricted Subsidiaries of Acquired Debt in connection with Indebtedness arising from the honoring by a transaction meeting either one bank or other financial institution of the financial tests set forth in clause (4) under Section 5.01(a)a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five business days; (1211) the issuance by any of Targa Resources Partners’ Restricted Subsidiaries to Targa Resources Xxxxx Energy Partners or to any of its Restricted Subsidiaries of Disqualified Equity to Xxxxx Energy Partners or any Disqualified Equityof its Restricted Subsidiaries; provided, however, that: (Aa) any subsequent issuance or transfer of Equity Interests of a Restricted Subsidiary that results in any such Disqualified Equity being held held, directly or indirectly, by a Person other than Targa Resources Xxxxx Energy Partners or a Restricted Subsidiary of Targa Resources Xxxxx Energy Partners; and (Bb) any sale or other transfer of any such Disqualified Equity to a Person that is not either Targa Resources Xxxxx Energy Partners or a Restricted Subsidiary of Targa Resources Partners Xxxxx Energy Partners; will be deemed, in each case, to constitute an issuance of such Disqualified Equity by Xxxxx Equity Partners or such Restricted Subsidiary that was not permitted by this clause clause: (12); and) the incurrence by Xxxxx Energy Partners or any of its Restricted Subsidiaries of Indebtedness in the ordinary course of business under documentary letters of credit which are to be repaid in full not more than one year after the date on which such Indebtedness was originally incurred to finance the purchase of goods by Xxxxx Energy Partners or any of its Restricted Subsidiaries; (13) the incurrence of Indebtedness arising from agreements with Xxxxx Energy Partners or any of its Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earn-outs, or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or a Subsidiary in accordance with the terms of the indenture, other than guarantees of Indebtedness incurred or assumed by Targa Resources any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition; and (14) the incurrence by Xxxxx Energy Partners or any of its Restricted Subsidiaries of additional Indebtedness; provided that, after giving effect to any such incurrence, the Indebtedness in an aggregate principal amount of all Indebtedness incurred under this clause (13) and then outstanding does at any time outstanding, not to exceed the greater of (a) $150.0 50.0 million and (b) 7.55.0 % of Targa Resources Partners’ Consolidated Net Tangible Assets. Targa Resources Xxxxx Energy Partners shall will not incur, and shall will not permit Finance Corp. or any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of Targa Resources Partners, Finance Corp. Xxxxx Energy Partners or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness of a Person shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of such Person Xxxxx Energy Partners solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. For purposes of determining compliance with this Section 4.09, if in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (1314) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, Targa Resources Xxxxx Energy Partners will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares of the same class of Disqualified Equity will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section 4.09; provided, however, in each such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges of Targa Resources Xxxxx Energy Partners as accrued. Notwithstanding any other provision of this Section 4.09, (i) the maximum amount of Indebtedness that Targa Resources Xxxxx Energy Partners or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. FurtherThe amount of any Indebtedness outstanding as of any date will be: (1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount; (2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and (3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the accounting reclassification lesser of: (A) the Fair Market Value of any obligation such assets at the date of Targa Resources Partners or any determination; and (B) the amount of its Restricted Subsidiaries as the Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09the other Person.

Appears in 1 contract

Samples: Indenture (Holly Energy Partners Lp)

Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources Partners The Partnership shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and Targa Resources Partners the Partnership will not issue any Disqualified Equity and will not permit any of its Restricted Subsidiaries to issue any Disqualified Equity; provided, however, that Targa Resources Partners the Partnership and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) ), and Targa Resources Partners the Partnership and the Restricted Subsidiaries may issue Disqualified Equity, if the Fixed Charge Coverage Ratio for Targa Resources Partners’ the Partnership’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, issued would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred incurred, or the Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter period. (b) The provisions Notwithstanding the prohibitions of Section 4.09(a) hereof ), so long as no Default or Event of Default shall not prohibit have occurred and be continuing or would be caused thereby, the incurrence of Partnership and its Restricted Subsidiaries may incur any of the following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Equity described in clause (ii) below:): (1i) the incurrence by Targa Resources Partners the Partnership and any Restricted Subsidiary of additional Indebtedness (including letters of credit) under Credit Facilities, Facilities and the guarantees thereof; provided that, after giving effect to such incurrence, that the aggregate principal amount of all Indebtedness of the Partnership and the Restricted Subsidiaries incurred under pursuant to this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Targa Resources Partners and its Restricted Subsidiaries thereunderi) and then outstanding under all Credit Facilities after giving effect to such incurrence does not exceed the greater of (aA) $2,000.0 400.0 million and or (bB) the sum of $1.5 billion and 20300.0 million plus 15% of Targa Resources Partners’ the Consolidated Net Tangible AssetsAssets of the Partnership; (2ii) the incurrence by Targa Resources Partners the Partnership and its Restricted Subsidiaries of Existing Indebtedness (other than under the Existing IndebtednessCredit Facilities); (3iii) the incurrence by Targa Resources Partners, Finance Corp. the Partnership and the Subsidiary Guarantors of Indebtedness represented by the Notes issued and sold in the related Note Guarantees to be issued on the date of this Indenture and Offering, any Exchange Notes and the Guarantees and the related Note Guarantees that may be issued pursuant to a Registration Rights AgreementObligations; (4iv) the incurrence by Targa Resources Partners the Partnership or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of Targa Resources Partners the Partnership or any of its such Restricted SubsidiariesSubsidiary, including all Permitted Refinancing Indebtedness incurred to renew, refundextend, refinance, renew, replace, defease or discharge refund any Indebtedness incurred pursuant to this clause (4iv), provided that after giving effect to any such incurrence incurrence, the aggregate principal amount of all Indebtedness incurred pursuant to this clause (4iv) and then outstanding does shall not exceed the greater of (a) $50.0 15.0 million and or (b) 4.02.5% of Targa Resources Partners’ the Consolidated Net Tangible AssetsAssets of the Partnership at such time; (5v) the incurrence by Targa Resources Partners the Partnership or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refundextend, refinance, renew, replace, defease or discharge any refund, Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clause (2ii) or (3iii) of this Section 4.09(b) or this clause (5v); (6vi) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of any Permitted Receivables Financing in an aggregate principal amount at any time outstanding not to exceed $400.0 million; (7) the incurrence by Targa Resources Partners Partnership or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources Partners the Partnership and any of its Restricted Subsidiaries; provided, however, that: (A) if Targa Resources Partners or any Guarantor the Partnership is the obligor on such Indebtedness and the payee a Subsidiary Guarantor is not Targa Resources Partners or a Guarantorthe obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, or if a Subsidiary Guarantor is the obligor on such Indebtedness and neither the Partnership nor another Subsidiary Guarantor is the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the case Guarantee of Targa Resources Partners, or the Note Guarantee, in the case of a such Subsidiary Guarantor, ; and (B) (1i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Targa Resources Partners the Partnership or a Restricted Subsidiary of Targa Resources Partners thereof and (2ii) any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources Partners or neither the Partnership nor a Restricted Subsidiary of Targa Resources Partnersthereof, will shall be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources Partners the Partnership or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (7vi); (8) vii) the incurrence by Targa Resources Partners the Partnership or any of its Restricted Subsidiaries of Hedging ObligationsObligations that are incurred for the purpose of fixing or hedging (but not for speculative purposes) (A) foreign currency exchange rate risks of the Partnership or any Restricted Subsidiary, (B) interest rate risks with respect to any floating rate Indebtedness of the Partnership or any Restricted Subsidiary that is permitted by the terms of this Indenture to be outstanding or (C) commodities pricing risks of the Partnership or any Restricted Subsidiary in respect of Hydrocarbons used, produced, processed or sold by the Partnership or any of its Restricted Subsidiaries; (9viii) the guarantee by Targa Resources Partners the Partnership or any of its Restricted Subsidiaries of Indebtedness of Targa Resources Partners the Partnership or a any of its Restricted Subsidiary of Targa Resources Partners Subsidiaries that was permitted to be incurred by another provision of this Section 4.09; provided provided, that if in the event such Indebtedness that is being guaranteed is subordinated to a Subordinated Obligation or pari passu with the Notesa Guarantor Subordinated Obligation, then the Guarantee guarantee shall be subordinated in right of payment to the Notes or pari passuthe Guarantee, as applicable, to the same extent as the Indebtedness guaranteedcase may be; (10ix) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of obligations relating to net gas balancing positions arising bid, performance, surety and appeal bonds incurred in the ordinary course of business business, including guarantees and consistent with past practiceobligations respecting standby letters of credit supporting such obligations, to the extent not drawn (in each case other than an obligation for money borrowed); (11x) the incurrence by Targa Resources Partners the Partnership or any of its Restricted Subsidiaries of Acquired Debt in connection with a transaction merger or consolidation meeting either one of the financial tests set forth in clause (4iv) under of Section 5.01(a); (12) the issuance by any of Targa Resources Partners’ Restricted Subsidiaries to Targa Resources Partners or to any of its Restricted Subsidiaries of any Disqualified Equity; provided, however, that: (A) any subsequent issuance or transfer of Equity Interests that results in any such Disqualified Equity being held by a Person other than Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners; and (B) any sale or other transfer of any such Disqualified Equity to a Person that is not either Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners will be deemed, in each case, to constitute an issuance of such Disqualified Equity by such Restricted Subsidiary that was not permitted by this clause (12); and (13xi) the incurrence by Targa Resources Partners the Partnership or any of its Restricted Subsidiaries of additional Indebtedness; provided that, after giving effect to any such incurrence, the Indebtedness in an aggregate principal amount of all Indebtedness incurred under this clause (13) and then at any time outstanding does not to exceed the greater of (a) $150.0 25.0 million and or (b) 7.54.0% of Targa Resources Partners’ the Consolidated Net Tangible Assets. Targa Resources Partners shall not incur, and shall not permit Finance Corp. or any Guarantor to incur, any Indebtedness Assets of the Partnership. (including Permitted Debtc) that is contractually subordinated in right of payment to any other Indebtedness of Targa Resources Partners, Finance Corp. or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness of a Person shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of such Person solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. For purposes of determining compliance with this Section 4.09, if in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses paragraphs (1b)(i) through (13b)(xi) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof), Targa Resources Partners will the Partnership shall be permitted to classify (or later reclassify in whole or in part) such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, incurrence in any manner that complies with this Section 4.09. An item of Indebtedness may be divided and classified in one or more of the types of Permitted Indebtedness. Any Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated Issue Date shall be considered incurred under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause Section 4.09(a). (1d) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares of the same class of Disqualified Equity will shall not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section 4.09; provided, however, in each such case, that the amount of any such accrual, accretion or payment thereof is included in Fixed Charges of Targa Resources Partners the Partnership as accrued. Notwithstanding any other provision of this Section 4.09, (i) the maximum amount of Indebtedness that Targa Resources Partners or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. Further, the accounting reclassification of any obligation of Targa Resources Partners or any of its Restricted Subsidiaries as Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09.

Appears in 1 contract

Samples: Indenture (Markwest Energy Partners L P)

Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources Partners The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and Targa Resources Partners will the Company shall not issue any Disqualified Equity and will shall not permit any of its Restricted Subsidiaries to issue any Disqualified Equity; provided, however, provided that Targa Resources Partners the Company and any the Restricted Subsidiary Subsidiaries may incur Indebtedness (including Acquired Debt) ), and Targa Resources Partners the Company and the Restricted Subsidiaries may issue Disqualified Equity, if the Fixed Charge Coverage Ratio for Targa Resources Partners’ the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, issued would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred incurred, or the Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter period. (b) The provisions of So long as no Default shall have occurred and be continuing or would be caused thereby, Section 4.09(a) hereof shall will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Equity described in clause (ii) below:): (1i) the incurrence by Targa Resources Partners the Company and any Restricted Subsidiary Guarantor of additional Indebtedness (including letters of credit) under Credit Facilities, Facilities and the guarantees thereof; provided that, after giving effect to such incurrence, that the aggregate principal amount of all Indebtedness incurred under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Targa Resources Partners Company and its the Restricted Subsidiaries thereunderincurred pursuant to this Section 4.09(b)(i) and then outstanding under all Credit Facilities after giving effect to such incurrence does not exceed the greater of (a) $2,000.0 800.0 million and or (b) the sum of $1.5 billion and 600.0 million plus 20% of Targa Resources Partners’ the Consolidated Net Tangible AssetsAssets of the Company; (2ii) the incurrence by Targa Resources Partners the Company and its Restricted Subsidiaries of Existing Indebtedness (other than under the Existing IndebtednessCredit Agreement); (3iii) the incurrence by Targa Resources Partners, Finance Corp. the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes issued and sold in this offering and the related Note Guarantees to be issued on the date of this Indenture and any Exchange Notes and the related Note Guarantees that may be issued pursuant to a Registration Rights AgreementGuarantees; (4iv) the incurrence by Targa Resources Partners the Company or any of its Restricted Subsidiaries Subsidiary Guarantor of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of Targa Resources Partners the Company or any of its such Restricted SubsidiariesSubsidiary, in an aggregate principal amount including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), provided that after giving effect Section 4.09(b)(iv) not to such incurrence the aggregate principal amount of all Indebtedness incurred pursuant to this clause (4) and then outstanding does not exceed the greater of (a) $50.0 20.0 million and at any time outstanding or (b) 4.02.5% of Targa Resources Partners’ the Consolidated Net Tangible AssetsAssets of the Company; (5v) the incurrence by Targa Resources Partners the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any discharge, Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clause (24.09(b)(ii) or (3) of this Section 4.09(biii) or this clause (5Section 4.09(b)(v); (6vi) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of any Permitted Receivables Financing in an aggregate principal amount at any time outstanding not to exceed $400.0 million; (7) the incurrence by Targa Resources Partners Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources Partners the Company and any of its Restricted Subsidiaries; provided, however, provided that: (A) if Targa Resources Partners or any Guarantor the Company is the obligor on such Indebtedness and the payee a Subsidiary Guarantor is not Targa Resources Partners or a Guarantorthe obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, or if a Subsidiary Guarantor is the obligor on such Indebtedness and neither the Company nor another Subsidiary Guarantor is the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the case Guarantee of Targa Resources Partners, or the Note Guarantee, in the case of a such Subsidiary Guarantor, ; and (B) (1i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Targa Resources Partners the Company or a Restricted Subsidiary of Targa Resources Partners thereof and (2ii) any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources Partners the Company or a Restricted Subsidiary of Targa Resources Partnersthereof, will shall be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources Partners the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (7Section 4.09(b)(vi); (8) vii) the incurrence by Targa Resources Partners the Company or any of its Restricted Subsidiaries of Hedging Obligations; (9viii) the guarantee by Targa Resources Partners the Company or any of its Restricted Subsidiaries of Indebtedness of Targa Resources Partners the Company or a any of its Restricted Subsidiary of Targa Resources Partners Subsidiaries that was permitted to be incurred by another provision of this Section 4.09; provided that if in the event such Indebtedness that is being guaranteed is subordinated to Subordinated Indebtedness or pari passu with the NotesGuarantor Subordinated Indebtedness, then the Guarantee guarantee shall be subordinated in right of payment to the Notes or pari passuthe Guarantee, as applicable, to the same extent as the Indebtedness guaranteedcase may be; (10ix) the incurrence by Targa Resources Partners the Company or any Subsidiary Guarantor of its Restricted Subsidiaries of obligations relating to net gas balancing positions arising in the ordinary course of business and consistent with past practice; (11) the incurrence by Targa Resources Partners additional Indebtedness or any of its Restricted Subsidiaries of Acquired Debt in connection with a transaction meeting either one of the financial tests set forth in clause (4) under Section 5.01(a); (12) the issuance by any of Targa Resources Partners’ Restricted Subsidiaries to Targa Resources Partners or to any of its Restricted Subsidiaries of any Disqualified Equity; provided, however, that: (A) any subsequent issuance or transfer of Equity Interests that results in any such Disqualified Equity being held by a Person other than Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners; and (B) any sale or other transfer of any such Disqualified Equity to a Person that is not either Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners will be deemed, in each case, to constitute an issuance of such Disqualified Equity by such Restricted Subsidiary that was not permitted by this clause (12); and (13) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of additional Indebtedness; provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (13) and then at any time outstanding does not to exceed the greater of (a) $150.0 30.0 million and at any time outstanding or (b) 7.53.0% of Targa Resources Partners’ the Consolidated Net Tangible Assets. Targa Resources Partners shall not incur, and shall not permit Finance Corp. Assets of the Company; and (x) the incurrence by the Company or any Guarantor to incur, any of its Restricted Subsidiaries of Indebtedness (including Permitted Debt) that is contractually subordinated in right arising from Guarantees of payment to any other Indebtedness of Targa Resources Partners, Finance Corp. Joint Ventures at any time outstanding not to exceed the greater of $10.0 million or such Guarantor unless such Indebtedness is also contractually subordinated in right 1.0% of payment to the Notes and Consolidated Net Tangible Assets of the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness of a Person shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of such Person solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. Company. (c) For purposes of determining compliance with this Section 4.09, if in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1Sections 4.09(b)(i) through (13) abovex), or is entitled to be incurred pursuant to Section 4.09(a) hereof), Targa Resources Partners the Company will be permitted to classify (or later reclassify in whole or in part) such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. An item of Indebtedness may be divided and classified in one or more of the types of Permitted Indebtedness. Any outstanding Indebtedness under the Credit Facilities outstanding on the date on which Notes are first issued Issue Date shall be considered incurred under Section 4.09(b)(i) and authenticated under this Indenture will initially may not be deemed to have been incurred on such date in reliance on the exception provided by clause reclassified. (1d) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares of the same class of Disqualified Equity will shall not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section 4.09; provided, however, in each such case, that the amount of any such accrual, accretion or payment thereof is included in Fixed Charges of Targa Resources Partners the Company as accrued. . (e) Notwithstanding any other provision of this Section 4.09, (i) the maximum amount of Indebtedness or Disqualified Equity that Targa Resources Partners 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 the fluctuations in exchange rates or currency values. Further, the accounting reclassification of any obligation of Targa Resources Partners or any of its Restricted Subsidiaries as Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09.

Appears in 1 contract

Samples: First Supplemental Indenture (Penn Virginia Resource Partners L P)

Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources Partners The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and Targa Resources Partners will the Company shall not issue any Disqualified Equity and will shall not permit any of its Restricted Subsidiaries to issue any Disqualified Equity; provided, however, provided that Targa Resources Partners the Company and any the Restricted Subsidiary Subsidiaries may incur Indebtedness (including Acquired Debt) ), and Targa Resources Partners the Company and the Restricted Subsidiaries may issue Disqualified Equity, if the Fixed Charge Coverage Ratio for Targa Resources Partners’ the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, issued would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred incurred, or the Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter period. (b) The provisions of So long as no Default shall have occurred and be continuing or would be caused thereby, Section 4.09(a) hereof shall will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Equity described in clause (ii) below:): (1i) the incurrence by Targa Resources Partners the Company and any Restricted Subsidiary Guarantor of additional Indebtedness (including guarantees thereof and letters of credit) under Credit Facilities, ; provided that, after giving effect to such incurrence, that the aggregate principal amount of all Indebtedness incurred under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Targa Resources Partners Company and its the Restricted Subsidiaries thereunderincurred pursuant to this Section 4.09(b)(i) and then outstanding under all Credit Facilities after giving effect to such incurrence does not exceed the greater of (a) $2,000.0 million and 1.2 billion or (b) the sum of $1.5 billion and 875.0 million plus 20% of Targa Resources Partners’ the Consolidated Net Tangible AssetsAssets of the Company; (2ii) the incurrence by Targa Resources Partners the Company and its Restricted Subsidiaries of Existing Indebtedness (other than under the Existing IndebtednessCredit Agreement); (3iii) the incurrence by Targa Resources Partners, Finance Corp. the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued and sold in this offering on the date of this Indenture Issue Date and any the Exchange Notes and the related Note Guarantees that may be issued pursuant to a Registration Rights Agreement; (4iv) the incurrence by Targa Resources Partners the Company or any of its Restricted Subsidiaries Subsidiary Guarantor of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of Targa Resources Partners the Company or any of its such Restricted SubsidiariesSubsidiary, in an aggregate principal amount including all Permitted Refinancing Indebtedness incurred to renew, refundextend, refinance, renew, replace, defease defease, discharge or discharge refund any Indebtedness incurred pursuant to this clause (4), provided that after giving effect Section 4.09(b)(iv) not to such incurrence the aggregate principal amount of all Indebtedness incurred pursuant to this clause (4) and then outstanding does not exceed the greater of (a) $50.0 million and at any time outstanding or (b) 4.02.5% of Targa Resources Partners’ the Consolidated Net Tangible AssetsAssets of the Company; (5v) the incurrence by Targa Resources Partners the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refundextend, refinance, renew, replace, defease defease, discharge or discharge any refund Indebtedness (other than intercompany Indebtedness) that was permitted by this the Indenture to be incurred under Section 4.09(a) hereof or clause (24.09(b)(ii) or (3) of this Section 4.09(biii) or this clause (5Section 4.09(b)(v); (6vi) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of any Permitted Receivables Financing in an aggregate principal amount at any time outstanding not to exceed $400.0 million; (7) the incurrence by Targa Resources Partners Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources Partners the Company and any of its Restricted Subsidiaries; provided, however, provided that: (A) if Targa Resources Partners or any Guarantor the Company is the obligor on such Indebtedness and the payee a Subsidiary Guarantor is not Targa Resources Partners or a Guarantorthe obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, or if a Subsidiary Guarantor is the obligor on such Indebtedness and neither the Company nor another Subsidiary Guarantor is the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the case Guarantee of Targa Resources Partners, or the Note Guarantee, in the case of a such Subsidiary Guarantor, ; and (B) (1i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Targa Resources Partners the Company or a Restricted Subsidiary of Targa Resources Partners thereof and (2ii) any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources Partners the Company or a Restricted Subsidiary of Targa Resources Partnersthereof, will shall be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources Partners the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (7Section 4.09(b)(vi); (8) vii) the incurrence by Targa Resources Partners the Company or any of its Restricted Subsidiaries of Hedging Obligations; (9viii) the guarantee by Targa Resources Partners the Company or any of its Restricted Subsidiaries of Indebtedness of Targa Resources Partners the Company or a any of its Restricted Subsidiary of Targa Resources Partners Subsidiaries that was permitted to be incurred by another provision of this Section 4.09; provided that if in the event such Indebtedness that is being guaranteed is subordinated to Subordinated Indebtedness or pari passu with the NotesGuarantor Subordinated Indebtedness, then the Guarantee guarantee shall be subordinated in right of payment to the Notes or pari passuthe Guarantee, as applicable, to the same extent as the Indebtedness guaranteedcase may be; (10ix) the incurrence by Targa Resources Partners the Company or any Subsidiary Guarantor of its Restricted Subsidiaries of obligations relating to net gas balancing positions arising in the ordinary course of business and consistent with past practice; (11) the incurrence by Targa Resources Partners additional Indebtedness or any of its Restricted Subsidiaries of Acquired Debt in connection with a transaction meeting either one of the financial tests set forth in clause (4) under Section 5.01(a); (12) the issuance by any of Targa Resources Partners’ Restricted Subsidiaries to Targa Resources Partners or to any of its Restricted Subsidiaries of any Disqualified Equity; provided, however, that: (A) any subsequent issuance or transfer of Equity Interests that results in any such Disqualified Equity being held by a Person other than Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners; and (B) any sale or other transfer of any such Disqualified Equity to a Person that is not either Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners will be deemed, in each case, to constitute an issuance of such Disqualified Equity by such Restricted Subsidiary that was not permitted by this clause (12); and (13) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of additional Indebtedness; provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (13) and then at any time outstanding does not to exceed the greater of (a) $150.0 60.0 million and at any time outstanding or (b) 7.53.0% of Targa Resources Partners’ the Consolidated Net Tangible Assets. Targa Resources Partners shall not incur, and shall not permit Finance Corp. Assets of the Company; and (x) the incurrence by the Company or any Guarantor to incur, any of its Restricted Subsidiaries of Indebtedness (including Permitted Debt) that is contractually subordinated in right arising from Guarantees of payment to any other Indebtedness of Targa Resources Partners, Finance Corp. Joint Ventures at any time outstanding not to exceed the greater of $20.0 million or such Guarantor unless such Indebtedness is also contractually subordinated in right 1.0% of payment to the Notes and Consolidated Net Tangible Assets of the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness of a Person shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of such Person solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. Company. (c) For purposes of determining compliance with this Section 4.09, if in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1Sections 4.09(b)(i) through (13) abovex), or is entitled to be incurred pursuant to Section 4.09(a) hereof), Targa Resources Partners the Company will be permitted to classify (or later reclassify in whole or in part) such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. An item of Indebtedness may be divided and classified in one or more of the types of Permitted Indebtedness. Any outstanding Indebtedness under the Credit Facilities outstanding on the date on which Notes are first issued Issue Date shall be considered incurred under Section 4.09(b)(i) and authenticated under this Indenture will initially may not be deemed to have been incurred on such date in reliance on the exception provided by clause reclassified. (1d) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares or units of the same class of Disqualified Equity will shall not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section 4.09; provided, however, in each such case, that the amount of any such accrual, accretion or payment thereof is included in Fixed Charges of Targa Resources Partners the Company as accrued. . (e) Notwithstanding any other provision of this Section 4.09, (i) the maximum amount of Indebtedness or Disqualified Equity that Targa Resources Partners the Company or any Restricted Subsidiary may incur or issue pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of the fluctuations in exchange rates or currency values. Further, the accounting reclassification of any obligation of Targa Resources Partners or any of its Restricted Subsidiaries as Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09.

Appears in 1 contract

Samples: Fourth Supplemental Indenture (PVR Partners, L. P.)

Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources Partners Sunoco LP shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and Targa Resources Partners will not issue any Disqualified Equity Sunoco LP shall not, and will shall not permit any of its Restricted Subsidiaries to to, issue any Disqualified Equity; provided, however, that Targa Resources Partners Sunoco LP and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) and Targa Resources Partners Sunoco LP and the Restricted Subsidiaries may issue Disqualified Equity, if the Fixed Charge Coverage Ratio for Targa Resources Partners’ Sunoco LP’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter period. (b) The provisions of Section 4.09(a) hereof shall not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Equity described in clause (ii11) below: (1) the incurrence by Targa Resources Partners Sunoco LP and any Restricted Subsidiary of additional Indebtedness (including letters of credit) under one or more Credit Facilities; provided, provided that, after giving effect to such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Targa Resources Partners Sunoco LP and its Restricted Subsidiaries thereunder) and then outstanding does not exceed the greater of (a) $2,000.0 1,500.0 million and (b) the sum of $1.5 billion 1,200.0 million and 2025.0% of Targa Resources Partners’ Sunoco LP’s Consolidated Net Tangible Assets; (2) the incurrence by Targa Resources Partners Sunoco LP and its Restricted Subsidiaries of the Existing Indebtedness; (3) the incurrence by Targa Resources PartnersSunoco LP, Finance Corp. and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and Indenture, any Exchange Notes and the related Note Guarantees that may be issued in exchange for other Notes pursuant to the terms of a Registration Rights Agreement, and the Note Guarantees; (4) the incurrence by Targa Resources Partners Sunoco LP or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of Targa Resources Partners Sunoco LP or any of its Restricted Subsidiaries, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), ; provided that after giving effect to such incurrence the aggregate principal amount of all Indebtedness incurred pursuant to this clause (4) and then outstanding does not exceed the greater of (a) $50.0 45.0 million and (b) 4.03.5% of Targa Resources Partners’ Sunoco LP’s Consolidated Net Tangible Assets; (5) the incurrence by Targa Resources Partners Sunoco LP or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clause clauses (2) or (3) of this Section 4.09(b) or this clause (5); (6) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of any Permitted Receivables Financing in an aggregate principal amount at any time outstanding not to exceed $400.0 million; (7) the incurrence by Targa Resources Partners Sunoco LP or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources Partners Sunoco LP and any of its Restricted Subsidiaries; provided, however, that: (A) if Targa Resources Partners Sunoco LP or any Guarantor is the obligor on such Indebtedness and the payee is not Targa Resources Partners Sunoco LP or a Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of Targa Resources PartnersSunoco LP, or the Note Guarantee, in the case of a Guarantor, and (B) (1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Targa Resources Partners Sunoco LP or a Restricted Subsidiary of Targa Resources Partners Sunoco LP and (2) any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources Partners Sunoco LP or a Restricted Subsidiary of Targa Resources PartnersSunoco LP, will be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources Partners Sunoco LP or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (76); (8) 7) the incurrence by Targa Resources Partners Sunoco LP or any of its Restricted Subsidiaries of Hedging ObligationsObligations incurred in the ordinary course of business and not for speculative purposes; (9) 8) the guarantee by Targa Resources Partners Sunoco LP or any of its Restricted Subsidiaries of Indebtedness of Targa Resources Partners Sunoco LP or a Restricted Subsidiary of Targa Resources Partners Sunoco LP that was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed; (109) the incurrence by Targa Resources Partners Sunoco LP or any of its Restricted Subsidiaries of obligations relating to net gas balancing positions arising in the ordinary course of business and consistent with past practice; (1110) the incurrence by Targa Resources Partners Sunoco LP or any of its Restricted Subsidiaries of Acquired Debt in connection with a transaction meeting either one of the financial tests set forth in clause (4Section 5.01(a)(4) under Section 5.01(a)hereof; (1211) the issuance by any of Targa Resources Partners’ Sunoco LP’s Restricted Subsidiaries to Targa Resources Partners Sunoco LP or to any of its Restricted Subsidiaries of any Disqualified Equity; provided, however, that: (Aa) any subsequent issuance or transfer of Equity Interests that results in any such Disqualified Equity being held by a Person other than Targa Resources Partners Sunoco LP or a Restricted Subsidiary of Targa Resources PartnersSunoco LP; and (Bb) any sale or other transfer of any such Disqualified Equity to a Person that is not either Targa Resources Partners Sunoco LP or a Restricted Subsidiary of Targa Resources Partners Sunoco LP; will be deemed, in each case, to constitute an issuance of such Disqualified Equity by such Restricted Subsidiary that was not permitted by this clause (11); (12)) the incurrence by Sunoco LP or any of its Restricted Subsidiaries of liability in respect of the Indebtedness of any Unrestricted Subsidiary of Sunoco LP or any Joint Venture, but only to the extent that such liability is the result of Sunoco LP’s or any such Restricted Subsidiary’s being a general partner of such Unrestricted Subsidiary or Joint Venture and not as guarantor of such Indebtedness; provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (12) and then outstanding does not exceed $50.0 million; and (13) the incurrence by Targa Resources Partners Sunoco LP or any of its Restricted Subsidiaries of additional Indebtedness; provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (13) and then outstanding does not exceed the greater of (a) $150.0 60.0 million and (b) 7.55.0% of Targa Resources Partners’ Sunoco LP’s Consolidated Net Tangible Assets. Targa Resources Partners Sunoco LP shall not incur, and shall not permit Finance Corp. or any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of Targa Resources PartnersSunoco LP, Finance Corp. or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness of a Person shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of such Person solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. For purposes of determining compliance with this Section 4.09, if an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (13) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, Targa Resources Partners Sunoco LP will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares of the same class of Disqualified Equity will shall not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section 4.09; provided, however, in each such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges of Targa Resources Partners Sunoco LP as accrued. Notwithstanding any other provision of this Section 4.09, (i) the maximum amount of Indebtedness that Targa Resources Partners Sunoco LP or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. Further, the accounting reclassification of any obligation of Targa Resources Partners or any of its Restricted Subsidiaries as Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09.

Appears in 1 contract

Samples: Indenture (Sunoco LP)

Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources Partners shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and Targa Resources Partners will not issue any Disqualified Equity and will not permit any of its Restricted Subsidiaries to issue any Disqualified Equity; provided, however, that Targa Resources Partners and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) and Targa Resources Partners and the Restricted Subsidiaries may issue Disqualified Equity, if the Fixed Charge Coverage Ratio for Targa Resources Partners’ most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter period. (b) The provisions of Section 4.09(a) hereof shall not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Equity described in clause (ii) below: (1) the incurrence by Targa Resources Partners and any Restricted Subsidiary of additional Indebtedness (including letters of credit) under Credit Facilities, provided that, after giving effect to such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Targa Resources Partners and its Restricted Subsidiaries thereunder) and then outstanding does not exceed the greater of (a) $2,000.0 1,100.0 million and (b) the sum of $1.5 billion 750.0 million and 20% of Targa Resources Partners’ Consolidated Net Tangible Assets; (2) the incurrence by Targa Resources Partners and its Restricted Subsidiaries of the Existing Indebtedness; (3) the incurrence by Targa Resources Partners, Finance Corp. and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and any Exchange Notes and the related Note Guarantees that may be issued pursuant to a Registration Rights Agreement; (4) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of Targa Resources Partners or any of its Restricted Subsidiaries, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), provided that after giving effect to such incurrence the aggregate principal amount of all Indebtedness incurred pursuant to this clause (4) and then outstanding does not exceed the greater of (a) $50.0 million and (b) 4.0% of Targa Resources Partners’ Consolidated Net Tangible Assets; (5) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clause (2) or (3) of this Section 4.09(b) or this clause (5); (6) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of any Permitted Receivables Financing in an aggregate principal amount at any time outstanding not to exceed $400.0 million; (7) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources Partners and any of its Restricted Subsidiaries; provided, however, that: (A) if Targa Resources Partners or any Guarantor is the obligor on such Indebtedness and the payee is not Targa Resources Partners or a Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of Targa Resources Partners, or the Note Guarantee, in the case of a Guarantor, and (B) (1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners and (2) any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners, will be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources Partners or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (76); (8) 7) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of Hedging Obligations; (9) 8) the guarantee by Targa Resources Partners or any of its Restricted Subsidiaries of Indebtedness of Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners that was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed; (109) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of obligations relating to net gas balancing positions arising in the ordinary course of business and consistent with past practice; (1110) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of Acquired Debt in connection with a transaction meeting either one of the financial tests set forth in clause (4) under Section 5.01(a); (1211) the issuance by any of Targa Resources Partners’ Restricted Subsidiaries to Targa Resources Partners or to any of its Restricted Subsidiaries of any Disqualified Equity; provided, however, that: (A) any subsequent issuance or transfer of Equity Interests that results in any such Disqualified Equity being held by a Person other than Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners; and (B) any sale or other transfer of any such Disqualified Equity to a Person that is not either Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners will be deemed, in each case, to constitute an issuance of such Disqualified Equity by such Restricted Subsidiary that was not permitted by this clause (1211); and (1312) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of additional Indebtedness; provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (1312) and then outstanding does not exceed the greater of (a) $150.0 50.0 million and (b) 7.54.0% of Targa Resources Partners’ Consolidated Net Tangible Assets. Targa Resources Partners shall not incur, and shall not permit Finance Corp. or any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of Targa Resources Partners, Finance Corp. or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness of a Person shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of such Person solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. For purposes of determining compliance with this Section 4.09, if an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (1312) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, Targa Resources Partners will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares of the same class of Disqualified Equity will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section 4.09; provided, however, in each such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges of Targa Resources Partners as accrued. Notwithstanding any other provision of this Section 4.09, (i) the maximum amount of Indebtedness that Targa Resources Partners or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. Further, the accounting reclassification of any obligation of Targa Resources Partners or any of its Restricted Subsidiaries as Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09.

Appears in 1 contract

Samples: Indenture (Targa Resources Partners LP)

Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources Partners shall CNX Midstream will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and Targa Resources Partners CNX Midstream will not issue any Disqualified Equity and will not permit any of its Restricted Subsidiaries to issue any Disqualified EquityPreferred Stock; provided, however, that Targa Resources Partners CNX Midstream and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) and Targa Resources Partners ), CNX Midstream may issue Disqualified Equity, and the Restricted Subsidiaries of CNX Midstream may incur Indebtedness (including Acquired Debt) or issue Disqualified EquityPreferred Stock, if the Fixed Charge Coverage Ratio for Targa Resources Partners’ CNX Midstream’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity or such Preferred Stock is issued, as the case may be, would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Equity or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period. (b) The provisions of Section 4.09(a) hereof shall will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Equity described Preferred Stock referred to in clause (iiviii) below: (1i) the incurrence by Targa Resources Partners CNX Midstream and any Restricted Subsidiary Subsidiaries of additional Indebtedness (including letters of credit) under one or more Credit Facilities, provided that, after giving effect to such incurrence, the Facilities in an aggregate principal amount of all Indebtedness incurred at any one time outstanding under this clause (1i) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Targa Resources Partners CNX Midstream and its Restricted Subsidiaries thereunder) and then outstanding does not to exceed the greater of (aB) $2,000.0 750.0 million and (bC) the sum of $1.5 billion 430.0 million and 2035.0% of Targa Resources Partners’ CNX Midstream’s Consolidated Net Tangible Assets; (2ii) the incurrence by Targa Resources Partners CNX Midstream and its Restricted Subsidiaries of the Existing Indebtedness; (3iii) the incurrence by Targa Resources Partners, Finance Corp. the Issuers and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and any Exchange Notes and the related Note Guarantees that may be issued pursuant to a Registration Rights AgreementIndenture; (4iv) the incurrence by Targa Resources Partners CNX Midstream or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction design, construction, installation or improvement of property, plant or equipment used in the business of Targa Resources Partners CNX Midstream or any of its Restricted Subsidiaries, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4iv), ; provided that after giving effect to such incurrence the aggregate principal amount of all Indebtedness incurred pursuant to this clause (4iv) and then outstanding does not exceed the greater of (aB) $50.0 100.0 million and (bC) 4.010.0% of Targa Resources Partners’ CNX Midstream’s Consolidated Net Tangible Assets; (5v) the incurrence by Targa Resources Partners CNX Midstream or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, extend, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clause clauses (2ii), (iii), (iv), (xi) or (3xii) of this Section 4.09(b) or this clause (5v); (6vi) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of any Permitted Receivables Financing in an aggregate principal amount at any time outstanding not to exceed $400.0 million; (7) the incurrence by Targa Resources Partners CNX Midstream or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources Partners CNX Midstream and any of its Restricted Subsidiaries; provided, however, that: (A) if Targa Resources Partners or any Guarantor is the obligor on such Indebtedness and the payee is not Targa Resources Partners or a Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of Targa Resources Partners, or the Note Guarantee, in the case of a Guarantor, and (B) (1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners and (2) any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners, will be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources Partners or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (7); (8) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of Hedging Obligations; (9) the guarantee by Targa Resources Partners or any of its Restricted Subsidiaries of Indebtedness of Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners that was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed; (10) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of obligations relating to net gas balancing positions arising in the ordinary course of business and consistent with past practice; (11) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of Acquired Debt in connection with a transaction meeting either one of the financial tests set forth in clause (4) under Section 5.01(a); (12) the issuance by any of Targa Resources Partners’ Restricted Subsidiaries to Targa Resources Partners or to any of its Restricted Subsidiaries of any Disqualified Equity; provided, however, that: (A) any subsequent issuance or transfer of Equity Interests that results in any such Disqualified Equity being held by a Person other than Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners; and (B) any sale or other transfer of any such Disqualified Equity to a Person that is not either Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners will be deemed, in each case, to constitute an issuance of such Disqualified Equity by such Restricted Subsidiary that was not permitted by this clause (12); and (13) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of additional Indebtedness; provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (13) and then outstanding does not exceed the greater of (a) $150.0 million and (b) 7.5% of Targa Resources Partners’ Consolidated Net Tangible Assets. Targa Resources Partners shall not incur, and shall not permit Finance Corp. or any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of Targa Resources Partners, Finance Corp. or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness of a Person shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of such Person solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. For purposes of determining compliance with this Section 4.09, if an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (13) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, Targa Resources Partners will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares of the same class of Disqualified Equity will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section 4.09; provided, however, in each such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges of Targa Resources Partners as accrued. Notwithstanding any other provision of this Section 4.09, (i) the maximum amount of Indebtedness that Targa Resources Partners or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. Further, the accounting reclassification of any obligation of Targa Resources Partners or any of its Restricted Subsidiaries as Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09.

Appears in 1 contract

Samples: Indenture (CNX Midstream Partners LP)

Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources Regency Energy Partners shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and Targa Resources Regency Energy Partners will not issue any Disqualified Equity and will not permit any of its Restricted Subsidiaries to issue any Disqualified Equity; provided, however, that Targa Resources Regency Energy Partners and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) and Targa Resources Regency Energy Partners and the Restricted Subsidiaries may issue Disqualified Equity, if the Fixed Charge Coverage Ratio for Targa Resources Regency Energy Partners’ most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter period. (b) The provisions of Section 4.09(a) hereof shall not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Equity preferred securities described in clause (ii11) below: (1) the incurrence by Targa Resources Regency Energy Partners and any Restricted Subsidiary of additional Indebtedness (including any letters of credit) under one or more Credit Facilities, provided provided, that, after giving effect to such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Targa Resources Regency Energy Partners and its Restricted Subsidiaries thereunder) and then outstanding does not exceed the greater of (a) $2,000.0 900.0 million and (b) the sum of $1.5 billion 500.0 million and 2020.0% of Targa Resources Regency Energy Partners’ Consolidated Net Tangible Assets; (2) the incurrence by Targa Resources Regency Energy Partners and its Restricted Subsidiaries of the Existing Indebtedness; (3) the incurrence by Targa Resources Regency Energy Partners, Finance Corp. and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and any Exchange Notes and the related Note Guarantees that may be issued pursuant to a Registration Rights AgreementIndenture; (4) the incurrence by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), provided that after giving effect to such incurrence the aggregate principal amount of all Indebtedness incurred pursuant to this clause (4) and then outstanding does not exceed the greater of (a) $50.0 20.0 million and (b) 4.02.0% of Targa Resources Regency Energy Partners’ Consolidated Net Tangible Assets; (5) the incurrence by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge discharge, any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clause clauses (2) or (3) of this Section 4.09(b) or this clause (5); (6) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of any Permitted Receivables Financing in an aggregate principal amount at any time outstanding not to exceed $400.0 million; (7) the incurrence by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources Regency Energy Partners and any of its Restricted Subsidiaries; provided, however, that: (A) if Targa Resources Regency Energy Partners or any Guarantor is the obligor on such Indebtedness and the payee is not Targa Resources Regency Energy Partners or a Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of Targa Resources Regency Energy Partners, or the Note Guarantee, in the case of a Guarantor, and (B) (1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Targa Resources Regency Energy Partners or a Restricted Subsidiary of Targa Resources Regency Energy Partners and (2) any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources Regency Energy Partners or a Restricted Subsidiary of Targa Resources Regency Energy Partners, will be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources Regency Energy Partners or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (76); (8) 7) the incurrence by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of Hedging Obligations; (9) 8) the guarantee by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of Indebtedness of Targa Resources Regency Energy Partners or a Restricted Subsidiary of Targa Resources Regency Energy Partners that was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed; (109) the incurrence by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of obligations relating to net gas balancing positions arising in the ordinary course of business and consistent with past practice; (1110) the incurrence by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of Acquired Debt in connection with a transaction meeting either one of the financial tests set forth in clause (4) under this Section 5.01(a)4.09; (1211) the issuance by any of Targa Resources Regency Energy Partners’ Restricted Subsidiaries to Targa Resources Regency Energy Partners or to any of its Restricted Subsidiaries of any Disqualified Equitypreferred securities; provided, however, that: (Aa) any subsequent issuance or transfer of Equity Interests that results in any such Disqualified Equity preferred securities being held by a Person other than Targa Resources Regency Energy Partners or a Restricted Subsidiary of Targa Resources Regency Energy Partners; and (Bb) any sale or other transfer of any such Disqualified Equity preferred securities to a Person that is not either Targa Resources Regency Energy Partners or a Restricted Subsidiary of Targa Resources Regency Energy Partners will be deemed, in each case, to constitute an issuance of such Disqualified Equity preferred securities by such Restricted Subsidiary that was not permitted by this clause (1211); and (1312) the incurrence by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of additional Indebtedness; provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (1312) and then outstanding does not exceed the greater of (a) $150.0 25.0 million and (b) 7.52.5% of Targa Resources Regency Energy Partners’ Consolidated Net Tangible Assets. Targa Resources Regency Energy Partners shall not incur, and shall not permit Finance Corp. or any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of Targa Resources Regency Energy Partners, Finance Corp. or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness of a Person shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of such Person solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. For purposes of determining compliance with this Section 4.09, if an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (1312) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, Targa Resources Regency Energy Partners will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares of the same class of Disqualified Equity will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section 4.09; provided, however, in each such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges of Targa Resources Regency Energy Partners as accrued. Notwithstanding any other provision of this Section 4.09, (i) the maximum amount of Indebtedness that Targa Resources Regency Energy Partners or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. Further, the accounting reclassification of any obligation of Targa Resources Partners or any of its Restricted Subsidiaries as Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09.

Appears in 1 contract

Samples: Fifth Supplemental Indenture (Regency Energy Partners LP)

Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources Xxxxx Energy Partners shall will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and Targa Resources Xxxxx Energy Partners will not issue any Disqualified Equity and will not permit any of its Restricted Subsidiaries to issue any Disqualified Equity; provided, however, that Targa Resources Xxxxx Energy Partners and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) and Targa Resources Xxxxx Energy Partners and the Restricted Subsidiaries may issue Disqualified Equity, if the Fixed Charge Coverage Ratio for Targa Resources Partners’ most recently ended four full fiscal quarters for which internal financial statements are available the Reference Period immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, would have been at least 2.0 2.00 to 1.01.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter periodReference Period. (b) The provisions of Section 4.09(a) hereof shall will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Equity described in clause (ii) below:): (1) the incurrence by Targa Resources Partners Xxxxx Energy Partners, Finance Corp. and any Restricted Subsidiary of additional Indebtedness (including and letters of credit) credit and the Guarantees thereof under Credit Facilities, provided that, after giving effect to such incurrence, the Facilities in an aggregate principal amount of all Indebtedness incurred at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Targa Resources Xxxxx Energy Partners and its Restricted Subsidiaries thereunder) and then outstanding does not to exceed the greater of (a) $2,000.0 million 1.4 billion and (b) the sum of $1.5 1.0 billion and 2030% of Targa Resources Partners’ Consolidated Net Tangible AssetsAssets (determined as of the date of incurrence and after giving effect to the use of proceeds therefrom); (2) the incurrence by Targa Resources Finance Corp., Xxxxx Energy Partners and its Restricted Subsidiaries of the Existing Indebtedness; (3) the incurrence by Targa Resources Partners, Finance Corp. the Issuers and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and any Exchange Notes and the related Note Guarantees that may be issued pursuant to a Registration Rights AgreementIssue Date; (4) the incurrence by Targa Resources Xxxxx Energy Partners or any of its Restricted Subsidiaries of Indebtedness represented by Capital Finance Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of Targa Resources Xxxxx Energy Partners or any of its Restricted Subsidiaries, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), provided that after giving effect at any time outstanding not to such incurrence the aggregate principal amount of all Indebtedness incurred pursuant to this clause (4) and then outstanding does not exceed the greater of (a) $50.0 75.0 million and (b) 4.05.0% of Targa Resources Partners’ Consolidated Net Tangible AssetsAssets (determined as of the date of incurrence and after giving effect to the use of proceeds therefrom); (5) the incurrence by Targa Resources Xxxxx Energy Partners or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clause clauses (2), (3), (4) or (310) of this Section 4.09(b) or this clause (5); (6) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of any Permitted Receivables Financing in an aggregate principal amount at any time outstanding not to exceed $400.0 million; (7) the incurrence by Targa Resources Xxxxx Energy Partners or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources Xxxxx Energy Partners and any of its Restricted Subsidiaries; provided, however, that: (A) if Targa Resources Xxxxx Energy Partners or any Guarantor is the obligor on such Indebtedness and the payee is not Targa Resources Xxxxx Energy Partners or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of Targa Resources Xxxxx Energy Partners, or the Note Guarantee, in the case of a Guarantor, ; and (B) (1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Targa Resources Xxxxx Energy Partners or a Restricted Subsidiary of Targa Resources Xxxxx Energy Partners and (2) any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources Xxxxx Energy Partners or a Restricted Subsidiary of Targa Resources Xxxxx Energy Partners, will be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources Xxxxx Energy Partners or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (76); (8) 7) the incurrence by Targa Resources Xxxxx Energy Partners or any of its Restricted Subsidiaries of Hedging Obligations; (9) 8) the guarantee Guarantee by Targa Resources Partners Xxxxx Energy Partners, or any Restricted Subsidiary of its Restricted Subsidiaries of (a) Indebtedness of Targa Resources Partners Xxxxx Energy Partners, or a Restricted Subsidiary of Targa Resources Xxxxx Energy Partners that was permitted to be incurred by another provision of this Section 4.094.09 or (b) Indebtedness incurred by Joint Ventures, provided that such Guarantee constitutes a Permitted Investment; and provided further, in each case, that if the Indebtedness being guaranteed Guaranteed is subordinated to or pari passu with the NotesNotes or the Note Guarantees, then the Guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteedGuaranteed; (9) the incurrence by Xxxxx Energy Partners or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, health or other types of social security benefits, unemployment or other insurance or self-insurance obligations, insurance contracts, reclamation, statutory obligations, bankers’ acceptances, and performance, payment, appeal and surety bonds in the ordinary course of business, including Guarantees and obligations respecting standby letters of credit supporting such obligations, to the extent not drawn (in each case other than an obligation for money borrowed) and replacements of any of the foregoing; (10) the incurrence by Targa Resources Xxxxx Energy Partners or any of its Restricted Subsidiaries of obligations relating to net gas balancing positions arising in the ordinary course of business and consistent with past practicePermitted Acquisition Indebtedness; (11) the incurrence issuance by Targa Resources Xxxxx Energy Partners or any of its Restricted Subsidiaries of Acquired Debt in connection with a transaction meeting either one of the financial tests set forth in clause (4) under Section 5.01(a); (12) the issuance by any of Targa Resources Partners’ Restricted Subsidiaries Disqualified Equity to Targa Resources Xxxxx Energy Partners or to any of its Restricted Subsidiaries of any Disqualified EquitySubsidiaries, as the case may be; provided, however, that: (A) any subsequent issuance or transfer of Equity Interests of a Restricted Subsidiary that results in any such Disqualified Equity being held held, directly or indirectly, by a Person other than Targa Resources Xxxxx Energy Partners or a Restricted Subsidiary of Targa Resources Xxxxx Energy Partners; and (B) any sale or other transfer of any such Disqualified Equity to a Person that is not either Targa Resources Xxxxx Energy Partners or a Restricted Subsidiary of Targa Resources Partners Xxxxx Energy Partners; will be deemed, in each case, to constitute an issuance of such Disqualified Equity by Xxxxx Energy Partners or such Restricted Subsidiary that was not permitted by this clause clause: (12)) the incurrence by Xxxxx Energy Partners or any of its Restricted Subsidiaries of Indebtedness in the ordinary course of business under documentary letters of credit which are to be repaid in full not more than one year after the date on which such Indebtedness was originally incurred to finance the purchase of goods by Xxxxx Energy Partners or any of its Restricted Subsidiaries; and (13) the incurrence by Targa Resources Xxxxx Energy Partners or any of its Restricted Subsidiaries of additional Indebtedness; provided that, after giving effect to any such incurrence, the Indebtedness in an aggregate principal amount of all Indebtedness incurred under this clause (13) and then outstanding does at any time outstanding, not to exceed the greater of (a) $150.0 75.0 million and (b) 7.55.0 % of Targa Resources Partners’ Consolidated Net Tangible AssetsAssets (determined as of the date of incurrence and after giving effect to the use of proceeds therefrom). Targa Resources Xxxxx Energy Partners shall will not incur, and shall will not permit Finance Corp. or any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of Targa Resources Xxxxx Energy Partners, Finance Corp. or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness of a Person shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of Xxxxx Energy Partners, Finance Corp. or any such Person Guarantor solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. For purposes of determining compliance with this Section 4.09, if in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (13) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, Targa Resources Xxxxx Energy Partners will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares or units of the same class of Disqualified Equity will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section 4.09; provided, however, in each such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges of Targa Resources Xxxxx Energy Partners as accruedaccrued to the extent required by the definition of such term. Notwithstanding any other provision of this Section 4.09, (i) the maximum amount of Indebtedness that Targa Resources Xxxxx Energy Partners or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. FurtherThe amount of any Indebtedness outstanding as of any date will be: (1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount; (2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and (3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the accounting reclassification lesser of: (A) the Fair Market Value of such assets at the date of determination; and (B) the amount of the Indebtedness of the other Person. For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed, in the case of revolving credit debt; 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 (i) the principal amount of such Indebtedness being refinanced plus (ii) the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses incurred in connection with such refinancing. The principal amount of any obligation Indebtedness incurred to refinance other Indebtedness, if incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Indebtedness is denominated that is in effect on the date of Targa Resources Partners or any of its Restricted Subsidiaries as Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09such refinancing.

Appears in 1 contract

Samples: Indenture (Holly Energy Partners Lp)

Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources Partners shall The Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and Targa Resources Partners the Company will not issue any Disqualified Equity Equity, and the Company will not permit any of its Restricted Subsidiaries (other than a Guarantor) to issue any Disqualified Equity; provided, however, that Targa Resources Partners the Company and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) and Targa Resources Partners the Company and the any Restricted Subsidiaries Subsidiary may issue Disqualified Equity, if if, for the Fixed Charge Coverage Ratio for Targa Resources Partners’ Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, Fixed Charge Coverage Ratio would have been at least 2.0 1.75 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter period. (b) The provisions of Section 4.09(a) hereof shall will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Equity described in clause (ii) below: (1) the incurrence by Targa Resources Partners and the Company or any of its Restricted Subsidiary Subsidiaries of additional Indebtedness (including guarantees and letters of credit) under one or more Credit Facilities, provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Targa Resources Partners the Company and its Restricted Subsidiaries thereunder) and then outstanding does not exceed the greater of (a) $2,000.0 800.0 million and (b) the sum of $1.5 billion and 20(i) 90% of Targa Resources Partnersthe book value of the Company’s and its Restricted SubsidiariesConsolidated Net Tangible Assetsaccounts receivable and (ii) 85% of the Company’s and its Restricted Subsidiaries’ inventory, calculated on a consolidated basis and in accordance with GAAP, in each case based on the Company’s balance sheet as of the end of the latest quarter for which the Company has internal financial statements available (and after giving pro forma effect to any acquisitions made subsequent to such balance sheet date; provided that any such adjustments shall be calculated in the manner provided in the definition of Fixed Charge Coverage Ratio); (2) the incurrence by Targa Resources Partners and the Company or its Restricted Subsidiaries of the Existing Indebtedness; (3) the incurrence by Targa Resources Partners, Finance Corp. the Company and the Guarantors of Indebtedness represented by the Notes issued and sold in this offering and the related Note Guarantees to be issued on the date of this Indenture and any Exchange Notes and the related Note Guarantees that may be issued pursuant to a Registration Rights AgreementIndenture; (4) the incurrence by Targa Resources Partners the Company or any of its Restricted Subsidiaries of Indebtedness (including Indebtedness represented by Capital Finance Lease Obligations, Attributable Debt, mortgage financings or purchase money obligations) or the issuance by the Company or any of its Restricted Subsidiaries of Disqualified Equity, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction design, construction, installation, repair or improvement of propertyproperty (real or personal), plant or equipment or other assets used in the business of Targa Resources Partners the Company or such Restricted Subsidiary (whether through the direct purchase of assets or the Capital Stock of any of its Restricted SubsidiariesPerson owning such assets), including all Permitted Refinancing Indebtedness incurred to renew, refundextend, refinance, renew, replace, defease or discharge refund any Indebtedness incurred pursuant to this clause (4), ; provided that after giving effect to any such incurrence incurrence, the aggregate principal amount of all Indebtedness incurred pursuant to this clause (4) and then outstanding does not exceed the greater of (a) $50.0 200.0 million and (b) 4.010.0% of Targa Resources Partners’ the Company’s Consolidated Net Tangible AssetsAssets at such time; (5) the incurrence by Targa Resources Partners the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renewto, refundextend, refinance, renew, replace, defease or discharge any refund Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred or Disqualified Equity to be issued under Section 4.09(a) hereof or clause subclause (2), (3) or (312) of this Section 4.09(b) or this clause (5); (6) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of any Permitted Receivables Financing in an aggregate principal amount at any time outstanding not to exceed $400.0 million; (7) the incurrence by Targa Resources Partners Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources Partners the Company and any of its Restricted Subsidiaries; provided, however, that: (Aa) if Targa Resources Partners or any Guarantor the Company is the obligor on such Indebtedness and the payee a Guarantor is not Targa Resources Partners or a Guarantorthe obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, or if a Guarantor is the obligor on such Indebtedness and neither the Company nor another Guarantor is the obligee, such Indebtedness must be expressly subordinated to the prior payment in the case full in cash of Targa Resources Partners, or all Obligations with respect to the Note Guarantee, in the case Guarantee of a such Guarantor, ; and (Bb) (1i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Targa Resources Partners the Company or a Restricted Subsidiary of Targa Resources Partners the Company and (2ii) any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources Partners or neither the Company nor a Restricted Subsidiary of Targa Resources Partners, the Company will be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources Partners the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (76); (8) 7) the incurrence by Targa Resources Partners the Company or any of its Restricted Subsidiaries of obligations under Hedging ObligationsContracts in the ordinary course of business and not for speculative purposes, including any obligations with respect to letters of credit issued in connection therewith; (9) 8) the guarantee by Targa Resources Partners the Company or any of its Restricted Subsidiaries of Indebtedness of Targa Resources Partners the Company or a any of its Restricted Subsidiary of Targa Resources Partners Subsidiaries that was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed; (109) the incurrence by Targa Resources Partners the Company or any of its Restricted Subsidiaries of obligations relating to net gas Hydrocarbon balancing positions arising in the ordinary course of business and consistent with past practicebusiness; (1110) the incurrence by Targa Resources Partners the Company or any of its Restricted Subsidiaries of Acquired Debt Indebtedness in connection with a transaction meeting either one respect of bid, performance, surety and similar bonds issued for the account of the financial tests set forth Company and any of its Restricted Subsidiaries in clause the ordinary course of business, including guarantees and obligations of the Company or any of its Restricted Subsidiaries with respect to letters of credit supporting such obligations (4) under Section 5.01(ain each case other than an obligation for money borrowed); (1211) the issuance by any of Targa Resources Partners’ the Company’s Restricted Subsidiaries to Targa Resources Partners the Company or to any of its Restricted Subsidiaries of any Disqualified Equity; provided, however, that: (Aa) any subsequent issuance or transfer of Equity Interests that results in any such Disqualified Equity being held by a Person other than Targa Resources Partners the Company or a Restricted Subsidiary of Targa Resources Partnersthe Company; and (Bb) any sale or other transfer of any such Disqualified Equity to a Person that is not either Targa Resources Partners the Company or a Restricted Subsidiary of Targa Resources Partners will the Company shall be deemed, in each case, to constitute an issuance of such Disqualified Equity preferred securities by such Restricted Subsidiary that was not permitted by this clause (11); (12); and) the incurrence or issuance by the Company or any of its Restricted Subsidiaries of (a) Indebtedness or Disqualified Equity of the Company or a Restricted Subsidiary incurred to finance an acquisition and (b) Acquired Debt, provided that, after giving effect to the related merger or acquisition transaction, on a pro forma basis, either (i) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.09(a) hereof or (ii) the Fixed Charge Coverage ratio for the Company would not be less than immediately prior to such transactions; (13) the incurrence by Targa Resources Partners the Company or any of its Restricted Subsidiaries of additional IndebtednessIndebtedness or the issuance by the Company or any of its Restricted Subsidiaries of Disqualified Equity; provided that, after giving effect to any such incurrenceincurrence or issuance, the aggregate principal amount of all Indebtedness, including all Permitted Refinancing Indebtedness incurred to extend, refinance, renew, replace, defease or refund any Indebtedness incurred or Disqualified Equity issued under this clause (13) and then outstanding ), does not exceed the greater of (a) $150.0 100.0 million and (b) 7.54.5% of Targa Resources Partners’ the Company’s Consolidated Net Tangible Assets. Targa Resources Partners shall not incur; (14) Indebtedness incurred by the Company or any Restricted Subsidiary of the Company to the extent that the net proceeds thereof are promptly deposited to defease or to satisfy and discharge the Notes; (15) Indebtedness of the Company or any Restricted Subsidiary of the Company consisting of obligations to pay insurance premiums or take-or-pay obligations contained in supply arrangements incurred in the ordinary course of business; (16) Indebtedness in respect of any bankers’ acceptance, bank guarantees, letter of credit, warehouse receipt or similar facilities, and shall reinvestment obligations related thereto, entered into in the ordinary course of business; (17) Guarantees (a) incurred in the ordinary course of business in respect of obligations of (or to) suppliers, customers, franchisees, lessors and licensees that, in each case, are non-Affiliates or (b) otherwise constituting Investments permitted under this Indenture; (18) Indebtedness of Foreign Subsidiaries incurred in an aggregate principal amount at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, refinance, renew, replace, defease or refund any Indebtedness incurred under this clause (18), not permit Finance Corp. to exceed as of any date of incurrence $40.0 million; (19) Indebtedness issued by the Company or any Guarantor of its Restricted Subsidiaries to incurany current, future or former director, officer, consultant or employee of the Company, the direct or indirect parent of the Company or any Restricted Subsidiary of the Company (or any of their Affiliates), or their estates or the beneficiaries of such estates to finance the purchase, redemption, acquisition or retirement for value of Equity Interests permitted by Section 4.07(b)(5) hereof, in an aggregate principal amount at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, refinance, renew, replace, defease or refund any Indebtedness incurred under this clause (including Permitted Debt19), not to exceed $10.0 million as of any date of incurrence; (20) that is contractually subordinated Indebtedness in right respect of payment Treasury Management Arrangements; (21) Contribution Indebtedness; (22) (a) Indebtedness incurred in connection with any Sale and Leaseback Transaction and any refinancing, refunding, renewal or extension of any such Indebtedness, provided that, except to the extent otherwise permitted hereunder, the principal amount of any other Indebtedness of Targa Resources Partners, Finance Corp. or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment not increased above the principal amount thereof outstanding immediately prior to the Notes such refinancing, refunding, renewal or extension and the applicable Note Guarantee on substantially identical termsdirect and contingent obligors with respect to such Indebtedness are not changed; provided(b) Indebtedness in respect of overdraft facilities, however, that no employee credit card programs and other cash management arrangements in the ordinary course of business; and (c) Indebtedness representing deferred compensation to employees of a Person shall be deemed to be contractually subordinated the Company (or any direct or indirect parent of the Company) and its Restricted Subsidiaries incurred in right the ordinary course of payment to any business; and (23) cash management obligations and other Indebtedness in respect of such Person solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basisnetting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case in connection with deposit accounts. For purposes of determining compliance with this Section 4.09, if in the event that an item of proposed Indebtedness (including Acquired Debt) or Disqualified Equity meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (1323) aboveof Section 4.09(b), or is entitled to be incurred pursuant to Section 4.09(a) hereof, Targa Resources Partners the Company will be permitted to divide and classify (or later divide, classify or reclassify in whole or in part in its sole discretion) such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, Disqualified Equity in any manner that complies with this Section 4.094.09 (including in part pursuant to one or more clauses and/or in part pursuant to Section 4.09(a) hereof). Any Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially Existing ABL Facility shall be deemed to have been incurred on such date in reliance on the exception provided by clause under Section 4.09(b)(1) hereof and may not be later classified or reclassified pursuant to Section 4.09(a) hereof. (1c) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares of the same class of Disqualified Equity will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section 4.09; , provided, however, in each such case, that the amount of any such accrual, accretion or payment thereof is included in Fixed Charges of Targa Resources Partners the Company as accrued. Notwithstanding any other provision accrued to the extent required by the definition of this Section 4.09, (i) the maximum amount of Indebtedness that Targa Resources Partners or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency valuesterm. Further, the accounting reclassification of any obligation of Targa Resources Partners the Company or any of its Restricted Subsidiaries as Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09. (d) For purposes of determining any particular amount of Indebtedness, any Guarantees, Liens or obligations with respect to letters of credit, in each case, supporting Indebtedness otherwise included in the determination of such particular amount, will not be included. In addition, notwithstanding any other provision of this Section 4.09, the maximum amount of Indebtedness that may be incurred pursuant to this Section 4.09 will not be deemed to be exceeded, with respect to any outstanding Indebtedness, due solely to the result of fluctuations in the exchange rates of currencies. The principal amount of any Indebtedness incurred to refinance other Indebtedness, if incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Indebtedness is denominated that is in effect on the date of such refinancing.

Appears in 1 contract

Samples: Indenture (CVR Energy Inc)

Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources Partners The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and Targa Resources Partners the Company will not issue any Disqualified Equity and will not permit any of its Restricted Subsidiaries to issue any Disqualified Equity; provided, however, that Targa Resources Partners the Company and any Restricted Subsidiary Guarantor may incur Indebtedness (including Acquired Debt) and Targa Resources Partners ), and the Restricted Subsidiaries Company and any Subsidiary Guarantor may issue Disqualified Equity, if the Fixed Charge Coverage Ratio for Targa Resources Partners’ the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, issued would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred incurred, or the Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter period. (b) The provisions of So long as no Default shall have occurred and be continuing or would be caused thereby, Section 4.09(a) hereof shall will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Equity described in clause (ii) below:): (1i) the incurrence by Targa Resources Partners the Company and any Restricted Subsidiary Guarantor of additional Indebtedness (including letters of credit) under Credit Facilities, Facilities and the guarantees thereof; provided that, after giving effect to such incurrence, that the aggregate principal amount of all Indebtedness of the Company and the Restricted Subsidiaries incurred under pursuant to this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Targa Resources Partners and its Restricted Subsidiaries thereunderi) and then outstanding under all Credit Facilities after giving effect to such incurrence does not exceed the greater of (aA) $2,000.0 225.0 million and or (bB) the sum of $1.5 billion and 2015% of Targa Resources Partners’ the Consolidated Net Tangible AssetsAssets of the Company, in each case less the aggregate amount of all repayments of Indebtedness under any Credit Facility that have been made by the Company or any of its Restricted Subsidiaries with Net Proceeds from Asset Sales to the extent such repayments constitute a permanent reduction of commitments under the terms of such Credit Facility; (2ii) the incurrence by Targa Resources Partners the Company and its Restricted Subsidiaries of Existing Indebtedness (other than under the Existing IndebtednessCredit Agreement); (3iii) the incurrence by Targa Resources Partners, Finance Corp. the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes issued and sold in the Offering and the related Note Guarantees to be issued on the date of this Indenture and any Exchange Notes and the related Note Guarantees that may be issued pursuant to a the Registration Rights Agreement; (4iv) the incurrence by Targa Resources Partners the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of Targa Resources Partners the Company or any of its such Restricted SubsidiariesSubsidiary, in an aggregate principal amount including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred pursuant to this clause (4), provided that after giving effect iv) not to such incurrence the aggregate principal amount of all Indebtedness incurred pursuant to this clause (4) and then outstanding does not exceed the greater of (a) $50.0 10.0 million and (b) 4.0% of Targa Resources Partners’ Consolidated Net Tangible Assetsat any time outstanding; (5v) the incurrence by Targa Resources Partners the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any discharge, Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clause (2ii) or (3iii) of this Section 4.09(b) or this clause (5v);; Back to Contents (6vi) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of any Permitted Receivables Financing in an aggregate principal amount at any time outstanding not to exceed $400.0 million; (7) the incurrence by Targa Resources Partners Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources Partners the Company and any of its Restricted Subsidiaries; provided, however, that: (A) if Targa Resources Partners or any Guarantor the Company is the obligor on such Indebtedness and the payee a Subsidiary Guarantor is not Targa Resources Partners or a Guarantorthe obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, or if a Subsidiary Guarantor is the obligor on such Indebtedness and neither the Company nor another Subsidiary Guarantor is the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the case Guarantee of Targa Resources Partners, or the Note Guarantee, in the case of a such Subsidiary Guarantor, ; and (B) (1i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Targa Resources Partners the Company or a Restricted Subsidiary of Targa Resources Partners thereof and (2ii) any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources Partners the Company or a Restricted Subsidiary of Targa Resources Partnersthereof, will shall be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources Partners the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (7vi); (8) vii) the incurrence by Targa Resources Partners the Company or any of its Restricted Subsidiaries of Hedging ObligationsObligations that are incurred for the purpose of fixing or hedging (but not for speculative purposes) (A) foreign currency exchange rate risks of the Company or any Restricted Subsidiary, (B) interest rate risks with respect to any floating rate Indebtedness of the Company or any Restricted Subsidiary that is permitted by the terms of this Indenture to be outstanding or (C) commodities pricing risks of the Company or any Restricted Subsidiary in respect of Hydrocarbons used, produced, processed or sold by the Company or any of its Restricted Subsidiaries; (9viii) the guarantee by Targa Resources Partners the Company or any of its Restricted Subsidiaries of Indebtedness of Targa Resources Partners the Company or a any of its Restricted Subsidiary of Targa Resources Partners Subsidiaries that was permitted to be incurred by another provision of this Section 4.09; provided provided, that if in the event such Indebtedness that is being guaranteed is subordinated to a Subordinated Obligation or pari passu with the Notesa Guarantor Subordinated Obligation, then the Guarantee guarantee shall be subordinated in right of payment to the Notes or pari passuthe Guarantee, as applicable, to the same extent as the Indebtedness guaranteedcase may be; (10ix) the incurrence by Targa Resources Partners the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, payment obligations relating in connection with health or other types of social security benefits, unemployment or other insurance or self-insurance obligations, reclamation, statutory obligations, banks’ acceptances and bid, performance, surety and appeal bonds or other similar obligations incurred in the ordinary course of business, including guarantees and obligations respecting standby letters of credit supporting such obligations, to net gas balancing positions the extent not drawn (in each case other than an obligation for money borrowed); (x) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance of Disqualified Equity in an aggregate principal amount at any time outstanding not to exceed $25.0 million; (xi) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds; (xii) the incurrence of Indebtedness arising from agreements with the Company or any Restricted Subsidiary providing for indemnification, adjustment of purchase price, earn outs, or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or a Subsidiary in accordance with the terms of the Indenture, other than guarantees of Indebtedness incurred or assumed by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition; and Back to Contents (xiii) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness arising out of advances on trade receivables, factoring of receivables, customer prepayments and similar transactions in the ordinary course of business and consistent with past practice; (11) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of Acquired Debt in connection with a transaction meeting either one of the financial tests set forth in clause (4) under Section 5.01(a); (12) the issuance by any of Targa Resources Partners’ Restricted Subsidiaries to Targa Resources Partners or to any of its Restricted Subsidiaries of any Disqualified Equity; provided, however, that: (A) any subsequent issuance or transfer of Equity Interests that results in any such Disqualified Equity being held by a Person other than Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners; and (B) any sale or other transfer of any such Disqualified Equity to a Person that is not either Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners will be deemed, in each case, to constitute an issuance of such Disqualified Equity by such Restricted Subsidiary that was not permitted by this clause (12); and (13) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of additional Indebtedness; provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (13) and then outstanding does not exceed the greater of (a) $150.0 million and (b) 7.5% of Targa Resources Partners’ Consolidated Net Tangible Assets. Targa Resources Partners shall not incur, and shall not permit Finance Corp. or any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of Targa Resources Partners, Finance Corp. or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness of a Person shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of such Person solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. For purposes of determining compliance with this Section 4.09, if an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (13) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, Targa Resources Partners will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares of the same class of Disqualified Equity will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section 4.09; provided, however, in each such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges of Targa Resources Partners as accrued. Notwithstanding any other provision of this Section 4.09, (i) the maximum amount of Indebtedness that Targa Resources Partners or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. Further, the accounting reclassification of any obligation of Targa Resources Partners or any of its Restricted Subsidiaries as Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09.

Appears in 1 contract

Samples: Indenture (Atlas Pipeline Partners Lp)

Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources Partners shall Sunoco LP will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and Targa Resources Partners Sunoco LP will not issue any Disqualified Equity not, and will not permit any of its Restricted Subsidiaries to to, issue any Disqualified Equity; provided, however, that Targa Resources Partners Sunoco LP and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) and Targa Resources Partners Sunoco LP and the Restricted Subsidiaries may issue Disqualified Equity, if the Fixed Charge Coverage Ratio for Targa Resources Partners’ Sunoco LP’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter period. (b) The provisions of Section 4.09(a) hereof shall not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Equity described in clause (ii11) below: (1) the incurrence by Targa Resources Partners Sunoco LP and any Restricted Subsidiary of additional Indebtedness (including letters of credit) under one or more Credit Facilities, ; provided that, after giving effect to such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Targa Resources Partners Sunoco LP and its Restricted Subsidiaries thereunder) and then outstanding does not exceed the greater of (a) $2,000.0 1,500.0 million and (b) the sum of $1.5 billion 1,200.0 million and 2025.0% of Targa Resources Partners’ Sunoco LP’s Consolidated Net Tangible Assets; (2) the incurrence by Targa Resources Partners Sunoco LP and its Restricted Subsidiaries of the Existing Indebtedness; (3) the incurrence by Targa Resources PartnersSunoco LP, Finance Corp. and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and any Exchange Notes and the related Note Guarantees that may be issued pursuant to a Registration Rights AgreementGuarantees; (4) the incurrence by Targa Resources Partners Sunoco LP or any of its Restricted Subsidiaries of Indebtedness represented by Capital Finance Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of Targa Resources Partners Sunoco LP or any of its Restricted Subsidiaries, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), ; provided that after giving effect to such incurrence the aggregate principal amount of all Indebtedness incurred pursuant to this clause (4) and then outstanding does not exceed the greater of (a) $50.0 million and (b) 4.03.5% of Targa Resources Partners’ Sunoco LP’s Consolidated Net Tangible Assets; (5) the incurrence by Targa Resources Partners Sunoco LP or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge discharge, any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clause clauses (2) or (3) of this Section 4.09(b) or this clause (5); (6) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of any Permitted Receivables Financing in an aggregate principal amount at any time outstanding not to exceed $400.0 million; (7) the incurrence by Targa Resources Partners Sunoco LP or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources Partners Sunoco LP and any of its Restricted Subsidiaries; provided, however, that: (A) if Targa Resources Partners Sunoco LP or any Guarantor is the obligor on such Indebtedness and the payee is not Targa Resources Partners Sunoco LP or a Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of Targa Resources PartnersSunoco LP, or the Note Guarantee, in the case of a Guarantor, ; and (B) (1i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Targa Resources Partners Sunoco LP or a Restricted Subsidiary of Targa Resources Partners Sunoco LP and (2ii) any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources Partners Sunoco LP or a Restricted Subsidiary of Targa Resources PartnersSunoco LP, will be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources Partners Sunoco LP or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (76); (8) 7) the incurrence by Targa Resources Partners Sunoco LP or any of its Restricted Subsidiaries of Hedging ObligationsObligations incurred in the ordinary course of business and not for speculative purposes; (9) 8) the guarantee by Targa Resources Partners Sunoco LP or any of its Restricted Subsidiaries of Indebtedness of Targa Resources Partners Sunoco LP or a Restricted Subsidiary of Targa Resources Partners Sunoco LP that was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed; (109) the incurrence by Targa Resources Partners Sunoco LP or any of its Restricted Subsidiaries of obligations relating to net gas balancing positions arising in the ordinary course of business and consistent with past practice; (1110) the incurrence by Targa Resources Partners Sunoco LP or any of its Restricted Subsidiaries of Acquired Debt in connection with a transaction meeting either one of the financial tests set forth in clause (4Section 5.01(a)(4) under Section 5.01(a)hereof; (1211) the issuance by any of Targa Resources Partners’ Sunoco LP’s Restricted Subsidiaries to Targa Resources Partners Sunoco LP or to any of its Restricted Subsidiaries of any Disqualified Equity; provided, however, that: (A) any subsequent issuance or transfer of Equity Interests that results in any such Disqualified Equity being held by a Person other than Targa Resources Partners Sunoco LP or a Restricted Subsidiary of Targa Resources PartnersSunoco LP; and (B) any sale or other transfer of any such Disqualified Equity to a Person that is not either Targa Resources Partners Sunoco LP or a Restricted Subsidiary of Targa Resources Partners Sunoco LP; will be deemed, in each case, to constitute an issuance of such Disqualified Equity by such Restricted Subsidiary that was not permitted by this clause (11); (12)) the incurrence by Sunoco LP or any of its Restricted Subsidiaries of liability in respect of the Indebtedness of any Unrestricted Subsidiary of Sunoco LP or any Joint Venture, but only to the extent that such liability is the result of Sunoco LP’s or any such Restricted Subsidiary’s being a general partner of such Unrestricted Subsidiary or Joint Venture and not as guarantor of such Indebtedness; provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (12) and then outstanding does not exceed $100.0 million; and (13) the incurrence by Targa Resources Partners Sunoco LP or any of its Restricted Subsidiaries of additional Indebtedness; provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (13) and then outstanding does not exceed the greater of (a) $150.0 75.0 million and (b) 7.55.0% of Targa Resources Partners’ Sunoco LP’s Consolidated Net Tangible Assets. Targa Resources Partners shall Xxxxxx LP will not incur, and shall will not permit Finance Corp. or any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of Targa Resources PartnersSunoco LP, Finance Corp. or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness of a Person shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of such Person solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. For purposes of determining compliance with this Section 4.09, if an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (13) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, Targa Resources Partners Sunoco LP will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under the Credit Facilities Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares issuances of Disqualified Equity of the same class class, for purposes of Disqualified Equity will not this Section 4.09, shall not, in each case, be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section 4.09; provided, however, in each such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges of Targa Resources Partners as accruedEquity. Notwithstanding any other provision of this Section 4.09, (i) the maximum amount of Indebtedness that Targa Resources Partners Sunoco LP or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. Further, the accounting reclassification of any obligation of Targa Resources Partners or any of its Restricted Subsidiaries as Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09.

Appears in 1 contract

Samples: Indenture (Sunoco LP)

Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources Regency Energy Partners shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and Targa Resources Regency Energy Partners will not issue any Disqualified Equity and will not permit any of its Restricted Subsidiaries to issue any Disqualified Equity; provided, however, that Targa Resources Regency Energy Partners and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) and Targa Resources Regency Energy Partners and the Restricted Subsidiaries may issue Disqualified Equity, if the Fixed Charge Coverage Ratio for Targa Resources Regency Energy Partners’ most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter period. (b) The provisions of Section 4.09(a) hereof shall not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Equity described preferred securities describe in clause (ii) below: (1) the incurrence by Targa Resources Regency Energy Partners and any Restricted Subsidiary of additional Indebtedness (including and letters of credit) under Credit Facilities, provided provided, that, after giving effect to such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Targa Resources Regency Energy Partners and its Restricted Subsidiaries thereunder) and then outstanding does not exceed the greater of (a) $2,000.0 450.0 million and (b) the sum of $1.5 billion 250.0 million and 20% of Targa Resources Regency Energy Partners’ Consolidated Net Tangible Assets; (2) the incurrence by Targa Resources Regency Energy Partners and its Restricted Subsidiaries of the Existing Indebtedness; (3) the incurrence by Targa Resources Regency Energy Partners, Finance Corp. and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and any the Exchange Notes and the related Note Guarantees that may to be issued pursuant to a Registration Rights Agreement; (4) the incurrence by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease defense or discharge any Indebtedness incurred pursuant to this clause (4), provided that after giving effect to such incurrence the aggregate principal amount of all Indebtedness incurred pursuant to this clause (4) and then outstanding does not exceed the greater of (a) $50.0 20.0 million and (b) 4.02.0% of Targa Resources Regency Energy Partners’ Consolidated Net Tangible Assets; (5) the incurrence by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clause clauses (2) or (3) of this Section 4.09(b) or this clause (5); (6) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of any Permitted Receivables Financing in an aggregate principal amount at any time outstanding not to exceed $400.0 million; (7) the incurrence by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources Regency Energy Partners and any of its Restricted Subsidiaries; provided, however, that: (A) if Targa Resources Regency Energy Partners or any Guarantor is the obligor on such Indebtedness and the payee is not Targa Resources Regency Energy Partners or a Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of Targa Resources Regency Energy Partners, or the Note Guarantee, in the case of a Guarantor, and (B) (1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Targa Resources Regency Energy Partners or a Restricted Subsidiary of Targa Resources Regency Energy Partners and (2) any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources Regency Energy Partners or a Restricted Re- stricted Subsidiary of Targa Resources Regency Energy Partners, will be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources Regency Energy Partners or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (76); (8) 7) the incurrence by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of Hedging Obligations; (9) 8) the guarantee by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of Indebtedness of Targa Resources Regency Energy Partners or a Restricted Subsidiary of Targa Resources Regency Energy Partners that was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed; (109) the incurrence by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of obligations relating to net gas balancing positions arising in the ordinary course of business and consistent with past practice; (1110) the incurrence by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of Acquired Debt in connection with a transaction meeting either one of the financial tests set forth in clause (4) under Section 5.01(a); (1211) the issuance by any of Targa Resources Regency Energy Partners’ Restricted Subsidiaries to Targa Resources Regency Energy Partners or to any of its Restricted Subsidiaries of any Disqualified Equitypreferred securities; provided, however, that: (Aa) any subsequent issuance or transfer of Equity Interests that results in any such Disqualified Equity preferred securities being held by a Person other than Targa Resources Regency Energy Partners or a Restricted Subsidiary of Targa Resources Regency Energy Partners; and (Bb) any sale or other transfer of any such Disqualified Equity preferred securities to a Person that is not either Targa Resources Regency Energy Partners or a Restricted Subsidiary of Targa Resources Regency Energy Partners will be deemed, in each case, to constitute an issuance of such Disqualified Equity preferred securities by such Restricted Subsidiary that was not permitted by this clause (1211); and (1312) the incurrence by Targa Resources Regency Energy Partners or any of its Restricted Subsidiaries of additional Indebtedness; provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (1312) and then outstanding does not exceed the greater of (a) $150.0 25.0 million and (b) 7.52.5% of Targa Resources Regency Energy Partners’ Consolidated Net Tangible Assets. Targa Resources Regency Energy Partners shall not incur, and shall not permit Finance Corp. or any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of Targa Resources Regency Energy Partners, Finance Corp. or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness of a Person shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of such Person solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. For purposes of determining compliance with this Section 4.09, if an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (1312) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, Targa Resources Regency Energy Partners will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares of the same class of Disqualified Equity will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section 4.09; provided, however, in each such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges of Targa Resources Regency Energy Partners as accrued. Notwithstanding any other provision of this Section 4.09, (i) the maximum amount of Indebtedness that Targa Resources Regency Energy Partners or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. Further, the accounting reclassification of any obligation of Targa Resources Partners or any of its Restricted Subsidiaries as Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09.

Appears in 1 contract

Samples: Indenture (Regency Energy Partners LP)

Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources Partners The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and Targa Resources Partners the Company will not issue any Disqualified Equity and will not permit any of its Restricted Subsidiaries to issue any Disqualified Equity; provided, however, that Targa Resources Partners the Company and any Restricted Subsidiary Guarantor may incur Indebtedness (including Acquired Debt) and Targa Resources Partners ), and the Restricted Subsidiaries Company and the Subsidiary Guarantors may issue Disqualified Equity, if the Fixed Charge Coverage Ratio for Targa Resources Partners’ the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, issued would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred incurred, or the Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter period. (b) The provisions of So long as no Default shall have occurred and be continuing or would be caused thereby, Section 4.09(a) hereof shall will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Equity described in clause (ii) below:): (1i) the incurrence by Targa Resources Partners the Company and any Restricted Subsidiary Guarantor of additional Indebtedness (including letters of credit) under Credit Facilities, Facilities and the guarantees thereof; provided that, after giving effect to such incurrence, that the aggregate principal amount of all Indebtedness of the Company and the Restricted Subsidiaries incurred under pursuant to this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Targa Resources Partners and its Restricted Subsidiaries thereunderi) and then outstanding under all Credit Facilities after giving effect to such incurrence does not exceed the greater of (aA) $2,000.0 800.0 million and or (bB) the sum of $1.5 billion and 400.0 million plus 20% of Targa Resources Partners’ the Consolidated Net Tangible AssetsAssets of the Company, in each case less the aggregate amount of all repayments of Indebtedness under any Credit Facility that have been made by the Company or any of its Restricted Subsidiaries in respect of asset sales or casualty events to the extent such repayments constitute a permanent reduction of commitments under the terms of such Credit Facility; (2ii) the incurrence by Targa Resources Partners the Company and its Restricted Subsidiaries of Existing Indebtedness (other than under the Existing IndebtednessCredit Agreement); (3iii) the incurrence by Targa Resources Partners, Finance Corp. the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes issued and sold in the Offering and the related Note Guarantees to be issued on the date of this Indenture and any Exchange Notes and the related Note Guarantees that may be issued pursuant to a the Registration Rights Agreement; (4iv) the incurrence by Targa Resources Partners the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of Targa Resources Partners the Company or any of its such Restricted SubsidiariesSubsidiary, in an aggregate principal amount including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred pursuant to this clause (4), provided that after giving effect iv) not to such incurrence the aggregate principal amount of all Indebtedness incurred pursuant to this clause (4) and then outstanding does not exceed the greater of (a) $50.0 40.0 million and at any time outstanding or (b) 4.02.5% of Targa Resources Partners’ Consolidated Net Tangible AssetsAssets of the Company; (5v) the incurrence by Targa Resources Partners the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any discharge, Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clause (2ii) or (3iii) of this Section 4.09(b) or this clause (5v); (6vi) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of any Permitted Receivables Financing in an aggregate principal amount at any time outstanding not to exceed $400.0 million; (7) the incurrence by Targa Resources Partners Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources Partners the Company and any of its Restricted Subsidiaries; provided, however, that: (A) if Targa Resources Partners or any Guarantor the Company is the obligor on such Indebtedness and the payee a Subsidiary Guarantor is not Targa Resources Partners or a Guarantorthe obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, or if a Subsidiary Guarantor is the obligor on such Indebtedness and neither the Company nor another Subsidiary Guarantor is the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the case Guarantee of Targa Resources Partners, or the Note Guarantee, in the case of a such Subsidiary Guarantor, ; and (B) (1i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Targa Resources Partners the Company or a Restricted Subsidiary of Targa Resources Partners thereof and (2ii) any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources Partners the Company or a Restricted Subsidiary of Targa Resources Partnersthereof, will shall be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources Partners the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (7vi); (8) vii) the incurrence by Targa Resources Partners the Company or any of its Restricted Subsidiaries of Hedging ObligationsObligations that are incurred for the purpose of fixing or hedging (but not for speculative purposes) (A) foreign currency exchange rate risks of the Company or any Restricted Subsidiary, (B) interest rate risks with respect to any floating rate Indebtedness of the Company or any Restricted Subsidiary that is permitted by the terms of this Indenture to be outstanding or (C) commodities pricing risks of the Company or any Restricted Subsidiary in respect of Hydrocarbons used, produced, processed or sold by the Company or any of its Restricted Subsidiaries; (9viii) the guarantee by Targa Resources Partners the Company or any of its Restricted Subsidiaries of Indebtedness of Targa Resources Partners the Company or a any of its Restricted Subsidiary of Targa Resources Partners Subsidiaries that was permitted to be incurred by another provision of this Section 4.09; provided provided, that if in the event such Indebtedness that is being guaranteed is subordinated to a Subordinated Obligation or pari passu with the Notesa Guarantor Subordinated Obligation, then the Guarantee guarantee shall be subordinated in right of payment to the Notes or pari passuthe Guarantee, as applicable, to the same extent as the Indebtedness guaranteedcase may be; (10ix) the incurrence by Targa Resources Partners the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, payment obligations relating in connection with health or other types of social security benefits, unemployment or other insurance or self-insurance obligations, reclamation, statutory obligations, bankers’ acceptances and bid, performance, surety and appeal bonds or other similar obligations incurred in the ordinary course of business, including guarantees and obligations respecting standby letters of credit supporting such obligations, to net gas balancing positions the extent not drawn (in each case other than an obligation for money borrowed); (x) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance of Disqualified Equity in an aggregate principal amount at any time outstanding not to exceed the greater of (a) $60.0 million at any time outstanding or (b) 5.0% of Consolidated Net Tangible Assets of the Company; (xi) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds; (xii) the incurrence of Indebtedness arising from agreements with the Company or any Restricted Subsidiary providing for indemnification, adjustment of purchase price, earn outs, or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or a Subsidiary in accordance with the terms of the Indenture, other than guarantees of Indebtedness incurred or assumed by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition; and (xiii) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness arising out of advances on trade receivables, factoring of receivables, customer prepayments and similar transactions in the ordinary course of business and consistent with past practice;. (11c) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of Acquired Debt in connection with a transaction meeting either one of the financial tests set forth in clause (4) under Section 5.01(a); (12) the issuance by any of Targa Resources Partners’ Restricted Subsidiaries to Targa Resources Partners or to any of its Restricted Subsidiaries of any Disqualified Equity; provided, however, that: (A) any subsequent issuance or transfer of Equity Interests that results in any such Disqualified Equity being held by a Person other than Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners; and (B) any sale or other transfer of any such Disqualified Equity to a Person that is not either Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners will be deemed, in each case, to constitute an issuance of such Disqualified Equity by such Restricted Subsidiary that was not permitted by this clause (12); and (13) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of additional Indebtedness; provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (13) and then outstanding does not exceed the greater of (a) $150.0 million and (b) 7.5% of Targa Resources Partners’ Consolidated Net Tangible Assets. Targa Resources Partners shall not incur, and shall not permit Finance Corp. or any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of Targa Resources Partners, Finance Corp. or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness of a Person shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of such Person solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. For purposes of determining compliance with this Section 4.09, if in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses paragraphs (1b)(i) through (13b)(xiii) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof), Targa Resources Partners will the Company shall be permitted to classify (or later reclassify in whole or in part) such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. An item of Indebtedness may be divided and classified in one or more of the types of Permitted Indebtedness. Any Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated Issue Date shall be considered incurred under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause Section 4.09(a). (1d) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares of the same class of Disqualified Equity will shall not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section 4.09; provided, however, in each such case, that the amount of any such accrual, accretion or payment thereof is included in Fixed Charges of Targa Resources Partners the Company as accrued. Notwithstanding any other provision of this Section 4.09, (i) the maximum amount of Indebtedness that Targa Resources Partners or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. Further, the accounting reclassification of any obligation of Targa Resources Partners or any of its Restricted Subsidiaries as Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09.

Appears in 1 contract

Samples: Indenture (Atlas Pipeline Partners Lp)

Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources Partners The Partnership shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired DebtDebt and Disqualified Equity), and Targa Resources Partners will not issue any Disqualified Equity and will not permit any of its Restricted Subsidiaries to issue any Disqualified Equityother than Permitted Debt; provided, however, that Targa Resources Partners the Partnership and any Restricted Subsidiary Guarantor may incur Indebtedness (including Acquired Debt) Debt and Targa Resources Partners and the Restricted Subsidiaries may issue Disqualified Equity), if the Fixed Charge Coverage Ratio for Targa Resources Partners’ the Partnership's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, would have been at least 2.0 2.00 to 1.01.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter period. (b) The provisions of Section 4.09(a5.03(a) hereof shall not prohibit the incurrence of any of the following items of Indebtedness (collectively, "Permitted Debt”) or the issuance of any Disqualified Equity described in clause (ii) below:"): (1i) the incurrence by Targa Resources Partners the Partnership and any of its Restricted Subsidiary Subsidiaries of additional the Indebtedness under the Credit Facilities and the guarantees thereof; provided that the aggregate principal amount of all Indebtedness of the Partnership and its Restricted Subsidiaries outstanding under all Credit Facilities pursuant to this clause (including letters of credit) under Credit Facilities, provided thatb)(i), after giving effect to such incurrence, does not exceed $650.0 million less the aggregate principal amount of all repayments of Indebtedness incurred under this clause (1) (with letters the Credit Facilities that have been made by the Partnership or any of credit being deemed to have a principal amount equal to the maximum potential liability of Targa Resources Partners and its Restricted Subsidiaries thereunder) and then outstanding does not exceed in respect of Asset Sales to the greater extent such repayments constitute a permanent reduction of (a) $2,000.0 million and (b) the sum of $1.5 billion and 20% of Targa Resources Partners’ Consolidated Net Tangible Assetscommitments under such Credit Facilities; (2ii) the incurrence by Targa Resources Partners the Partnership and its Restricted Subsidiaries of the Existing Indebtedness; (3iii) the incurrence by Targa Resources Partners, Finance Corp. the Partnership and the Subsidiary Guarantors of (A) $200.0 million in aggregate principal amount of Indebtedness represented by the Series A Notes and the Guarantees and the related Note Guarantees to be issued on Obligations and (B) Indebtedness represented by the date of this Indenture and any Exchange Series B Notes and the Guarantees and the related Note Guarantees that may be issued pursuant to a Registration Rights AgreementObligations; (4iv) the incurrence by Targa Resources Partners the Partnership or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred in the ordinary course of business for the purpose of financing all or any part of the purchase price or cost of construction construction, improvement or improvement development of property, plant or equipment used in the business of Targa Resources Partners the Partnership or any of its such Restricted SubsidiariesSubsidiary, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), provided that after giving effect to such incurrence the in an aggregate principal amount of all Indebtedness incurred pursuant not to this clause (4) and then outstanding does not exceed the greater of (a) $50.0 20.0 million and (b) 4.0% of Targa Resources Partners’ Consolidated Net Tangible Assetsat any time outstanding; (5v) the incurrence by Targa Resources Partners the Partnership or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clause (2) or (3) of this Section 4.09(b) or this clause (5); (6vi) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of any Permitted Receivables Financing in an aggregate principal amount at any time outstanding not to exceed $400.0 million; (7) the incurrence by Targa Resources Partners Partnership or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources Partners the Partnership and any of its Restricted Subsidiaries; provided, however, that: (A) if Targa Resources Partners an Issuer or any Subsidiary Guarantor is the obligor on such Indebtedness and to a Restricted Subsidiary of the payee Partnership that is not Targa Resources Partners or a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of Targa Resources Partnersthe Partnership, or the Note GuaranteeGuarantee of such Subsidiary Guarantor, in the case of a Subsidiary Guarantor, and, (B) such intercompany Indebtedness is owed by the Partnership or any of its Restricted Subsidiaries to either the Partnership or a Wholly Owned Restricted Subsidiary and (1C) (I) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Targa Resources Partners the Partnership or a Wholly Owned Restricted Subsidiary of Targa Resources Partners and (2II) any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources Partners the Partnership or a Wholly Owned Restricted Subsidiary of Targa Resources PartnersSubsidiary, will shall be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources Partners the Partnership or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (7vi); (8) vii) the incurrence by Targa Resources Partners the Partnership or any of its Restricted Subsidiaries of Hedging ObligationsObligations entered into in the ordinary course of business; (9viii) the guarantee by Targa Resources Partners the Partnership or any of its Restricted Subsidiaries the Subsidiary Guarantors of Indebtedness of Targa Resources Partners the Partnership or a Restricted Subsidiary of Targa Resources Partners that was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed5.03; (10ix) Indebtedness in respect of bid, performance, surety and appeal bonds issued for the incurrence by Targa Resources Partners account of the Partnership or any of its Restricted Subsidiaries of obligations relating to net gas balancing positions arising in the ordinary course of business business, including guarantees and consistent with past practice; (11) obligations of the incurrence by Targa Resources Partners Partnership or any of its Restricted Subsidiaries with respect to letters of Acquired Debt credit supporting such obligations (in connection with a transaction meeting either one of the financial tests set forth in clause (4) under Section 5.01(aeach case other than for an obligation for money borrowed); (12) the issuance by any of Targa Resources Partners’ Restricted Subsidiaries to Targa Resources Partners or to any of its Restricted Subsidiaries of any Disqualified Equity; provided, however, that: (A) any subsequent issuance or transfer of Equity Interests that results in any such Disqualified Equity being held by a Person other than Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners; and (B) any sale or other transfer of any such Disqualified Equity to a Person that is not either Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners will be deemed, in each case, to constitute an issuance of such Disqualified Equity by such Restricted Subsidiary that was not permitted by this clause (12); and (13x) the incurrence by Targa Resources Partners the Partnership or any of its Restricted Subsidiaries of additional Indebtedness; provided that, after giving effect to any such incurrence, the Indebtedness in an aggregate principal amount of all Indebtedness incurred under this clause not to exceed $20.0 million at any time outstanding; and (13xi) and then outstanding does not exceed the greater of (a) $150.0 million and (b) 7.5% of Targa Resources Partners’ Consolidated Net Tangible Assets. Targa Resources Partners shall not incur, and shall not permit Finance Corp. incurrence by the Partnership or any Guarantor to incurof its Restricted Subsidiaries of Permitted Marketing Obligations, Permitted Contango Market Transaction Obligations and Permitted Operating Obligations. (c) To the extent that the Partnership's Unrestricted Subsidiaries incur Non-Recourse Debt and any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of Targa Resources Partners, Finance Corp. or such Guarantor unless such Indebtedness is also contractually subordinated in right ceases to be Non-Recourse Debt of payment to the Notes and the applicable Note Guarantee on substantially identical terms; providedsuch Unrestricted Subsidiary, however, that no Indebtedness of a Person then such event shall be deemed to be contractually subordinated in right constitute an incurrence of payment Indebtedness by a Restricted Subsidiary of the Partnership that was subject to any other Indebtedness of such Person solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. this Section 5.03. (d) For purposes of determining compliance with this Section 4.095.03, if in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1i) through (13xi) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof5.03(a), Targa Resources Partners will the Partnership shall be permitted permitted, in its sole discretion, to classify such item of Indebtedness on the date of its incurrenceit is incurred, or later reclassify all or a portion of such item of Indebtedness, Indebtedness in any manner that complies with this Section 4.095.03. An item of Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued may be divided and authenticated under this Indenture will initially be deemed to have been incurred on such date classified in reliance on the exception provided by clause (1) one or more of the definition types of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares of the same class of Disqualified Equity will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section 4.09; provided, however, in each such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges of Targa Resources Partners as accrued. Notwithstanding any other provision of this Section 4.09, (i) the maximum amount of Indebtedness that Targa Resources Partners or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. Further, the accounting reclassification of any obligation of Targa Resources Partners or any of its Restricted Subsidiaries as Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09.

Appears in 1 contract

Samples: First Supplemental Indenture (Plains All American Pipeline Lp)

Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources Partners shall TLLP will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and Targa Resources Partners TLLP will not issue any Disqualified Equity and will not permit any of its Restricted Subsidiaries to issue any Disqualified Equity; provided, however, that Targa Resources Partners TLLP and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) and Targa Resources Partners TLLP and the any Restricted Subsidiaries Subsidiary may issue Disqualified Equity, if the Fixed Charge Coverage Ratio for Targa Resources Partners’ most recently ended four full fiscal quarters for which internal financial statements are available TLLP’s Reference Period immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, would have been at least 2.0 2.00 to 1.01.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter periodReference Period. (b) The provisions of Section 4.09(a) hereof shall will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Equity described in clause (ii) below:): (1) the incurrence by Targa Resources Partners TLLP and any Restricted Subsidiary of additional Indebtedness (including letters of credit) under pursuant to one or more Credit Facilities, provided that, after giving effect to such incurrence, the Facilities in an aggregate principal amount of all Indebtedness incurred at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Targa Resources Partners TLLP and its Restricted Subsidiaries thereunder) and then outstanding does not to exceed the greater of (a) $2,000.0 2,100.0 million and (b) the sum of $1.5 billion 1,400.0 million and 2020.0% of Targa Resources Partners’ Consolidated Net Tangible AssetsAssets (determined as of the date of incurrence and after giving effect to the use of proceeds therefrom); (2) the incurrence by Targa Resources Partners TLLP, Finance Corp. and its Restricted Subsidiaries of the Existing Indebtedness; (3) the incurrence by Targa Resources PartnersTLLP, Finance Corp. and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and any Exchange Notes and the related Note Guarantees that may be issued pursuant to a Registration Rights AgreementIssue Date; (4) the incurrence by Targa Resources Partners TLLP or any of its Restricted Subsidiaries of Indebtedness represented by Capital Financing Lease Obligations, Synthetic Lease Obligations, mortgage financings or purchase money obligationsobligations (including any Acquired Debt), in each case, incurred in connection with the purchase of, or for the purpose of financing all or any part of the purchase price or cost of construction construction, improvement or improvement of development of, property, plant or equipment used or useful in the business of Targa Resources Partners TLLP or any of its Restricted SubsidiariesSubsidiaries and related financing costs, and Attributable Debt in respect of sale and leaseback transactions, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), provided that after giving effect at any time outstanding not to such incurrence the aggregate principal amount of all Indebtedness incurred pursuant to this clause (4) and then outstanding does not exceed the greater of (a) $50.0 250.0 million and (b) 4.05.0% of Targa Resources Partners’ TLLP’s Consolidated Net Tangible AssetsAssets (determined as of the date of incurrence and after giving effect to the use of proceeds therefrom); (5) the incurrence by Targa Resources Partners TLLP or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clause (2), (3), (12) or (313) of this Section 4.09(b) or this clause (5); (6) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of any Permitted Receivables Financing in an aggregate principal amount at any time outstanding not to exceed $400.0 million; (7) the incurrence by Targa Resources Partners TLLP or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources Partners TLLP and any of its Restricted Subsidiaries; provided, however, that: (A) if Targa Resources Partners TLLP or any Guarantor is the obligor on such Indebtedness and the payee is not Targa Resources Partners TLLP or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of Targa Resources PartnersTLLP, or the Note Guarantee, in the case of a Guarantor, ; and (B) (1i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Targa Resources Partners TLLP or a Restricted Subsidiary of Targa Resources Partners TLLP and (2ii) any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources Partners TLLP or a Restricted Subsidiary of Targa Resources PartnersTLLP, will be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources Partners TLLP or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (76); (8) 7) the incurrence by Targa Resources Partners TLLP or any of its Restricted Subsidiaries of Hedging Obligations; (9) 8) the guarantee by Targa Resources Partners TLLP or any of its Restricted Subsidiaries the Guarantors of Indebtedness of Targa Resources Partners TLLP or a Restricted Subsidiary of Targa Resources Partners that was permitted to be TLLP or the Indebtedness incurred by another provision of this Section 4.09Joint Ventures constituting Permitted Investments; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the NotesNotes or Note Guarantees, then the Guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed; (109) the incurrence by Targa Resources Partners TLLP or any of its Restricted Subsidiaries of obligations relating to net gas balancing positions arising Indebtedness in respect of workers’ compensation or similar liabilities, health or other types of social security benefits, unemployment or other insurance or self-insurance obligations, insurance contracts, reclamation, statutory obligations, bankers’ acceptances, and bid, performance, advance, payment, deposit, appeal and surety bonds in the ordinary course of business business, including guarantees and consistent with past practiceobligations respecting standby letters of credit supporting such obligations, to the extent not drawn (in each case other than an obligation for money borrowed) and replacements of any of the foregoing; (1110) the incurrence by Targa Resources Partners TLLP or any of its Restricted Subsidiaries of Acquired Debt in connection with Indebtedness arising from the honoring by a transaction meeting either one bank or other financial institution of the financial tests set forth in clause (4) under Section 5.01(a)a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days; (1211) the issuance by any of Targa Resources Partners’ Restricted Subsidiaries to Targa Resources Partners TLLP or to any of its Restricted Subsidiaries of Disqualified Equity to TLLP or any Disqualified Equityof its Restricted Subsidiaries, as the case may be; provided, however, that: (Aa) any subsequent issuance or transfer of Equity Interests of a Restricted Subsidiary that results in any such Disqualified Equity being held held, directly or indirectly, by a Person other than Targa Resources Partners TLLP or a Restricted Subsidiary of Targa Resources PartnersTLLP; and (Bb) any sale or other transfer of any such Disqualified Equity to a Person that is not either Targa Resources Partners TLLP or a Restricted Subsidiary of Targa Resources Partners TLLP, will be deemed, in each case, to constitute an issuance of such Disqualified Equity by TLLP or such Restricted Subsidiary that was not permitted by this clause clause; (12); and) the incurrence by TLLP or any of its Restricted Subsidiaries of Permitted Acquisition Indebtedness; (13) the incurrence by Targa Resources Partners TLLP of Indebtedness in the ordinary course of business under documentary letters of credit, which are to be repaid in full not more than one year after the date on which such Indebtedness was originally incurred to finance the purchase of goods by TLLP or any of its Restricted Subsidiaries; (14) the incurrence of Indebtedness arising from agreements with TLLP or any of its Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earn-outs, or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or a Subsidiary in accordance with the terms of this Indenture, other than guarantees of Indebtedness incurred or assumed by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition; and (15) the incurrence by TLLP or any of its Restricted Subsidiaries of additional Indebtedness; provided that, after giving effect to any such incurrence, the Indebtedness in an aggregate principal amount of all Indebtedness incurred under this clause (13) and then outstanding does at any time outstanding, not to exceed the greater of (a) $150.0 250.0 million and (b) 7.55.0% of Targa Resources Partners’ Consolidated Net Tangible AssetsAssets (determined as of the date of incurrence and after giving effect to the use of proceeds therefrom). Targa Resources Partners shall TLLP will not incur, and shall will not permit Finance Corp. or any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of Targa Resources Partners, Finance Corp. TLLP or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness of a Person shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of such Person TLLP solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. For purposes of determining compliance with this Section 4.09, if in the event that an item of proposed Indebtedness (including Acquired Debt) meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (1315) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, Targa Resources Partners TLLP will be permitted to classify all or a portion of such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. ; provided that Indebtedness under the Credit Facilities Agreements outstanding on the date on which Notes are first issued and authenticated under this Indenture Issue Date will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. .” The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares of the same class of Disqualified Equity will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section 4.09; provided, however, in each such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges of Targa Resources Partners as accrued. Notwithstanding any other provision of this Section 4.09, (i) the maximum amount of Indebtedness that Targa Resources Partners TLLP or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. FurtherThe amount of any Indebtedness outstanding as of any date will be: (1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount; (2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and (3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the accounting reclassification lesser of: (A) the Fair Market Value of such assets at the date of determination; and (B) the amount of the Indebtedness of the other Person. For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed, in the case of revolving credit debt; 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 (i) the principal amount of such Indebtedness being refinanced plus (ii) the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses incurred in connection with such refinancing. The principal amount of any obligation Indebtedness incurred to refinance other Indebtedness, if incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Indebtedness is denominated that is in effect on the date of Targa Resources Partners or any of its Restricted Subsidiaries as Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09such refinancing.

Appears in 1 contract

Samples: Indenture (Tesoro Logistics Northwest Pipeline LLC)

Incurrence of Indebtedness and Issuance of Disqualified Equity. (a) Targa Resources Partners shall The Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and Targa Resources Partners the Company will not issue any Disqualified Equity and will not permit any of its Restricted Subsidiaries to issue any Disqualified Equity; provided, however, that Targa Resources Partners the Company and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) and Targa Resources Partners the Company and the Restricted Subsidiaries may issue Disqualified Equity, if the Fixed Charge Coverage Ratio for Targa Resources Partners’ most recently ended four full fiscal quarters for which internal financial statements are available the Company’s Reference Period immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter periodReference Period. (b) The provisions of Section 4.09(a) hereof shall will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Equity described in clause (ii11) below: (1) the incurrence by Targa Resources Partners and the Company or any of its Restricted Subsidiary Subsidiaries of additional Indebtedness (including and letters of credit) credit and the Guarantees thereof under Credit Facilities, provided that, after giving effect to such incurrence, the Facilities in an aggregate principal amount of all Indebtedness incurred at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Targa Resources Partners the Company and its Restricted Subsidiaries thereunder) and then outstanding does not to exceed the greater of (a) $2,000.0 200.0 million and (b) the sum of $1.5 billion 25.0 million and 2030.0% of Targa Resources Partners’ Consolidated Net Tangible AssetsAssets (determined as of the date of incurrence and after giving effect to the use of proceeds therefrom); (2) the incurrence by Targa Resources Partners the Company and its Restricted Subsidiaries of the any Existing Indebtedness; (3) the incurrence by Targa Resources Partners, Finance Corp. the Company and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and any Exchange Notes and the related Note Guarantees that may be issued pursuant to a Registration Rights AgreementIssue Date; (4) the incurrence by Targa Resources Partners the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Finance Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of Targa Resources Partners the Company or any of its Restricted Subsidiaries, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), provided that after giving effect at any time outstanding not to such incurrence the aggregate principal amount of all Indebtedness incurred pursuant to this clause (4) and then outstanding does not exceed the greater of (a) $50.0 20.0 million and (b) 4.03.0% of Targa Resources Partners’ Consolidated Net Tangible AssetsAssets (determined as of the date of incurrence and after giving effect to the use of proceeds therefrom); (5) the incurrence by Targa Resources Partners the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clause (2), (3), (4), (10) or (314) of this Section 4.09(b) or this clause (5); (6) the incurrence by Targa Resources Partners or any of its Restricted Subsidiaries of any Permitted Receivables Financing in an aggregate principal amount at any time outstanding not to exceed $400.0 million; (7) the incurrence by Targa Resources Partners Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Targa Resources Partners the Company and any of its Restricted Subsidiaries; provided, however, that: (A) if Targa Resources Partners the Company or any Guarantor is the obligor on such Indebtedness and the payee is not Targa Resources Partners the Company or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of Targa Resources Partnersthe Company, or the Note Guarantee, in the case of a Guarantor, ; and (B) (1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Targa Resources Partners the Company or a Restricted Subsidiary of Targa Resources Partners the Company and (2) any sale or other transfer of any such Indebtedness to a Person that is not either Targa Resources Partners the Company or a Restricted Subsidiary of Targa Resources Partnersthe Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by Targa Resources Partners Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (76); (8) 7) the incurrence by Targa Resources Partners the Company or any of its Restricted Subsidiaries of Hedging ObligationsObligations or Indebtedness under Treasury Management Arrangements; (9) 8) the guarantee Guarantee by Targa Resources Partners the Company, or any of its Restricted Subsidiaries of (a) Indebtedness of Targa Resources Partners the Company or a Restricted Subsidiary of Targa Resources Partners the Company that was permitted to be incurred by another provision of this Section 4.094.09 or (b) Indebtedness incurred by Joint Ventures, provided that such Guarantee constitutes a Permitted Investment; and provided further, in each case, that if the Indebtedness being guaranteed Guaranteed is subordinated to or pari passu with the NotesNotes or the Note Guarantees, then the Guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteedGuaranteed; (9) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, health or other types of social security benefits, unemployment or other insurance or self-insurance obligations, insurance contracts, reclamation, statutory obligations, bankers’ acceptances, and performance, payment, appeal and surety bonds in the ordinary course of business, including Guarantees and obligations respecting standby letters of credit supporting such obligations, to the extent not drawn (in each case other than an obligation for money borrowed) and replacements of any of the foregoing; (10) the incurrence by Targa Resources Partners the Company or any of its Restricted Subsidiaries of obligations relating to net gas balancing positions arising in the ordinary course of business and consistent with past practicePermitted Acquisition Indebtedness; (11) the incurrence issuance by Targa Resources Partners the Company or any of its Restricted Subsidiaries of Acquired Debt in connection with a transaction meeting either one of Disqualified Equity to the financial tests set forth in clause (4) under Section 5.01(a); (12) the issuance by any of Targa Resources Partners’ Restricted Subsidiaries to Targa Resources Partners Company or to any of its Restricted Subsidiaries of any Disqualified EquitySubsidiaries, as the case may be; provided, however, that: (A) any subsequent issuance or transfer of Equity Interests of a Restricted Subsidiary that results in any such Disqualified Equity being held held, directly or indirectly, by a Person other than Targa Resources Partners the Company or a Restricted Subsidiary of Targa Resources Partnersthe Company; and (B) any sale or other transfer of any such Disqualified Equity to a Person that is not either Targa Resources Partners the Company or a Restricted Subsidiary of Targa Resources Partners the Company; will be deemed, in each case, to constitute an issuance of such Disqualified Equity by the Company or such Restricted Subsidiary that was not permitted by this clause clause; (12); and) the incurrence in the ordinary course of business by the Company or any of its Restricted Subsidiaries of Indebtedness under letters of credit incurred pursuant to a Credit Facility, provided that such obligations are reimbursed within 10 days following the drawing of such letter of credit; (13) the incurrence by Targa Resources Partners the Company or any of its Restricted Subsidiaries of additional Indebtedness; liability in respect of the Indebtedness of any Unrestricted Subsidiary of the Company or any Joint Venture but only to the extent that such liability is the result of the Company’s or any such Restricted Subsidiary’s being a general partner of such Unrestricted Subsidiary or Joint Venture and not as guarantor of such Indebtedness and provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (13) and then outstanding does not exceed $25.0 million; and (14) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (14) at any time outstanding not to exceed the greater of (a) $150.0 35.0 million and (b) 7.55.0% of Targa Resources Partners’ Consolidated Net Tangible AssetsAssets (determined as of the date of incurrence and after giving effect to the use of proceeds therefrom). Targa Resources Partners shall The Company will not incur, and shall will not permit Finance Corp. or any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of Targa Resources Partners, Finance Corp. the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness of a Person shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company or any such Person Subsidiary Guarantor solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. For purposes of determining compliance with this Section 4.09, if in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (1314) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, Targa Resources Partners the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares or units of the same class of Disqualified Equity will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section 4.09; provided, however, in each such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges of Targa Resources Partners the Company as accruedaccrued to the extent required by the definition of such term. Notwithstanding any other provision of this Section 4.09, (i) the maximum amount of Indebtedness that Targa Resources Partners the Company or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. FurtherThe amount of any Indebtedness outstanding as of any date will be: (1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount; (2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and (3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the accounting reclassification lesser of: (A) the Fair Market Value of such assets at the date of determination; and (B) the amount of the Indebtedness of the other Person. For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed, in the case of revolving credit debt; 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 (i) the principal amount of such Indebtedness being refinanced plus (ii) the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses incurred in connection with such refinancing. The principal amount of any obligation Indebtedness incurred to refinance other Indebtedness, if incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Indebtedness is denominated that is in effect on the date of Targa Resources Partners or any of its Restricted Subsidiaries as Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09such refinancing.

Appears in 1 contract

Samples: Indenture (Aris Water Solutions, Inc.)

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