Incurrence of Indebtedness and Issuance of Preferred Equity. 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 the Partnership shall not issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries to issue any shares of preferred equity; provided, however, that, the Issuers may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, if the Fixed Charge Coverage Ratio for the Partnership’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 2.0 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period. The first paragraph of this Section 4.09 shall not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”): (a) the incurrence by the Partnership and its Restricted Subsidiaries of (i) Indebtedness represented by the Notes, including any Notes issued as payment of interest on the Notes in accordance with the terms of the Notes, (ii) their respective obligations arising under the Collateral Documents to the extent such obligations would represent Indebtedness and (iii) dividends payable in kind in respect of the Preferred Interests; (b) the incurrence by the Partnership or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under the first paragraph of this Section 4.09 or clauses (a), (b) and (h) of this paragraph; (c) the incurrence by the Partnership or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Partnership and any of its Restricted Subsidiaries as provided in Section 4.24 hereof; provided, however, that (i) such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Notes and (ii) (A) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Partnership or a Restricted Subsidiary thereof or (B) any sale or other transfer of any such Indebtedness to a Person that is not either the Partnership or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Partnership or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (c); (d) the incurrence by the Partnership or any of its Restricted Subsidiaries of Hedging Obligations that are incurred for the purpose of fixing or hedging interest rate risk with respect to any floating rate Indebtedness that is permitted by the terms of this Indenture to be outstanding; (e) the Guarantee by the Partnership or any of its Restricted Subsidiaries of Indebtedness permitted to be incurred by another provision of this Section 4.09; (f) the incurrence by the Partnership or any of its Restricted Subsidiaries of Indebtedness in respect of performance, surety or appeal bonds in the ordinary course of business; (g) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms and the payment of dividends on Disqualified Stock, including the Preferred Interests, in the form of additional shares of the same class of Disqualified Stock or, in the case of the Preferred Interests, a guaranteed payment by the Partnership or the allocation of gross or net income of the Partnership in accordance with the terms of the Partnership Agreement, will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for the purposes of this covenant; provided, however, in each such case, that the amount thereof is included in Fixed Charges of the Partnership or the applicable Restricted Subsidiary as accrued; (h) so long as at the time of incurrence no Default or Event of Default has occurred and is continuing, the incurrence by the Partnership of FF&E Financing; provided, however, that (i) the principal amount of such Indebtedness does not exceed the cost (including sales and excise taxes, installation and delivery charges and other direct costs of, and other direct expenses paid or charged in connection with, such purchase) of the FF&E purchased or leased with the proceeds thereof and (ii) the aggregate principal amount of such Indebtedness, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause, does not exceed $5 million outstanding at any time; and (i) the issuance of the Partnership Interests, including the Preferred Interests, in accordance with the Partnership Agreement. The Partnership will not incur any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Partnership unless such Indebtedness is also contractually subordinated in right of payment to the Notes on substantially identical terms; provided, however, that no Indebtedness of the Partnership shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Partnership solely by virtue of being unsecured. For purposes of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (a) through (i) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.09, the Partnership will be permitted to classify such item of Indebtedness as of any date of determination in any manner that complies with this Section 4.09.
Appears in 2 contracts
Samples: Amended and Restated Indenture (NGA Holdco, LLC), Investment Agreement (Shreveport Capital Corp)
Incurrence of Indebtedness and Issuance of Preferred Equity. The Partnership shall (a) 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 the Partnership shall Company will not issue any Disqualified Stock and shall the Company will not permit any of its Restricted Subsidiaries to issue any shares of Disqualified Stock or preferred equity; provided, however, that, that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Company or any Restricted Subsidiary of the Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock or preferred equity, if the Fixed Charge Coverage Ratio for the Partnership’s Company's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such preferred equity is issued issued, as the case may be, would have been at least 2.0 to 11.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the preferred equity had been issued, as the case may be, at the beginning of such four-quarter period. .
(b) The first paragraph provisions of this Section 4.09 shall 4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “"Permitted Debt”"):
(a1) the incurrence by the Partnership Company, the Guarantors or any of the Company's Restricted Subsidiaries of additional Indebtedness and letters of credit and bankers' acceptances thereunder under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and any Guarantors and any Restricted Subsidiaries thereunder) not to exceed $895 million;
(2) the incurrence by the Company and its Restricted Subsidiaries of (i) Indebtedness represented by the Notes, including any Notes issued as payment of interest on the Notes in accordance with the terms of the Notes, (ii) their respective obligations arising under the Collateral Documents to the extent such obligations would represent Indebtedness and (iii) dividends payable in kind in respect outstanding on the date of the Preferred Intereststhis Indenture;
(b3) the incurrence by the Partnership Company and the Guarantors (including any future Guarantor) of Indebtedness represented by the notes and the related Note Guarantees to be issued on the date of this Indenture and the exchange notes and the related Note Guarantees to be issued pursuant to the Registration Rights Agreement;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings, industrial revenue bonds, purchase money obligations or other Indebtedness or preferred stock, or synthetic lease obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, development, construction, installation or improvement of property (real or personal and including Capital Stock), plant or equipment used in the business of the Company or any of its Restricted Subsidiaries (in each case, whether through the direct purchase of such assets or the Equity Interests of any Person owning such assets), in an aggregate principal amount not to exceed, immediately after giving effect to any such incurrence, the greater of (x) $70.0 million and (y) 5.0% of Total Assets;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under the first paragraph Section 4.09(a) hereof or clause (2), (3), (4), (5), (12), (15) or (16) of this Section 4.09 or clauses (a4.09(b), (b) and (h) of this paragraph;
(c6) the incurrence by the Partnership Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Partnership Company and any of its Restricted Subsidiaries as provided in Section 4.24 hereofSubsidiaries; provided, however, that that:
(iA) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes and notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and
(iiB) (Ai) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Partnership Company or a Restricted Subsidiary thereof or of the Company, and (Bii) any sale or other transfer of any such Indebtedness to a Person that is not either the Partnership Company or a Restricted Subsidiary thereof of the Company, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Partnership Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (c6);
(d7) the issuance by any of the Company's Restricted Subsidiaries to the Company or to another Restricted Subsidiary of shares of preferred equity or Disqualified Stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred equity or Disqualified Stock being held by a Person other than the Company or a Restricted Subsidiary of the Company, and
(B) any sale or other transfer of any such preferred equity or Disqualified Stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such preferred equity or Disqualified Stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Partnership Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred other than 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 outstandingspeculative purposes;
(e9) the Guarantee guarantee by any Restricted Subsidiary of the Partnership or any of its Restricted Subsidiaries Company of Indebtedness of the Company or a Restricted Subsidiary of the Company that was permitted to be incurred by another provision of this Section 4.094.09 (including Section 4.09(a) hereof); provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee thereof shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness so guaranteed;
(f10) the incurrence by the Partnership Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers' compensation claims, payment obligations in connection with health or other types of social security benefits, unemployment or other insurance or self-insurance obligations, reclamation, statutory obligations, bankers' acceptances, performance, surety or appeal similar bonds in the ordinary course and letters of business;
credit or completion or performance guarantees or equipment leases (g) the accrual of interestincluding, the accretion without limitation, performance guarantees and reimbursement obligations arising under or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms and the payment of dividends on Disqualified Stock, including the Preferred Interests, in the form of additional shares of the same class of Disqualified Stock or, in the case of the Preferred Interests, a guaranteed payment by the Partnership or the allocation of gross or net income of the Partnership in accordance with the terms of the Partnership Purchase Agreement), will not be deemed to be an incurrence or other similar obligations in the ordinary course of Indebtedness business or an issuance of Disqualified Stock for the purposes of this covenant; provided, however, in each such case, that the amount thereof is included in Fixed Charges of the Partnership or the applicable Restricted Subsidiary as accruedconsistent with past practice;
(h11) so long as at the time of incurrence no Default or Event of Default has occurred and is continuing, the incurrence by the Partnership Company or any of FF&E Financingits 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;
(12) Indebtedness, Disqualified Stock or preferred equity of Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged into a Restricted Subsidiary in accordance with the terms of this Indenture; provided, however, that such Indebtedness, or Disqualified Stock or preferred equity is not incurred or issued in contemplation of such acquisition or merger or to provide all or a portion of the funds or credit support required to consummate such acquisition or merger; provided further, however, that, for any such Indebtedness, Disqualified Stock or preferred equity outstanding under this clause (i12) in excess of $10.0 million on the date such Person is acquired by the Company or a Restricted Subsidiary, after giving effect to such acquisition and the incurrence or issuance of such Indebtedness, Disqualified Stock or preferred equity either:
(A) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first sentence of this Section 4.09; or
(B) the Fixed Charge Coverage Ratio, on the date of and after giving pro forma effect to such acquisition and such incurrence or issuance, would not be reduced as a result of such acquisition;
(13) Indebtedness incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is Non-Recourse Debt to the Company or any Restricted Subsidiary of the Company other than such Receivables Subsidiary (except for Standard Securitization Undertakings);
(14) the incurrence of Indebtedness arising from agreements of the Company or a 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 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;
(15) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance of Disqualified Stock or preferred equity in an aggregate principal amount (or accreted value, as applicable) or having an aggregate liquidation preference at any time outstanding not to exceed $85.0 million (it being understood that any Indebtedness, Disqualified Stock or preferred equity incurred pursuant to this clause (15) shall cease to be deemed incurred or outstanding for purposes of this Section 4.09 from and after the date on which the Company could have incurred such Indebtedness or Disqualified Stock or preferred equity under Section 4.09(a) hereof without reliance upon this clause (15));
(16) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness arising out of advances on exports, advances on imports, advances on trade receivables, factoring of receivables, customer prepayments and similar transactions in the ordinary course of business and consistent with past practice;
(17) the incurrence of additional Indebtedness by a Foreign Subsidiary in an aggregate principal amount which does not exceed the cost greater of (including sales and excise taxes, installation and delivery charges and other direct costs of, and other direct expenses paid a) $50 million or charged in connection with, such purchase(b) 3.5% of the FF&E purchased or leased with the proceeds thereof and (ii) the aggregate principal amount of such Indebtedness, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause, does not exceed $5 million outstanding Total Assets at any time; andone time outstanding (which amount may, but need not, be incurred in whole or in part under a Credit Facility);
(i18) the issuance of the Partnership Interests, including the Preferred Interests, in accordance with the Partnership Agreement. The Partnership will not incur any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Partnership unless such Indebtedness is also contractually subordinated Company or any of its Restricted Subsidiaries in right of payment to the Notes on substantially identical terms; provided, however, that no Indebtedness respect of the Partnership shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Partnership solely by virtue of being unsecured. For purposes of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (a) through (i) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.09, the Partnership will be permitted to classify such item of Indebtedness as of any date of determination in any manner that complies with this Section 4.09.Management Notes; and
Appears in 2 contracts
Samples: Indenture (Dresser-Rand Group Inc.), Indenture (Dresser-Rand Group Inc.)
Incurrence of Indebtedness and Issuance of Preferred Equity. The Partnership shall (a) Parent and the Issuer will not, and shall will not permit any of its Parent's 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 Parent and the Partnership shall Issuer will not issue any Disqualified Stock and shall will not permit the Issuer or any of its Parent's Restricted Subsidiaries to issue any Disqualified Stock or any shares of preferred equity; provided, however, thatthat Parent, the Issuers Issuer and any of Parent's Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue Disqualified StockStock and the Issuer and any of Parent's Restricted Subsidiaries may issue preferred equity, if if, on the date of such incurrence or issuance, the Fixed Charge Coverage Ratio for the Partnership’s Parent's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such preferred equity is issued issued, as the case may be, would have been at least 2.0 (A) 1.75 to 11.00 if such Indebtedness is incurred or such Disqualified Stock or such preferred equity is issued on or prior to June 30, 2008 or (B) 2.00 to 1.00 if such Indebtedness is incurred or such Disqualified Stock or such preferred equity is issued after June 30, 2008, in each case, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the preferred equity had been issued, as the case may be, at the beginning of such four-quarter period. .
(b) The first paragraph provisions of this Section 4.09 shall 4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “"Permitted Debt”"):
(a1) the incurrence by Parent, the Partnership and its Issuer or any of Parent's Restricted Subsidiaries of Indebtedness and letters of credit and bankers' acceptances thereunder under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (i1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Parent, the Issuer and such Restricted Subsidiaries thereunder) not to exceed $2,170 million less the aggregate amount of all Net Proceeds of Asset Sales applied by Parent, the Issuer or any of Parent's Restricted Subsidiaries since the Merger 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;
(2) the incurrence by Parent, the Issuer and the Subsidiary Guarantors of Indebtedness represented by the Notes, including Second Priority Notes (excluding any Additional Notes or any additional Fixed Rate Notes issued as payment after the Issue Date) and the related Note Guarantees or Fixed Rate Note Guarantees;
(3) the incurrence by Parent, the Issuer and Parent's Restricted Subsidiaries of interest Indebtedness (other than Indebtedness described in clause (1) or (2)) outstanding on the Notes in accordance with the terms of the NotesMerger Date, (ii) their respective obligations arising under the Collateral Documents reduced to the extent such obligations would represent amounts shall be been repaid or retired, the incurrence by Parent, the Issuer and Parent's Restricted Subsidiaries of Indebtedness and (iii) dividends payable in kind in respect of to the Preferred Interestsextent outstanding on the Merger Date;
(b4) the incurrence by Parent, the Partnership Issuer or any of its Parent's Restricted Subsidiaries of Indebtedness represented by mortgage financings or purchase money obligations (but not Capital Lease Obligations), in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, development, construction, installation or improvement of property (real or personal), plant or equipment used in the ordinary course of business of Parent, the Issuer or any of Parent's Restricted Subsidiaries in an aggregate principal amount which, when taken together with all other Indebtedness of Parent, the Issuer and Parent's Restricted Subsidiaries incurred pursuant to this clause (4) and outstanding on the date of such incurrence, does not exceed $50 million;
(5) the incurrence by Parent, the Issuer or any of Parent's Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under the first paragraph Section 4.09(a) or clause (2), (3), (5), (12) or (18) of this Section 4.09 or clauses (a4.09(b), (b) and (h) of this paragraph;
(c6) the incurrence by Parent, the Partnership Issuer or any of its Parent's Restricted Subsidiaries of intercompany Indebtedness between or among Parent, the Partnership Issuer and any of its Parent's Restricted Subsidiaries as provided in Section 4.24 hereofSubsidiaries; provided, however, that that:
(ia) if Parent, the Issuer or any Subsidiary Guarantor is the obligor on such Indebtedness must be and the payee is not Parent, the Issuer or a Subsidiary Guarantor, such Indebtedness is expressly subordinated in right of payment to the prior payment in full in cash of all Obligations then due with respect to the Notes and Notes, in the case of the Issuer, or the Note Guarantee, in the case of Parent or a Subsidiary Guarantor; and
(ii) (Ai) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Parent, the Partnership Issuer or a Restricted Subsidiary thereof or of Parent and (Bii) any sale or other transfer of any such Indebtedness to a Person that is not either Parent, the Partnership Issuer or a Restricted Subsidiary thereof of Parent, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by Parent, the Partnership Issuer or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (c6);
(d7) the issuance by the Issuer or any of Parent's Restricted Subsidiaries to Parent or the Issuer or to another Restricted Subsidiary of Parent of shares of preferred equity; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred equity being held by a Person other than Parent, the Issuer or a Restricted Subsidiary of Parent, and
(b) any sale or other transfer of any such preferred equity to a Person that is not either Parent, the Issuer or a Restricted Subsidiary of Parent, shall be deemed, in each case, to constitute an issuance of such preferred equity or Disqualified Stock by the Issuer or such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by Parent, the Partnership Issuer or any of its Parent's Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business and not 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 outstandingspeculative purposes;
(e9) the Guarantee guarantee by Parent, the Partnership Issuer or any Restricted Subsidiary of its Restricted Subsidiaries Parent of Indebtedness of Parent, the Issuer or a Restricted Subsidiary of Parent that was permitted to be incurred by another provision of this Section 4.094.09 (including Section 4.09(a)); provided that (A) if the Indebtedness being guaranteed is subordinated in right of payment to the Notes or the Note Guarantees, as applicable, then the guarantee thereof shall be subordinated in right of payment to the Notes or the Note Guarantee, as applicable, to the same extent as the Indebtedness so guaranteed and (B) if the Indebtedness being guaranteed is pari passu in right of payment to the Notes or the Note Guarantee, then the guarantee thereof shall be pari passu in right of payment to the Notes or the Note Guarantee, as applicable, to the same extent as the Indebtedness so guaranteed, provided, further, that any Restricted Subsidiary of Parent that guarantees other Indebtedness pursuant to this clause (9) shall concurrently guarantee, or already be a Subsidiary Guarantor with respect to, the Notes pursuant to Section 4.19;
(f10) the incurrence by Parent, the Partnership Issuer or any of its Parent's Restricted Subsidiaries of Indebtedness in respect of workers' compensation claims, payment obligations in connection with health or other types of social security benefits, unemployment or other insurance or self-insurance obligations, insurance premium finance agreements, reclamation, statutory obligations, bankers' acceptances and performance, appeal or surety or appeal bonds in the ordinary course of business;
(g11) the accrual of interestincurrence by Parent, the accretion Issuer or amortization any of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms and the payment of dividends on Disqualified Stock, including the Preferred Interests, in the form of additional shares of the same class of Disqualified Stock or, in the case of the Preferred Interests, a guaranteed payment by the Partnership or the allocation of gross or net income of the Partnership in accordance with the terms of the Partnership Agreement, will not be deemed to be an incurrence Parent's Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or an issuance other financial institution of Disqualified Stock for the purposes of this covenant; provideda check, however, in each such case, that the amount thereof is included in Fixed Charges of the Partnership draft or the applicable Restricted Subsidiary as accrued;
(h) similar instrument inadvertently drawn against insufficient funds so long as at the time of incurrence no Default or Event of Default has occurred and is continuing, the incurrence by the Partnership of FF&E Financing; provided, however, that (i) the principal amount of such Indebtedness does not exceed the cost (including sales and excise taxes, installation and delivery charges and other direct costs of, and other direct expenses paid or charged in connection with, such purchase) of the FF&E purchased or leased with the proceeds thereof and (ii) the aggregate principal amount of such Indebtedness, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause, does not exceed $5 million outstanding at any time; and
(i) the issuance of the Partnership Interests, including the Preferred Interests, in accordance with the Partnership Agreement. The Partnership will not incur any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Partnership unless such Indebtedness is also contractually subordinated in right of payment to the Notes on substantially identical terms; provided, however, that no Indebtedness of the Partnership shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Partnership solely by virtue of being unsecured. For purposes of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (a) through (i) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.09, the Partnership will be permitted to classify such item of Indebtedness as of any date of determination in any manner that complies with this Section 4.09.covered within five business days;
Appears in 2 contracts
Samples: Indenture (Swift Transportation Co Inc), Indenture (Swift Transportation Co Inc)
Incurrence of Indebtedness and Issuance of Preferred Equity. The Partnership shall (a) Parent and the Issuer will not, and shall will not permit any of its Parent's 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 Parent and the Partnership shall Issuer will not issue any Disqualified Stock and shall will not permit the Issuer or any of its Parent's Restricted Subsidiaries to issue any Disqualified Stock or any shares of preferred equity; provided, however, thatthat Parent, the Issuers Issuer and any of Parent's Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue Disqualified StockStock and the Issuer and any of Parent's Restricted Subsidiaries may issue preferred equity, if if, on the date of such incurrence or issuance, the Fixed Charge Coverage Ratio for the Partnership’s Parent's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such preferred equity is issued issued, as the case may be, would have been at least 2.0 (A) 1.75 to 11.00 if such Indebtedness is incurred or such Disqualified Stock or such preferred equity is issued on or prior to June 30, 2008 or (B) 2.00 to 1.00 if such Indebtedness is incurred or such Disqualified Stock or such preferred equity is issued after June 30, 2008, in each case, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the preferred equity had been issued, as the case may be, at the beginning of such four-quarter period. .
(b) The first paragraph provisions of this Section 4.09 shall 4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “"Permitted Debt”"):
(a1) the incurrence by Parent, the Partnership and its Issuer or any of Parent's Restricted Subsidiaries of Indebtedness and letters of credit and bankers' acceptances thereunder under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (i1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Parent, the Issuer and such Restricted Subsidiaries thereunder) not to exceed $2,170 million less the aggregate amount of all Net Proceeds of Asset Sales applied by Parent, the Issuer or any of Parent's Restricted Subsidiaries since the Merger 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;
(2) the incurrence by Parent, the Issuer and the Subsidiary Guarantors of Indebtedness represented by the Notes, including Second Priority Notes (excluding any Additional Notes or any additional Floating Rate Notes issued as payment after the Issue Date) and the related Note Guarantees or Floating Rate Note Guarantees;
(3) the incurrence by Parent, the Issuer and Parent's Restricted Subsidiaries of interest Indebtedness (other than Indebtedness described in clause (1) or (2)) outstanding on the Notes in accordance with the terms of the NotesMerger Date, (ii) their respective obligations arising under the Collateral Documents reduced to the extent such obligations would represent amounts shall be been repaid or retired, the incurrence by Parent, the Issuer and Parent's Restricted Subsidiaries of Indebtedness and (iii) dividends payable in kind in respect of to the Preferred Interestsextent outstanding on the Merger Date;
(b4) the incurrence by Parent, the Partnership Issuer or any of its Parent's Restricted Subsidiaries of Indebtedness represented by mortgage financings or purchase money obligations (but not Capital Lease Obligations), in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, development, construction, installation or improvement of property (real or personal), plant or equipment used in the ordinary course of business of Parent, the Issuer or any of Parent's Restricted Subsidiaries in an aggregate principal amount which, when taken together with all other Indebtedness of Parent, the Issuer and Parent's Restricted Subsidiaries incurred pursuant to this clause (4) and outstanding on the date of such incurrence, does not exceed $50 million;
(5) the incurrence by Parent, the Issuer or any of Parent's Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under the first paragraph Section 4.09(a) or clause (2), (3), (5), (12) or (18) of this Section 4.09 or clauses (a4.09(b), (b) and (h) of this paragraph;
(c6) the incurrence by Parent, the Partnership Issuer or any of its Parent's Restricted Subsidiaries of intercompany Indebtedness between or among Parent, the Partnership Issuer and any of its Parent's Restricted Subsidiaries as provided in Section 4.24 hereofSubsidiaries; provided, however, that that:
(ia) if Parent, the Issuer or any Subsidiary Guarantor is the obligor on such Indebtedness must be and the payee is not Parent, the Issuer or a Subsidiary Guarantor, such Indebtedness is expressly subordinated in right of payment to the prior payment in full in cash of all Obligations then due with respect to the Notes and Notes, in the case of the Issuer, or the Note Guarantee, in the case of Parent or a Subsidiary Guarantor; and
(ii) (Ai) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Parent, the Partnership Issuer or a Restricted Subsidiary thereof or of Parent and (Bii) any sale or other transfer of any such Indebtedness to a Person that is not either Parent, the Partnership Issuer or a Restricted Subsidiary thereof of Parent, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by Parent, the Partnership Issuer or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (c6);
(d7) the issuance by the Issuer or any of Parent's Restricted Subsidiaries to Parent or the Issuer or to another Restricted Subsidiary of Parent of shares of preferred equity; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred equity being held by a Person other than Parent, the Issuer or a Restricted Subsidiary of Parent, and
(b) any sale or other transfer of any such preferred equity to a Person that is not either Parent, the Issuer or a Restricted Subsidiary of Parent, shall be deemed, in each case, to constitute an issuance of such preferred equity or Disqualified Stock by the Issuer or such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by Parent, the Partnership Issuer or any of its Parent's Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business and not 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 outstandingspeculative purposes;
(e9) the Guarantee guarantee by Parent, the Partnership Issuer or any Restricted Subsidiary of its Restricted Subsidiaries Parent of Indebtedness of Parent, the Issuer or a Restricted Subsidiary of Parent that was permitted to be incurred by another provision of this Section 4.094.09 (including Section 4.09(a)); provided that (A) if the Indebtedness being guaranteed is subordinated in right of payment to the Notes or the Note Guarantees, as applicable, then the guarantee thereof shall be subordinated in right of payment to the Notes or the Note Guarantee, as applicable, to the same extent as the Indebtedness so guaranteed and (B) if the Indebtedness being guaranteed is pari passu in right of payment to the Notes or the Note Guarantee, then the guarantee thereof shall be pari passu in right of payment to the Notes or the Note Guarantee, as applicable, to the same extent as the Indebtedness so guaranteed, provided, further, that any Restricted Subsidiary of Parent that guarantees other Indebtedness pursuant to this clause (9) shall concurrently guarantee, or already be a Subsidiary Guarantor with respect to, the Notes pursuant to Section 4.19;
(f10) the incurrence by Parent, the Partnership Issuer or any of its Parent's Restricted Subsidiaries of Indebtedness in respect of workers' compensation claims, payment obligations in connection with health or other types of social security benefits, unemployment or other insurance or self-insurance obligations, insurance premium finance agreements, reclamation, statutory obligations, bankers' acceptances and performance, appeal or surety or appeal bonds in the ordinary course of business;
(g11) the accrual of interestincurrence by Parent, the accretion Issuer or amortization any of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms and the payment of dividends on Disqualified Stock, including the Preferred Interests, in the form of additional shares of the same class of Disqualified Stock or, in the case of the Preferred Interests, a guaranteed payment by the Partnership or the allocation of gross or net income of the Partnership in accordance with the terms of the Partnership Agreement, will not be deemed to be an incurrence Parent's Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or an issuance other financial institution of Disqualified Stock for the purposes of this covenant; provideda check, however, in each such case, that the amount thereof is included in Fixed Charges of the Partnership draft or the applicable Restricted Subsidiary as accrued;
(h) similar instrument inadvertently drawn against insufficient funds so long as at the time of incurrence no Default or Event of Default has occurred and is continuing, the incurrence by the Partnership of FF&E Financing; provided, however, that (i) the principal amount of such Indebtedness does not exceed the cost (including sales and excise taxes, installation and delivery charges and other direct costs of, and other direct expenses paid or charged in connection with, such purchase) of the FF&E purchased or leased with the proceeds thereof and (ii) the aggregate principal amount of such Indebtedness, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause, does not exceed $5 million outstanding at any time; and
(i) the issuance of the Partnership Interests, including the Preferred Interests, in accordance with the Partnership Agreement. The Partnership will not incur any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Partnership unless such Indebtedness is also contractually subordinated in right of payment to the Notes on substantially identical terms; provided, however, that no Indebtedness of the Partnership shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Partnership solely by virtue of being unsecured. For purposes of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (a) through (i) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.09, the Partnership will be permitted to classify such item of Indebtedness as of any date of determination in any manner that complies with this Section 4.09.covered within five business days;
Appears in 2 contracts
Samples: Indenture (Swift Transportation Co Inc), Indenture (Swift Transportation Co Inc)
Incurrence of Indebtedness and Issuance of Preferred Equity. The Partnership shall 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 the Partnership shall Company will not issue any Disqualified Stock and shall will not permit any of its Restricted Subsidiaries to issue any shares of preferred equity. The preceding paragraph will not prohibit the incurrence of any of the following items of Indebtedness (collectively, "Permitted Debt"):
(1) the incurrence by the Company (and the guarantee by its Subsidiaries) of:
(a) Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1)(a) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Subsidiaries thereunder) not to exceed $800.0 million, less the aggregate amount of all Net Proceeds of Asset Sales, Casualty Events or Condemnation Events applied by the Company or any of its Subsidiaries since the Closing Date to repay any term Indebtedness under any such Credit Facility or to repay, or cash collateralize letters of credit under, any revolving Indebtedness under any such Credit Facility and effect a corresponding commitment reduction thereunder; and
(b) Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount outstanding under this clause (1)(b) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Subsidiaries thereunder) not to exceed $100.0 million, less the aggregate amount of all Net Proceeds of Asset Sales, Casualty Events and Condemnation Events applied by the Company or any of its Subsidiaries since the Closing Date to repay any term Indebtedness under any such Credit Facility or to repay, or cash collateralize letters of credit under, any revolving Indebtedness under any such Credit Facility and effect a corresponding commitment reduction thereunder;
(2) the incurrence by the Issuers and the Guarantors of Indebtedness represented by the Notes, the Second Priority Notes and the Third Priority Notes to be issued on the Closing Date, the related Subsidiary guarantees and the other Obligations incurred under the Indentures on the Closing Date, and the Exchange Notes and the related Subsidiary guarantees to be issued pursuant to the Registration Rights Agreement;
(3) the incurrence by the Company or any of its Subsidiaries of Expansion Debt; provided, however, that, :
(a) any Expansion Debt incurred by the Issuers may incur Indebtedness Excluded Subsidiary is recourse only to the Expansion Assets financed with such Expansion Debt and to other Expansion Assets owned by the Excluded Subsidiary (including Acquired Debtany rights of the Excluded Subsidiary under Shared Facilities Arrangements);
(b) or issue Disqualified Stock, if the Fixed Charge Coverage Ratio for the Partnership’s 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 the Expansion Debt is incurred or such Disqualified Stock is issued would have been at least 2.0 to 11.0, determined on a pro forma Pro Forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness Expansion Debt had been incurred or the Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period. The first paragraph of this Section 4.09 shall not prohibit period and the incurrence proceeds therefrom had been applied as intended to be applied (but without giving effect to the completion of any construction projects unless actual completion has been achieved), at least 25% of the following items cost of Indebtedness (collectively, “Permitted Debt”):such Expansion Assets is financed with Equity Contributions or the proceeds of Perpetual Preferred Stock or Affiliate Subordinated Indebtedness;
(ac) if the Fixed Charge Coverage Ratio for the Company's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which the Expansion Debt is incurred would have been less than 2.0 to 1.0, determined on a Pro Forma basis as if the Expansion Debt had been incurred at the beginning of such period and the proceeds therefrom had been applied as intended to be applied (but without giving effect to the completion of any construction projects unless actual completion has been achieved),
(i) at least 40% of the cost of such Expansion Assets is financed with Equity Contributions or the proceeds of Perpetual Preferred Stock or Affiliate Subordinated Indebtedness, and
(ii) after giving effect to such incurrence, the amount of Expansion Debt incurred pursuant to this clause (3), together with the aggregate amount of all other Expansion Debt then outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Expansion Debt incurred pursuant to this clause (3), does not exceed $250.0 million;
(4) the incurrence by the Partnership and its Restricted Subsidiaries of (i) Indebtedness represented by the Notes, including any Notes issued as payment of interest on the Notes in accordance with the terms of the Notes, (ii) their respective obligations arising under the Collateral Documents to the extent such obligations would represent Indebtedness and (iii) dividends payable in kind in respect of the Preferred Interests;
(b) the incurrence by the Partnership Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance or replace replace, Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under the first paragraph of this Section 4.09 or clauses (a2), (b3), (4) and or (h10) of this paragraph;
(c5) the incurrence by the Partnership Company or any of its Restricted Subsidiaries Guarantor of intercompany Indebtedness between or among the Partnership Company and any Guarantor that is subordinated in right of its Restricted Subsidiaries as provided payment to all Secured Obligations pursuant to a customary subordination agreement delivered to the Collateral Agent (together with all other documents or instruments required to effect such subordination and any other documents reasonably requested by the Collateral Agent in Section 4.24 hereofconnection therewith), and is not secured other than by unperfected security interests; provided, however, that (i) such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Notes and (ii) (A) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Partnership Company or a Restricted Subsidiary thereof or Guarantor and (Bii) any sale or other transfer of any such Indebtedness to a Person that is not either the Partnership Company or a Restricted Subsidiary thereof shall Guarantor will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Partnership Company or such Restricted SubsidiaryGuarantor, as the case may be, that was not permitted by this clause (c5); and provided, further, that any such intercompany Indebtedness must be included in the Collateral;
(d6) the incurrence by the Partnership Company or any of its Restricted Subsidiaries of Hedging Obligations, in connection with Permitted Debt or otherwise, in the ordinary course of business and not for speculative purposes; provided, that (a) such Hedging Obligations have tenors that are incurred for expire on or prior to the purpose maturity date (or other expiration) of fixing the underlying obligation being hedged, and (b) any such Hedging Obligations hedging or hedging managing interest rate risk with respect to any floating rate Indebtedness (i) First Priority Lien Debt have tenors that is permitted by expire on or prior to the terms Stated Maturity of this Indenture the Notes, (ii) Second Priority Lien Debt have tenors that expire on or prior to be outstandingthe Stated Maturity of the Second Priority Notes, or (iii) Third Priority Lien Debt have tenors that expire on or prior to the Stated Maturity of the Third Priority Notes;
(e) the Guarantee by the Partnership or any of its Restricted Subsidiaries of Indebtedness permitted to be incurred by another provision of this Section 4.09;
(f7) the incurrence by the Partnership Company or any of its Restricted Subsidiaries of Indebtedness in respect of performanceworkers' compensation claims, self-insurance obligations, bankers' acceptances, and performance and surety or appeal bonds in the ordinary course of business;
(g8) the incurrence by the Company or any of its 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;
(9) the accrual incurrence by the Company of interest, the accretion or amortization of original issue discount, the payment of interest on any (a) Affiliate Subordinated Indebtedness in an aggregate principal amount not to exceed $250.0 million at any one time outstanding and (b) Working Capital Facility Indebtedness in an aggregate principal amount not to exceed $750.0 million at any one time outstanding;
(10) the form incurrence by the Company of additional Indebtedness with Third Parry Subordinated Indebtedness; provided, that:
(a) the same terms and the payment of dividends on Disqualified Stock, including the Preferred Interests, in the form of additional shares net proceeds of the same class Third Party Subordinated Indebtedness are applied:
(i) to acquire all or substantially all of Disqualified Stock orthe assets of, or any Equity Interests in, a business that constitutes a Permitted Business; provided, that in the case of the Preferred an acquisition of Equity Interests, the business is or becomes a guaranteed payment by the Partnership or the allocation of gross or net income Subsidiary of the Partnership in accordance Company and a Guarantor concurrently with the terms of the Partnership Agreement, will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for the purposes of this covenant; provided, however, in each such case, that the amount thereof is included in Fixed Charges of the Partnership or the applicable Restricted Subsidiary as accruedacquisition;
(hii) so long to make a capital expenditure;
(iii) to acquire other assets that are not classified as at the time of incurrence no Default current assets under GAAP and that are used or Event of Default has occurred and is continuing, the incurrence by the Partnership of FF&E Financinguseful in a Permitted Business; provided, however, that or
(iiv) the principal amount of such Indebtedness does not exceed the cost (including sales and excise taxes, installation and delivery charges and other direct costs of, and other direct expenses paid or charged in connection with, such purchase) any combination of the FF&E purchased or leased with the proceeds thereof and (ii) the aggregate principal amount of such Indebtedness, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause, does not exceed $5 million outstanding at any timeforegoing; and
(ib) the issuance Fixed Charge Coverage Ratio for the Company's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which the Third Party Subordinated Indebtedness is incurred would have been at least 2.0 to 1.0, determined on a Pro Forma basis as if the Third Party Subordinated Indebtedness had been incurred at the beginning of such period and the Partnership Interests, including proceeds therefrom had been applied as intended to be applied (but without giving effect to the Preferred Interests, in accordance with the Partnership Agreementcompletion of any construction projects unless actual completion has been achieved). The Partnership Company will not incur incur, and will not permit any Subsidiary to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Partnership Company or such Subsidiary unless such Indebtedness is also contractually subordinated in right of payment to the Notes Secured Obligations on substantially identical termsterms or on terms that are more favorable to the holders of the Secured Obligations; provided, however, that no Indebtedness of the Partnership shall will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Partnership Company or any of its Subsidiaries solely by virtue of being unsecured. For purposes unsecured or by virtue of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (a) through (i) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.09, the Partnership will be permitted to classify such item of Indebtedness as of any date of determination in any manner that complies with this Section 4.09being secured on a junior basis.
Appears in 1 contract
Samples: First Priority Indenture (Delta Energy Center, LLC)
Incurrence of Indebtedness and Issuance of Preferred Equity. The Partnership shall (a) Premier 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, 57 contingently or otherwise, with respect to (collectively, “incur”"INCUR") any Indebtedness (including Acquired Debt), and the Partnership shall Premier will not issue any Disqualified Stock and shall will not permit any of its Restricted Subsidiaries to issue any shares of preferred equity; providedPROVIDED, howeverHOWEVER, that, the Issuers that Premier may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, if if:
(1) the Hard Rock Hotel & Casino Biloxi is Operating; and
(2) the Fixed Charge Coverage Ratio for the Partnership’s Premier's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 2.0 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period. .
(b) The first paragraph provisions of this Section 4.09 shall 4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”"PERMITTED DEBT"):
(a1) the incurrence by the Partnership Premier and its Restricted Subsidiaries of (ia) Indebtedness represented by the Notes, including any Notes to be issued as payment of interest on the date of this Indenture and the Notes to be issued in accordance with exchange for the terms of Notes pursuant to the Notes, Registration Rights Agreement and (iib) their respective obligations arising under the Collateral Documents to the extent such obligations would represent Indebtedness and (iii) dividends payable in kind in respect of the Preferred InterestsIndebtedness;
(b2) the incurrence by the Partnership Premier or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance refinance, replace, defease or replace discharge Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under the first paragraph of this Section 4.09 4.09(a) hereof or clauses (a1), (b2) and (h) 8) of this paragraph;
(c3) the incurrence by Premier of:
(A) FF&E Financing; PROVIDED, HOWEVER, that the Partnership principal amount of such Indebtedness does not exceed the cost (including sales and excise taxes, installation and delivery changes and other direct costs of, and other direct expenses paid or charged in connection with, such purchase) of the FF&E purchased or leased or to be purchased or leased with the proceeds thereof; and
(B) Permitted Refinancing Indebtedness incurred to refund, refinance, replace, defease or discharge any FF&E Financing or Permitted Refinancing Indebtedness, in each case, incurred pursuant to this clause (3); PROVIDED, HOWEVER, that the aggregate principal amount of FF&E Financing and Permitted Refinancing Indebtedness incurred pursuant to this clause (3) does not exceed $30.0 million at any one time outstanding;
(4) the incurrence by Premier or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Partnership Premier and any of its Restricted Subsidiaries as provided in Section 4.24 hereofSubsidiaries; providedPROVIDED, howeverHOWEVER, that that:
(iA) if Premier or any Guarantor is the obligor on such Indebtedness and the payee is not Premier or any 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 and Notes, in the case of Premier, or the Subsidiary Guarantee, in the case of a Guarantor; and
(iiB) (Ai) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Partnership Premier or a Restricted Subsidiary thereof or of Premier and (Bii) any sale or other transfer of any such Indebtedness to a Person that is not either the Partnership Premier or a Restricted Subsidiary thereof shall of Premier, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Partnership Premier or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (c4);
(d5) the incurrence by the Partnership Premier or any of its Restricted Subsidiaries of Hedging Obligations that are incurred for the purpose of fixing or hedging interest rate risk with respect to any floating rate Indebtedness that is permitted by the terms of this Indenture to be outstanding;
(e6) the Guarantee guarantee by the Partnership Premier or any of its Restricted Subsidiaries of Indebtedness of Premier or a Restricted Subsidiary of Premier that was permitted to be incurred by another provision of this Section 4.09; PROVIDED, HOWEVER, that if the Indebtedness being guaranteed is subordinated to or PARI PASSU with the Notes, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed;
(f7) the incurrence by the Partnership Premier or any of its Restricted Subsidiaries of Indebtedness in respect of performanceworkers' compensation claims, self-insurance obligations, bankers' acceptances, performance and surety bonds or appeal bonds standby letters of credit incurred in the ordinary course of businessbusiness in an aggregate principal amount not to exceed $4.0 million at any one time outstanding under this clause (7);
(g8) the incurrence by Premier or any of its Restricted Subsidiaries of Indebtedness, including all Permitted Refinancing Indebtedness incurred to refund, refinance, replace, defease or discharge such Indebtedness in an aggregate principal amount not to exceed $10.0 million;
(9) the incurrence of Indebtedness represented by the Rank Note; and
(10) the incurrence by Premier of Indebtedness represented by the Series 2004 Note.
(c) Premier will not incur, and will not permit any of its Restricted Subsidiaries to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of Premier or such Restricted Subsidiary unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Subsidiary Guarantee on substantially identical terms; PROVIDED, HOWEVER, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of Premier or any of its Restricted Subsidiaries solely by virtue of being unsecured.
(d) For purposes of determining compliance with this Section 4.09 in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (8) above, or is entitled to be incurred pursuant to Section 4.09(a), Premier will be permitted to classify such item of Indebtedness on the date of its incurrence in any manner that complies with this Section 4.09. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms and the payment of dividends on Disqualified Stock, including the Preferred Interests, Stock in the form of additional shares of the same class of Disqualified Stock or, in the case of the Preferred Interests, a guaranteed payment by the Partnership or the allocation of gross or net income of the Partnership in accordance with the terms of the Partnership Agreement, will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for the purposes of this covenant; provided, howeverPROVIDED, in each such case, that the amount thereof is included in the Fixed Charges of the Partnership or the applicable Restricted Subsidiary Premier as accrued;
(h) so long as at the time of incurrence no Default or Event of Default has occurred and is continuing, the incurrence by the Partnership of FF&E Financing; provided, however, that (i) the principal amount of such Indebtedness does not exceed the cost (including sales and excise taxes, installation and delivery charges and other direct costs of, and other direct expenses paid or charged in connection with, such purchase) of the FF&E purchased or leased with the proceeds thereof and (ii) the aggregate principal amount of such Indebtedness, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause, does not exceed $5 million outstanding at any time; and
(i) the issuance of the Partnership Interests, including the Preferred Interests, in accordance with the Partnership Agreement. The Partnership will not incur any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to Notwithstanding any other Indebtedness of the Partnership unless such Indebtedness is also contractually subordinated in right of payment to the Notes on substantially identical terms; provided, however, that no Indebtedness of the Partnership shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Partnership solely by virtue of being unsecured. For purposes of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (a) through (i) above, or is entitled to be incurred pursuant to the first paragraph provision of this Section 4.09, the Partnership will be permitted to classify such item maximum amount of Indebtedness as of that Premier or any date of determination in any manner that complies with this Section 4.09.Restricted Subsidiary may incur pursuant to this
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Equity. (a) The Partnership 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 continentally or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), Indebtedness but excluding any Permitted Indebtedness) and that the Partnership shall Company will not issue any Disqualified Stock and shall will not permit any of its Restricted Subsidiaries to issue any shares of preferred equitystock; provided, however, that, that the Issuers Company may incur Indebtedness (including Acquired DebtIndebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), if the Fixed Charge Coverage Ratio for the Partnership’s Company's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 2.0 to 11.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred incurred, or the Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period. The first paragraph of this Section 4.09 shall not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(a) the incurrence by the Partnership and its Restricted Subsidiaries of (i) Indebtedness represented by the Notes, including any Notes issued as payment of interest on the Notes in accordance with the terms of the Notes, (ii) their respective obligations arising under the Collateral Documents to the extent such obligations would represent Indebtedness and (iii) dividends payable in kind in respect of the Preferred Interests;.
(b) the incurrence The Company shall not , and shall not permit any Subsidiary Guarantor to, directly or indirectly, in any event incur any Indebtedness that by its terms (or by the Partnership or terms of any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance or replace Indebtedness (other than intercompany agreement governing such Indebtedness) that was permitted by this Indenture to be incurred under the first paragraph of this Section 4.09 or clauses (a), (b) and (h) of this paragraph;
(c) the incurrence by the Partnership or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Partnership and any of its Restricted Subsidiaries as provided in Section 4.24 hereof; provided, however, that (i) such Indebtedness must be expressly is subordinated to any other Indebtedness of the prior payment in full in cash of all Obligations with respect to the Notes and (ii) (A) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Partnership or a Restricted Subsidiary thereof or (B) any sale or other transfer of any such Indebtedness to a Person that is not either the Partnership or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Partnership Company or such Restricted SubsidiarySubsidiary Guarantor, as the case may be, that was not permitted unless such Indebtedness is also by this clause its terms (c);
(d) the incurrence by the Partnership or any of its Restricted Subsidiaries of Hedging Obligations that are incurred for the purpose of fixing or hedging interest rate risk with respect to any floating rate Indebtedness that is permitted by the terms of this Indenture any agreement governing such Indebtedness) made expressly subordinate to be outstanding;
(e) the Notes or the Subsidiary Guarantee by of such Subsidiary Guarantor, as the Partnership or any of its Restricted Subsidiaries of Indebtedness permitted case may be, to be incurred by another provision of this Section 4.09;
(f) the incurrence by the Partnership or any of its Restricted Subsidiaries of Indebtedness in respect of performance, surety or appeal bonds same extent and in the ordinary course of business;
(g) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms and the payment of dividends on Disqualified Stock, including the Preferred Interests, in the form of additional shares of the same class of Disqualified Stock or, in the case of the Preferred Interests, a guaranteed payment by the Partnership or the allocation of gross or net income of the Partnership in accordance with the terms of the Partnership Agreement, will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for the purposes of this covenant; provided, however, in each such case, that the amount thereof is included in Fixed Charges of the Partnership or the applicable Restricted Subsidiary manner as accrued;
(h) so long as at the time of incurrence no Default or Event of Default has occurred and is continuing, the incurrence by the Partnership of FF&E Financing; provided, however, that (i) the principal amount of such Indebtedness does not exceed the cost (including sales and excise taxes, installation and delivery charges and other direct costs of, and other direct expenses paid or charged in connection with, such purchase) of the FF&E purchased or leased with the proceeds thereof and (ii) the aggregate principal amount of such Indebtedness, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred is subordinated pursuant to this clause, does not exceed $5 million outstanding at any time; and
(i) subordination provisions that are most favorable to the issuance holders of the Partnership Interests, including the Preferred Interests, in accordance with the Partnership Agreement. The Partnership will not incur any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Partnership unless Company or such Indebtedness is also contractually subordinated in right of payment to Subsidiary Guarantor, as the Notes on substantially identical terms; provided, however, that no Indebtedness of the Partnership shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Partnership solely by virtue of being unsecured. For purposes of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (a) through (i) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.09, the Partnership will be permitted to classify such item of Indebtedness as of any date of determination in any manner that complies with this Section 4.09case may be.
Appears in 1 contract
Samples: Indenture (Parker Drilling Co /De/)
Incurrence of Indebtedness and Issuance of Preferred Equity. The Partnership shall 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 the Partnership shall Company will not issue any Disqualified Stock and shall will not permit any of its Restricted Subsidiaries to issue any shares of preferred equity. The preceding paragraph will not prohibit the incurrence of any of the following items of Indebtedness (collectively, "Permitted Debt"):
(1) the incurrence by the Company (and the guarantee by its Subsidiaries) of:
(a) Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1)(a) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Subsidiaries thereunder) not to exceed $800.0 million, less the aggregate amount of all Net Proceeds of Asset Sales, Casualty Events or Condemnation Events applied by the Company or any of its Subsidiaries since the Closing Date to repay any term Indebtedness under any such Credit Facility or to repay, or cash collateralize letters of credit under, any revolving Indebtedness under any such Credit Facility and effect a corresponding commitment reduction thereunder; and
(b) Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount outstanding under this clause (1)(b) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Subsidiaries thereunder) not to exceed $100.0 million, less the aggregate amount of all Net Proceeds of Asset Sales, Casualty Events and Condemnation Events applied by the Company or any of its Subsidiaries since the Closing Date to repay any term Indebtedness under any such Credit Facility or to repay, or cash collateralize letters of credit under, any revolving Indebtedness under any such Credit Facility and effect a corresponding commitment reduction thereunder;
(2) the incurrence by the Issuers and the Guarantors of Indebtedness represented by the Notes, the Second Priority Notes and the Third Priority Notes to be issued on the Closing Date, the related Subsidiary guarantees and the other Obligations incurred under the Indentures on the Closing Date, and the Exchange Notes and the related Subsidiary guarantees to be issued pursuant to the Registration Rights Agreement;
(3) the incurrence by the Company or any of its Subsidiaries of Expansion Debt; provided, however, that, :
(a) any Expansion Debt incurred by the Issuers may incur Indebtedness Excluded Subsidiary is recourse only to the Expansion Assets financed with such Expansion Debt and to other Expansion Assets owned by the Excluded Subsidiary (including Acquired Debtany rights of the Excluded Subsidiary under Shared Facilities Arrangements);
(b) or issue Disqualified Stock, if the Fixed Charge Coverage Ratio for the Partnership’s 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 the Expansion Debt is incurred or such Disqualified Stock is issued would have been at least 2.0 to 11.0, determined on a pro forma Pro Forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness Expansion Debt had been incurred or the Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period. The first paragraph of this Section 4.09 shall not prohibit period and the incurrence proceeds therefrom had been applied as intended to be applied (but without giving effect to the completion of any construction projects unless actual completion has been achieved), at least 25% of the following items cost of Indebtedness (collectively, “Permitted Debt”):such Expansion Assets is financed with Equity Contributions or the proceeds of Perpetual Preferred Stock or Affiliate Subordinated Indebtedness;
(ac) if the Fixed Charge Coverage Ratio for the Company's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which the Expansion Debt is incurred would have been less than 2.0 to 1.0, determined on a Pro Forma basis as if the Expansion Debt had been incurred at the beginning of such period and the proceeds therefrom had been applied as intended to be applied (but without giving effect to the completion of any construction projects unless actual completion has been achieved),
(i) at least 40% of the cost of such Expansion Assets is financed with Equity Contributions or the proceeds of Perpetual Preferred Stock or Affiliate Subordinated Indebtedness, and
(ii) after giving effect to such incurrence, the amount of Expansion Debt incurred pursuant to this clause (3), together with the aggregate amount of all other Expansion Debt then outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Expansion Debt incurred pursuant to this clause (3), does not exceed $250.0 million;
(4) the incurrence by the Partnership and its Restricted Subsidiaries of (i) Indebtedness represented by the Notes, including any Notes issued as payment of interest on the Notes in accordance with the terms of the Notes, (ii) their respective obligations arising under the Collateral Documents to the extent such obligations would represent Indebtedness and (iii) dividends payable in kind in respect of the Preferred Interests;
(b) the incurrence by the Partnership Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance or replace replace, Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under the first paragraph of this Section 4.09 or clauses (a2), (b3), (4) and or (h10) of this paragraph;
(c5) the incurrence by the Partnership Company or any of its Restricted Subsidiaries Guarantor of intercompany Indebtedness between or among the Partnership Company and any Guarantor that is subordinated in right of its Restricted Subsidiaries as provided payment to all Secured Obligations pursuant to a customary subordination agreement delivered to the Collateral Agent (together with all other documents or instruments required to effect such subordination and any other documents reasonably requested by the Collateral Agent in Section 4.24 hereofconnection therewith), and is not secured other than by unperfected security interests; provided, however, that (i) such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Notes and (ii) (A) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Partnership Company or a Restricted Subsidiary thereof or Guarantor and (Bii) any sale or other transfer of any such Indebtedness to a Person that is not either the Partnership Company or a Restricted Subsidiary thereof shall Guarantor will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Partnership Company or such Restricted SubsidiaryGuarantor, as the case may be, that was not permitted by this clause (c5); and provided, further, that any such intercompany Indebtedness must be included in the Collateral;
(d6) the incurrence by the Partnership Company or any of its Restricted Subsidiaries of Hedging Obligations, in connection with Permitted Debt or otherwise, in the ordinary course of business and not for speculative purposes; provided, that (a) such Hedging Obligations have tenors that are incurred for expire on or prior to the purpose maturity date (or other expiration) of fixing the underlying obligation being hedged, and (b) any such Hedging Obligations hedging or hedging managing interest rate risk with respect to any floating rate Indebtedness (i) First Priority Lien Debt have tenors that is permitted by expire on or prior to the terms Stated Maturity of this Indenture the Notes, (ii) Second Priority Lien Debt have tenors that expire on or prior to be outstandingthe Stated Maturity of the Second Priority Notes, or (iii) Third Priority Lien Debt have tenors that expire on or prior to the Stated Maturity of the Third Priority Notes;
(e) the Guarantee by the Partnership or any of its Restricted Subsidiaries of Indebtedness permitted to be incurred by another provision of this Section 4.09;
(f7) the incurrence by the Partnership Company or any of its Restricted Subsidiaries of Indebtedness in respect of performanceworkers' compensation claims, self-insurance obligations, bankers' acceptances, and performance and surety or appeal bonds in the ordinary course of business;
(g8) the incurrence by the Company or any of its 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;
(9) the accrual incurrence by the Company of interest, the accretion or amortization of original issue discount, the payment of interest on any (a) Affiliate Subordinated Indebtedness in an aggregate principal amount not to exceed $250.0 million at any one time outstanding and (b) Working Capital Facility Indebtedness in an aggregate principal amount not to exceed $750.0 million at any one time outstanding;
(10) the form incurrence by the Company of additional Indebtedness with Third Party Subordinated Indebtedness; provided, that:
(a) the same terms and the payment of dividends on Disqualified Stock, including the Preferred Interests, in the form of additional shares net proceeds of the same class Third Party Subordinated Indebtedness are applied:
(i) to acquire all or substantially all of Disqualified Stock orthe assets of, or any Equity Interests in, a business that constitutes a Permitted Business; provided, that in the case of the Preferred an acquisition of Equity Interests, the business is or becomes a guaranteed payment by the Partnership or the allocation of gross or net income Subsidiary of the Partnership in accordance Company and a Guarantor concurrently with the terms of the Partnership Agreement, will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for the purposes of this covenant; provided, however, in each such case, that the amount thereof is included in Fixed Charges of the Partnership or the applicable Restricted Subsidiary as accruedacquisition;
(hii) so long to make a capital expenditure;
(iii) to acquire other assets that are not classified as at the time of incurrence no Default current assets under GAAP and that are used or Event of Default has occurred and is continuing, the incurrence by the Partnership of FF&E Financinguseful in a Permitted Business; provided, however, that or
(iiv) the principal amount of such Indebtedness does not exceed the cost (including sales and excise taxes, installation and delivery charges and other direct costs of, and other direct expenses paid or charged in connection with, such purchase) any combination of the FF&E purchased or leased with the proceeds thereof and (ii) the aggregate principal amount of such Indebtedness, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause, does not exceed $5 million outstanding at any timeforegoing; and
(ib) the issuance Fixed Charge Coverage Ratio for the Company's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which the Third Party Subordinated Indebtedness is incurred would have been at least 2.0 to 1.0, determined on a Pro Forma basis as if the Third Party Subordinated Indebtedness had been incurred at the beginning of such period and the Partnership Interests, including proceeds therefrom had been applied as intended to be applied (but without giving effect to the Preferred Interests, in accordance with the Partnership Agreementcompletion of any construction projects unless actual completion has been achieved). The Partnership Company will not incur incur, and will not permit any Subsidiary to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Partnership Company or such Subsidiary unless such Indebtedness is also contractually subordinated in right of payment to the Notes Secured Obligations on substantially identical termsterms or on terms that are more favorable to the holders of the Secured Obligations; provided, however, that no Indebtedness of the Partnership shall will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Partnership Company or any of its Subsidiaries solely by virtue of being unsecured. For purposes unsecured or by virtue of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (a) through (i) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.09, the Partnership will be permitted to classify such item of Indebtedness as of any date of determination in any manner that complies with this Section 4.09being secured on a junior basis.
Appears in 1 contract
Samples: First Priority Secured Floating Rate Notes Indenture (Calpine Corp)
Incurrence of Indebtedness and Issuance of Preferred Equity. The Partnership shall (a) Parent and the Company will not, and shall will not permit any of its Parent’s 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 Parent and the Partnership shall Company will not issue any Disqualified Stock and shall will not permit the Company or any of its Parent’s Restricted Subsidiaries to issue any Disqualified Stock or any shares of preferred equity; provided, however, thatthat Parent, the Issuers Company and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue Disqualified StockStock and the Company and any Restricted Subsidiary may issue preferred equity, if if, on the date of such incurrence or issuance, the Fixed Charge Coverage Ratio for the PartnershipParent’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such preferred equity is issued issued, as the case may be, would have been at least 2.0 2.00 to 11.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the preferred equity had been issued, as the case may be, at the beginning of such four-quarter period. ; provided, further, that the amount of Indebtedness (including Acquired Debt) that may be incurred pursuant to the foregoing Restricted Subsidiaries that are not Subsidiary Guarantors of the Notes shall not exceed $50.0 million at any one time outstanding.
(b) The first paragraph provisions of this Section 4.09 shall 4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(a1) the incurrence by Parent, the Partnership Company or any Subsidiary Guarantor of Indebtedness and its letters of credit and bankers’ acceptances thereunder under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Parent, the Company and such Subsidiary Guarantor thereunder) not to exceed $1,650.0 million less the aggregate amount of all Net Proceeds of Asset Sales applied by Parent, the Company or any of Parent’s 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;
(2) the incurrence by Parent, the Company and Parent’s Restricted Subsidiaries of (i) Indebtedness represented by (a) the Notes, including any Notes issued as payment of interest on the Issue Date, the Note Guarantees and the related Exchange Notes and Exchange Guarantees issued in accordance with a registered exchange offer pursuant to the terms of the NotesRegistration Rights Agreement, (iib) their respective obligations arising under any Indebtedness (other than Indebtedness described in clause (1)) and (c) issuance of preferred equity outstanding on the Collateral Documents Issue Date, reduced to the extent such obligations would represent Indebtedness and (iii) dividends payable in kind in respect of the Preferred Interestsamounts shall have been repaid or retired;
(b3) the incurrence by Parent, the Partnership Company or any of its Parent’s Restricted Subsidiaries of Indebtedness represented by mortgage financings or purchase money obligations (but not Capital Lease Obligations), in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, development, construction, installation or improvement of property (real or personal), plant or equipment used in the ordinary course of business of Parent, the Company or any of Parent’s Restricted Subsidiaries and any 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 clause (3) in an aggregate principal amount which, when taken together with all other Indebtedness of Parent, the Company and Parent’s Restricted Subsidiaries incurred pursuant to this clause (3) and clause (14) and outstanding on the date of such incurrence, does not exceed $350.0 million;
(4) the incurrence by Parent, the Company or any of Parent’s Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under the first paragraph Section 4.09(a) or clause (1), (2), (4), or (11) of this Section 4.09 or clauses (a4.09(b), (b) and (h) of this paragraph;
(c5) the incurrence by Parent, the Partnership Company or any of its Parent’s Restricted Subsidiaries of intercompany Indebtedness between or among Parent, the Partnership Company and any of its Parent’s Restricted Subsidiaries as provided in Section 4.24 hereofSubsidiaries; provided, however, that that:
(ia) if Parent, the Company or any Subsidiary Guarantor is the obligor on such Indebtedness must be and the payee is not Parent, the Company or a Subsidiary Guarantor, such Indebtedness is expressly subordinated in right of payment to the prior payment in full in cash of all Obligations then due with respect to the Notes and Notes, in the case of the Company, or the Note Guarantee, in the case of Parent or a Subsidiary Guarantor; and
(iib) (Ai) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Parent, the Partnership Company or a Restricted Subsidiary thereof or of Parent and (Bii) any sale or other transfer of any such Indebtedness to a Person that is not either Parent, the Partnership Company or a Restricted Subsidiary thereof of Parent, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by Parent, the Partnership Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (c5);
(d6) the issuance by the Company or any of Parent’s Restricted Subsidiaries to Parent or the Company or to another Restricted Subsidiary of Parent of shares of preferred equity; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred equity being held by a Person other than Parent, the Company or a Restricted Subsidiary of Parent, and
(b) any sale or other transfer of any such preferred equity to a Person that is not either Parent, the Company or a Restricted Subsidiary of Parent, shall be deemed, in each case, to constitute an issuance of such preferred equity or Disqualified Stock by the Company or such Restricted Subsidiary that was not permitted by this clause (6);
(7) the incurrence by Parent, the Partnership Company or any of its Parent’s Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business and not 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 outstandingspeculative purposes;
(e) 8) the Guarantee guarantee by Parent, the Partnership Company or any Restricted Subsidiary of its Restricted Subsidiaries Parent of Indebtedness of Parent, the Company or a Restricted Subsidiary of Parent that was permitted to be incurred by another provision of this Section 4.094.09 (including Section 4.09(a)); provided that (A) if the Indebtedness being guaranteed is subordinated in right of payment to the Notes or the Note Guarantees, as applicable, then the guarantee thereof shall be subordinated in right of payment to the Notes or the Note Guarantee, as applicable, to the same extent as the Indebtedness so guaranteed and (B) if the Indebtedness being guaranteed is pari passu in right of payment to the Notes or the Note Guarantee, then the guarantee thereof shall be pari passu in right of payment to the Notes or the Note Guarantee, as applicable, to the same extent as the Indebtedness so guaranteed, provided, further, that any Restricted Subsidiary of Parent that guarantees other Indebtedness pursuant to this clause (8) shall concurrently guarantee, or already be a Subsidiary Guarantor with respect to, the Notes pursuant to Section 4.19;
(f9) the incurrence by Parent, the Partnership Company or any of its Parent’s Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, payment obligations in connection with health or other types of social security benefits, unemployment or other insurance or self-insurance obligations, insurance premium finance agreements, reclamation, statutory obligations, bankers’ acceptances and performance, appeal or surety or appeal bonds in the ordinary course of business;
(g10) the incurrence by Parent, the Company or any of Parent’s Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds so long as such Indebtedness is covered within five business days;
(11) Indebtedness, Disqualified Stock or preferred equity of any Person that is acquired by Parent, the Company or any of Parent’s Restricted Subsidiaries or merged into or consolidated with, or transfers substantially all of its assets to, a Restricted Subsidiary in of Parent accordance with the terms of this Indenture; provided, however, that such Indebtedness, Disqualified Stock or preferred equity is not incurred or issued in contemplation of such acquisition or merger or to provide all or a portion of the funds or credit support required to consummate such acquisition or merger; provided further, that the aggregate principal amount of any such Indebtedness, Disqualified Stock or preferred equity incurred or issued pursuant to this clause (11) since the Issue Date, including all Permitted Refinancing Indebtedness incurred to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (11), shall not exceed $50.0 million in the aggregate;
(12) the incurrence of Indebtedness consisting of indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary 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;
(13) the incurrence of Indebtedness of the Company owing to the Captive Insurance Companies; provided, that the aggregate principal amount of any such Indebtedness incurred pursuant to this clause (13) shall not exceed $35.0 million at any one time outstanding; provided, further, that (i) any event that results in a Captive Insurance Company ceasing to be a Subsidiary of Parent or (ii) any sale or other transfer of any such Indebtedness to a Person that is not a Captive Insurance Company, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by Company that was not permitted by this clause (13);
(14) the incurrence by Parent, the Company or any of Parent’s Restricted Subsidiaries in the ordinary course of business of Capital Lease Obligations with respect to Motor Vehicles and any 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 clause (14) in an aggregate principal amount which, when taken together with all other Capital Lease Obligations of Parent, the Company and Parent’s Restricted Subsidiaries incurred pursuant to this clause (14) and clause (3) above and outstanding on the date of such incurrence, does not exceed $350.0 million;
(15) the incurrence of Indebtedness by a Receivables Subsidiary in a Qualified Receivables Transaction that is not recourse to Parent or any of Parent’s Restricted Subsidiary that is not a Receivables Subsidiary (except for Standard Securitization Undertakings), provided that Parent, the Company or the applicable Restricted Subsidiary applies the proceeds of such transaction in compliance with Section 4.10; and
(16) the incurrence by Parent, the Company or any of Parent’s Restricted Subsidiaries of additional Indebtedness or issuance of Disqualified Stock or preferred equity in an aggregate principal amount at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (16), not to exceed $80.0 million.
(c) Parent and the Company will not incur, and will not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of Parent, the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of Parent, the Company or any Subsidiary Guarantor 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, in the event that an item of proposed Indebtedness, Disqualified Stock or preferred equity meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (16) of Section 4.09(b), or is entitled to be incurred pursuant to Section 4.09(a), the Company will be permitted to classify such item of Indebtedness, Disqualified Stock or preferred equity on the date of its incurrence and will only be required to include the amount and type of such Indebtedness, Disqualified Stock or preferred equity in one of clauses (1) through (16) of Section 4.09(b) or as having been incurred pursuant to Section 4.09(a), although the Company may divide and classify an item of Indebtedness, Disqualified Stock or preferred equity in one or more of the categories of Permitted Debt described in such clauses or as having been incurred pursuant to Section 4.09(a) and may later reclassify all or a portion of such item of Indebtedness, Disqualified Stock or preferred equity, in any manner that complies with this Section 4.09. Indebtedness under Credit Facilities outstanding on the Issue Date and the Indebtedness represented by the Notes and the related Note Guarantees will be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interestinterest or dividends, the accretion of accreted value or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms terms, the reclassification of preferred equity as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Stock, including the Preferred Interests, Stock or preferred equity in the form of additional shares of the same class of Disqualified Stock or, in the case of the Preferred Interests, a guaranteed payment by the Partnership or the allocation of gross or net income of the Partnership in accordance with the terms of the Partnership Agreement, preferred equity will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock or preferred equity for the purposes of this covenantSection 4.09; provided, however, in each such casecase (other than preferred stock that is not Disqualified Stock), that the amount thereof of any such accrual, accretion or amortization or payment (without duplication) is included in Fixed Charges of Parent, the Partnership or the applicable Company and Parent’s Restricted Subsidiary Subsidiaries as accrued;
(h) so long as at the time of incurrence no Default , accreted or Event of Default has occurred and is continuing, the incurrence by the Partnership of FF&E Financing; provided, however, that (i) the principal amount of such Indebtedness does not exceed the cost (including sales and excise taxes, installation and delivery charges and other direct costs of, and other direct expenses paid amortized or charged in connection with, such purchase) of the FF&E purchased or leased with the proceeds thereof and (ii) the aggregate principal amount of such Indebtedness, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause, does not exceed $5 million outstanding at any time; and
(i) the issuance of the Partnership Interests, including the Preferred Interests, in accordance with the Partnership Agreementpaid. The Partnership will not incur any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to Notwithstanding any other Indebtedness of the Partnership unless such Indebtedness is also contractually subordinated in right of payment to the Notes on substantially identical terms; provided, however, that no Indebtedness of the Partnership shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Partnership solely by virtue of being unsecured. For purposes of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (a) through (i) above, or is entitled to be incurred pursuant to the first paragraph provision of this Section 4.09, the Partnership will be permitted to classify such item maximum amount of Indebtedness as of that Parent, the Company or any date of determination in any manner that complies with Restricted Subsidiary may incur pursuant to this Section 4.094.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.
Appears in 1 contract
Samples: Indenture (Swift Transportation Co)
Incurrence of Indebtedness and Issuance of Preferred Equity. 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 the Partnership shall not issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries to issue any shares of preferred equity; provided, however, that, the Issuers may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, if the Fixed Charge Coverage Ratio for the Partnership’s 's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 2.0 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the preferred equity or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period. The first paragraph of this Section 4.09 shall not prohibit the incurrence of any of the following items of Indebtedness so long as no Default or Event of Default has occurred and is continuing (collectively, “"Permitted Debt”"):
(a) the incurrence by the Partnership and its Restricted Subsidiaries of (i) Indebtedness represented by the Notes, including any Notes to be issued as payment of interest on the date of this Indenture and the Exchange Notes in accordance with to be issued pursuant to the terms of the Notes, Registration Rights Agreement and (ii) their respective obligations arising under the Collateral Documents to the extent such obligations would represent Indebtedness and (iii) dividends payable in kind in respect of the Preferred InterestsIndebtedness;
(b) the incurrence by the Partnership or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under the first paragraph of this Section 4.09 or clauses (a), (b) and (h) of this paragraph;
(c) the incurrence by the Partnership or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Partnership and any of its Restricted Subsidiaries as provided in Section 4.24 4.22 hereof; provided, however, that (i) such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Notes and (ii) (A) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Partnership or a Restricted Subsidiary thereof thereof; or (B) any sale or other transfer of any such Indebtedness to a Person that is not either the Partnership or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Partnership or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (c);
(d) the incurrence by the Partnership or any of its Restricted Subsidiaries of Hedging Obligations that are incurred for the purpose of fixing or hedging interest rate risk with respect to any floating rate Indebtedness that is permitted by the terms of this Indenture to be outstanding;
(e) the Guarantee by the Partnership or any of its Restricted Subsidiaries of Indebtedness permitted to be incurred by another provision of this Section 4.09;
(f) the incurrence by the Partnership or any of its Restricted Subsidiaries of Indebtedness in respect of performance, surety or appeal bonds in the ordinary course of business;
(g) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms and the payment of dividends on Disqualified Stock, including the Preferred Interests, Stock in the form of additional shares of the same class of Disqualified Stock or, in the case of the Preferred Interests, a guaranteed payment by the Partnership or the allocation of gross or net income of the Partnership in accordance with the terms of the Partnership Agreement, will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for the purposes of this covenant; provided, however, in each such case, that the amount thereof is included in Fixed Charges of the Partnership or the applicable Restricted Subsidiary Subsidiary, as the case may be, as accrued;
(h) so long as at the time of incurrence no Default or Event of Default has occurred and is continuing, the incurrence by the Partnership of FF&E Financing; provided, however, that (i) the principal amount of such Indebtedness does not exceed the cost (including sales and excise taxes, installation and delivery charges and other direct costs of, and other direct expenses paid or charged in connection with, such purchase) of the FF&E purchased or leased with the proceeds thereof thereof, (ii) no Indebtedness incurred under the Notes is utilized for the purchase or lease of such FF&E and (iiiii) the aggregate principal amount of such Indebtedness, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause, does not exceed $5 6.0 million outstanding at any time; and;
(i) the issuance Guarantee by the Partnership of Indebtedness incurred by any minority or woman owned business enterprise that provides goods or services to the Partnership; provided, however, that (i) such Indebtedness is directly related to the construction, development or operation of the Shreveport Resort and (ii) the total amount of Guarantees for which the Partnership Interestshas become and may become obligated pursuant to this clause may not exceed an aggregate of $200,000;
(j) Indebtedness existing on the date the Notes are issued, including Indebtedness represented by the Preferred InterestsExisting Notes; and
(k) the incurrence by any of the Partnership's Unrestricted Subsidiaries of Non-Recourse Debt; provided, in accordance with however, that if any such Indebtedness ceases to be Non-Recourse Debt of an Unrestricted Subsidiary, such event shall be deemed to constitute an incurrence of Indebtedness by the Partnership Agreement. applicable Restricted Subsidiary that was not permitted by this clause (k); The Partnership will not incur any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Partnership unless such Indebtedness is also contractually subordinated in right of payment to the Notes on substantially identical terms; provided, however, that no Indebtedness of the Partnership shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Partnership solely by virtue of being unsecured. For purposes of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (a) through (ik) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.09, the Partnership will be permitted to classify such item of Indebtedness as of any on the date of determination its incurrence in any manner that complies with this Section 4.09.
Appears in 1 contract
Samples: Indenture (Shreveport Capital Corp)
Incurrence of Indebtedness and Issuance of Preferred Equity. The Partnership shall (a) Holdings will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), and the Partnership shall Holdings will not issue any Disqualified Stock and shall will not permit any of its Restricted Subsidiaries to issue any shares of preferred equity; provided, however, that, the Issuers that Holdings may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Company or any other Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue preferred equity, if the Fixed Charge Coverage Ratio for the Partnership’s Holdings' most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such preferred equity is issued issued, as the case may be, would have been at least 2.0 to 11.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the preferred equity had been issued, as the case may be, at the beginning of such four-quarter period. .
(b) The first paragraph provisions of this Section 4.09 shall 4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “"Permitted Debt”"):
(a1) the incurrence by Holdings or any of its Restricted Subsidiaries of additional Indebtedness and letters of credit and bankers' acceptances thereunder under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the Partnership maximum potential liability of Holdings and its Restricted Subsidiaries thereunder) not to exceed $920.0 million;
(2) the incurrence by Holdings and its Restricted Subsidiaries of Indebtedness to the extent outstanding on the date of this Indenture;
(i3) the incurrence by Holdings and the Guarantors (including any future Guarantor) of Indebtedness represented by the Notes, including any Notes notes and the related Note Guarantees to be issued as payment of interest on the Notes in accordance with date of this Indenture and the terms of exchange notes and the Notes, (ii) their respective obligations arising under the Collateral Documents related Note Guarantees to be issued pursuant to the extent such obligations would represent Indebtedness and (iii) dividends payable in kind in respect of the Preferred InterestsRegistration Rights Agreement;
(b4) the incurrence by Holdings or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings, industrial revenue bonds, purchase money obligations or other Indebtedness or preferred stock, or synthetic lease obligations, in each case, incurred for the Partnership purpose of financing all or any part of the purchase price or cost of design, development, construction, installation or improvement of property (real or personal and including Capital Stock), plant or equipment used in the business of Holdings or any of its Restricted Subsidiaries (in each case, whether through the direct purchase of such assets or the Equity Interests of any Person owning such assets), in an aggregate principal amount not to exceed at any time outstanding the greater of (x) $75.0 million and (y) 5.0% of Total Assets;
(5) the incurrence by Holdings 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, replace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under the first paragraph Section 4.09(a) hereof or clauses (2), (3), (4), (5), (12) or (16) of this Section 4.09 or clauses (a4.09(b), (b) and (h) of this paragraph;
(c6) the incurrence by the Partnership Holdings or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Partnership Holdings and any of its Restricted Subsidiaries as provided in Section 4.24 hereofSubsidiaries; provided, however, that that:
(iA) if Holdings or any Guarantor is the obligor on such Indebtedness and the payee is not Holdings 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 and notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and
(iiB) (Ai) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Partnership Holdings or a Restricted Subsidiary thereof or of Holdings, and (Bii) any sale or other transfer of any such Indebtedness to a Person that is not either the Partnership Holdings or a Restricted Subsidiary thereof shall of Holdings, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Partnership Holdings or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (c6);
(d7) the issuance by any of Holdings' Restricted Subsidiaries to Holdings or to any of its Restricted Subsidiaries of shares of preferred equity; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred equity being held by a Person other than Holdings or a Restricted Subsidiary of Holdings, and
(B) any sale or other transfer of any such preferred equity to a Person that is not either Holdings or a Restricted Subsidiary of Holdings, will be deemed, in each case, to constitute an issuance of such preferred equity by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Partnership Holdings or any of its Restricted Subsidiaries of Hedging Obligations that are incurred other than 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 outstandingspeculative purposes;
(e9) the Guarantee guarantee by the Partnership Holdings or any of its Restricted Subsidiaries of Indebtedness of Holdings or a Restricted Subsidiary of Holdings that was permitted to be incurred by another provision of this Section 4.094.09 (including Section 4.09(a) hereof); 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;
(f10) the incurrence by the Partnership Holdings or any of its Restricted Subsidiaries of Indebtedness in respect of workers' compensation claims, payment obligations in connection with health or other types of social security benefits, unemployment or other insurance or self-insurance obligations, reclamation, statutory obligations, bankers' acceptances, performance, surety or appeal similar bonds and letters of credit or completion or performance guarantees (including without limitation, performance guarantees pursuant to coal supply agreements or equipment leases), or other similar obligations in the ordinary course of businessbusiness or consistent with past practice;
(g11) the accrual incurrence by Holdings or any of interestits Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, the accretion draft or amortization of original issue discountsimilar instrument inadvertently drawn against insufficient funds;
(12) Indebtedness, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms and the payment of dividends on Disqualified Stock, including the Preferred Interests, in the form of additional shares of the same class of Disqualified Stock or, in the case or preferred equity of the Preferred Interests, Persons that are acquired by Holdings or any of its Restricted Subsidiaries or merged into a guaranteed payment by the Partnership or the allocation of gross or net income of the Partnership Restricted Subsidiary in accordance with the terms of the Partnership Agreement, will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for the purposes of this covenant; provided, however, in each such case, that the amount thereof is included in Fixed Charges of the Partnership or the applicable Restricted Subsidiary as accrued;
(h) so long as at the time of incurrence no Default or Event of Default has occurred and is continuing, the incurrence by the Partnership of FF&E FinancingIndenture; provided, however, that such Indebtedness or Disqualified Stock is not incurred in contemplation of such acquisition or merger or to provide all or a portion of the funds or credit support required to consummate such acquisition or merger; provided further, however, that, for any such indebtedness outstanding under this clause (i12) in excess of $10.0 million on the principal amount date such Person is acquired by Holdings or a Restricted Subsidiary, after giving effect to such acquisition and the incurrence of such Indebtedness does either:
(A) Holdings would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first sentence of this Section 4.09; or
(B) the Fixed Charge Coverage Ratio would not exceed be less than immediately prior to such acquisition;
(13) Indebtedness incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is not recourse to Holdings or any Restricted Subsidiary of Holdings other than a Receivables Subsidiary (except for Standard Securitization Undertakings);
(14) the cost (including sales and excise taxesincurrence of Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, installation and delivery charges and other direct costs ofadjustment of purchase price, and other direct expenses paid earn outs, or charged similar obligations, in each case, incurred or assumed in connection with, such purchase) of the FF&E purchased or leased with the proceeds thereof and dis- position 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;
(ii15) the incurrence by Holdings or any of its Restricted Subsidiaries of additional Indebtedness or the issuance of Disqualified Stock or preferred equity in an aggregate principal amount of such (or accreted value, as applicable) or having an aggregate liquidation preference at any time outstanding not to exceed $100.0 million (it being understood that any Indebtedness, including all Permitted Refinancing Indebtedness incurred to refund, refinance Disqualified Stock or replace any Indebtedness preferred equity incurred pursuant to this clause, does not exceed $5 million outstanding at any time; and
clause (i15) the issuance of the Partnership Interests, including the Preferred Interests, in accordance with the Partnership Agreement. The Partnership will not incur any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment shall cease to any other Indebtedness of the Partnership unless such Indebtedness is also contractually subordinated in right of payment to the Notes on substantially identical terms; provided, however, that no Indebtedness of the Partnership shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Partnership solely by virtue of being unsecured. For incurred or outstanding for purposes of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (a) through (i) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.09, 4.09 from and after the Partnership will be permitted to classify date on which Holdings could have incurred such item of Indebtedness as of any date of determination in any manner that complies with or Disqualified Stock or preferred equity under Section 4.09(a) hereof without reliance upon this Section 4.09.clause (15)); and
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Equity. (a) The Partnership 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, otherwise with respect to (collectively, “"incur”) "), any Indebtedness (including Acquired Debt), and the Partnership Borrower shall not issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries to issue any shares of preferred equity.
(b) Section 5.06(a) shall not prohibit the incurrence of any of the following items (collectively, "Permitted Debt"):
(i) (A) the incurrence by the Borrower (and the guarantee by its Subsidiaries) of Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (i)(A) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Borrower and its Subsidiaries thereunder) not to exceed $800,000,000 less the aggregate amount of all Net Proceeds of Asset Sales, Casualty Events or Condemnation Events applied by the Borrower or any of its Subsidiaries since the Closing Date to repay any term Indebtedness under any such Credit Facilities or to repay, or cash collateralize letters of credit under, any revolving Indebtedness under any such Credit Facilities and effect a corresponding commitment reduction thereunder, and (B) the incurrence by the Borrower (and the guarantee by its Subsidiaries) of Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount outstanding under this clause (i)(B) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Borrower and its Subsidiaries thereunder) not to exceed $100,000,000 less the aggregate amount of all Net Proceeds of Asset Sales, Casualty Events and Condemnation Events applied by the Borrower or any of its Subsidiaries since the Closing Date to repay any term Indebtedness under any such Credit Facility or to repay, or cash collateralize letters of credit under, any revolving Indebtedness under any such Credit Facility and effect a corresponding commitment reduction thereunder;
(ii) the incurrence by the Borrower, CalGen Finance and the Guarantors of Indebtedness represented by the Notes, the related Note Guarantees and the other Note Obligations incurred on the Closing Date, and the exchange notes and the related Note Guarantees to be issued pursuant to the Registration Rights Agreement;
(iii) the incurrence by the Borrower or any of its Subsidiaries of Expansion Debt; provided, however, that, :
(A) any Expansion Debt incurred by the Issuers may incur Indebtedness Excluded Subsidiary is recourse only to the Expansion Assets financed with such Expansion Debt and to other Expansion Assets owned by the Excluded Subsidiary (including Acquired Debtany rights of the Excluded Subsidiary under Shared Facilities Arrangements);
(B) or issue Disqualified Stock, if the Fixed Charge Coverage Ratio for the Partnership’s 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 the Expansion Debt is incurred or such Disqualified Stock is issued would have been at least 2.0 to 11.0, determined on a pro forma Pro Forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness Expansion Debt had been incurred or the Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period. The first paragraph of this Section 4.09 shall not prohibit period and the incurrence proceeds therefrom had been applied as intended to be applied (but without giving effect to the completion of any construction projects unless actual completion has been achieved), at least 25% of the following items cost of Indebtedness (collectively, “Permitted Debt”):such Expansion Assets is financed with Equity Contributions or the proceeds of Perpetual Preferred Stock or Affiliate Subordinated Indebtedness;
(aC) if the Fixed Charge Coverage Ratio for the Borrower's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which the Expansion Debt is incurred would have been less than 2.0 to 1.0, determined on a Pro Forma basis as if the Expansion Debt had been incurred at the beginning of such period and the proceeds therefrom had been applied as intended to be applied (but without giving effect to the completion of any construction projects unless actual completion has been achieved);
(1) at least 40% of the cost of such Expansion Assets is financed with Equity Contributions or the proceeds of Perpetual Preferred Stock or Affiliate Subordinated Indebtedness; and
(2) after giving effect to such incurrence, the amount of Expansion Debt incurred pursuant to this clause (iii), together with the aggregate amount of all other Expansion Debt then outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Expansion Debt incurred pursuant to this clause (iii), does not exceed $250,000,000;
(iv) the incurrence by the Partnership and its Restricted Subsidiaries of (i) Indebtedness represented by the Notes, including any Notes issued as payment of interest on the Notes in accordance with the terms of the Notes, (ii) their respective obligations arising under the Collateral Documents to the extent such obligations would represent Indebtedness and (iii) dividends payable in kind in respect of the Preferred Interests;
(b) the incurrence by the Partnership Borrower or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance or replace replace, Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture Agreement to be incurred under the first paragraph clauses (ii), (iii), (iv) or (x) of this Section 4.09 or clauses (a5.06(b), (b) and (h) of this paragraph;
(cv) the incurrence by the Partnership Borrower or any of its Restricted Subsidiaries Guarantor of intercompany Indebtedness between or among the Partnership Borrower and any Guarantors that is subordinated in right of its Restricted Subsidiaries as provided in Section 4.24 hereofpayment to all Secured Obligations on the terms set forth on Exhibit A hereto and is not secured other than by unperfected security interests; provided, however, that (i) such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Notes and (ii) (A) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Partnership Borrower or a Restricted Subsidiary thereof or Guarantor and (B) any sale or other transfer of any such Indebtedness to a Person that is not either the Partnership Borrower or a Restricted Subsidiary thereof shall Guarantor will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Partnership Borrower or such Restricted SubsidiaryGuarantor, as the case may be, that was not permitted by this clause (cv);; and provided, farther, that any such intercompany Indebtedness must be included in the Collateral.
(dvi) the incurrence by the Partnership Borrower or any of its Restricted Subsidiaries of Hedging Obligations, in connection with Permitted Debt or otherwise, in the ordinary course of business and not for speculative purposes; provided, that (A) such Hedging Obligations will have tenors that are incurred for expire on or prior to the purpose maturity date (or other expiration) of fixing the underlying Obligation being hedged, and (B) any such Hedging Obligations hedging or hedging managing interest rate risk with respect to any floating rate Indebtedness a particular series of Notes or loans under this Agreement, the Second Priority Term Loan Agreement or the Revolving Loan Agreement will have tenors that is permitted by expire on or prior to the terms Stated Maturity of this Indenture to be outstandingthe applicable Notes or loans;
(e) the Guarantee by the Partnership or any of its Restricted Subsidiaries of Indebtedness permitted to be incurred by another provision of this Section 4.09;
(fvii) the incurrence by the Partnership Borrower or any of its Restricted Subsidiaries of Indebtedness in respect of performanceworkers' compensation claims, self-insurance obligations, bankers' acceptances, and performance and surety or appeal bonds in the ordinary course of business;
(gviii) the incurrence by the Borrower or any of its 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;
(ix) the incurrence by the Borrower of (a) Affiliate Subordinated Indebtedness in an aggregate principal amount not to exceed $250,000,000 at any one time outstanding and (b) Working Capital Facility Indebtedness in an aggregate principal amount not to exceed $750,000,000 at any one time outstanding; and
(x) the incurrence by the Borrower of Third Party Subordinated Indebtedness; provided, that:
(A) the Net Proceeds of the Third Party Subordinated Indebtedness are applied:
(1) to acquire all or substantially all of the assets of, or any Equity Interests in, a business that constitutes a Permitted Business, provided, that in the case of an acquisition of Equity Interests, the business is or becomes a Subsidiary of the Borrower and a Guarantor concurrently with such acquisition;
(2) to make a capital expenditure;
(3) to acquire other assets that are not classified as current assets under GAAP and that are used or useful in a Permitted Business; or
(4) any combination of the foregoing; and
(B) the Fixed Charge Coverage Ratio for the Borrower's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which the Third Party Subordinated Indebtedness is incurred would have been at least 2.0 to 1.0, determined on a Pro Forma basis as if the Third Party Subordinated Indebtedness had been incurred at the beginning of such period and the proceeds therefrom had been applied as intended to be applied (but without giving effect to the completion of any construction projects unless actual completion has been achieved).
(c) The Borrower shall not incur, and shall not permit any Subsidiary to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Borrower or such Subsidiary unless such Indebtedness is also contractually subordinated in right of payment to the First Priority Term Loans, the applicable First Priority Term Loan Guarantees and the other First Priority Term Loan Obligations on substantially identical terms or on terms that are more favorable to the Lenders hereunder; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Borrower or any of its Subsidiaries solely by virtue of being unsecured or by virtue of being secured on a junior basis.
(d) For purposes of determining compliance with this Section 5.06, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (i) through (x) of Section 5.06(b), the Borrower 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 5.06. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms terms, and the payment of dividends on Disqualified Stock, including the Preferred Interests, Stock in the form of additional shares of the same class of Disqualified Stock or, in the case of the Preferred Interests, a guaranteed payment by the Partnership or the allocation of gross or net income of the Partnership in accordance with the terms of the Partnership Agreement, will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for the purposes of this covenant; providedSection 5.06. Notwithstanding any other provision of this Section 5.06, however, in each such case, the maximum amount of Indebtedness that the amount thereof is included in Fixed Charges of the Partnership Borrower or the applicable Restricted any Subsidiary as accrued;
(h) so long as at the time of incurrence no Default or Event of Default has occurred and is continuing, the incurrence by the Partnership of FF&E Financing; provided, however, that (i) the principal amount of such Indebtedness does not exceed the cost (including sales and excise taxes, installation and delivery charges and other direct costs of, and other direct expenses paid or charged in connection with, such purchase) of the FF&E purchased or leased with the proceeds thereof and (ii) the aggregate principal amount of such Indebtedness, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred may incur pursuant to this clause, does Section 5.06 shall not exceed $5 million outstanding at any time; and
(i) the issuance of the Partnership Interests, including the Preferred Interests, in accordance with the Partnership Agreement. The Partnership will not incur any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Partnership unless such Indebtedness is also contractually subordinated in right of payment to the Notes on substantially identical terms; provided, however, that no Indebtedness of the Partnership shall be deemed to be contractually subordinated exceeded solely as a result of fluctuations in right of payment to any other Indebtedness of the Partnership solely by virtue of being unsecured. For purposes of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (a) through (i) above, exchange rates or is entitled to be incurred pursuant to the first paragraph of this Section 4.09, the Partnership will be permitted to classify such item of Indebtedness as of any date of determination in any manner that complies with this Section 4.09currency values.
Appears in 1 contract
Samples: Credit and Guarantee Agreement (Delta Energy Center, LLC)
Incurrence of Indebtedness and Issuance of Preferred Equity. (a) The Partnership 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, otherwise with respect to (collectively, “"incur”) "), any Indebtedness (including Acquired Debt), and the Partnership Borrower shall not issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries to issue any shares of preferred equity.
(b) Section 5.06(a) shall not prohibit the incurrence of any of the following items (collectively, "Permitted Debt"):
(i) (A) the incurrence by the Borrower (and the guarantee by its Subsidiaries) of Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (i)(A) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Borrower and its Subsidiaries thereunder) not to exceed $800,000,000 less the aggregate amount of all Net Proceeds of Asset Sales, Casualty Events or Condemnation Events applied by the Borrower or any of its Subsidiaries since the Closing Date to repay any term Indebtedness under any such Credit Facilities or to repay, or cash collateralize letters of credit under, any revolving Indebtedness under any such Credit Facilities and effect a corresponding commitment reduction thereunder, and (B) the incurrence by the Borrower (and the guarantee by its Subsidiaries) of Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount outstanding under this clause (i)(B) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Borrower and its Subsidiaries thereunder) not to exceed $100,000,000 less the aggregate amount of all Net Proceeds of Asset Sales, Casualty Events and Condemnation Events applied by the Borrower or any of its Subsidiaries since the Closing Date to repay any term Indebtedness under any such Credit Facility or to repay, or cash collateralize letters of credit under, any revolving Indebtedness under any such Credit Facility and effect a corresponding commitment reduction thereunder;
(ii) the incurrence by the Borrower, CalGen Finance and the Guarantors of Indebtedness represented by the Notes, the related Note Guarantees and the other Note Obligations incurred on the Closing Date, and the exchange notes and the related Note Guarantees to be issued pursuant to the Registration Rights Agreement;
(iii) the incurrence by the Borrower or any of its Subsidiaries of Expansion Debt; provided, however, that, :
(A) any Expansion Debt incurred by the Issuers may incur Indebtedness Excluded Subsidiary is recourse only to the Expansion Assets financed with such Expansion Debt and to other Expansion Assets owned by the Excluded Subsidiary (including Acquired Debtany rights of the Excluded Subsidiary under Shared Facilities Arrangements);
(B) or issue Disqualified Stock, if the Fixed Charge Coverage Ratio for the Partnership’s 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 the Expansion Debt is incurred or such Disqualified Stock is issued would have been at least 2.0 to 11.0, determined on a pro forma Pro Forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness Expansion Debt had been incurred or the Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period. The first paragraph of this Section 4.09 shall not prohibit period and the incurrence proceeds therefrom had been applied as intended to be applied (but without giving effect to the completion of any construction projects unless actual completion has been achieved), at least 25% of the following items cost of Indebtedness (collectively, “Permitted Debt”):such Expansion Assets is financed with Equity Contributions or the proceeds of Perpetual Preferred Stock or Affiliate Subordinated Indebtedness;
(aC) if the Fixed Charge Coverage Ratio for the Borrower's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which the Expansion Debt is incurred would have been less than 2.0 to 1.0, determined on a Pro Forma basis as if the Expansion Debt had been incurred at the beginning of such period and the proceeds therefrom had been applied as intended to be applied (but without giving effect to the completion of any construction projects unless actual completion has been achieved);
(1) at least 40% of the cost of such Expansion Assets is financed with Equity Contributions or the proceeds of Perpetual Preferred Stock or Affiliate Subordinated Indebtedness; and
(2) after giving effect to such incurrence, the amount of Expansion Debt incurred pursuant to this clause (iii), together with the aggregate amount of all other Expansion Debt then outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Expansion Debt incurred pursuant to this clause (iii), does not exceed $250,000,000;
(iv) the incurrence by the Partnership and its Restricted Subsidiaries of (i) Indebtedness represented by the Notes, including any Notes issued as payment of interest on the Notes in accordance with the terms of the Notes, (ii) their respective obligations arising under the Collateral Documents to the extent such obligations would represent Indebtedness and (iii) dividends payable in kind in respect of the Preferred Interests;
(b) the incurrence by the Partnership Borrower or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance or replace replace, Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture Agreement to be incurred under the first paragraph clauses (ii), (iii), (iv) or (x) of this Section 4.09 or clauses (a5.06(b), (b) and (h) of this paragraph;
(cv) the incurrence by the Partnership Borrower or any of its Restricted Subsidiaries Guarantor of intercompany Indebtedness between or among the Partnership Borrower and any Guarantors that is subordinated in right of its Restricted Subsidiaries as provided in Section 4.24 hereofpayment to all Secured Obligations on the terms set forth on Exhibit A hereto and is not secured other than by unperfected security interests; provided, however, that (i) such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Notes and (ii) (A) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Partnership Borrower or a Restricted Subsidiary thereof or Guarantor and (B) any sale or other transfer of any such Indebtedness to a Person that is not either the Partnership Borrower or a Restricted Subsidiary thereof shall Guarantor will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Partnership Borrower or such Restricted SubsidiaryGuarantor, as the case may be, that was not permitted by this clause (cv);; and provided, further, that any such intercompany Indebtedness must be included in the Collateral.
(dvi) the incurrence by the Partnership Borrower or any of its Restricted Subsidiaries of Hedging Obligations, in connection with Permitted Debt or otherwise, in the ordinary course of business and not for speculative purposes; provided, that (A) such Hedging Obligations will have tenors that are incurred for expire on or prior to the purpose maturity date (or other expiration) of fixing the underlying Obligation being hedged, and (B) any such Hedging Obligations hedging or hedging managing interest rate risk with respect to any floating rate Indebtedness a particular series of Notes or loans under this Agreement, the Second Priority Term Loan Agreement or the Revolving Loan Agreement will have tenors that is permitted by expire on or prior to the terms Stated Maturity of this Indenture to be outstandingthe applicable Notes or loans;
(e) the Guarantee by the Partnership or any of its Restricted Subsidiaries of Indebtedness permitted to be incurred by another provision of this Section 4.09;
(fvii) the incurrence by the Partnership Borrower or any of its Restricted Subsidiaries of Indebtedness in respect of performanceworkers' compensation claims, self-insurance obligations, bankers' acceptances, and performance and surety or appeal bonds in the ordinary course of business;
(gviii) the incurrence by the Borrower or any of its 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;
(ix) the incurrence by the Borrower of (a) Affiliate Subordinated Indebtedness in an aggregate principal amount not to exceed $250,000,000 at any one time outstanding and (b) Working Capital Facility Indebtedness in an aggregate principal amount not to exceed $750,000,000 at any one time outstanding; and
(x) the incurrence by the Borrower of Third Party Subordinated Indebtedness; provided, that:
(A) the Net Proceeds of the Third Party Subordinated Indebtedness are applied:
(1) to acquire all or substantially all of the assets of, or any Equity Interests in, a business that constitutes a Permitted Business, provided, that in the case of an acquisition of Equity Interests, the business is or becomes a Subsidiary of the Borrower and a Guarantor concurrently with such acquisition;
(2) to make a capital expenditure;
(3) to acquire other assets that are not classified as current assets under GAAP and that are used or useful in a Permitted Business; or
(4) any combination of the foregoing; and
(B) the Fixed Charge Coverage Ratio for the Borrower's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which the Third Party Subordinated Indebtedness is incurred would have been at least 2.0 to 1.0, determined on a Pro Forma basis as if the Third Party Subordinated Indebtedness had been incurred at the beginning of such period and the proceeds therefrom had been applied as intended to be applied (but without giving effect to the completion of any construction projects unless actual completion has been achieved).
(c) The Borrower shall not incur, and shall not permit any Subsidiary to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Borrower or such Subsidiary unless such Indebtedness is also contractually subordinated in right of payment to the First Priority Term Loans, the applicable First Priority Term Loan Guarantees and the other First Priority Term Loan Obligations on substantially identical terms or on terms that are more favorable to the Lenders hereunder; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Borrower or any of its Subsidiaries solely by virtue of being unsecured or by virtue of being secured on a junior basis.
(d) For purposes of determining compliance with this Section 5.06, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (i) through (x) of Section 5.06(b), the Borrower 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 5.06. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms terms, and the payment of dividends on Disqualified Stock, including the Preferred Interests, Stock in the form of additional shares of the same class of Disqualified Stock or, in the case of the Preferred Interests, a guaranteed payment by the Partnership or the allocation of gross or net income of the Partnership in accordance with the terms of the Partnership Agreement, will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for the purposes of this covenant; providedSection 5.06. Notwithstanding any other provision of this Section 5.06, however, in each such case, the maximum amount of Indebtedness that the amount thereof is included in Fixed Charges of the Partnership Borrower or the applicable Restricted any Subsidiary as accrued;
(h) so long as at the time of incurrence no Default or Event of Default has occurred and is continuing, the incurrence by the Partnership of FF&E Financing; provided, however, that (i) the principal amount of such Indebtedness does not exceed the cost (including sales and excise taxes, installation and delivery charges and other direct costs of, and other direct expenses paid or charged in connection with, such purchase) of the FF&E purchased or leased with the proceeds thereof and (ii) the aggregate principal amount of such Indebtedness, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred may incur pursuant to this clause, does Section 5.06 shall not exceed $5 million outstanding at any time; and
(i) the issuance of the Partnership Interests, including the Preferred Interests, in accordance with the Partnership Agreement. The Partnership will not incur any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Partnership unless such Indebtedness is also contractually subordinated in right of payment to the Notes on substantially identical terms; provided, however, that no Indebtedness of the Partnership shall be deemed to be contractually subordinated exceeded solely as a result of fluctuations in right of payment to any other Indebtedness of the Partnership solely by virtue of being unsecured. For purposes of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (a) through (i) above, exchange rates or is entitled to be incurred pursuant to the first paragraph of this Section 4.09, the Partnership will be permitted to classify such item of Indebtedness as of any date of determination in any manner that complies with this Section 4.09currency values.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Equity. (a) The Partnership shall Borrower will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Partnership shall Borrower will not issue any Disqualified Stock and shall will not permit any of its Restricted Subsidiaries to issue any shares of preferred equity; provided, however, that, that the Issuers Borrower may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Borrower any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue preferred equity, if on the date thereof the Fixed Charge Coverage Ratio for the PartnershipBorrower’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such preferred equity is issued issued, as the case may be, would have been at least 2.0 2.00 to 11.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the preferred equity had been issued, as the case may be, at the beginning of such four-quarter period. .
(b) The first paragraph provisions of this Section 4.09 shall 9.01(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted DebtIndebtedness”):
(i) the incurrence under Credit Facilities by (a) the Borrower any of its Restricted Subsidiaries of additional Indebtedness and letters of credit and bankers’ acceptances thereunder in an aggregate principal amount under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Borrower and its Restricted Subsidiaries thereunder) not to exceed the greater of (i) $400,000,000, (ii) the sum of $200,000,000 and 30% of the Borrower’s Adjusted Consolidated Net Tangible Assets determined as of the date of the incurrence of such Indebtedness after giving effect to the application of the proceeds therefrom or (iii) the Borrowing Base (as defined herein) and (b) any Foreign Subsidiary in an aggregate principal amount under this clause (1) not to exceed $20,000,000, in each case outstanding at any one time;
(ii) (A) the incurrence by the Partnership Borrower and its Restricted Subsidiaries of (i) Indebtedness represented by the Notes, including any Notes issued as payment of interest on the Notes in accordance with the terms of the Notes, (ii) their respective obligations arising under the Collateral Documents to the extent such obligations would represent Indebtedness outstanding on February 12, 2010, including, without limitation, the ABL Facility and the Senior Notes, and (iiiB) dividends payable in kind in respect of the Preferred InterestsSecond Lien Term Facility and any Credit Agreement Refinancing Indebtedness;
(biii) the incurrence by the Partnership Borrower or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings, industrial revenue bonds, purchase money obligations or other Indebtedness or preferred stock, or synthetic lease obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, development, construction, installation or improvement of property (real or personal and including Capital Stock), plant or equipment used in the business of the Borrower or any of its Restricted Subsidiaries (in each case, whether through the direct purchase of such assets or the Equity Interests of any Person owning such assets), in an aggregate principal amount not to exceed at any time outstanding the greater of (x) $10,000,000 or (y) 1.5% of Adjusted Consolidated Net Tangible Assets;
(iv) the incurrence by the Borrower or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness Debt in exchange for, or the net proceeds of which are used to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture Agreement to be incurred under the first paragraph Section 9.01(a) or clauses (ii), (iii), (iv), (xi) or (xv) of this Section 4.09 or clauses (a9.01(b), (b) and (h) of this paragraph;
(cv) the incurrence by the Partnership Borrower or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Partnership Borrower and any of its Restricted Subsidiaries as provided in Section 4.24 hereofSubsidiaries; provided, however, that that:
(iA) if the Borrower or any Guarantor is the obligor on such Indebtedness and the payee is not the Borrower or a Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Notes and Loans;
(ii) (Ai) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Partnership Borrower or a Restricted Subsidiary thereof or of the Borrower and (Bii) any sale or other transfer of any such Indebtedness to a Person that is not either the Partnership Borrower or a Restricted Subsidiary thereof shall of the Borrower, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Partnership Borrower or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (cb);
(dvi) The issuance by any of the Borrower’s Restricted Subsidiaries to the Borrower or to any of its Restricted Subsidiaries of shares of preferred equity; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred equity being held by a Person other than the Borrower or a Restricted Subsidiary of the Borrower, and
(B) any sale or other transfer of any such preferred equity to a Person that is not either the Borrower or a Restricted Subsidiary of the Borrower, will be deemed, in each case, to constitute an issuance of such preferred equity by such Restricted Subsidiary that was not permitted by this clause (vi);
(vii) the incurrence by the Partnership Borrower or any of its Restricted Subsidiaries of Hedging Obligations that are incurred other than 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 outstandingspeculative purposes;
(eviii) the Guarantee guarantee by the Partnership Borrower or any of its Restricted Subsidiaries of Indebtedness of the Borrower or a Restricted Subsidiary of the Borrower that was permitted to be incurred by another provision of this Section 4.099.01 (including Section 9.01(a) hereof); provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Loans, then the Guarantees shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(fix) the incurrence by the Partnership Borrower or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, payment obligations in connection with health or other types of social security benefits, unemployment or other insurance or self-insurance obligations, reclamation, statutory obligations, bankers’ acceptances, performance, surety or appeal similar bonds and letters of credit or completion or performance guarantees (including without limitation, performance guarantees pursuant to supply agreements or equipment leases), or other similar obligations in the ordinary course of businessbusiness or consistent with past practice;
(gx) the accrual incurrence by the Borrower or any of interestits Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, the accretion draft or amortization of original issue discountsimilar instrument inadvertently drawn against insufficient funds;
(xi) Indebtedness, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms and the payment of dividends on Disqualified Stock, including the Preferred Interests, in the form of additional shares Stock or preferred equity of the same class Borrower or any Restricted Subsidiary incurred or issued to finance an acquisition or of Disqualified Stock or, in the case of the Preferred Interests, a guaranteed payment Persons that are acquired by the Partnership Borrower or the allocation any of gross its Restricted Subsidiaries or net income of the Partnership merged into a Restricted Subsidiary in accordance with the terms of the Partnership this Agreement, will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for the purposes of this covenant; provided, however, in each such case, that the amount thereof is included in Fixed Charges of the Partnership or the applicable Restricted Subsidiary as accrued;
(h) so long as at the time of incurrence no Default or Event of Default has occurred and is continuing, the incurrence by the Partnership of FF&E Financing; provided, however, that (i) the principal amount of for any such Indebtedness does not exceed outstanding under this clause (xi) in excess of $10,000.000, after giving effect to such acquisition and the cost (including sales and excise taxes, installation and delivery charges and other direct costs of, and other direct expenses paid or charged in connection with, such purchase) of the FF&E purchased or leased with the proceeds thereof and (ii) the aggregate principal amount incurrence of such Indebtedness, including all Permitted Refinancing Disqualified Stock and preferred equity, either:
(A) the Borrower would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 9.01(a); or
(B) the Fixed Charge Coverage Ratio would not be less than immediately prior to such acquisition;
(xii) Indebtedness incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is not recourse to refundthe Borrower or any Restricted Subsidiary of the Borrower other than the Receivables Subsidiary (except for Standard Securitization Undertakings);
(xiii) the incurrence of Indebtedness arising from agreement of the Borrower or a Restricted Subsidiary providing for indemnification, refinance adjustment of purchase price, earn outs, or replace 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 Agreement, 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;
(xiv) the incurrence by the Borrower or any of its Restricted Subsidiaries of additional Indebtedness or the issuance of Disqualified Stock or preferred equity in an aggregate principal amount (or accreted value, as applicable) or having an aggregate liquidation preference at any time outstanding not to exceed the greater of $35,000,000 or 3.5% of the Borrower’s Adjusted Consolidated Net Tangible Assets (it being understood that any Indebtedness, Disqualified Stock or preferred equity incurred pursuant to this clause, does not exceed $5 million outstanding at any time; and
clause (ixiv) the issuance of the Partnership Interests, including the Preferred Interests, in accordance with the Partnership Agreement. The Partnership will not incur any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment shall cease to any other Indebtedness of the Partnership unless such Indebtedness is also contractually subordinated in right of payment to the Notes on substantially identical terms; provided, however, that no Indebtedness of the Partnership shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Partnership solely by virtue of being unsecured. For incurred or outstanding for purposes of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (a) through (i) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.09, 9.01 from and after the Partnership will be permitted to classify date on which the Borrower could have incurred such item of Indebtedness as of any date of determination in any manner that complies with or Disqualified Stock or preferred equity under Section 9.01(a) hereof without reliance upon this Section 4.09.clause (xiv)); and
Appears in 1 contract
Samples: Credit Agreement (Forest Oil Corp)
Incurrence of Indebtedness and Issuance of Preferred Equity. (a) The Partnership Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”"INCUR") any Indebtedness (including Acquired Debt), Indebtedness but excluding any Permitted Indebtedness) and that the Partnership shall Company will not issue any Disqualified Stock and shall will not permit any of its Restricted Subsidiaries to issue any shares of preferred equitystock; providedPROVIDED, howeverHOWEVER, that, that the Issuers Company may incur Indebtedness (including Acquired DebtIndebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), if the Fixed Charge Coverage Ratio for the Partnership’s Company's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least (i) 2.0 to 11.0 if such date occurs on or after the Issue Date and on or prior to March 31, 1998, or (ii) 2.25 to 1.0 if such date occurs after March 31, 1998, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred incurred, or the Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The Company shall not, and shall not permit any Subsidiary Guarantor to, directly or indirectly, in any event incur any Indebtedness that by its terms (or by the terms of any agreement governing such Indebtedness) is subordinated to any other Indebtedness of that Company or such Subsidiary Guarantor, as the case may be, unless such Indebtedness is also by its terms (or by the terms of any agreement governing such Indebtedness) made expressly subordinate to the Notes or the Subsidiary Guarantee of such Subsidiary Guarantor, as the case may be, to the same extent and in the same manner as such Indebtedness is subordinated pursuant to subordination provisions that are most favorable to the holders of any other Indebtedness of the Company or such Subsidiary Guarantor, as the case may be. The first paragraph of this Section 4.09 foregoing provisions shall not prohibit apply to the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”"PERMITTED INDEBTEDNESS"):
(ai) Indebtedness (and any guarantee thereof) under the Working Line in an aggregate principal amount at any one time outstanding not to exceed the greater of (A) $35.0 million, less any amounts derived from Asset Sales and applied to the permanent reduction of the Indebtedness thereunder as contemplated by Section 4.10 hereof or (B) 80% of the Company's Acceptable Accounts Receivable (as defined in the Working Line) (the "MAXIMUM BANK FACILITY AMOUNT"), and any renewals, amendments, extensions, supplements, modifications, deferrals, refinancing or replacements (each, for purposes of this clause (i), a "REFINANCING") thereof, including any successive refinancing thereof, so long as the aggregate principal amount of any such new Indebtedness, together with the aggregate principal amount of all other Indebtedness outstanding pursuant to this clause (i), shall not at any one time exceed the Maximum Bank Facility Amount;
(ii) Indebtedness under the Acquisition Line in an aggregate principal amount at any one time outstanding not to exceed $10.0 million, and any renewals, amendments, extensions, supplements, modifications, deferrals, refinancing or replacements (each, for purposes of this clause (ii), a "REFINANCING") thereof, including any successive refinancing thereof, so long as the aggregate principal amount of any such new Indebtedness hereunder, together with the aggregate principal amount of all other Indebtedness outstanding pursuant to this clause (ii), shall not at any one time exceed $10.0 million;
(iii) Indebtedness under the Notes;
(iv) Indebtedness under any Existing Indebtedness and any Indebtedness under Letters of Credit existing on the Issue Date;
(v) Indebtedness under Interest Rate Protection Obligations, provided that (A) such Interest Rate Protection Obligations are related to payment obligations on Permitted Indebtedness or Indebtedness otherwise permitted by Section 4.9(a) hereof and (B) the incurrence notional principal amount of such Interest Rate Protection Obligations does not exceed the principal amount of such Indebtedness to which such Interest Rate Protection Obligations relate;
(vi) Indebtedness under Currency Hedge Obligations, provided that (A) such Currency Hedge Obligations are related to payment obligations on Permitted Indebtedness or Indebtedness otherwise permitted by Section 4.9(a) hereof or to the foreign currency cash flows reasonably expected to be generated by the Partnership Company and its Restricted Subsidiaries and (B) the notional principal amount of (i) Indebtedness represented by such Currency Hedge Obligations does not exceed the Notes, including any Notes issued as payment principal amount of interest on the Notes in accordance with the terms of the Notes, (ii) their respective obligations arising under the Collateral Documents to the extent such obligations would represent Indebtedness and (iii) dividends payable in kind in respect the amount of the Preferred Interestssuch foreign currency cash flows to which such Currency Hedge Obligations relate;
(bvii) the incurrence by Subsidiary Guarantees of the Partnership or Notes (and any assumption of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under the first paragraph of this Section 4.09 or clauses (aobligations guaranteed thereby), (b) and (h) of this paragraph;
(cviii) Indebtedness of the incurrence by Company to a Wholly Owned Restricted Subsidiary and Indebtedness of any Restricted Subsidiary of the Partnership Company to the Company or any of its a Wholly Owned Restricted Subsidiaries of intercompany Indebtedness between or among the Partnership and any of its Restricted Subsidiaries as provided in Section 4.24 hereofSubsidiary; providedPROVIDED, howeverHOWEVER, that (i) such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Notes and (ii) (A) upon any subsequent issuance or transfer of Equity Interests any Capital Stock or any other event that results in any such Indebtedness being held by a Person other than the Partnership or a Wholly Owned Restricted Subsidiary thereof ceasing to be a Wholly Owned Restricted Subsidiary or (B) any sale or other subsequent transfer of any such Indebtedness (except to a Person that is not either the Partnership Company or a Wholly Owned Restricted Subsidiary thereof Subsidiary), such Indebtedness shall be deemed, in each case, to constitute be incurred and shall be treated as an incurrence for purposes of Section 4.9(a) hereof at the time the Wholly Owned Restricted Subsidiary in question ceased to be a Wholly Owned Restricted Subsidiary or the time such Indebtedness by the Partnership or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (c)subsequent transfer occurred;
(dix) the incurrence by the Partnership or any of its Restricted Subsidiaries of Hedging Obligations that are incurred for the purpose of fixing or hedging interest rate risk with respect to any floating rate Indebtedness that is permitted by the terms of this Indenture to be outstanding;
(e) the Guarantee by the Partnership or any of its Restricted Subsidiaries of Indebtedness permitted to be incurred by another provision of this Section 4.09;
(f) the incurrence by the Partnership or any of its Restricted Subsidiaries of Indebtedness in respect of performancebid, performance or surety bonds issued for the account of the Company or appeal bonds any Restricted Subsidiary thereof in the ordinary course of business, including guarantees or obligations of the Company or any Restricted Subsidiary thereof with respect to letters of credit supporting such bid, performance or surety obligations (in each case other than for an obligation for money borrowed);
(gx) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms and the payment of dividends on Disqualified Stock, including the Preferred Interests, in the form of additional shares of the same class of Disqualified Stock or, in the case of the Preferred Interests, a guaranteed payment by the Partnership or the allocation of gross or net income of the Partnership in accordance with the terms of the Partnership Agreement, will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for the purposes of this covenant; provided, however, in each such case, that the amount thereof is included in Fixed Charges of the Partnership or the applicable Restricted Subsidiary as accrued;
(h) so long as at the time of incurrence no Default or Event of Default has occurred and is continuing, the incurrence by the Partnership Company or its Restricted Subsidiaries of FF&E Financing; provided, however, that Non-Recourse Purchase Money Indebtedness;
(ixi) the principal amount of such Indebtedness does not exceed the cost (including sales and excise taxes, installation and delivery charges and other direct costs of, and other direct expenses paid or charged in connection with, such purchase) of the FF&E purchased or leased with the proceeds thereof and (ii) the aggregate principal amount of such Indebtedness, including all any Permitted Refinancing Indebtedness incurred to refund, refinance by the Company or replace a Restricted Subsidiary of any Indebtedness incurred pursuant to clause (iii) or (iv) of this clauseSection 4.9(b), does including any successive refinancing by the Company or such Restricted Subsidiary;
(xii) Capital Lease Obligations in an aggregate amount not exceed in excess of $5 8.0 million outstanding at any timeone time outstanding; and
(ixiii) the issuance of the Partnership Interests, including the Preferred Interests, in accordance with the Partnership Agreement. The Partnership will not incur any additional Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Partnership unless such Indebtedness is also contractually subordinated in right of payment to the Notes on substantially identical terms; provided, however, that no Indebtedness of the Partnership shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Partnership solely by virtue of being unsecured. For purposes of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (a) through (i) above, or is entitled to be incurred issued pursuant to the first paragraph one or more credit agreements in an aggregate principal amount for all such credit agreements not in excess of this Section 4.09, the Partnership will be permitted to classify such item of Indebtedness as of $5.0 million at any date of determination in one time outstanding and any manner that complies with this Section 4.09guarantee thereof.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Equity. The Partnership shall 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 the Partnership shall Company will not issue any Disqualified Stock and shall will not permit any of its Restricted Subsidiaries to issue any shares of preferred equity; provided, however, that, the Issuers may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, if the Fixed Charge Coverage Ratio for the Partnership’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 2.0 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period. The first preceding paragraph of this Section 4.09 shall will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “"Permitted Debt”"):
(a1) the incurrence by the Partnership Company (and the guarantee by its Restricted Subsidiaries Subsidiaries) of revolving credit Indebtedness and letters of credit under Credit Facilities with Persons that are not Affiliates of the Company in an aggregate principal amount at any one time outstanding under this clause (i1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (1), not to exceed $50.0 million less the aggregate principal amount of Indebtedness incurred pursuant to clause (3) of this paragraph;
(2) the incurrence by the Issuers and the Guarantors of Indebtedness represented by the Notes, including any Notes the related Subsidiary Guarantees and the other Note Obligations to be issued as payment of interest on the Notes in accordance with the terms of the Notes, (ii) their respective obligations arising under the Collateral Documents to the extent such obligations would represent Indebtedness and (iii) dividends payable in kind in respect of the Preferred Interestsdate hereof;
(b3) the incurrence by the Partnership Issuers and the Guarantors of Indebtedness represented by Additional Notes (and the related Subsidiary Guarantees) issued under this Indenture after the date thereof, in an aggregate principal amount at any one time outstanding under this clause (3), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (3), not to exceed $50.0 million less the aggregate principal amount of Indebtedness incurred pursuant to clause (1) of this paragraph;
(4) the incurrence by the Company and the Guarantors of Indebtedness represented by the Term Loans, the related Subsidiary Guarantees and the other Term Loan Obligations on the first date of issuance of the Notes in an aggregate principal amount not to exceed $385.0 million;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the costs associated with the construction, installation, operation, maintenance or improvement of any of the Facilities, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (5), not to exceed $50.0 million at any time outstanding;
(6) the incurrence by the Company or any of its Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance or replace replace, Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under the first paragraph of this Section 4.09 or clauses (a1), (b2), (3), (4), (5) and or (h6) of this paragraph;
(c7) the incurrence by the Partnership Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Partnership Company and any of its Restricted Subsidiaries as provided in Section 4.24 hereofSubsidiaries; provided, however, that (i) such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Notes and (ii) (A) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Partnership Company or a Restricted Subsidiary thereof or of the Company and (Bii) any sale or other transfer of any such Indebtedness to a Person that is not either the Partnership Company or a Restricted Subsidiary thereof shall of the Company will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Partnership Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (c7); and provided, further, that any such intercompany Indebtedness must be included in the Collateral;
(d8) the incurrence by the Company or any of its Subsidiaries of Hedging Obligations, in connection with Permitted Debt or otherwise, in the ordinary course of business and not for speculative purposes;
(9) the incurrence by the Partnership Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred for the purpose of fixing or hedging interest rate risk with respect to any floating rate Indebtedness that is permitted by the terms of this Indenture to be outstanding;
(e) the Guarantee by the Partnership or any of its Restricted Subsidiaries of Indebtedness permitted to be incurred by another provision of this Section 4.09;
(f) the incurrence by the Partnership or any of its Restricted Subsidiaries of Indebtedness in respect of performanceworkers' compensation claims, self-insurance obligations, bankers' acceptances, and performance and surety or appeal bonds in the ordinary course of business;
(g) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms and the payment of dividends on Disqualified Stock, including the Preferred Interests, in the form of additional shares of the same class of Disqualified Stock or, in the case of the Preferred Interests, a guaranteed payment by the Partnership or the allocation of gross or net income of the Partnership in accordance with the terms of the Partnership Agreement, will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for the purposes of this covenant; provided, however, in each such case, that the amount thereof is included in Fixed Charges of the Partnership or the applicable Restricted Subsidiary as accrued;
(h) so long as at the time of incurrence no Default or Event of Default has occurred and is continuing, the incurrence by the Partnership of FF&E Financing; provided, however, that (i) the principal amount of such Indebtedness does not exceed the cost (including sales and excise taxes, installation and delivery charges and other direct costs of, and other direct expenses paid or charged in connection with, such purchase) of the FF&E purchased or leased with the proceeds thereof and (ii) the aggregate principal amount of such Indebtedness, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause, does not exceed $5 million outstanding at any time; and
(i) the issuance of the Partnership Interests, including the Preferred Interests, in accordance with the Partnership Agreement. The Partnership will not incur any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Partnership unless such Indebtedness is also contractually subordinated in right of payment to the Notes on substantially identical terms; provided, however, that no Indebtedness of the Partnership shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Partnership solely by virtue of being unsecured. For purposes of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (a) through (i) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.09, the Partnership will be permitted to classify such item of Indebtedness as of any date of determination in any manner that complies with this Section 4.09.
Appears in 1 contract
Samples: Indenture (Calpine Corp)
Incurrence of Indebtedness and Issuance of Preferred Equity. The Partnership shall (a) Midwest will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), and the Partnership shall Midwest will not issue any Disqualified Stock and shall will not permit any of its Restricted Subsidiaries to issue any shares of preferred equitystock; provided, however, that, the Issuers that Midwest may incur unsecured Indebtedness (including Acquired Debt) or issue Disqualified Stock, Stock if the Fixed Charge Consolidated Interest Coverage Ratio for the Partnership’s Midwest's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued issued, as the case may be, would have been at least 2.0 to 1, determined on a pro forma Pro Forma basis (including a pro forma Pro Forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period. .
(b) The first paragraph provisions of this Section 4.09 shall 4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “"Permitted Debt”"):
(a1) the incurrence by Midwest (and the guarantee by its Subsidiaries) of Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Midwest and its Subsidiaries thereunder) not to exceed $900 million less the aggregate amount of all Net Proceeds of Asset Sales or Recovery Events applied by Midwest or any of its Subsidiaries after the date of this Indenture to repay any term Indebtedness under a Credit Facility, to repay any revolving credit Indebtedness under a Credit Facility and effect a corresponding commitment reduction thereunder, or to cash collateralize letters of credit, in each case pursuant to Section 4.10(b)(2) hereof;
(2) the incurrence by the Partnership Issuers (and its Restricted the Guarantee by Midwest or any Subsidiaries of (iMidwest) of Indebtedness represented by the Notes, including any Notes to be issued as payment of interest under and on the date of this Indenture and all related Note Obligations incurred on the date of this Indenture, and the Notes in accordance with the terms of the Notes, (ii) their respective obligations arising under the Collateral Documents to be issued pursuant to the extent such obligations would represent Indebtedness and (iii) dividends payable in kind in respect of the Preferred InterestsRegistration Rights Agreement;
(b3) (A) Capitalized Lease Liabilities outstanding on the date of this Indenture and (B) Capitalized Lease Liabilities entered into in the ordinary course of business having an aggregate notional principal amount of not more than $50.0 million at any one time outstanding (including Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this Section 4.09(b)(3)(B), not to exceed $50.0 million);
(4) Indebtedness of Midwest under Interest Rate Hedging Transactions;
(5) Indebtedness consisting of (A) reimbursement obligations of Midwest with respect to letters of credit, surety bonds and performance bonds used by Midwest in the ordinary course of business and (B) workers' compensation claims, self-insurance obligations and bankers' acceptances;
(6) Indebtedness in the form of subordinated, unsecured intercompany loans between or among Midwest and its Subsidiaries;
(7) Indebtedness in the form of guarantees made by and reimbursement obligations with respect to stand-by letters of credit issued for the account of Midwest (including, in each case, Permitted Marketing Support) in the ordinary course of business related to the Facilities in connection with Permitted Trading Activities conducted by or for the benefit of Midwest, whether directly with unaffiliated third parties or with Edison Mission Marketing & Trading for sales to unaffiliated third parties on behalf of Midwest;
(8) Indebtedness of Midwest incurred to finance Environmental Capital Expenditures;
(9) Indebtedness of Midwest incurred to finance Necessary Capital Expenditures;
(10) the incurrence by the Partnership Midwest 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 repaid within five Business Days;
(11) the incurrence by Midwest or any of its Subsidiaries of unsecured Indebtedness in respect of obligations to pay the deferred purchase price of goods and services or progress payments in connection with such goods and services; provided, that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within no more than 60 days of the incurrence of the related Indebtedness) in the ordinary course of business and not in connection with the borrowing of money;
(12) the incurrence by Midwest of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance or replace replace, Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under the first paragraph Section 4.09(a) hereof or under clauses (2), (3), (8), (9), (12) or (13) of this Section 4.09 or clauses (a4.09(b), (b) and (h) of this paragraph;; and
(c13) the incurrence by the Partnership Midwest of Secured Debt in an aggregate principal amount, or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Partnership and any of its Restricted Subsidiaries as provided in Section 4.24 hereof; provided, however, that (i) such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Notes and (ii) (A) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Partnership or a Restricted Subsidiary thereof or (B) any sale or other transfer of any such Indebtedness to a Person that is not either the Partnership or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Partnership or such Restricted Subsidiaryaccreted value, as the case may beapplicable, that was not permitted by this clause (c);
(d) the incurrence by the Partnership or at any of its Restricted Subsidiaries of Hedging Obligations that are incurred for the purpose of fixing or hedging interest rate risk with respect to any floating rate Indebtedness that is permitted by the terms of this Indenture to be one time outstanding;
(e) the Guarantee by the Partnership or any of its Restricted Subsidiaries of Indebtedness permitted to be incurred by another provision of this Section 4.09;
(f) the incurrence by the Partnership or any of its Restricted Subsidiaries of Indebtedness in respect of performance, surety or appeal bonds in the ordinary course of business;
(g) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms and the payment of dividends on Disqualified Stock, including the Preferred Interests, in the form of additional shares of the same class of Disqualified Stock or, in the case of the Preferred Interests, a guaranteed payment by the Partnership or the allocation of gross or net income of the Partnership in accordance with the terms of the Partnership Agreement, will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for the purposes of this covenant; provided, however, in each such case, that the amount thereof is included in Fixed Charges of the Partnership or the applicable Restricted Subsidiary as accrued;
(h) so long as at the time of incurrence no Default or Event of Default has occurred and is continuing, the incurrence by the Partnership of FF&E Financing; provided, however, that (i) the principal amount of such Indebtedness does not exceed the cost (including sales and excise taxes, installation and delivery charges and other direct costs of, and other direct expenses paid or charged in connection with, such purchase) of the FF&E purchased or leased with the proceeds thereof and (ii) the aggregate principal amount of such Indebtedness, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clauseclause (13), does not to exceed the greater of (A) $5 100.0 million outstanding at any time; andand (B) such maximum principal amount of Indebtedness as would not, after giving Pro Forma effect to the incurrence thereof and the application of the proceeds therefrom, cause the Secured Leverage Ratio to be greater than 2.75 to 1.0.
(ic) the issuance of the Partnership Interests, including the Preferred Interests, in accordance with the Partnership Agreement. The Partnership will not incur any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Partnership unless such Indebtedness is also contractually subordinated in right of payment to the Notes on substantially identical terms; provided, however, that no Indebtedness of the Partnership shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Partnership solely by virtue of being unsecured. For purposes of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (a) through (iSection 4.09(b) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.09, the Partnership Midwest will be permitted to classify such item of Indebtedness as of any on the date of determination its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on Disqualified Stock in the form of additional shares of the same class of Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for purposes of this Section 4.09; provided, in each such case, that the amount thereof is included in Consolidated Interest Expense of Midwest as accrued. Notwithstanding any other provision of this covenant, the maximum amount of Indebtedness that Midwest or any of its Subsidiaries may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.
Appears in 1 contract
Samples: Indenture (Midwest Generation LLC)
Incurrence of Indebtedness and Issuance of Preferred Equity. The Partnership (a) Xxxx Las Vegas and the Restricted Entities shall not, and shall not permit any of its their respective Restricted Subsidiaries to, directly or indirectly, (i) create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), and the Partnership shall not or (ii) issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries to issue any or shares of preferred equitystock; provided, however, that, the Issuers Xxxx Las Vegas and its Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock), if (i) the Opening Date has occurred and (ii) the Fixed Charge Coverage Ratio of Xxxx Las Vegas for the Partnership’s Xxxx Las Vegas' most recently ended four full fiscal quarters following the Opening Date for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued (the "Reference Period") would have been at least 2.0 to 11.0, determined on a pro forma basis (basis, including a pro forma application of the net proceeds therefrom)from the Indebtedness, as if the additional Indebtedness had been incurred or the Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period. .
(b) The first paragraph provisions of this Section 4.09 4.09(a) shall not prohibit the incurrence of any of the following items of Indebtedness so long as no Default or Event of Default has occurred and is continuing or would result therefrom (collectively, “"Permitted Debt”"):
(1) the incurrence by Xxxx Las Vegas and any of its Restricted Subsidiaries of Indebtedness under the Credit Agreement in an aggregate principal amount (with letters of credit being deemed to have a principal amount equal to the sum of the face amount thereof and related unpaid reimbursement obligations) not to exceed an amount equal to (a) $1.0 billion less (b) the aggregate amount of all prepayments of principal Indebtedness that result in permanent reductions of the commitments under the Credit Agreement;
(2) the incurrence by the Partnership Issuers, the Restricted Entities and its their respective Restricted Subsidiaries of (i) Indebtedness represented by the Notes, including any Notes issued as payment of interest on the Notes in accordance with the terms of the Notes, (ii) their respective obligations arising under the Collateral Documents Notes, the Credit Agreement, the FF&E Facility and, to the extent such those obligations would represent Indebtedness and (iii) dividends payable in kind in respect of Indebtedness, the Preferred InterestsCollateral Documents;
(b3) the incurrence by the Partnership Xxxx Las Vegas, any Restricted Entity or any of its their respective Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under the first paragraph this Section 4.09(a), under clauses (2) or (7) of this Section 4.09 or clauses (a4.09(b), or under this clause (b) and (h) of this paragraph3);
(c4) the incurrence of intercompany Indebtedness (i) between or among Xxxx Las Vegas and/or its Restricted Subsidiaries, (ii) between or among Xxxxxxx Xxxxxx and Xxxx Resorts Holdings, (iii) between or among the Xxxx Group Entities and (iv) the incurrence by the Partnership Restricted Entities or any of their respective Restricted Subsidiaries of intercompany Indebtedness (to the extent that Xxxx Las Vegas, any of its Restricted Subsidiaries, or, as the case may be, the applicable Restricted Entity, would be permitted to make loans giving rise to, or otherwise hold, such Indebtedness as a Restricted Payment under Section 4.07 hereof) owing to Xxxx Las Vegas or any of its Restricted Subsidiaries of intercompany Subsidiaries, so long as:
(a) if Xxxx Las Vegas or any Guarantor is the obligor on the Indebtedness, the Indebtedness between or among the Partnership and any of its Restricted Subsidiaries as provided in Section 4.24 hereof; provided, however, that (i) such Indebtedness must be is expressly subordinated in right of payment to the prior payment in full in cash of all Obligations with respect to the Notes Notes, in the case of the Xxxx Las Vegas, or its guarantee under the Guarantee and Collateral Agreement to which it is a party, in the case of a Guarantor; provided, however, that no Indebtedness of Xxxx Las Vegas or any Guarantor shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of Xxxx Las Vegas or any such Guarantor solely by virtue of being unsecured;
(ii) (Ai) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Partnership a Guarantor or Xxxx Las Vegas or a Restricted Subsidiary thereof or thereof, and (Bii) any sale or other transfer of any such Indebtedness to a Person that is not either the Partnership or neither Xxxx Las Vegas nor a Restricted Subsidiary thereof nor any Guarantor shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Partnership Xxxx Las Vegas, such Restricted Entity or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (4); and
(c) in the case of any Indebtedness incurred pursuant to clause (iv) above, such Indebtedness is permitted to be incurred as a Restricted Payment under Section 4.07 hereof, and, for purposes of Section 4.07 hereof, the obligee or payee on such Indebtedness shall be deemed to have a Restricted Payment on the date on which such Indebtedness is incurred in an amount equal to the principal amount of the Indebtedness incurred on such date (or, if less, the principal amount of such Indebtedness from time to time outstanding);
(d5) the incurrence by Xxxx Las Vegas, the Partnership Restricted Entities or any of its their respective Restricted Subsidiaries of Hedging Obligations that are incurred for the purpose of fixing or hedging interest rate risk with respect to any floating rate Indebtedness that is permitted by the terms of this Indenture to be outstanding;
(e6) the Guarantee incurrence by Xxxx Las Vegas, the Partnership Restricted Entities or any of their respective Restricted Subsidiaries of Indebtedness solely in respect of performance, surety, appeal or similar bonds or standby letters of credit, so long as the aggregate amount of all such bonds and standby letters of credit is not greater than $20.0 million at any time outstanding;
(7) the incurrence by Xxxx Las Vegas, any Restricted Entity or any of their respective Restricted Subsidiaries of FF&E Financing or Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, including the FF&E Facility in each case, incurred for the purpose of financing all or part of the purchase price or cost of construction or improvement of property, plant or equipment used in the Project by Xxxx Las Vegas or any of its Restricted Subsidiaries of Indebtedness permitted to be incurred by another provision of this Section 4.09;Subsidiaries, so long as:
(f) the incurrence by the Partnership or any of its Restricted Subsidiaries of Indebtedness in respect of performance, surety or appeal bonds in the ordinary course of business;
(g) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms and the payment of dividends on Disqualified Stock, including the Preferred Interests, in the form of additional shares of the same class of Disqualified Stock or, in the case of the Preferred Interests, a guaranteed payment by the Partnership or the allocation of gross or net income of the Partnership in accordance with the terms of the Partnership Agreement, will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for the purposes of this covenant; provided, however, in each such case, that the amount thereof is included in Fixed Charges of the Partnership or the applicable Restricted Subsidiary as accrued;
(h) so long as at the time of incurrence no Default or Event of Default has occurred and is continuing, the incurrence by the Partnership of FF&E Financing; provided, however, that (ia) the principal amount of such Indebtedness does not exceed the cost (including sales and excise taxes, installation and delivery charges and other direct costs of, and other direct expenses paid or charged in connection with, such purchase) of the FF&E or other assets purchased or leased with the proceeds thereof and thereof,
(iib) unless such Indebtedness is unsecured or is incurred under the FF&E Facility, as in effect of the date of this Indenture, not less than 70% of the aggregate fair market value of the purchase or lease costs of such FF&E or other assets is paid with the proceeds of Indebtedness incurred under this clause (7), and
(c) the aggregate principal amount of such Indebtedness, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clauseclause (7), does not exceed $5 million an amount outstanding at any timetime equal to the greater of:
(1) $188.5 million (or $198.5 million from and after the Aircraft Refinancing Date, so long as such additional $10.0 million of Indebtedness is used solely to repay Replacement Aircraft Indebtedness) less (i) the aggregate amount of all prepayments of principal made under the FF&E Facility, less (ii) permanent commitment reductions under the FF&E Facility resulting from the application of Asset Sale or Event of Loss proceeds, and
(2) $100.0 million,
(8) (i) the Guarantee by Xxxx Las Vegas, any Restricted Entity or any of their Restricted Subsidiaries of Indebtedness of any other of Xxxx Las Vegas and any of its Restricted Subsidiaries, (ii) the Guarantee by Xxxxxxx Xxxxxx or Wynn Resorts Holdings of Indebtedness of Wynn Resorts Holdings or Xxxxxxx Xxxxxx or Xxxx Las Vegas or any of its Restricted Subsidiaries, as the case may be, or (iii) the Guarantee by any Wynn Group Entity of Indebtedness of Xxxx Las Vegas, any Restricted Entity, and any of their respective Restricted Subsidiaries, in each case, to the extent the Indebtedness to be Guaranteed is permitted to be incurred by such other entity by another provision of this Section 4.09;
(9) the incurrence by Xxxx Las Vegas or any of its Restricted Subsidiaries of Indebtedness in connection with the repurchase, redemption or other acquisition or retirement for value of Equity Interests of Wynn Resorts or any Restricted Entity permitted pursuant to clause (6) of Section 4.07(b) hereof;
(10) the incurrence or issuance by Xxxx Las Vegas' Unrestricted Subsidiaries of Nonrecourse Debt; provided, however, that if any such Indebtedness ceases to be Non-Recourse Debt of an Unrestricted Subsidiary (but continues to be Indebtedness of a Subsidiary of Xxxx Las Vegas), such event shall be deemed to constitute an incurrence of Indebtedness by a Restricted Subsidiary of Xxxx Las Vegas that was not permitted by this clause (10);
(11) the incurrence by Xxxx Las Vegas or any of its Restricted Subsidiaries of additional Indebtedness (so long as such Indebtedness is incurred under the Credit Agreement or through the issuance of Additional Notes under this Indenture, or is unsecured Indebtedness) to be used to develop and construct an Entertainment Facility on land included in the Project (other than the Golf Course Land) in an aggregate principal amount (or original accreted value, as applicable) at any time not to exceed the lesser of (a) $50.0 million and (b) 200% of the Net New Equity Proceeds received by Xxxx Las Vegas or any of its Restricted Subsidiaries since the date of this Indenture and used to develop and construct such Entertainment Facility, excluding any Net New Equity Proceeds to the extent those proceeds are:
(a) utilized as a basis for incurring Indebtedness pursuant to clause (12) below,
(b) used to make Restricted Payments under clause (4)(B) of Section 4.07(a) hereof, or clause (2) or (3) of Section 4.07(b) hereof, or
(c) used to make Permitted Investments of the type permitted by clause (5) of the definition of Permitted Investments;
(12) the incurrence by Xxxx Las Vegas or any of its Restricted Subsidiaries of additional Indebtedness (so long as such Indebtedness is incurred under the Credit Agreement or the FF&E Facility or through the issuance of Additional Notes under this Indenture, or is unsecured Indebtedness) in an aggregate principal amount (or initial accreted value, as applicable) at any time outstanding incurred pursuant to this clause (12), not to exceed $50.0 million, so long as Indebtedness incurred pursuant to this clause (12) prior to the Completion Date is matched dollar for dollar, by additional Net New Equity Proceeds received by Xxxx Las Vegas or any of its Restricted Subsidiaries since the date of this Indenture, excluding any Net New Equity Proceeds to the extent those proceeds are:
(a) utilized as a basis for incurring Indebtedness pursuant to clause (11) above,
(b) used to make Restricted Payments under clause 4(B) of the Section 4.07(a) hereof, or clause (2) or (3) of Section 4.07(b) hereof, or
(c) used to make Permitted Investments of the type permitted by clause (5) of the definition of Permitted Investments;
(13) the accretion or amortization of original issue discount and the write-up of Indebtedness in accordance with GAAP purchase accounting; and
(i14) the issuance incurrence by Xxxx Las Vegas, any Restricted Entity or any of their respective Restricted Subsidiaries on or prior to the Partnership InterestsFinal Completion Date of Indebtedness represented by performance bonds, including guaranties, trade letters of credit, bankers' acceptances or similar instruments issued by Person other than Wynn Resorts, any Restricted Entity or any of their respective Restricted Subsidiaries for the Preferred Interestsbenefit of a trade creditor of any such Person, in an aggregate amount not to exceed $10.0 million at any time outstanding so long as:
(a) such Indebtedness is incurred in the ordinary course of business; and
(b) the obligations of Xxxx Las Vegas, any Restricted Entity or the applicable Restricted Subsidiary, as the case may be, supported by such performance bonds, guaranties, trade letters of credit, bankers' acceptances or similar instruments (1) consist solely of payment obligations with respect to costs incurred in accordance with the Partnership Project Budget which would otherwise be permitted to be paid by the applicable entity pursuant to the Disbursement Agreement. The Partnership will not , (2) are secured, and (3) are secured solely by Liens permitted by clause (22) of the definition of "Permitted Liens."
(c) Neither Xxxx Las Vegas nor any Guarantor shall incur any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Partnership Xxxx Las Vegas or such Guarantor unless such Indebtedness is also contractually subordinated (except for the priority of Permitted Liens and except as otherwise contemplated by the Intercreditor Agreements) in right of payment to the Notes Notes, in the case of Xxxx Las Vegas, or the Note Guarantee contained in its Guarantee and Collateral Agreement, in the case of a Guarantor on substantially identical terms; provided, however, that no . No Indebtedness of the Partnership Xxxx Las Vegas or any Guarantor shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Partnership Xxxx Las Vegas or any such Guarantor solely by virtue of being unsecured. .
(d) For purposes of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (a1) through (i13) aboveof Section 4.09(b) hereof, or is entitled to be incurred pursuant to the first paragraph of this Section 4.094.09(a), the Partnership will Issuers shall be permitted to classify such item of Indebtedness as of any on the date of determination its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09.
Appears in 1 contract
Samples: Indenture (Wynn Las Vegas LLC)
Incurrence of Indebtedness and Issuance of Preferred Equity. The Partnership 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 continentally or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), Indebtedness but excluding any Permitted Indebtedness) and that the Partnership shall Company will not issue any Disqualified Stock and shall will not permit any of its Restricted Subsidiaries to issue any shares of preferred equitystock; provided, however, that, that the Issuers Company may incur Indebtedness (including Acquired DebtIndebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), if the Fixed Charge Coverage Ratio for the Partnership’s Company's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 2.0 to 11.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred incurred, or the Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period. The first paragraph of this Section 4.09 Company shall not prohibit the incurrence of , and shall not permit any of the following items of Subsidiary Guarantor to, directly or indirectly, in any event incur any Indebtedness that by its terms (collectively, “Permitted Debt”):
(a) the incurrence or by the Partnership and its Restricted Subsidiaries of (i) Indebtedness represented by the Notes, including any Notes issued as payment of interest on the Notes in accordance with the terms of the Notes, (iiany agreement governing such Indebtedness) their respective obligations arising under the Collateral Documents is subordinated to the extent such obligations would represent any other Indebtedness and (iii) dividends payable in kind in respect of the Preferred Interests;
(b) the incurrence by the Partnership or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under the first paragraph of this Section 4.09 or clauses (a), (b) and (h) of this paragraph;
(c) the incurrence by the Partnership or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Partnership and any of its Restricted Subsidiaries as provided in Section 4.24 hereof; provided, however, that (i) such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Notes and (ii) (A) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Partnership or a Restricted Subsidiary thereof or (B) any sale or other transfer of any such Indebtedness to a Person that is not either the Partnership or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Partnership Company or such Restricted SubsidiarySubsidiary Guarantor, as the case may be, that was not permitted unless such Indebtedness is also by this clause its terms (c);
(d) the incurrence by the Partnership or any of its Restricted Subsidiaries of Hedging Obligations that are incurred for the purpose of fixing or hedging interest rate risk with respect to any floating rate Indebtedness that is permitted by the terms of this Indenture any agreement governing such Indebtedness) made expressly subordinate to be outstanding;
(e) the Notes or the Subsidiary Guarantee by of such Subsidiary Guarantor, as the Partnership or any of its Restricted Subsidiaries of Indebtedness permitted case may be, to be incurred by another provision of this Section 4.09;
(f) the incurrence by the Partnership or any of its Restricted Subsidiaries of Indebtedness in respect of performance, surety or appeal bonds same extent and in the ordinary course of business;
(g) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms and the payment of dividends on Disqualified Stock, including the Preferred Interests, in the form of additional shares of the same class of Disqualified Stock or, in the case of the Preferred Interests, a guaranteed payment by the Partnership or the allocation of gross or net income of the Partnership in accordance with the terms of the Partnership Agreement, will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for the purposes of this covenant; provided, however, in each such case, that the amount thereof is included in Fixed Charges of the Partnership or the applicable Restricted Subsidiary manner as accrued;
(h) so long as at the time of incurrence no Default or Event of Default has occurred and is continuing, the incurrence by the Partnership of FF&E Financing; provided, however, that (i) the principal amount of such Indebtedness does not exceed the cost (including sales and excise taxes, installation and delivery charges and other direct costs of, and other direct expenses paid or charged in connection with, such purchase) of the FF&E purchased or leased with the proceeds thereof and (ii) the aggregate principal amount of such Indebtedness, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred is subordinated pursuant to this clause, does not exceed $5 million outstanding at any time; and
(i) subordination provisions that are most favorable to the issuance holders of the Partnership Interests, including the Preferred Interests, in accordance with the Partnership Agreement. The Partnership will not incur any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Partnership unless Company or such Indebtedness is also contractually subordinated in right of payment to Subsidiary Guarantor, as the Notes on substantially identical terms; provided, however, that no Indebtedness of the Partnership shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Partnership solely by virtue of being unsecured. For purposes of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (a) through (i) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.09, the Partnership will be permitted to classify such item of Indebtedness as of any date of determination in any manner that complies with this Section 4.09case may be.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Equity. The Partnership shall 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 the Partnership shall Company will not issue any Disqualified Stock and shall will not permit any of its Restricted Subsidiaries to issue any shares of preferred equity. The preceding paragraph will not prohibit the incurrence of any of the following items of Indebtedness (collectively, "Permitted Debt"):
(1) the incurrence by the Company (and the guarantee by its Subsidiaries) of:
(a) Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1)(a) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Subsidiaries thereunder) not to exceed $800.0 million, less the aggregate amount of all Net Proceeds of Asset Sales, Casualty Events or Condemnation Events applied by the Company or any of its Subsidiaries since the Closing Date to repay any term Indebtedness under any such Credit Facility or to repay, or cash collateralize letters of credit under, any revolving Indebtedness under any such Credit Facility and effect a corresponding commitment reduction thereunder; and
(b) Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount outstanding under this clause (1)(b) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Subsidiaries thereunder) not to exceed $100.0 million, less the aggregate amount of all Net Proceeds of Asset Sales, Casualty Events and Condemnation Events applied by the Company or any of its Subsidiaries since the Closing Date to repay any term Indebtedness under any such Credit Facility or to repay, or cash collateralize letters of credit under, any revolving Indebtedness under any such Credit Facility and effect a corresponding commitment reduction thereunder;
(2) the incurrence by the Issuers and the Guarantors of Indebtedness represented by the First Priority Notes, the Second Priority Notes and the Notes to be issued on the Closing Date, the related Subsidiary guarantees and the other Obligations incurred under the Indentures on the Closing Date, and the Exchange Notes and the related Subsidiary guarantees to be issued pursuant to the registration Rights Agreement;
(3) the incurrence by the Company or any of its Subsidiaries of Expansion Debt; provided, however, that, :
(a) any Expansion Debt incurred by the Issuers may incur Indebtedness Excluded Subsidiary is recourse only to the Expansion Assets financed with such Expansion Debt and to other Expansion Assets owned by the Excluded Subsidiary (including Acquired Debtany rights of the Excluded Subsidiary under Shared Facilities Arrangements);
(b) or issue Disqualified Stock, if the Fixed Charge Coverage Ratio for the Partnership’s 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 the Expansion Debt is incurred or such Disqualified Stock is issued would have been at least 2.0 to 11.0, determined on a pro forma Pro Forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness Expansion Debt had been incurred or the Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period. The first paragraph of this Section 4.09 shall not prohibit period and the incurrence proceeds therefrom had been applied as intended to be applied (but without giving effect to the completion of any construction projects unless actual completion has been achieved), at least 25% of the following items cost of Indebtedness (collectively, “Permitted Debt”):such Expansion Assets is financed with Equity Contributions or the proceeds of Perpetual Preferred Stock or Affiliate Subordinated Indebtedness;
(ac) if the Fixed Charge Coverage Ratio for the Company's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which the Expansion Debt is incurred would have been less than 2.0 to 1.0, determined on a Pro Forma basis as if the Expansion Debt had been incurred at the beginning of such period and the proceeds therefrom had been applied as intended to be applied (but without giving effect to the completion of any construction projects unless actual completion has been achieved),
(i) at least 40% of the cost of such Expansion Assets is financed with Equity Contributions or the proceeds of Perpetual Preferred Stock or Affiliate Subordinated Indebtedness, and
(ii) after giving effect to such incurrence, the amount of Expansion Debt incurred pursuant to this clause (3), together with the aggregate amount of all other Expansion Debt then outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Expansion Debt incurred pursuant to this clause (3), does not exceed $250.0 million;
(4) the incurrence by the Partnership and its Restricted Subsidiaries of (i) Indebtedness represented by the Notes, including any Notes issued as payment of interest on the Notes in accordance with the terms of the Notes, (ii) their respective obligations arising under the Collateral Documents to the extent such obligations would represent Indebtedness and (iii) dividends payable in kind in respect of the Preferred Interests;
(b) the incurrence by the Partnership Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance or replace replace, Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under the first paragraph of this Section 4.09 or clauses (a2), (b3), (4) and or (h10) of this paragraph;
(c5) the incurrence by the Partnership Company or any of its Restricted Subsidiaries Guarantor of intercompany Indebtedness between or among the Partnership Company and any Guarantor that is subordinated in right of its Restricted Subsidiaries as provided payment to all Secured Obligations pursuant to a customary subordination agreement delivered to the Collateral Agent (together with all other documents or instruments required to effect such subordination and any other documents reasonably requested by the Collateral Agent in Section 4.24 hereofconnection therewith), and is not secured other than by unperfected security interests; provided, however, that (i) such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Notes and (ii) (A) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Partnership Company or a Restricted Subsidiary thereof or Guarantor and (Bii) any sale or other transfer of any such Indebtedness to a Person that is not either the Partnership Company or a Restricted Subsidiary thereof shall Guarantor will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Partnership Company or such Restricted SubsidiaryGuarantor, as the case may be, that was not permitted by this clause (c5); and provided, further, that any such intercompany Indebtedness must be included in the Collateral;
(d6) the incurrence by the Partnership Company or any of its Restricted Subsidiaries of Hedging Obligations, in connection with Permitted Debt or otherwise, in the ordinary course of business and not for speculative purposes; provided, that (a) such Hedging Obligations have tenors that are incurred for expire on or prior to the purpose maturity date (or other expiration) of fixing the underlying obligation being hedged, and (b) any such Hedging Obligations hedging or hedging managing interest rate risk with respect to any floating rate Indebtedness (i) First Priority Lien Debt have tenors that is permitted by expire on or prior to the terms Stated Maturity of this Indenture the First Priority Notes, (ii) Second Priority Lien Debt have tenors that expire on or prior to be outstandingthe Stated Maturity of the Second Priority Notes, or (iii) Third Priority Lien Debt have tenors that expire on or prior to the Stated Maturity of the Notes;
(e) the Guarantee by the Partnership or any of its Restricted Subsidiaries of Indebtedness permitted to be incurred by another provision of this Section 4.09;
(f7) the incurrence by the Partnership Company or any of its Restricted Subsidiaries of Indebtedness in respect of performanceworkers' compensation claims, self-insurance obligations, bankers' acceptances, and performance and surety or appeal bonds in the ordinary course of business;
(g8) the incurrence by the Company or any of its 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;
(9) the accrual incurrence by the Company of interest, the accretion or amortization of original issue discount, the payment of interest on any (a) Affiliate Subordinated Indebtedness in an aggregate principal amount not to exceed $250.0 million at any one time outstanding and (b) Working Capital Facility Indebtedness in an aggregate principal amount not to exceed $750.0 million at any one time outstanding;
(10) the form incurrence by the Company of additional Indebtedness with Third Party Subordinated Indebtedness; provided, that:
(a) the same terms and the payment of dividends on Disqualified Stock, including the Preferred Interests, in the form of additional shares net proceeds of the same class Third Party Subordinated Indebtedness are applied:
(i) to acquire all or substantially all of Disqualified Stock orthe assets of, or any Equity Interests in, a business that constitutes a Permitted Business; provided, that in the case of the Preferred an acquisition of Equity Interests, the business is or becomes a guaranteed payment by the Partnership or the allocation of gross or net income Subsidiary of the Partnership in accordance Company and a Guarantor concurrently with the terms of the Partnership Agreement, will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for the purposes of this covenant; provided, however, in each such case, that the amount thereof is included in Fixed Charges of the Partnership or the applicable Restricted Subsidiary as accruedacquisition;
(hii) so long to make a capital expenditure;
(iii) to acquire other assets that are not classified as at the time of incurrence no Default current assets under GAAP and that are used or Event of Default has occurred and is continuing, the incurrence by the Partnership of FF&E Financinguseful in a Permitted Business; provided, however, that or
(iiv) the principal amount of such Indebtedness does not exceed the cost (including sales and excise taxes, installation and delivery charges and other direct costs of, and other direct expenses paid or charged in connection with, such purchase) any combination of the FF&E purchased or leased with the proceeds thereof and (ii) the aggregate principal amount of such Indebtedness, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause, does not exceed $5 million outstanding at any timeforegoing; and
(ib) the issuance Fixed Charge Coverage Ratio for the Company's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which the Third Party Subordinated Indebtedness is incurred would have been at least 2.0 to 1.0, determined on a Pro Forma basis as if the Third Party Subordinated Indebtedness had been incurred at the beginning of such period and the Partnership Interests, including proceeds therefrom had been applied as intended to be applied (but without giving effect to the Preferred Interests, in accordance with the Partnership Agreementcompletion of any construction projects unless actual completion has been achieved). The Partnership Company will not incur incur, and will not permit any Subsidiary to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Partnership Company or such Subsidiary unless such Indebtedness is also contractually subordinated in right of payment to the Notes Secured Obligations on substantially identical termsterms or on terms that are more favorable to the holders of the Secured Obligations; provided, however, that no Indebtedness of the Partnership shall will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Partnership Company or any of its Subsidiaries solely by virtue of being unsecured. For purposes unsecured or by virtue of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (a) through (i) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.09, the Partnership will be permitted to classify such item of Indebtedness as of any date of determination in any manner that complies with this Section 4.09being secured on a junior basis.
Appears in 1 contract
Samples: Third Priority Secured Notes Indenture (Delta Energy Center, LLC)
Incurrence of Indebtedness and Issuance of Preferred Equity. (a) The Partnership shall 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 the Partnership shall Company will not issue any Disqualified Stock and shall will not permit any of its Restricted Subsidiaries to issue any shares of preferred equity; provided, however, that, that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Company or any other Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue preferred equity, if on the date thereof the Fixed Charge Coverage Ratio for the PartnershipCompany’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such preferred equity is issued issued, as the case may be, would have been at least 2.0 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the preferred equity had been issued, as the case may be, at the beginning of such four-quarter period. The first paragraph of this Section 4.09 shall .
(b) Paragraph (a) above will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(i) the incurrence under Credit Facilities by (a) the Company or any of its Restricted Subsidiaries of Indebtedness and letters of credit and bankers’ acceptances thereunder in an aggregate principal amount under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed $375.0 million outstanding at any one time;
(ii) the incurrence by the Partnership Company and its Restricted Subsidiaries of (i) Indebtedness represented by the Notes, including any Notes issued as payment of interest on the Notes in accordance with the terms of the Notes, (ii) their respective obligations arising under the Collateral Documents to the extent such obligations would represent Indebtedness and (iii) dividends payable in kind in respect of outstanding on the Preferred InterestsClosing Date;
(biii) the incurrence by the Partnership Company and its Restricted Subsidiaries (including any future Guarantor) of Indebtedness represented (A) by the Senior Notes issued on the Closing Date and related Notes Guarantees and any exchange notes and the related Note Guarantees to be issued pursuant to the registration rights agreement entered into or required to be entered into pursuant to the Senior Notes Indenture or (B) by Lease Refinancing Notes and related guarantees;
(iv) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by (A) Capital Lease Obligations and other Indebtedness in respect of leases, in each case, relating to aircraft or Aircraft Sale and Leaseback Transactions; and (B) other Capital Lease Obligations, mortgage financings, industrial revenue bonds, purchase money obligations or other Indebtedness or preferred stock, or synthetic lease obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, development, construction, installation or improvement of property (real or personal and including Capital Stock), plant or equipment used in the business of the Company or any of its Restricted Subsidiaries (in each case, whether through the direct purchase of such assets or the Equity Interests of any Person owning such assets), in an aggregate principal amount under this clause (B) not to exceed at any time outstanding 5.0% of Total Assets;
(v) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under the first paragraph Section 6.02(a) or clauses (ii), (iii), (iv), (v), (xii) or (xvi) of this Section 4.09 or clauses (a6.02(b), (b) and (h) of this paragraph;
(cvi) the incurrence by the Partnership Company or any of its Restricted Subsidiaries of intercompany Indebtedness and cash management pooling obligations and arrangements between or among the Partnership Company and any of its Restricted Subsidiaries (treating the EMEA JV and any other Permitted Joint Venture as provided in Section 4.24 hereofRestricted Subsidiaries for this purpose); provided, however, that that:
(iA) if the Initial Borrower or any Loan Party is the obligor on such Indebtedness (other than cash management pooling obligations and arrangements and Indebtedness owed to the EMEA JV and any other Permitted Joint Venture) and the payee is not the Initial Borrower or a Loan Party, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes Revolving Facility and the Guarantees given under the Loan Document Guarantee; and
(iiB) (Ax) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Partnership Company or a Restricted Subsidiary thereof or of the Company and (By) any sale or other transfer of any such Indebtedness to a Person that is not either the Partnership Company or a Restricted Subsidiary thereof shall of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Partnership Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (cb)(vi);
(dvii) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of shares of preferred equity; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred equity being held by a Person other than the Company or a Restricted Subsidiary of the Company, and
(B) any sale or other transfer of any such preferred equity to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such preferred equity by such Restricted Subsidiary that was not permitted by this clause (vii);
(viii) the incurrence by the Partnership Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred other than 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 outstandingspeculative purposes;
(eix) the Guarantee guarantee by the Partnership Company or any of its Restricted Subsidiaries of Indebtedness and cash management pooling obligations and arrangements of the Company or a Restricted Subsidiary of the Company (treating the EMEA JV and any other Permitted Joint Venture as Restricted Subsidiaries for this purpose); provided that any such guarantee (other than a guarantee of cash management pooling obligations and arrangements) by the Company or any of its Restricted Subsidiaries in respect of a Permitted Joint Venture that does not exist on the Closing Date shall not exceed the amount set forth in clause (19)(B) of the definition of “Permitted Investments”) that was permitted to be incurred by another provision of this Section 4.09covenant (including the first paragraph hereof); 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;
(fx) the incurrence by the Partnership Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, payment obligations in connection with health or other types of social security benefits, unemployment or other insurance or self-insurance obligations, reclamation, statutory obligations, bankers’ acceptances, bid, performance, surety or appeal similar bonds and letters of credit or completion or performance guarantees (including without limitation, performance guarantees pursuant to flying contracts, supply agreements or equipment leases), or other similar obligations in the ordinary course of businessbusiness or consistent with past practice;
(gxi) 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) Indebtedness, Disqualified Stock or preferred equity of the Company or any Restricted Subsidiary incurred or issued to finance an acquisition (including an acquisition of aircraft) or of Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged into a Restricted Subsidiary in accordance with the terms of this Agreement; provided, however, that for any such indebtedness outstanding under this clause (xii) in excess of $10.0 million, after giving effect to such acquisition and the incurrence of such Indebtedness, Disqualified Stock and preferred equity either:
(A) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first sentence of this covenant; or
(B) the Fixed Charge Coverage Ratio would not be less than immediately prior to such acquisition;
(xiii) Indebtedness incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is not recourse to the Company or any Restricted Subsidiary of the Company other than a Receivables Subsidiary (except for Standard Securitization Undertakings);
(xiv) the incurrence of Indebtedness arising from agreements of the Company or a 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 this Agreement, 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;
(xv) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance of Disqualified Stock or preferred equity in an aggregate principal amount (or accreted value, as applicable) or having an aggregate liquidation preference at any time outstanding not to exceed the greater of $125.0 million or 5.0% of Total Assets (it being understood that any Indebtedness, Disqualified Stock or preferred equity incurred pursuant to this clause (xv) shall cease to be deemed incurred or outstanding for purposes of this covenant from and after the date on which the Company could have incurred such Indebtedness or Disqualified Stock or preferred equity under the first paragraph of this covenant without reliance upon this clause (xv));
(xvi) Contribution Indebtedness; and
(xvii) Manufacturer Support Indebtedness, Deposit Financings and Vendor Financings at any time outstanding not to exceed in the aggregate 3.0% of Total Assets.
(c) The Initial Borrower will not incur, and will not permit any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Borrower or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Revolving Facility on substantially identical terms (or terms more favorable to the Lenders under the Revolving Facility); provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness 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 6.02, in the event that an item of proposed Indebtedness, Disqualified Stock or preferred equity meets the criteria of more than one of the categories of Permitted Debt described in Section 6.02(b)(i)(b)(xvii) above, or is entitled to be incurred pursuant to the first paragraph of this covenant, the Company will be permitted to classify such item of Indebtedness, Disqualified Stock or preferred equity on the date of its incurrence and will only be required to include the amount and type of such Indebtedness, Disqualified Stock or preferred equity in one of the above clauses, although the Company may divide and classify an item of Indebtedness, Disqualified Stock or preferred equity in one or more of the types of Indebtedness, Disqualified Stock or preferred equity and may later reclassify all or a portion of such item of Indebtedness, Disqualified Stock or preferred equity, in any manner that complies with this covenant. The accrual of interestinterest or dividends, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms and terms, the reclassification of preferred equity as Indebtedness due to a change in accounting principles, the payment of dividends on Disqualified Stock, including the Preferred Interests, Stock or preferred equity in the form of additional shares of the same class of Disqualified Stock or, or preferred equity and unrealized losses or charges in respect of Hedging Obligations (including those resulting from the case application of the Preferred Interests, a guaranteed payment by the Partnership SFAS 133 or the allocation of gross or net income of the Partnership in accordance with the terms of the Partnership Agreement, any comparable standard relating to hedge accounting) will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock or preferred equity for the purposes of this covenant; provided, however, in each such casecase (other than preferred stock that is not Disqualified Stock), that the amount thereof of any such accrual, accretion or payment is included in Fixed Charges of the Partnership Company as accrued. Notwithstanding any other provision of this covenant, the maximum amount of Indebtedness that the Company or the applicable any Restricted Subsidiary may incur pursuant to this covenant shall not be deemed to be exceeded solely as accrued;a result of fluctuations in exchange rates or currency values.
(he) so long as at For purposes of determining compliance with any U.S. dollar denominated restriction on the time incurrence of incurrence no Default or Event of Default has occurred and Indebtedness where the Indebtedness incurred is continuingdenominated in a different currency, the incurrence by amount of such Indebtedness will be the Partnership U.S. Dollar Equivalent determined on the date of FF&E Financingthe establishment of the facility or instrument under which such Indebtedness was incurred; provided, however, that if such Indebtedness denominated in a different currency is subject to a Currency Agreement with respect to U.S. dollars, covering all principal, premium, if any, and interest payable on such Indebtedness, the amount of such Indebtedness expressed in U.S. dollars will be as provided in such Currency Agreement. The principal amount of any refinancing Indebtedness incurred in the same currency as the Indebtedness being refinanced will be the U.S. Dollar Equivalent of the Indebtedness refinanced, except to the extent that (i) such U.S. Dollar Equivalent was determined based on a Currency Agreement, in which case the refinancing Indebtedness will be determined in accordance with the preceding sentence, and (ii) the principal amount of such the refinancing Indebtedness does not exceed exceeds the cost (including sales and excise taxes, installation and delivery charges and other direct costs of, and other direct expenses paid or charged in connection with, such purchase) of the FF&E purchased or leased with the proceeds thereof and (ii) the aggregate principal amount of the Indebtedness being refinanced, in which case the U.S. Dollar Equivalent of such Indebtednessexcess, including all Permitted Refinancing as appropriate, will be determined on the date such refinancing Indebtedness incurred to refund, refinance or replace is incurred.
(f) The amount of any Indebtedness incurred pursuant to this clause, does not exceed $5 million outstanding at as of any time; anddate will be:
(i) the issuance accreted value of the Partnership Interests, including the Preferred InterestsIndebtedness, in accordance with the Partnership Agreement. The Partnership will not incur case of any Indebtedness issued with original issue discount;
(including Permitted Debtii) that is contractually subordinated the principal amount of the Indebtedness, in right the case of payment to any other Indebtedness; and
(iii) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(A) the Fair Market Value of such assets at the date of determination; and
(B) the amount of the Indebtedness of the Partnership unless such Indebtedness is also contractually subordinated in right of payment to the Notes on substantially identical terms; provided, however, that no Indebtedness of the Partnership shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Partnership solely by virtue of being unsecured. For purposes of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (a) through (i) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.09, the Partnership will be permitted to classify such item of Indebtedness as of any date of determination in any manner that complies with this Section 4.09.Person
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Equity. (a) The Partnership shall 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 the Partnership shall Company will not issue any Disqualified Stock and shall will not permit any of its Restricted Subsidiaries to issue any shares of preferred equity; provided, however, that, that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue preferred equity, if the Fixed Charge Coverage Ratio for the Partnership’s Company's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such preferred equity is issued issued, as the case may be, would have been at least 2.0 2.25 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the preferred equity had been issued, as the case may be, at the beginning of such four-quarter period. .
(b) The first paragraph provisions of this Section 4.09 shall 4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “"Permitted Debt”"):
(a1) the incurrence by the Partnership Company or any of its Restricted Subsidiaries of additional Indebtedness and letters of credit and bankers' acceptances thereunder under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed $200.0 million;
(2) the incurrence by the Company and its Restricted Subsidiaries of (i) Indebtedness represented by the Notes, including any Notes issued as payment of interest on the Notes in accordance with the terms of the Notes, (ii) their respective obligations arising under the Collateral Documents to the extent such obligations would represent Indebtedness and (iii) dividends payable in kind in respect outstanding on the date of the Preferred Intereststhis Indenture;
(b3) the incurrence by the Partnership Company and the Guarantors (including any future Guarantor) of Indebtedness represented by the notes and the related Note Guarantees to be issued on the date of this Indenture and the exchange notes and the related Note Guarantees to be issued pursuant to the Registration Rights Agreement;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings, industrial revenue bonds or purchase money obligations, synthetic lease obligations, or the Attributable Debt with respect to sale and leaseback transactions, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, development, construction, installation or improvement of property (real or personal and including Capital Stock), plant or equipment used in the business of the Company or any of its Restricted Subsidiaries (in each case, whether through the direct purchase of such assets or the Equity Interests of any Person owning such assets), in an aggregate principal amount not to exceed at any time outstanding the greater of (x) $20.0 million and (y) 5% of Total Assets;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under the first paragraph Section 4.09(a) hereof or clauses (2), (3), (4), (5), (12), (15) or (16) of this Section 4.09 or clauses (a4.09(b), (b) and (h) of this paragraph;
(c6) the incurrence by the Partnership Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Partnership Company and any of its Restricted Subsidiaries as provided in Section 4.24 hereofSubsidiaries; provided, however, that that:
(iA) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes and notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and
(iiB) (Ai) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Partnership Company or a Restricted Subsidiary thereof or of the Company, and (Bii) any sale or other transfer of any such Indebtedness to a Person that is not either the Partnership Company or a Restricted Subsidiary thereof shall of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Partnership Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (c6);
(d7) the issuance by any of the Company's Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of shares of preferred equity; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred equity being held by a Person other than the Company or a Restricted Subsidiary of the Company, and
(B) any sale or other transfer of any such preferred equity to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such preferred equity by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Partnership Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred for in the purpose ordinary course 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 outstandingbusiness;
(e9) the Guarantee guarantee by the Partnership Company or any of its the Restricted Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary of the Company that was permitted to be incurred by another provision of this Section 4.09; 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;
(f10) the incurrence by the Partnership Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers' compensation claims, payment obligations in connection with health or other types of social security benefits, unemployment or other insurance or self-insurance obligations, reclamation, statutory obligations, bankers' acceptances, performance, surety or appeal similar bonds and letters of credit or completion or performance guarantees (including without limitation, performance guarantees pursuant to coal supply agreements or equipment leases), or other similar obligations in the ordinary course of business;
(g11) the accrual incurrence by the Company or any of interestits Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, the accretion draft or amortization of original issue discount, the payment of interest on any similar instrument inadvertently drawn against insufficient funds;
(12) Indebtedness in the form of additional Indebtedness with the same terms and the payment of dividends on Disqualified Stock, including the Preferred Interests, in the form of additional shares of the same class of or Disqualified Stock or, in the case of the Preferred Interests, a guaranteed payment Persons that are acquired by the Partnership Company or the allocation any of gross its Restricted Subsidiaries or net income of the Partnership merged into a Restricted Subsidiary in accordance with the terms of the Partnership Agreement, will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for the purposes of this covenant; provided, however, in each such case, that the amount thereof is included in Fixed Charges of the Partnership or the applicable Restricted Subsidiary as accrued;
(h) so long as at the time of incurrence no Default or Event of Default has occurred and is continuing, the incurrence by the Partnership of FF&E FinancingIndenture; provided, however, that such Indebtedness or Disqualified Stock is not incurred in contemplation of such acquisition or merger or to provide all or a portion of the funds or credit support required to consummate such acquisition or merger; provided further, however, that, for any such indebtedness outstanding under this clause (i12) in excess of $10.0 million on the principal amount date such Person is acquired by the Company or a Restricted Subsidiary, after giving effect to such acquisition and the incurrence of such Indebtedness does either:
(A) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first sentence of this Section 4.09; or
(B) the Fixed Charge Coverage Ratio would not exceed be less than immediately prior to such acquisition;
(13) Indebtedness incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is not recourse to the cost Company or any Restricted Subsidiary of the Company other than a Receivables Subsidiary (including sales and excise taxesexcept for Standard Securitization Undertakings);
(14) the incurrence of Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, installation and delivery charges and other direct costs ofadjustment of purchase price, and other direct expenses paid earn outs, or charged similar obligations, in each case, incurred or assumed in connection with, such purchase) of the FF&E purchased or leased with the proceeds thereof and 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;
(ii15) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance of Disqualified Stock in an aggregate principal amount of such Indebtedness(or accreted value, including all Permitted Refinancing Indebtedness incurred as applicable) or having an aggregate liquidation preference at any time outstanding not to refund, refinance or replace exceed $10.0 million (it being understood that any Indebtedness or Disqualified Stock incurred pursuant to this clause, does not exceed $5 million outstanding at any time; and
clause (i15) the issuance of the Partnership Interests, including the Preferred Interests, in accordance with the Partnership Agreement. The Partnership will not incur any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment shall cease to any other Indebtedness of the Partnership unless such Indebtedness is also contractually subordinated in right of payment to the Notes on substantially identical terms; provided, however, that no Indebtedness of the Partnership shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Partnership solely by virtue of being unsecured. For incurred or outstanding for purposes of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (a) through (i) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.094.09 from and after the date on which the Company, or the Partnership will be permitted to classify Restricted Subsidiary, as the case may be, could have incurred such item of Indebtedness as of any date of determination in any manner that complies with or Disqualified Stock under Section 4.09(a) hereof without reliance upon this Section 4.09.clause (15)); and
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Equity. The Partnership (1) Lessee shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness ----- (including Acquired Debt), and the Partnership Lessee shall not issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries to issue any shares of preferred equity; provided, however, that, the Issuers that Lessee may incur Indebtedness -------- ------- (including Acquired Debt) or issue Disqualified Stock, if (a) the Resort is Operating; and (b) the Fixed Charge Coverage Ratio for the Partnership’s Lessee's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 2.0 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the preferred equity or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period. The first paragraph of this Section 4.09 shall not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(a) the incurrence by the Partnership and its Restricted Subsidiaries of (i) Indebtedness represented by the Notes, including any Notes issued as payment of interest on the Notes in accordance with the terms of the Notes, (ii) their respective obligations arising under the Collateral Documents to the extent such obligations would represent Indebtedness and (iii) dividends payable in kind in respect of the Preferred Interests;
(b) the incurrence by the Partnership or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under the first paragraph of this Section 4.09 or clauses (a), (b) and (h) of this paragraph;
(c) the incurrence by the Partnership or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Partnership and any of its Restricted Subsidiaries as provided in Section 4.24 hereof; provided, however, that (i) such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to foregoing shall not -------- ------- prohibit the Notes and (ii) (A) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Partnership or a Restricted Subsidiary thereof or (B) any sale or other transfer incurrence of any such Indebtedness to a Person that is not either the Partnership or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Partnership or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (c);
(d) the incurrence by the Partnership or any of its Restricted Subsidiaries of Hedging Obligations that are incurred for the purpose of fixing or hedging interest rate risk with respect to any floating rate Indebtedness that is permitted by the terms of this Indenture to be outstanding;
(e) the Guarantee by the Partnership or any of its Restricted Subsidiaries of Indebtedness permitted to be incurred by another provision of this Section 4.09;
(f) the incurrence by the Partnership or any of its Restricted Subsidiaries of Indebtedness in respect of performance, surety or appeal bonds in the ordinary course of business;
(g) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms and the payment of dividends on Disqualified Stock, including the Preferred Interests, in the form of additional shares of the same class of Disqualified Stock or, in the case of the Preferred Interests, a guaranteed payment by the Partnership or the allocation of gross or net income of the Partnership in accordance with the terms of the Partnership Agreement, will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for the purposes of this covenant; provided, however, in each such case, that the amount thereof is included in Fixed Charges of the Partnership or the applicable Restricted Subsidiary as accrued;
(h) Permitted Debt so long as at the time of incurrence no Lease Default or Lease Event of Default has shall have occurred and is be continuing, the incurrence by the Partnership of FF&E Financing; provided, however, that (i) the principal amount of such Indebtedness does not exceed the cost (including sales and excise taxes, installation and delivery charges and other direct costs of, and other direct expenses paid or charged in connection with, such purchase) of the FF&E purchased or leased with the proceeds thereof and (ii) the aggregate principal amount of such Indebtedness, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause, does not exceed $5 million outstanding at any time; and.
(i2) the issuance of the Partnership Interests, including the Preferred Interests, in accordance with the Partnership Agreement. The Partnership Lessee will not incur any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Partnership Lessee unless such Indebtedness is also contractually subordinated in right of payment to its Obligations (including payment of Rent) to the Notes Participants under the Operative Documents on substantially identical terms; provided, however, -------- ------- that no Indebtedness of the Partnership Lessee shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Partnership Lessee solely by virtue of being unsecured. For purposes of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (a) through (i) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.09, the Partnership will be permitted to classify such item of Indebtedness as of any date of determination in any manner that complies with this Section 4.09.
Appears in 1 contract
Samples: Participation Agreement (HCS Ii Inc)
Incurrence of Indebtedness and Issuance of Preferred Equity. (a) The Partnership shall Issuer will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Partnership shall Issuer will not issue any Disqualified Stock and shall will not permit any of its Restricted Subsidiaries to issue any shares of preferred equity; provided, however, that, that the Issuers Issuer may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Issuer or any other Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue preferred equity, if the Fixed Charge Coverage Ratio for the PartnershipIssuer’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such preferred equity is issued issued, as the case may be, would have been at least 2.0 to 11.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the preferred equity had been issued, as the case may be, at the beginning of such four-quarter period. .
(b) The first paragraph provisions of this Section 4.09 shall 4.07(a) will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(a1) the incurrence by the Partnership Issuer or any of its Restricted Subsidiaries of additional Indebtedness and letters of credit and bankers’ acceptances thereunder under Credit Facilities (including the Credit Agreement, the Series A Notes and the Notes and the Guarantees thereof) in an aggregate principal amount at any time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Issuer and its Restricted Subsidiaries thereunder) not to exceed the greater of (x) $2,500 million, (y) an amount equal to 3.5 times Consolidated Cash Flow of the Issuer for the most recently ended four full fiscal quarters of the Issuer for which internal financial statements are available and (z) 25% of Total Tangible Assets;
(2) the incurrence by the Issuer and its Restricted Subsidiaries of (i) Indebtedness represented by Indebtedness, other than the Credit Agreement, the Series A Notes and the Notes, including any Notes issued as payment of interest on the Notes in accordance with the terms of the Notes, (ii) their respective obligations arising under the Collateral Documents to the extent such obligations would represent Indebtedness and (iii) dividends payable in kind in respect outstanding on the date of the Preferred Intereststhis Indenture;
(b3) letters of credit issued under Credit Facilities, so long as such letters of credit have not been drawn upon or, if drawn upon, have been reimbursed thereafter within sixty (60) days;
(4) the incurrence by the Partnership Issuer or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings, industrial revenue bonds, purchase money obligations or other Indebtedness or preferred stock, or synthetic lease obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, development, construction, lease, installation or improvement of property (real or personal and including Capital Stock), plant or equipment used or useful in the business of the Issuer or any of its Restricted Subsidiaries (in each case, whether through the direct purchase of such assets or the Equity Interests of any Person owning such assets), in an aggregate principal amount not to exceed at any time outstanding the greater of (x) $750 million or (y) 7.5% of Total Tangible Assets;
(5) Capital Lease Obligations incurred by the Issuer or any Restricted Subsidiary in respect of any sale leaseback transaction;
(6) the incurrence by 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 refinance, replace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) or any Disqualified Stock or preferred stock that was permitted by this Indenture to be incurred under the first paragraph Section 4.07(a) hereof or clauses (1), (2), (5), (6), (11) or (12) of this Section 4.09 or clauses (a4.07(b), (b) and (h) of this paragraph;
(c7) the incurrence by the Partnership Issuer or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Partnership Issuer and any of its Restricted Subsidiaries as provided in Section 4.24 hereofSubsidiaries; provided, however, that that:
(iA) if the Issuer or any Guarantor is the obligor on such Indebtedness and the payee is not 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 and Notes, in the case of the Issuer, or the Note Guarantee, in the case of a Guarantor; and
(iiB) (Ai) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Partnership Issuer or a Restricted Subsidiary thereof or of the Issuer, and (Bii) any sale or other transfer of any such Indebtedness to a Person that is not either the Partnership Issuer or a Restricted Subsidiary thereof shall of the Issuer, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Partnership Issuer or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (c7);
(d8) the issuance by any of the Issuer’s Restricted Subsidiaries to the Issuer or to any of its Restricted Subsidiaries of shares of preferred equity; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred equity 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 equity 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 equity by such Restricted Subsidiary that was not permitted by this clause (8);
(9) the incurrence by the Partnership Issuer or any of its Restricted Subsidiaries of Hedging Obligations that are incurred other than 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 outstandingspeculative purposes;
(e10) the Guarantee guarantee by the Partnership Issuer or any of its Restricted Subsidiaries of Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer that was permitted to be incurred by another provision of this Section 4.094.07 (including Section 4.07(a)); 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;
(f11) (x) Indebtedness, Disqualified Stock or preferred equity of Persons that are acquired by the Issuer or any of its Restricted Subsidiaries or merged into a Restricted Subsidiary in accordance with the terms of this Indenture, (y) Indebtedness incurred to finance the acquisition of a Restricted Subsidiary after the date of this Indenture or a corporation merged into or consolidated with the Issuer or any Restricted Subsidiary after the date of this Indenture and (z) Indebtedness assumed or incurred in connection with the acquisition of assets, where such acquisition, merger or consolidation is permitted under the terms of this Indenture; provided that for any such Indebtedness outstanding under this clause (11) in excess of the greater of (x) $750 million and (y) 7.5% of Total Tangible Assets (as of the end of the Issuer’s most recently ended fiscal quarter for which financial statements are available) on the date such Person is acquired by the Issuer or a Restricted Subsidiary, after giving effect to such acquisition and the incurrence of such Indebtedness either:
(A) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first sentence of this Section 4.07; or
(B) the Fixed Charge Coverage Ratio would not be less than immediately prior to such acquisition;
(12) Indebtedness incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is not recourse to the Issuer or any Restricted Subsidiary of the Issuer other than a Receivables Subsidiary (except for Standard Securitization Undertakings);
(13) the incurrence by the Partnership Issuer or any of its Restricted Subsidiaries of additional Indebtedness or the issuance of Disqualified Stock or preferred equity in respect an aggregate principal amount (or accreted value, as applicable) or having an aggregate liquidation preference at any time outstanding not to exceed the greater of performance(x) $500 million and (y) 5% Total Tangible Assets (it being understood that any Indebtedness, surety Disqualified Stock or appeal bonds in preferred equity incurred pursuant to this clause (13) shall cease to be deemed incurred or outstanding for purposes of this Section 4.07 from and after the ordinary course of businessdate on which the Issuer could have incurred such Indebtedness or Disqualified Stock or preferred equity under Section 4.07(a) without reliance upon this clause (13));
(g14) standby letters of credit or bank guarantees (other than letters of credit issued under Credit Facilities permitted by clause (1) of this paragraph) securing Indebtedness having an aggregate face amount not in excess of $100 million at any time outstanding;
(15) Indebtedness supported by a letter of credit in a principal amount outstanding not in excess of the stated amount of such letter of credit otherwise permitted to be incurred under this Indenture;
(16) Guarantees of Indebtedness of contractors and suppliers of the Issuer or any of its Restricted Subsidiaries or of persons who are not Affiliates of the Issuer and with whom the Issuer or any of its Restricted Subsidiaries has an existing business relationship in support of financing or bonding arrangements for such contractors or suppliers or such other person in connection with such business relationship; provided that the obligations of the Issuer or any of the Subsidiaries pursuant to this clause (16) shall not exceed $50 million at any time outstanding;
(17) Indebtedness relating to the financing of insurance policy premiums; provided that (x) such insurance is for the benefit of the Issuer or any of its Wholly Owned Domestic Subsidiaries and (y) the aggregate principal amount outstanding of Indebtedness permitted by this clause (17) shall not exceed $100 million at any time outstanding; and
(18) all premium (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on Indebtedness permitted to be incurred under this Indenture. The Issuer will not incur, and will not permit any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of 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 shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Issuer 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 4.07, in the event that an item of proposed Indebtedness, Disqualified Stock or preferred equity meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (18) above, or is entitled to be incurred pursuant to Section 4.07(a), the Issuer will be permitted to classify such item of Indebtedness, Disqualified Stock or preferred equity on the date of its incurrence and will only be required to include the amount and type of such Indebtedness, Disqualified Stock or preferred equity in one of the above clauses, although the Issuer may divide and classify an item of Indebtedness, Disqualified Stock or preferred equity in one or more of the types of Indebtedness, Disqualified Stock or preferred equity and may later reclassify all or a portion of such item of Indebtedness, Disqualified Stock or preferred equity, in any manner that complies with this Section 4.07. The accrual of interestinterest or dividends, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms terms, the reclassification of preferred equity as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Stock, including the Preferred Interests, Stock or preferred equity in the form of additional shares of the same class of Disqualified Stock or, in the case of the Preferred Interests, a guaranteed payment by the Partnership or the allocation of gross or net income of the Partnership in accordance with the terms of the Partnership Agreement, preferred equity will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock or preferred equity for the purposes of this covenantSection 4.07; provided, however, in each such casecase (other than preferred stock that is not Disqualified Stock), that the amount thereof of any such accrual, accretion or payment is included in Fixed Charges of the Partnership Issuer as accrued (other than the reclassification of preferred equity as Indebtedness due to a change in accounting principles). Notwithstanding any other provision of this Section 4.07, the maximum amount of Indebtedness that the Issuer or the applicable any Restricted Subsidiary may incur pursuant to this Section 4.07 shall not be deemed to be exceeded solely as accrueda result of fluctuations in exchange rates or currency values. The amount of any Indebtedness outstanding as of any date will be:
(1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(h) so long as at the time of incurrence no Default or Event of Default has occurred and is continuing, the incurrence by the Partnership of FF&E Financing; provided, however, that (i2) the principal amount of such Indebtedness does not exceed the cost (including sales and excise taxes, installation and delivery charges and other direct costs of, and other direct expenses paid or charged in connection with, such purchase) of the FF&E purchased or leased with the proceeds thereof and (ii) the aggregate principal amount of such Indebtedness, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace in the case of any Indebtedness incurred pursuant to this clause, does not exceed $5 million outstanding at any timeother Indebtedness; and
(i3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(A) the issuance Fair Market Value of such assets at the date of determination; and
(B) the amount of the Partnership Interests, including the Preferred Interests, in accordance with the Partnership Agreement. The Partnership will not incur any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Partnership unless such Indebtedness is also contractually subordinated in right of payment to the Notes on substantially identical terms; provided, however, that no Indebtedness of the Partnership shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Partnership solely by virtue of being unsecured. For purposes of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (a) through (i) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.09, the Partnership will be permitted to classify such item of Indebtedness as of any date of determination in any manner that complies with this Section 4.09Person.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Equity. The Partnership (a) Xxxx Las Vegas and the Restricted Entities shall not, and shall not permit any of its their respective Restricted Subsidiaries to, directly or indirectly, (i) create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), and the Partnership shall not or (ii) issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries to issue any or shares of preferred equitystock; provided, however, that, the Issuers Xxxx Las Vegas and its Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock), if (i) the Opening Date has occurred and (ii) the Fixed Charge Coverage Ratio of Xxxx Las Vegas for the Partnership’s Xxxx Las Vegas' most recently ended four full fiscal quarters following the Opening Date for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued (the "Reference Period") would have been at least 2.0 to 11.0, determined on a pro forma basis (basis, including a pro forma application of the net proceeds therefrom)from the Indebtedness, as if the additional Indebtedness had been incurred or the Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period. .
(b) The first paragraph provisions of this Section 4.09 4.09(a) shall not prohibit the incurrence of any of the following items of Indebtedness so long as no Default or Event of Default has occurred and is continuing or would result therefrom (collectively, “"Permitted Debt”"):
(1) the incurrence by Xxxx Las Vegas and any of its Restricted Subsidiaries of Indebtedness under the Credit Agreement in an aggregate principal amount (with letters of credit being deemed to have a principal amount equal to the sum of the face amount thereof and related unpaid reimbursement obligations) not to exceed an amount equal to (a) $1.0 billion less (b) the aggregate amount of all prepayments of principal Indebtedness that result in permanent reductions of the commitments under the Credit Agreement;
(2) the incurrence by the Partnership Issuers, the Restricted Entities and its their respective Restricted Subsidiaries of (i) Indebtedness represented by the Notes, including any Notes issued as payment of interest on the Notes in accordance with the terms of the Notes, (ii) their respective obligations arising under the Collateral Documents Notes, the Credit Agreement, the FF&E Facility and, to the extent such those obligations would represent Indebtedness and (iii) dividends payable in kind in respect of Indebtedness, the Preferred InterestsCollateral Documents;
(b3) the incurrence by the Partnership Xxxx Las Vegas, any Restricted Entity or any of its their respective Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under the first paragraph this Section 4.09(a), under clauses (2) or (7) of this Section 4.09 or clauses (a4.09(b), or under this clause (b) and (h) of this paragraph3);
(c4) the incurrence of intercompany Indebtedness (i) between or among Xxxx Las Vegas and/or its Restricted Subsidiaries, (ii) between or among Xxxxxxx Xxxxxx and Xxxx Resorts Holdings, (iii) between or among the Xxxx Group Entities and (iv) the incurrence by the Partnership Restricted Entities or any of their respective Restricted Subsidiaries of intercompany Indebtedness (to the extent that Xxxx Las Vegas, any of its Restricted Subsidiaries, or, as the case may be, the applicable Restricted Entity, would be permitted to make loans giving rise to, or otherwise hold, such Indebtedness as a Restricted Payment under Section 4.07 hereof) owing to Xxxx Las Vegas or any of its Restricted Subsidiaries of intercompany Subsidiaries, so long as:
(a) if Xxxx Las Vegas or any Guarantor is the obligor on the Indebtedness, the Indebtedness between or among the Partnership and any of its Restricted Subsidiaries as provided in Section 4.24 hereof; provided, however, that (i) such Indebtedness must be is expressly subordinated in right of payment to the prior payment in full in cash of all Obligations with respect to the Notes Notes, in the case of the Xxxx Las Vegas, or its guarantee under the Guarantee and Collateral Agreement to which it is a party, in the case of a Guarantor; provided, however, that no Indebtedness of Xxxx Las Vegas or any Guarantor shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of Xxxx Las Vegas or any such Guarantor solely by virtue of being unsecured;
(ii) (Ai) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Partnership a Guarantor or Xxxx Las Vegas or a Restricted Subsidiary thereof or thereof, and (Bii) any sale or other transfer of any such Indebtedness to a Person that is not either the Partnership or neither Xxxx Las Vegas nor a Restricted Subsidiary thereof nor any Guarantor shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Partnership Xxxx Las Vegas, such Restricted Entity or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (4); and
(c) in the case of any Indebtedness incurred pursuant to clause (iv) above, such Indebtedness is permitted to be incurred as a Restricted Payment under Section 4.07 hereof, and, for purposes of Section 4.07 hereof, the obligee or payee on such Indebtedness shall be deemed to have a Restricted Payment on the date on which such Indebtedness is incurred in an amount equal to the principal amount of the Indebtedness incurred on such date (or, if less, the principal amount of such Indebtedness from time to time outstanding);
(d5) the incurrence by Xxxx Las Vegas, the Partnership Restricted Entities or any of its their respective Restricted Subsidiaries of Hedging Obligations that are incurred for the purpose of fixing or hedging interest rate risk with respect to any floating rate Indebtedness that is permitted by the terms of this Indenture to be outstanding;
(e6) the Guarantee incurrence by Xxxx Las Vegas, the Partnership Restricted Entities or any of their respective Restricted Subsidiaries of Indebtedness solely in respect of performance, surety, appeal or similar bonds or standby letters of credit, so long as the aggregate amount of all such bonds and standby letters of credit is not greater than $20.0 million at any time outstanding;
(7) the incurrence by Xxxx Las Vegas, any Restricted Entity or any of their respective Restricted Subsidiaries of FF&E Financing or Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, including the FF&E Facility in each case, incurred for the purpose of financing all or part of the purchase price or cost of construction or improvement of property, plant or equipment used in the Project by Xxxx Las Vegas or any of its Restricted Subsidiaries of Indebtedness permitted to be incurred by another provision of this Section 4.09;Subsidiaries, so long as:
(f) the incurrence by the Partnership or any of its Restricted Subsidiaries of Indebtedness in respect of performance, surety or appeal bonds in the ordinary course of business;
(g) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms and the payment of dividends on Disqualified Stock, including the Preferred Interests, in the form of additional shares of the same class of Disqualified Stock or, in the case of the Preferred Interests, a guaranteed payment by the Partnership or the allocation of gross or net income of the Partnership in accordance with the terms of the Partnership Agreement, will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for the purposes of this covenant; provided, however, in each such case, that the amount thereof is included in Fixed Charges of the Partnership or the applicable Restricted Subsidiary as accrued;
(h) so long as at the time of incurrence no Default or Event of Default has occurred and is continuing, the incurrence by the Partnership of FF&E Financing; provided, however, that (ia) the principal amount of such Indebtedness does not exceed the cost (including sales and excise taxes, installation and delivery charges and other direct costs of, and other direct expenses paid or charged in connection with, such purchase) of the FF&E or other assets purchased or leased with the proceeds thereof and thereof,
(iib) unless such Indebtedness is unsecured or is incurred under the FF&E Facility, as in effect of the date of this Indenture, not less than 70% of the aggregate fair market value of the purchase or lease costs of such FF&E or other assets is paid with the proceeds of Indebtedness incurred under this clause (7), and
(c) the aggregate principal amount of such Indebtedness, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clauseclause (7), does not exceed $5 million an amount outstanding at any timetime equal to the greater of:
(1) $188.5 million (or $198.5 million from and after the Aircraft Refinancing Date, so long as such additional $10.0 million of Indebtedness is used solely to repay Replacement Aircraft Indebtedness) less (i) the aggregate amount of all prepayments of principal made under the FF&E Facility, less (ii) permanent commitment reductions under the FF&E Facility resulting from the application of Asset Sale or Event of Loss proceeds, and
(2) $100.0 million,
(8) (i) the Guarantee by Xxxx Las Vegas, any Restricted Entity or any of their Restricted Subsidiaries of Indebtedness of any other of Xxxx Las Vegas and any of its Restricted Subsidiaries, (ii) the Guarantee by Xxxxxxx Xxxxxx or Xxxx Resorts Holdings of Indebtedness of Wynn Resorts Holdings or Xxxxxxx Xxxxxx or Xxxx Las Vegas or any of its Restricted Subsidiaries, as the case may be, or (iii) the Guarantee by any Wynn Group Entity of Indebtedness of Xxxx Las Vegas, any Restricted Entity, and any of their respective Restricted Subsidiaries, in each case, to the extent the Indebtedness to be Guaranteed is permitted to be incurred by such other entity by another provision of this Section 4.09;
(9) the incurrence by Xxxx Las Vegas or any of its Restricted Subsidiaries of Indebtedness in connection with the repurchase, redemption or other acquisition or retirement for value of Equity Interests of Wynn Resorts or any Restricted Entity permitted pursuant to clause (6) of Section 4.07(b) hereof;
(10) the incurrence or issuance by Xxxx Las Vegas' Unrestricted Subsidiaries of Nonrecourse Debt; provided, however, that if any such Indebtedness ceases to be Non-Recourse Debt of an Unrestricted Subsidiary (but continues to be Indebtedness of a Subsidiary of Xxxx Las Vegas), such event shall be deemed to constitute an incurrence of Indebtedness by a Restricted Subsidiary of Xxxx Las Vegas that was not permitted by this clause (10);
(11) the incurrence by Xxxx Las Vegas or any of its Restricted Subsidiaries of additional Indebtedness (so long as such Indebtedness is incurred under the Credit Agreement or through the issuance of Additional Notes under this Indenture, or is unsecured Indebtedness) to be used to develop and construct an Entertainment Facility on land included in the Project (other than the Golf Course Land) in an aggregate principal amount (or original accreted value, as applicable) at any time not to exceed the lesser of (a) $50.0 million and (b) 200% of the Net New Equity Proceeds received by Xxxx Las Vegas or any of its Restricted Subsidiaries since the date of this Indenture and used to develop and construct such Entertainment Facility, excluding any Net New Equity Proceeds to the extent those proceeds are:
(a) utilized as a basis for incurring Indebtedness pursuant to clause (12) below,
(b) used to make Restricted Payments under clause (4)(B) of Section 4.07(a) hereof, or clause (2) or (3) of Section 4.07(b) hereof, or
(c) used to make Permitted Investments of the type permitted by clause (5) of the definition of Permitted Investments;
(12) the incurrence by Xxxx Las Vegas or any of its Restricted Subsidiaries of additional Indebtedness (so long as such Indebtedness is incurred under the Credit Agreement or the FF&E Facility or through the issuance of Additional Notes under this Indenture, or is unsecured Indebtedness) in an aggregate principal amount (or initial accreted value, as applicable) at any time outstanding incurred pursuant to this clause (12), not to exceed $50.0 million, so long as Indebtedness incurred pursuant to this clause (12) prior to the Completion Date is matched dollar for dollar, by additional Net New Equity Proceeds received by Xxxx Las Vegas or any of its Restricted Subsidiaries since the date of this Indenture, excluding any Net New Equity Proceeds to the extent those proceeds are:
(a) utilized as a basis for incurring Indebtedness pursuant to clause (11) above,
(b) used to make Restricted Payments under clause 4(B) of the Section 4.07(a) hereof, or clause (2) or (3) of Section 4.07(b) hereof, or
(c) used to make Permitted Investments of the type permitted by clause (5) of the definition of Permitted Investments;
(13) the accretion or amortization of original issue discount and the write-up of Indebtedness in accordance with GAAP purchase accounting; and
(i14) the issuance incurrence by Xxxx Las Vegas, any Restricted Entity or any of their respective Restricted Subsidiaries on or prior to the Partnership InterestsFinal Completion Date of Indebtedness represented by performance bonds, including guaranties, trade letters of credit, bankers' acceptances or similar instruments issued by Person other than Wynn Resorts, any Restricted Entity or any of their respective Restricted Subsidiaries for the Preferred Interestsbenefit of a trade creditor of any such Person, in an aggregate amount not to exceed $10.0 million at any time outstanding so long as:
(a) such Indebtedness is incurred in the ordinary course of business; and
(b) the obligations of Xxxx Las Vegas, any Restricted Entity or the applicable Restricted Subsidiary, as the case may be, supported by such performance bonds, guaranties, trade letters of credit, bankers' acceptances or similar instruments (1) consist solely of payment obligations with respect to costs incurred in accordance with the Partnership Project Budget which would otherwise be permitted to be paid by the applicable entity pursuant to the Disbursement Agreement. The Partnership will not , (2) are secured, and (3) are secured solely by Liens permitted by clause (22) of the definition of "Permitted Liens."
(c) Neither Xxxx Las Vegas nor any Guarantor shall incur any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Partnership Xxxx Las Vegas or such Guarantor unless such Indebtedness is also contractually subordinated (except for the priority of Permitted Liens and except as otherwise contemplated by the Intercreditor Agreements) in right of payment to the Notes Notes, in the case of Xxxx Las Vegas, or the Note Guarantee contained in its Guarantee and Collateral Agreement, in the case of a Guarantor on substantially identical terms; provided, however, that no . No Indebtedness of the Partnership Xxxx Las Vegas or any Guarantor shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Partnership Xxxx Las Vegas or any such Guarantor solely by virtue of being unsecured. .
(d) For purposes of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (a1) through (i14) aboveof Section 4.09(b) hereof, or is entitled to be incurred pursuant to the first paragraph of this Section 4.094.09(a), the Partnership will Issuers shall be permitted to classify such item of Indebtedness as of any on the date of determination its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09.
Appears in 1 contract
Samples: Indenture (Wynn Resorts LTD)
Incurrence of Indebtedness and Issuance of Preferred Equity. 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 the Partnership shall not issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries to issue any shares of preferred equity; provided, however, that, the Issuers may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, if (a) the Shreveport Resort is Operating; and (b) the Fixed Charge Coverage Ratio for the Partnership’s 's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 2.0 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the preferred equity or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period. The first paragraph of this Section 4.09 shall not prohibit the incurrence of any of the following items of Indebtedness so long as no Default or Event of Default has occurred and is continuing (collectively, “"Permitted Debt”"):
(a) the incurrence by the Partnership and its Restricted Subsidiaries of (i) Indebtedness represented by the Notes, including any Notes to be issued as payment of interest on the date of this Indenture and the Exchange Notes in accordance with to be issued pursuant to the terms of the Notes, Registration Rights Agreement and (ii) their respective obligations arising under the Collateral Documents to the extent such obligations would represent Indebtedness and (iii) dividends payable in kind in respect of the Preferred InterestsIndebtedness;
(b) the incurrence by the Partnership or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under the first paragraph of this Section 4.09 or clauses (a), (b), (h) and (hj) of this paragraph;
(c) the incurrence by the Partnership or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Partnership and any of its Restricted Subsidiaries as provided in Section 4.24 hereof; provided, however, that (i) such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Notes and (ii) (A) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Partnership or a Restricted Subsidiary thereof or (B) any sale or other transfer of any such Indebtedness to a Person that is not either the Partnership or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Partnership or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (c);
(d) the incurrence by the Partnership or any of its Restricted Subsidiaries of Hedging Obligations that are incurred for the purpose of fixing or hedging interest rate risk with respect to any floating rate Indebtedness that is permitted by the terms of this Indenture to be outstanding;
(e) the Guarantee by the Partnership or any of its Restricted Subsidiaries of Indebtedness permitted to be incurred by another provision of this Section 4.09;
(f) the incurrence by the Partnership or any of its Restricted Subsidiaries of Indebtedness in respect of performance, surety or appeal bonds in the ordinary course of business;
(g) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms and the payment of dividends on Disqualified Stock, including the Preferred Interests, Stock in the form of additional shares of the same class of Disqualified Stock or, in the case of the Preferred Interests, a guaranteed payment by the Partnership or the allocation of gross or net income of the Partnership in accordance with the terms of the Partnership Agreement, will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for the purposes of this covenant; provided, however, in each such case, that the amount thereof is included in Fixed Charges of the Partnership or the applicable Restricted Subsidiary as accrued;
(h) so long as at the time of incurrence no Default or Event of Default has occurred and is continuing, the incurrence by the Partnership of FF&E Financing; provided, however, that (i) the principal amount of such Indebtedness does not exceed the cost (including sales and excise taxes, installation and delivery charges and other direct costs of, and other direct expenses paid or charged in connection with, such purchase) of the FF&E purchased or leased with the proceeds thereof thereof, (ii) no Indebtedness incurred under the Notes is utilized for the purchase or lease of such FF&E and (iiiii) the aggregate principal amount of such Indebtedness, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause, does not exceed $5 35.0 million outstanding at any time; and;
(i) the Guarantee by the Partnership of Indebtedness incurred by any minority or women owned business enterprise that provides goods or services to the Partnership; provided, however, that (i) such Indebtedness is directly related to the construction, development or operation of the Shreveport Resort and (ii) the total amount of Guarantees for which the Partnership has become and may become obligated pursuant to this clause may not exceed an aggregate of $200,000;
(j) the incurrence by the Partnership or any of its Restricted Subsidiaries of Indebtedness, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause, in an aggregate principal amount not to exceed $10.0 million at any one time outstanding for working capital purposes and other general purposes;
(k) the incurrence by the Partnership of Indebtedness to Hilton New Orleans Corporation, a Louisiana corporation, pursuant to the terms of the Loan and Settlement Agreement in an amount not to exceed $2.0 million; and
(l) the incurrence by the Partnership of Indebtedness to the City of New Orleans pursuant to the Compromise Agreement in the amount of $5.0 million to be paid promptly after the issuance of the Partnership Interests, including the Preferred Interests, in accordance with the Partnership AgreementNotes. The Partnership will not incur any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Partnership unless such Indebtedness is also contractually subordinated in right of payment to the Notes on substantially identical terms; provided, however, that no Indebtedness of the Partnership shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Partnership solely by virtue of being unsecured. For purposes of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (a) through (ik) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.09, the Partnership will be permitted to classify such item of Indebtedness as of any on the date of determination its incurrence in any manner that complies with this Section 4.09. If any Indebtedness that may be incurred under this Section 4.09 may be secured by a Pari Passu Lien on the Pari Passu Collateral, upon the request of the Issuers, the Trustee is authorized to enter into an intercreditor agreement with the holder or holders of that Indebtedness (the "Pari Passu Debtholder") in substantially the form as Exhibit G hereto.
Appears in 1 contract
Samples: Indenture (HCS Ii Inc)
Incurrence of Indebtedness and Issuance of Preferred Equity. (a) The Partnership shall 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 the Partnership shall Company will not issue any Disqualified Stock and shall will not permit any of its Restricted Subsidiaries to issue any shares of preferred equity; provided, however, that, that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Company or any other Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue preferred equity, if on the date thereof the Fixed Charge Coverage Ratio for the PartnershipCompany’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such preferred equity is issued issued, as the case may be, would have been at least 2.0 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the preferred equity had been issued, as the case may be, at the beginning of such four-quarter period. The first paragraph of this Section 4.09 shall .
(b) Paragraph (a) above will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(ai) the incurrence under Credit Facilities by the Company or any of its Restricted Subsidiaries of Indebtedness and letters of credit and bankers’ acceptances thereunder in an aggregate principal amount under this clause (i) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed $375.0 million outstanding at any one time;
(ii) the incurrence by the Partnership Company and its Restricted Subsidiaries of (i) Indebtedness represented by the Notes, including any Notes issued as payment of interest on the Notes in accordance with the terms of the Notes, (ii) their respective obligations arising under the Collateral Documents to the extent such obligations would represent Indebtedness and (iii) dividends payable in kind in respect of outstanding on the Preferred InterestsClosing Date;
(biii) the incurrence by the Partnership Company and its Restricted Subsidiaries (including any future Guarantor) of Indebtedness represented (A) by the Senior Notes issued on the Issue Date and related Notes Guarantees and any exchange notes and the related Note Guarantees to be issued pursuant to the registration rights agreement entered into or required to be entered into pursuant to the Senior Notes Indenture or (B) by Lease Refinancing Notes and related guarantees;
(iv) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by (A) Capital Lease Obligations and other Indebtedness in respect of leases, in each case, relating to aircraft or Aircraft Sale and Leaseback Transactions; and (B) other Capital Lease Obligations, mortgage financings, industrial revenue bonds, purchase money obligations or other Indebtedness or preferred stock, or synthetic lease obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, development, construction, installation or improvement of property (real or personal and including Capital Stock), plant or equipment used in the business of the Company or any of its Restricted Subsidiaries (in each case, whether through the direct purchase of such assets or the Equity Interests of any Person owning such assets), in an aggregate principal amount under this clause (B) not to exceed at any time outstanding 5.0% of Total Assets;
(v) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under the first paragraph Section 6.02(a) or clauses (ii), (iii), (iv), (v), (xii) or (xvi) of this Section 4.09 or clauses (a6.02(b), (b) and (h) of this paragraph;
(cvi) the incurrence by the Partnership Company or any of its Restricted Subsidiaries of intercompany Indebtedness and cash management pooling obligations and arrangements between or among the Partnership Company and any of its Restricted Subsidiaries (treating the EMEA JV and any other Permitted Joint Venture as provided in Section 4.24 hereofRestricted Subsidiaries for this purpose); provided, however, that that:
(iA) if the Initial Borrower or any Loan Party is the obligor on such Indebtedness (other than cash management pooling obligations and arrangements and Indebtedness owed to the EMEA JV and any other Permitted Joint Venture) and the payee is not the Initial Borrower or a Loan Party, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes Revolving Facility and the Guarantees given under the Loan Document Guarantee; and
(iiB) (Ax) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Partnership Company or a Restricted Subsidiary thereof or of the Company and (By) any sale or other transfer of any such Indebtedness to a Person that is not either the Partnership Company or a Restricted Subsidiary thereof shall of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Partnership Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (cb)(vi);
(dvii) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of shares of preferred equity; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred equity being held by a Person other than the Company or a Restricted Subsidiary of the Company, and
(B) any sale or other transfer of any such preferred equity to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such preferred equity by such Restricted Subsidiary that was not permitted by this clause (vii);
(viii) the incurrence by the Partnership Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred other than 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 outstandingspeculative purposes;
(eix) the Guarantee guarantee by the Partnership Company or any of its Restricted Subsidiaries of Indebtedness and cash management pooling obligations and arrangements of the Company or a Restricted Subsidiary of the Company (treating the EMEA JV and any other Permitted Joint Venture as Restricted Subsidiaries for this purpose); provided that any such guarantee (other than a guarantee of cash management pooling obligations and arrangements) by the Company or any of its Restricted Subsidiaries in respect of a Permitted Joint Venture that does not exist on the Closing Date shall not exceed the amount set forth in clause (19)(B) of the definition of “Permitted Investments”) that was permitted to be incurred by another provision of this Section 4.09covenant (including the first paragraph hereof); 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;
(fx) the incurrence by the Partnership Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, payment obligations in connection with health or other types of social security benefits, unemployment or other insurance or self-insurance obligations, reclamation, statutory obligations, bankers’ acceptances, bid, performance, surety or appeal similar bonds and letters of credit or completion or performance guarantees (including without limitation, performance guarantees pursuant to flying contracts, supply agreements or equipment leases), or other similar obligations in the ordinary course of businessbusiness or consistent with past practice;
(gxi) 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) Indebtedness, Disqualified Stock or preferred equity of the Company or any Restricted Subsidiary incurred or issued to finance an acquisition (including an acquisition of aircraft) or of Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged into a Restricted Subsidiary in accordance with the terms of this Agreement; provided, however, that for any such indebtedness outstanding under this clause (xii) in excess of $10.0 million, after giving effect to such acquisition and the incurrence of such Indebtedness, Disqualified Stock and preferred equity either:
(A) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first sentence of this covenant; or
(B) the Fixed Charge Coverage Ratio would not be less than immediately prior to such acquisition;
(xiii) Indebtedness incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is not recourse to the Company or any Restricted Subsidiary of the Company other than a Receivables Subsidiary (except for Standard Securitization Undertakings);
(xiv) the incurrence of Indebtedness arising from agreements of the Company or a 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 this Agreement, 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;
(xv) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance of Disqualified Stock or preferred equity in an aggregate principal amount (or accreted value, as applicable) or having an aggregate liquidation preference at any time outstanding not to exceed the greater of $125.0 million or 5.0% of Total Assets (it being understood that any Indebtedness, Disqualified Stock or preferred equity incurred pursuant to this clause (xv) shall cease to be deemed incurred or outstanding for purposes of this covenant from and after the date on which the Company could have incurred such Indebtedness or Disqualified Stock or preferred equity under the first paragraph of this covenant without reliance upon this clause (xv));
(xvi) Contribution Indebtedness; and
(xvii) Manufacturer Support Indebtedness, Deposit Financings and Vendor Financings at any time outstanding not to exceed in the aggregate 3.0% of Total Assets.
(c) The Initial Borrower will not incur, and will not permit any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Borrower or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Revolving Facility on substantially identical terms (or terms more favorable to the Lenders under the Revolving Facility); provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness 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 6.02, in the event that an item of proposed Indebtedness, Disqualified Stock or preferred equity meets the criteria of more than one of the categories of Permitted Debt described in Section 6.02(b)(i)(b)(xvii) above, or is entitled to be incurred pursuant to the first paragraph of this covenant, the Company will be permitted to classify such item of Indebtedness, Disqualified Stock or preferred equity on the date of its incurrence and will only be required to include the amount and type of such Indebtedness, Disqualified Stock or preferred equity in one of the above clauses, although the Company may divide and classify an item of Indebtedness, Disqualified Stock or preferred equity in one or more of the types of Indebtedness, Disqualified Stock or preferred equity and may later reclassify all or a portion of such item of Indebtedness, Disqualified Stock or preferred equity, in any manner that complies with this covenant. The accrual of interestinterest or dividends, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms and terms, the reclassification of preferred equity as Indebtedness due to a change in accounting principles, the payment of dividends on Disqualified Stock, including the Preferred Interests, Stock or preferred equity in the form of additional shares of the same class of Disqualified Stock or, or preferred equity and unrealized losses or charges in respect of Hedging Obligations (including those resulting from the case application of the Preferred Interests, a guaranteed payment by the Partnership SFAS 133 or the allocation of gross or net income of the Partnership in accordance with the terms of the Partnership Agreement, any comparable standard relating to hedge accounting) will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock or preferred equity for the purposes of this covenant; provided, however, in each such casecase (other than preferred stock that is not Disqualified Stock), that the amount thereof of any such accrual, accretion or payment is included in Fixed Charges of the Partnership Company as accrued. Notwithstanding any other provision of this covenant, the maximum amount of Indebtedness that the Company or the applicable any Restricted Subsidiary may incur pursuant to this covenant shall not be deemed to be exceeded solely as accrued;a result of fluctuations in exchange rates or currency values.
(he) so long as at For purposes of determining compliance with any U.S. dollar denominated restriction on the time incurrence of incurrence no Default or Event of Default has occurred and Indebtedness where the Indebtedness incurred is continuingdenominated in a different currency, the incurrence by amount of such Indebtedness will be the Partnership U.S. Dollar Equivalent determined on the date of FF&E Financingthe establishment of the facility or instrument under which such Indebtedness was incurred; provided, however, that if such Indebtedness denominated in a different currency is subject to a Currency Agreement with respect to U.S. dollars, covering all principal, premium, if any, and interest payable on such Indebtedness, the amount of such Indebtedness expressed in U.S. dollars will be as provided in such Currency Agreement. The principal amount of any refinancing Indebtedness incurred in the same currency as the Indebtedness being refinanced will be the U.S. Dollar Equivalent of the Indebtedness refinanced, except to the extent that (i) such U.S. Dollar Equivalent was determined based on a Currency Agreement, in which case the refinancing Indebtedness will be determined in accordance with the preceding sentence, and (ii) the principal amount of such the refinancing Indebtedness does not exceed exceeds the cost (including sales and excise taxes, installation and delivery charges and other direct costs of, and other direct expenses paid or charged in connection with, such purchase) of the FF&E purchased or leased with the proceeds thereof and (ii) the aggregate principal amount of the Indebtedness being refinanced, in which case the U.S. Dollar Equivalent of such Indebtednessexcess, including all Permitted Refinancing as appropriate, will be determined on the date such refinancing Indebtedness incurred to refund, refinance or replace is incurred.
(f) The amount of any Indebtedness incurred pursuant to this clause, does not exceed $5 million outstanding at as of any time; anddate will be:
(i) the issuance accreted value of the Partnership Interests, including the Preferred InterestsIndebtedness, in accordance with the Partnership Agreement. The Partnership will not incur case of any Indebtedness issued with original issue discount;
(including Permitted Debtii) that is contractually subordinated the principal amount of the Indebtedness, in right the case of payment to any other Indebtedness; and
(iii) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(A) the Fair Market Value of such assets at the date of determination; and
(B) the amount of the Indebtedness of the Partnership unless such Indebtedness is also contractually subordinated in right of payment to the Notes on substantially identical terms; provided, however, that no Indebtedness of the Partnership shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Partnership solely by virtue of being unsecured. For purposes of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (a) through (i) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.09, the Partnership will be permitted to classify such item of Indebtedness as of any date of determination in any manner that complies with this Section 4.09.Person
Appears in 1 contract
Samples: Credit Agreement (CHC Group Ltd.)
Incurrence of Indebtedness and Issuance of Preferred Equity. (a) The Partnership 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), and the Partnership Borrower shall not issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries to issue any shares of preferred equity.
(b) Section 5.6(a) shall not prohibit the incurrence of any of the following items (collectively, "Permitted Debt"):
(i) (A) the incurrence by the Borrower (and the guarantee by its Subsidiaries) of Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (i)(A) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Borrower and its Subsidiaries thereunder) not to exceed $800,000,000 less the aggregate amount of all Net Proceeds of Asset Sales, Casualty Events or Condemnation Events applied by the Borrower or any of its Subsidiaries since the Closing Date to repay any term Indebtedness under any such Credit Facilities or to repay, or cash collateralize letters of credit under, any revolving Indebtedness under any such Credit Facilities and effect a corresponding commitment reduction thereunder, and (B) the incurrence by the Borrower (and the guarantee by its Subsidiaries) of Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount outstanding under this clause (i)(B) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Borrower and its Subsidiaries thereunder) not to exceed $100,000,000 less the aggregate amount of all Net Proceeds of Asset Sales, Casualty Events and Condemnation Events applied by the Borrower or any of its Subsidiaries since the Closing Date to repay any term Indebtedness under any such Credit Facility or to repay, or cash collateralize letters of credit under, any revolving Indebtedness under any such Credit Facility and effect a corresponding commitment reduction thereunder;
(ii) the incurrence by the Borrower, CalGen Finance and the Guarantors of Indebtedness represented by the Notes, the related Note Guarantees and the other Note Obligations incurred on the Closing Date, and the exchange notes and the related Note Guarantees to be issued pursuant to the Registration Rights Agreement;
(iii) the incurrence by the Borrower or any of its Subsidiaries of Expansion Debt; provided, however, that, :
(A) any Expansion Debt incurred by the Issuers may incur Indebtedness Excluded Subsidiary is recourse only to the Expansion Assets financed with such Expansion Debt and to other Expansion Assets owned by the Excluded Subsidiary (including Acquired Debtany rights of the Excluded Subsidiary under Shared Facilities Arrangements);
(B) or issue Disqualified Stock, if the Fixed Charge Coverage Ratio for the Partnership’s 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 the Expansion Debt is incurred or such Disqualified Stock is issued would have been at least 2.0 to 11.0, determined on a pro forma Pro Forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness Expansion Debt had been incurred or the Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period. The first paragraph of this Section 4.09 shall not prohibit period and the incurrence proceeds therefrom had been applied as intended to be applied (but without giving effect to the completion of any construction projects unless actual completion has been achieved), at least 25% of the following items cost of Indebtedness (collectively, “Permitted Debt”):such Expansion Assets is financed with Equity Contributions or the proceeds of Perpetual Preferred Stock or Affiliate Subordinated Indebtedness;
(aC) if the Fixed Charge Coverage Ratio for the Borrower's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which the Expansion Debt is incurred would have been less than 2.0 to 1.0, determined on a Pro Forma basis as if the Expansion Debt had been incurred at the beginning of such period and the proceeds therefrom had been applied as intended to be applied (but without giving effect to the completion of any construction projects unless actual completion has been achieved);
(1) at least 40% of the cost of such Expansion Assets is financed with Equity Contributions or the proceeds of Perpetual Preferred Stock or Affiliate Subordinated Indebtedness; and
(2) after giving effect to such incurrence, the amount of Expansion Debt incurred pursuant to this clause (iii), together with the aggregate amount of all other Expansion Debt then outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Expansion Debt incurred pursuant to this clause (iii), does not exceed $250,000,000;
(iv) the incurrence by the Partnership and its Restricted Subsidiaries of (i) Indebtedness represented by the Notes, including any Notes issued as payment of interest on the Notes in accordance with the terms of the Notes, (ii) their respective obligations arising under the Collateral Documents to the extent such obligations would represent Indebtedness and (iii) dividends payable in kind in respect of the Preferred Interests;
(b) the incurrence by the Partnership Borrower or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance or replace replace, Indebtedness (other than intercompany Indebtedness) that 91 was permitted by this Indenture Agreement to be incurred under the first paragraph clauses (ii), (iii), (iv) or (x) of this Section 4.09 or clauses (a5.6(b), (b) and (h) of this paragraph;
(cv) the incurrence by the Partnership Borrower or any of its Restricted Subsidiaries Guarantor of intercompany Indebtedness between or among the Partnership Borrower and any Guarantors that is subordinated in right of its Restricted Subsidiaries as provided in Section 4.24 hereofpayment to all Secured Obligations on the terms set forth on Exhibit A hereto and is not secured other than by unperfected security interests; provided, however, that (i) such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Notes and (ii) (A) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Partnership Borrower or a Restricted Subsidiary thereof or Guarantor and (B) any sale or other transfer of any such Indebtedness to a Person that is not either the Partnership Borrower or a Restricted Subsidiary thereof shall Guarantor will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Partnership Borrower or such Restricted SubsidiaryGuarantor, as the case may be, that was not permitted by this clause (cv); and provided, further, that any such intercompany Indebtedness must be included in the Collateral;
(dvi) the incurrence by the Partnership Borrower or any of its Restricted Subsidiaries of Hedging Obligations, in connection with Permitted Debt or otherwise, in the ordinary course of business and not for speculative purposes; provided, that (A) such Hedging Obligations will have tenors that are incurred for expire on or prior to the purpose maturity date (or other expiration) of fixing the underlying Obligation being hedged, and (B) any such Hedging Obligations hedging or hedging managing interest rate risk with respect to any floating rate Indebtedness a particular series of Notes or loans under the Term Loan Agreements or this Agreement will have tenors that is permitted by expire on or prior to the terms Stated Maturity of this Indenture to be outstandingthe applicable Notes or loans;
(e) the Guarantee by the Partnership or any of its Restricted Subsidiaries of Indebtedness permitted to be incurred by another provision of this Section 4.09;
(fvii) the incurrence by the Partnership Borrower or any of its Restricted Subsidiaries of Indebtedness in respect of performanceworkers' compensation claims, self-insurance obligations, bankers' acceptances, and performance and surety or appeal bonds in the ordinary course of business;
(gviii) the incurrence by the Borrower or any of its 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;
(ix) the incurrence by the Borrower of (a) Affiliate Subordinated Indebtedness in an aggregate principal amount not to exceed $250,000,000 at any one time outstanding and (b) Working Capital Facility Indebtedness in an aggregate principal amount not to exceed $750,000,000 at any one time outstanding; and
(x) the incurrence by the Borrower of Third Party Subordinated Indebtedness; provided, that:
(A) the Net Proceeds of the Third Party Subordinated Indebtedness are applied:
(1) to acquire all or substantially all of the assets of, or any Equity Interests in, a business that constitutes a Permitted Business, provided, that in the case of an acquisition of Equity Interests, the business 92 is or becomes a Subsidiary of the Borrower and a Guarantor concurrently with such acquisition;
(2) to make a capital expenditure;
(3) to acquire other assets that are not classified as current assets under GAAP and that are used or useful in a Permitted Business; or
(4) any combination of the foregoing; and
(B) the Fixed Charge Coverage Ratio for the Borrower's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which the Third Party Subordinated Indebtedness is incurred would have been at least 2.0 to 1.0, determined on a Pro Forma basis as if the Third Party Subordinated Indebtedness had been incurred at the beginning of such period and the proceeds therefrom had been applied as intended to be applied (but without giving effect to the completion of any construction projects unless actual completion has been achieved).
(c) The Borrower shall not incur, and shall not permit any Subsidiary to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Borrower or such Subsidiary unless such Indebtedness is also contractually subordinated in right of payment to the Revolving Loans, the applicable Revolving Loan Guarantees and the other Revolving Loan Obligations on substantially identical terms or on terms that are more favorable to the Lenders hereunder; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Borrower or any of its Subsidiaries solely by virtue of being unsecured or by virtue of being secured on a junior basis.
(d) For purposes of determining compliance with this Section 5.6, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (i) through (x) of Section 5.6(b), the Borrower 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 5.6. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms terms, and the payment of dividends on Disqualified Stock, including the Preferred Interests, Stock in the form of additional shares of the same class of Disqualified Stock or, in the case of the Preferred Interests, a guaranteed payment by the Partnership or the allocation of gross or net income of the Partnership in accordance with the terms of the Partnership Agreement, will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for the purposes of this covenant; providedSection 5.6. Notwithstanding any other provision of this Section 5.6, however, in each such case, the maximum amount of Indebtedness that the amount thereof is included in Fixed Charges of the Partnership Borrower or the applicable Restricted any Subsidiary as accrued;
(h) so long as at the time of incurrence no Default or Event of Default has occurred and is continuing, the incurrence by the Partnership of FF&E Financing; provided, however, that (i) the principal amount of such Indebtedness does not exceed the cost (including sales and excise taxes, installation and delivery charges and other direct costs of, and other direct expenses paid or charged in connection with, such purchase) of the FF&E purchased or leased with the proceeds thereof and (ii) the aggregate principal amount of such Indebtedness, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred may incur pursuant to this clause, does Section 5.6 shall not exceed $5 million outstanding at any time; and
(i) the issuance of the Partnership Interests, including the Preferred Interests, in accordance with the Partnership Agreement. The Partnership will not incur any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Partnership unless such Indebtedness is also contractually subordinated in right of payment to the Notes on substantially identical terms; provided, however, that no Indebtedness of the Partnership shall be deemed to be contractually subordinated exceeded solely as a result of fluctuations in right of payment to any other Indebtedness of the Partnership solely by virtue of being unsecured. For purposes of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (a) through (i) above, exchange rates or is entitled to be incurred pursuant to the first paragraph of this Section 4.09, the Partnership will be permitted to classify such item of Indebtedness as of any date of determination in any manner that complies with this Section 4.09currency values.
Appears in 1 contract
Samples: Credit Agreement (Calpine Corp)
Incurrence of Indebtedness and Issuance of Preferred Equity. The Partnership shall 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 the Partnership shall Company will not issue any Disqualified Stock and shall will not permit any of its Restricted Subsidiaries to issue any shares of preferred equity. The preceding paragraph will not prohibit the incurrence of any of the following items of Indebtedness (collectively, "Permitted Debt"):
(1) the incurrence by the Company (and the guarantee by its Subsidiaries) of:
(a) Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1)(a) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Subsidiaries thereunder) not to exceed $800.0 million, less the aggregate amount of all Net Proceeds of Asset Sales, Casualty Events or Condemnation Events applied by the Company or any of its Subsidiaries since the Closing Date to repay any term Indebtedness under any such Credit Facility or to repay, or cash collateralize letters of credit under, any revolving Indebtedness under any such Credit Facility and effect a corresponding commitment reduction thereunder; and
(b) Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount outstanding under this clause (1)(b) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Subsidiaries thereunder) not to exceed $100.0 million, less the aggregate amount of all Net Proceeds of Asset Sales, Casualty Events and Condemnation Events applied by the Company or any of its Subsidiaries since the Closing Date to repay any term Indebtedness under any such Credit Facility or to repay, or cash collateralize letters of credit under, any revolving Indebtedness under any such Credit Facility and effect a corresponding commitment reduction thereunder;
(2) the incurrence by the Issuers and the Guarantors of Indebtedness represented by the First Priority Notes, the Second Priority Notes and the Notes to be issued on the Closing Date, the related Subsidiary guarantees and the other Obligations incurred under the Indentures on the Closing Date, and the Exchange Notes and the related Subsidiary guarantees to be issued pursuant to the Registration Rights Agreement;
(3) the incurrence by the Company or any of its Subsidiaries of Expansion Debt; provided, however, that, :
(a) any Expansion Debt incurred by the Issuers may incur Indebtedness Excluded Subsidiary is recourse only to the Expansion Assets financed with such Expansion Debt and to other Expansion Assets owned by the Excluded Subsidiary (including Acquired Debtany rights of the Excluded Subsidiary under Shared Facilities Arrangements);
(b) or issue Disqualified Stock, if the Fixed Charge Coverage Ratio for the Partnership’s 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 the Expansion Debt is incurred or such Disqualified Stock is issued would have been at least 2.0 to 11.0, determined on a pro forma Pro Forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness Expansion Debt had been incurred or the Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period. The first paragraph of this Section 4.09 shall not prohibit period and the incurrence proceeds therefrom had been applied as intended to be applied (but without giving effect to the completion of any construction projects unless actual completion has been achieved), at least 25% of the following items cost of Indebtedness (collectively, “Permitted Debt”):such Expansion Assets is financed with Equity Contributions or the proceeds of Perpetual Preferred Stock or Affiliate Subordinated Indebtedness;
(ac) if the Fixed Charge Coverage Ratio for the Company's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which the Expansion Debt is incurred would have been less than 2.0 to 1.0, determined on a Pro Forma basis as if the Expansion Debt had been incurred at the beginning of such period and the proceeds therefrom had been applied as intended to be applied (but without giving effect to the completion of any construction projects unless actual completion has been achieved),
(i) at least 40% of the cost of such Expansion Assets is financed with Equity Contributions or the proceeds of Perpetual Preferred Stock or Affiliate Subordinated Indebtedness, and
(ii) after giving effect to such incurrence, the amount of Expansion Debt incurred pursuant to this clause (3), together with the aggregate amount of all other Expansion Debt then outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Expansion Debt incurred pursuant to this clause (3), does not exceed $250.0 million;
(4) the incurrence by the Partnership and its Restricted Subsidiaries of (i) Indebtedness represented by the Notes, including any Notes issued as payment of interest on the Notes in accordance with the terms of the Notes, (ii) their respective obligations arising under the Collateral Documents to the extent such obligations would represent Indebtedness and (iii) dividends payable in kind in respect of the Preferred Interests;
(b) the incurrence by the Partnership Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance or replace replace, Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under the first paragraph of this Section 4.09 or clauses (a2), (b3), (4) and or (h10) of this paragraph;
(c5) the incurrence by the Partnership Company or any of its Restricted Subsidiaries Guarantor of intercompany Indebtedness between or among the Partnership Company and any Guarantor that is subordinated in right of its Restricted Subsidiaries as provided payment to all Secured Obligations pursuant to a customary subordination agreement delivered to the Collateral Agent (together with all other documents or instruments required to effect such subordination and any other documents reasonably requested by the Collateral Agent in Section 4.24 hereofconnection therewith), and is not secured other than by unperfected security interests; provided, however, that (i) such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Notes and (ii) (A) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Partnership Company or a Restricted Subsidiary thereof or Guarantor and (Bii) any sale or other transfer of any such Indebtedness to a Person that is not either the Partnership Company or a Restricted Subsidiary thereof shall Guarantor will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Partnership Company or such Restricted SubsidiaryGuarantor, as the case may be, that was not permitted by this clause (c5); and provided, further, that any such intercompany Indebtedness must be included in the Collateral;
(d6) the incurrence by the Partnership Company or any of its Restricted Subsidiaries of Hedging Obligations, in connection with Permitted Debt or otherwise, in the ordinary course of business and not for speculative purposes; provided, that (a) such Hedging Obligations have tenors that are incurred for expire on or prior to the purpose maturity date (or other expiration) of fixing the underlying obligation being hedged, and (b) any such Hedging Obligations hedging or hedging managing interest rate risk with respect to any floating rate Indebtedness (i) First Priority Lien Debt have tenors that is permitted by expire on or prior to the terms Stated Maturity of this Indenture the First Priority Notes, (ii) Second Priority Lien Debt have tenors that expire on or prior to be outstandingthe Stated Maturity of the Second Priority Notes, or (iii) Third Priority Lien Debt have tenors that expire on or prior to the Stated Maturity of the Notes;
(e) the Guarantee by the Partnership or any of its Restricted Subsidiaries of Indebtedness permitted to be incurred by another provision of this Section 4.09;
(f7) the incurrence by the Partnership Company or any of its Restricted Subsidiaries of Indebtedness in respect of performanceworkers' compensation claims, self-insurance obligations, bankers' acceptances, and performance and surety or appeal bonds in the ordinary course of business;
(g8) the incurrence by the Company or any of its 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;
(9) the accrual incurrence by the Company of interest, the accretion or amortization of original issue discount, the payment of interest on any (a) Affiliate Subordinated Indebtedness in an aggregate principal amount not to exceed $250.0 million at any one time outstanding and (b) Working Capital Facility Indebtedness in an aggregate principal amount not to exceed $750.0 million at any one time outstanding;
(10) the form incurrence by the Company of additional Indebtedness with Third Party Subordinated Indebtedness; provided, that:
(a) the same terms and the payment of dividends on Disqualified Stock, including the Preferred Interests, in the form of additional shares net proceeds of the same class Third Party Subordinated Indebtedness are applied:
(i) to acquire all or substantially all of Disqualified Stock orthe assets of, or any Equity Interests in, a business that constitutes a Permitted Business; provided, that in the case of the Preferred an acquisition of Equity Interests, the business is or becomes a guaranteed payment by the Partnership or the allocation of gross or net income Subsidiary of the Partnership in accordance Company and a Guarantor concurrently with the terms of the Partnership Agreement, will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for the purposes of this covenant; provided, however, in each such case, that the amount thereof is included in Fixed Charges of the Partnership or the applicable Restricted Subsidiary as accruedacquisition;
(hii) so long to make a capital expenditure;
(iii) to acquire other assets that are not classified as at the time of incurrence no Default current assets under GAAP and that are used or Event of Default has occurred and is continuing, the incurrence by the Partnership of FF&E Financinguseful in a Permitted Business; provided, however, that or
(iiv) the principal amount of such Indebtedness does not exceed the cost (including sales and excise taxes, installation and delivery charges and other direct costs of, and other direct expenses paid or charged in connection with, such purchase) any combination of the FF&E purchased or leased with the proceeds thereof and (ii) the aggregate principal amount of such Indebtedness, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause, does not exceed $5 million outstanding at any timeforegoing; and
(ib) the issuance Fixed Charge Coverage Ratio for the Company's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which the Third Party Subordinated Indebtedness is incurred would have been at least 2.0 to 1.0, determined on a Pro Forma basis as if the Third Party Subordinated Indebtedness had been incurred at the beginning of such period and the Partnership Interests, including proceeds therefrom had been applied as intended to be applied (but without giving effect to the Preferred Interests, in accordance with the Partnership Agreementcompletion of any construction projects unless actual completion has been achieved). The Partnership Company will not incur incur, and will not permit any Subsidiary to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Partnership Company or such Subsidiary unless such Indebtedness is also contractually subordinated in right of payment to the Notes Secured Obligations on substantially identical termsterms or on terms that are more favorable to the holders of the Secured Obligations; provided, however, that no Indebtedness of the Partnership shall will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Partnership Company or any of its Subsidiaries solely by virtue of being unsecured. For purposes unsecured or by virtue of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (a) through (i) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.09, the Partnership will be permitted to classify such item of Indebtedness as of any date of determination in any manner that complies with this Section 4.09being secured on a junior basis.
Appears in 1 contract
Samples: Third Priority Secured Notes Indenture (Calpine Corp)
Incurrence of Indebtedness and Issuance of Preferred Equity. (a) The Partnership shall 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 the Partnership shall Company will not issue any Disqualified Stock and shall will not permit any of its Restricted Subsidiaries to issue any shares of preferred equity; provided, however, that, that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Company or any other Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue preferred equity, if on the date thereof the Fixed Charge Coverage Ratio for the PartnershipCompany’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such preferred equity is issued issued, as the case may be, would have been at least 2.0 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the preferred equity had been issued, as the case may be, at the beginning of such four-quarter period. The first .
(b) paragraph of this Section 4.09 shall (a) above will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(ai) the incurrence under Credit Facilities by the Company or any of its Restricted Subsidiaries of Indebtedness and letters of credit and bankers’ acceptances thereunder in an aggregate principal amount under this clause (i) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed $375.0 million outstanding at any one time;
(ii) the incurrence by the Partnership Company and its Restricted Subsidiaries of (i) Indebtedness represented by the Notes, including any Notes issued as payment of interest on the Notes in accordance with the terms of the Notes, (ii) their respective obligations arising under the Collateral Documents to the extent such obligations would represent Indebtedness and (iii) dividends payable in kind in respect of outstanding on the Preferred InterestsClosing Date;
(biii) the incurrence by the Partnership Company and its Restricted Subsidiaries (including any future Guarantor) of Indebtedness represented (A) by the Senior Notes issued on the Issue Date and related Note Guarantees and any exchange notes and the related Note Guarantees to be issued pursuant to the registration rights agreement entered into or required to be entered into pursuant to the Senior Notes Indenture or (B) by Lease Refinancing Notes and related guarantees;
(iv) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by (A) Capital Lease Obligations and other Indebtedness in respect of leases, in each case, relating to aircraft or Aircraft Sale and Leaseback Transactions; and (B) other Capital Lease Obligations, mortgage financings, industrial revenue bonds, purchase money obligations or other Indebtedness or preferred stock, or synthetic lease obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, development, construction, installation or improvement of property (real or personal and including Capital Stock), plant or equipment used in the business of the Company or any of its Restricted Subsidiaries (in each case, whether through the direct purchase of such assets or the Equity Interests of any Person owning such assets), in an aggregate principal amount under this clause (B) not to exceed at any time outstanding 5.0% of Total Assets;
(v) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under the first paragraph Section 6.02(a) or clauses (ii), (iii), (iv), (v), (xii) or (xvi) of this Section 4.09 or clauses (a6.02(b), (b) and (h) of this paragraph;
(cvi) the incurrence by the Partnership Company or any of its Restricted Subsidiaries of intercompany Indebtedness and cash management pooling obligations and arrangements between or among the Partnership Company and any of its Restricted Subsidiaries (treating the EMEA JV and any other Permitted Joint Venture as provided in Section 4.24 hereofRestricted Subsidiaries for this purpose); provided, however, that that:
(iA) if the Initial Borrower or any Loan Party is the obligor on such Indebtedness (other than cash management pooling obligations and arrangements and Indebtedness owed to the EMEA JV and any other Permitted Joint Venture) and the payee is not the Initial Borrower or a Loan Party, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes Revolving Facility under the Loan Documents and the Guarantees given under the Loan Document Guarantee; and
(iiB) (Ax) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Partnership Company or a Restricted Subsidiary thereof or of the Company and (By) any sale or other transfer of any such Indebtedness to a Person that is not either the Partnership Company or a Restricted Subsidiary thereof shall of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Partnership Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (cb)(vi);
(dvii) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of shares of preferred equity; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred equity being held by a Person other than the Company or a Restricted Subsidiary of the Company, and
(B) any sale or other transfer of any such preferred equity to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such preferred equity by such Restricted Subsidiary that was not permitted by this clause (vii);
(viii) the incurrence by the Partnership Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred other than 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 outstandingspeculative purposes;
(eix) the Guarantee guarantee by the Partnership Company or any of its Restricted Subsidiaries of Indebtedness and cash management pooling obligations and arrangements of the Company or a Restricted Subsidiary of the Company (treating the EMEA JV and any other Permitted Joint Venture as Restricted Subsidiaries for this purpose); provided that any such guarantee (other than a guarantee of cash management pooling obligations and arrangements) by the Company or any of its Restricted Subsidiaries in respect of a Permitted Joint Venture that does not exist on the Closing Date shall not exceed the amount set forth in clause (19)(B) of the definition of “Permitted Investments”) that was permitted to be incurred by another provision of this Section 4.09covenant (including the first paragraph hereof); 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;
(fx) the incurrence by the Partnership Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, payment obligations in connection with health or other types of social security benefits, unemployment or other insurance or self-insurance obligations, reclamation, statutory obligations, bankers’ acceptances, bid, performance, surety or appeal similar bonds and letters of credit or completion or performance guarantees (including without limitation, performance guarantees pursuant to flying contracts, supply agreements or equipment leases), or other similar obligations in the ordinary course of businessbusiness or consistent with past practice;
(gxi) 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) Indebtedness, Disqualified Stock or preferred equity of the Company or any Restricted Subsidiary incurred or issued to finance an acquisition (including an acquisition of aircraft) or of Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged into a Restricted Subsidiary in accordance with the terms of this Agreement; provided, however, that for any such indebtedness outstanding under this clause (xii) in excess of $10.0 million, after giving effect to such acquisition and the incurrence of such Indebtedness, Disqualified Stock and preferred equity either:
(A) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first sentence of this covenant; or
(B) the Fixed Charge Coverage Ratio would not be less than immediately prior to such acquisition;
(xiii) Indebtedness incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is not recourse to the Company or any Restricted Subsidiary of the Company other than a Receivables Subsidiary (except for Standard Securitization Undertakings);
(xiv) the incurrence of Indebtedness arising from agreements of the Company or a 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 this Agreement, 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;
(xv) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance of Disqualified Stock or preferred equity in an aggregate principal amount (or accreted value, as applicable) or having an aggregate liquidation preference at any time outstanding not to exceed the greater of $125.0 million or 5.0% of Total Assets (it being understood that any Indebtedness, Disqualified Stock or preferred equity incurred pursuant to this clause (xv) shall cease to be deemed incurred or outstanding for purposes of this covenant from and after the date on which the Company could have incurred such Indebtedness or Disqualified Stock or preferred equity under the first paragraph of this covenant without reliance upon this clause (xv));
(xvi) Contribution Indebtedness; and
(xvii) Manufacturer Support Indebtedness, Deposit Financings and Vendor Financings at any time outstanding not to exceed in the aggregate 3.0% of Total Assets.
(c) The Initial Borrower will not incur, and will not permit any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Initial Borrower or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Revolving Facility on substantially identical terms (or terms more favorable to the Lenders under the Revolving Facility); provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness 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 6.02, in the event that an item of proposed Indebtedness, Disqualified Stock or preferred equity meets the criteria of more than one of the categories of Permitted Debt described in Section 6.02(b)above, or is entitled to be incurred pursuant to the first paragraph of this covenant, the Company will be permitted to classify such item of Indebtedness, Disqualified Stock or preferred equity on the date of its incurrence and will only be required to include the amount and type of such Indebtedness, Disqualified Stock or preferred equity in one of the above clauses, although the Company may divide and classify an item of Indebtedness, Disqualified Stock or preferred equity in one or more of the types of Indebtedness, Disqualified Stock or preferred equity and may later reclassify all or a portion of such item of Indebtedness, Disqualified Stock or preferred equity, in any manner that complies with this covenant. The accrual of interestinterest or dividends, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms and terms, the reclassification of preferred equity as Indebtedness due to a change in accounting principles, the payment of dividends on Disqualified Stock, including the Preferred Interests, Stock or preferred equity in the form of additional shares of the same class of Disqualified Stock or, or preferred equity and unrealized losses or charges in respect of Hedging Obligations (including those resulting from the case application of the Preferred Interests, a guaranteed payment by the Partnership SFAS 133 or the allocation of gross or net income of the Partnership in accordance with the terms of the Partnership Agreement, any comparable standard relating to hedge accounting) will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock or preferred equity for the purposes of this covenant; provided, however, in each such casecase (other than preferred stock that is not Disqualified Stock), that the amount thereof of any such accrual, accretion or payment is included in Fixed Charges of the Partnership Company as accrued. Notwithstanding any other provision of this covenant, the maximum amount of Indebtedness that the Company or the applicable any Restricted Subsidiary may incur pursuant to this covenant shall not be deemed to be exceeded solely as accrued;a result of fluctuations in exchange rates or currency values.
(he) so long as at For purposes of determining compliance with any U.S. dollar denominated restriction on the time incurrence of incurrence no Default or Event of Default has occurred and Indebtedness where the Indebtedness incurred is continuingdenominated in a different currency, the incurrence by amount of such Indebtedness will be the Partnership U.S. Dollar Equivalent determined on the date of FF&E Financingthe establishment of the facility or instrument under which such Indebtedness was incurred; provided, however, that if such Indebtedness denominated in a different currency is subject to a Currency Agreement with respect to U.S. dollars, covering all principal, premium, if any, and interest payable on such Indebtedness, the amount of such Indebtedness expressed in U.S. dollars will be as provided in such Currency Agreement. The principal amount of any refinancing Indebtedness incurred in the same currency as the Indebtedness being refinanced will be the U.S. Dollar Equivalent of the Indebtedness refinanced, except to the extent that (i) such U.S. Dollar Equivalent was determined based on a Currency Agreement, in which case the refinancing Indebtedness will be determined in accordance with the preceding sentence, and (ii) the principal amount of such the refinancing Indebtedness does not exceed exceeds the cost (including sales and excise taxes, installation and delivery charges and other direct costs of, and other direct expenses paid or charged in connection with, such purchase) of the FF&E purchased or leased with the proceeds thereof and (ii) the aggregate principal amount of the Indebtedness being refinanced, in which case the U.S. Dollar Equivalent of such Indebtednessexcess, including all Permitted Refinancing as appropriate, will be determined on the date such refinancing Indebtedness incurred to refund, refinance or replace is incurred.
(f) The amount of any Indebtedness incurred pursuant to this clause, does not exceed $5 million outstanding at as of any time; anddate will be:
(i) the issuance accreted value of the Partnership Interests, including the Preferred InterestsIndebtedness, in accordance with the Partnership Agreement. The Partnership will not incur case of any Indebtedness issued with original issue discount;
(including Permitted Debtii) that is contractually subordinated the principal amount of the Indebtedness, in right the case of payment to any other Indebtedness; and
(iii) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(A) the Fair Market Value of such assets at the date of determination; and
(B) the amount of the Indebtedness of the Partnership unless such Indebtedness is also contractually subordinated in right of payment to the Notes on substantially identical terms; provided, however, that no Indebtedness of the Partnership shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Partnership solely by virtue of being unsecured. For purposes of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (a) through (i) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.09, the Partnership will be permitted to classify such item of Indebtedness as of any date of determination in any manner that complies with this Section 4.09Person.
Appears in 1 contract
Samples: Credit Agreement (CHC Group Ltd.)
Incurrence of Indebtedness and Issuance of Preferred Equity. (a) The Partnership 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), and the Partnership Borrower shall not issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries to issue any shares of preferred equity.
(b) Section 5.6(a) shall not prohibit the incurrence of any of the following items (collectively, "Permitted Debt"):
(i) (A) the incurrence by the Borrower (and the guarantee by its Subsidiaries) of Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (i)(A) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Borrower and its Subsidiaries thereunder) not to exceed $800,000,000 less the aggregate amount of all Net Proceeds of Asset Sales, Casualty Events or Condemnation Events applied by the Borrower or any of its Subsidiaries since the Closing Date to repay any term Indebtedness under any such Credit Facilities or to repay, or cash collateralize letters of credit under, any revolving Indebtedness under any such Credit Facilities and effect a corresponding commitment reduction thereunder, and (B) the incurrence by the Borrower (and the guarantee by its Subsidiaries) of Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount outstanding under this clause (i)(B) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Borrower and its Subsidiaries thereunder) not to exceed $100,000,000 less the aggregate amount of all Net Proceeds of Asset Sales, Casualty Events and Condemnation Events applied by the Borrower or any of its Subsidiaries since the Closing Date to repay any term Indebtedness under any such Credit Facility or to repay, or cash collateralize letters of credit under, any revolving Indebtedness under any such Credit Facility and effect a corresponding commitment reduction thereunder;
(ii) the incurrence by the Borrower, CalGen Finance and the Guarantors of Indebtedness represented by the Notes, the related Note Guarantees and the other Note Obligations incurred on the Closing Date, and the exchange notes and the related Note Guarantees to be issued pursuant to the Registration Rights Agreement;
(iii) the incurrence by the Borrower or any of its Subsidiaries of Expansion Debt; provided, however, that, :
(A) any Expansion Debt incurred by the Issuers may incur Indebtedness Excluded Subsidiary is recourse only to the Expansion Assets financed with such Expansion Debt and to other Expansion Assets owned by the Excluded Subsidiary (including Acquired Debtany rights of the Excluded Subsidiary under Shared Facilities Arrangements);
(B) or issue Disqualified Stock, if the Fixed Charge Coverage Ratio for the Partnership’s 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 the Expansion Debt is incurred or such Disqualified Stock is issued would have been at least 2.0 to 11.0, determined on a pro forma Pro Forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness Expansion Debt had been incurred or the Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period. The first paragraph of this Section 4.09 shall not prohibit period and the incurrence proceeds therefrom had been applied as intended to be applied (but without giving effect to the completion of any construction projects unless actual completion has been achieved), at least 25% of the following items cost of Indebtedness (collectively, “Permitted Debt”):such Expansion Assets is financed with Equity Contributions or the proceeds of Perpetual Preferred Stock or Affiliate Subordinated Indebtedness;
(aC) if the Fixed Charge Coverage Ratio for the Borrower's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which the Expansion Debt is incurred would have been less than 2.0 to 1.0, determined on a Pro Forma basis as if the Expansion Debt had been incurred at the beginning of such period and the proceeds therefrom had been applied as intended to be applied (but without giving effect to the completion of any construction projects unless actual completion has been achieved);
(1) at least 40% of the cost of such Expansion Assets is financed with Equity Contributions or the proceeds of Perpetual Preferred Stock or Affiliate Subordinated Indebtedness; and
(2) after giving effect to such incurrence, the amount of Expansion Debt incurred pursuant to this clause (iii), together with the aggregate amount of all other Expansion Debt then outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Expansion Debt incurred pursuant to this clause (iii), does not exceed $250,000,000;
(iv) the incurrence by the Partnership and its Restricted Subsidiaries of (i) Indebtedness represented by the Notes, including any Notes issued as payment of interest on the Notes in accordance with the terms of the Notes, (ii) their respective obligations arising under the Collateral Documents to the extent such obligations would represent Indebtedness and (iii) dividends payable in kind in respect of the Preferred Interests;
(b) the incurrence by the Partnership Borrower or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance or replace replace, Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture Agreement to be incurred under the first paragraph clauses (ii), (iii), (iv) or (x) of this Section 4.09 or clauses (a5.6(b), (b) and (h) of this paragraph;
(cv) the incurrence by the Partnership Borrower or any of its Restricted Subsidiaries Guarantor of intercompany Indebtedness between or among the Partnership Borrower and any Guarantors that is subordinated in right of its Restricted Subsidiaries as provided in Section 4.24 hereofpayment to all Secured Obligations on the terms set forth on Exhibit A hereto and is not secured other than by unperfected security interests; provided, however, that (i) such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Notes and (ii) (A) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Partnership Borrower or a Restricted Subsidiary thereof or Guarantor and (B) any sale or other transfer of any such Indebtedness to a Person that is not either the Partnership Borrower or a Restricted Subsidiary thereof shall Guarantor will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Partnership Borrower or such Restricted SubsidiaryGuarantor, as the case may be, that was not permitted by this clause (cv); and provided, further, that any such intercompany Indebtedness must be included in the Collateral;
(dvi) the incurrence by the Partnership Borrower or any of its Restricted Subsidiaries of Hedging Obligations, in connection with Permitted Debt or otherwise, in the ordinary course of business and not for speculative purposes; provided, that (A) such Hedging Obligations will have tenors that are incurred for expire on or prior to the purpose maturity date (or other expiration) of fixing the underlying Obligation being hedged, and (B) any such Hedging Obligations hedging or hedging managing interest rate risk with respect to any floating rate Indebtedness a particular series of Notes or loans under the Term Loan Agreements or this Agreement will have tenors that is permitted by expire on or prior to the terms Stated Maturity of this Indenture to be outstandingthe applicable Notes or loans;
(e) the Guarantee by the Partnership or any of its Restricted Subsidiaries of Indebtedness permitted to be incurred by another provision of this Section 4.09;
(fvii) the incurrence by the Partnership Borrower or any of its Restricted Subsidiaries of Indebtedness in respect of performanceworkers' compensation claims, self-insurance obligations, bankers' acceptances, and performance and surety or appeal bonds in the ordinary course of business;
(gviii) the accrual incurrence by the Borrower or any of interestits 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;
(ix) the accretion or amortization incurrence by the Borrower of original issue discount, the payment of interest on any (a) Affiliate Subordinated Indebtedness in an aggregate principal amount not to exceed $250,000,000 at any one time outstanding and (b) Working Capital Facility Indebtedness in an aggregate principal amount not to exceed $750,000,000 at any one time outstanding; and
(x) the form incurrence by the Borrower of additional Indebtedness with Third Party Subordinated Indebtedness; provided, that:
(A) the same terms and the payment of dividends on Disqualified Stock, including the Preferred Interests, in the form of additional shares Net Proceeds of the same class Third Party Subordinated Indebtedness are applied:
(1) to acquire all or substantially all of Disqualified Stock orthe assets of, or any Equity Interests in, a business that constitutes a Permitted Business, provided, that in the case of the Preferred an acquisition of Equity Interests, the business is or becomes a guaranteed payment by the Partnership or the allocation of gross or net income Subsidiary of the Partnership in accordance Borrower and a Guarantor concurrently with the terms of the Partnership Agreement, will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for the purposes of this covenant; provided, however, in each such case, that the amount thereof is included in Fixed Charges of the Partnership or the applicable Restricted Subsidiary as accruedacquisition;
(h2) so long to make a capital expenditure;
(3) to acquire other assets that are not classified as at the time of incurrence no Default current assets under GAAP and that are used or Event of Default has occurred and is continuing, the incurrence by the Partnership of FF&E Financinguseful in a Permitted Business; provided, however, that or
(i4) the principal amount of such Indebtedness does not exceed the cost (including sales and excise taxes, installation and delivery charges and other direct costs of, and other direct expenses paid or charged in connection with, such purchase) any combination of the FF&E purchased or leased with the proceeds thereof and (ii) the aggregate principal amount of such Indebtedness, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause, does not exceed $5 million outstanding at any timeforegoing; and
(iB) the issuance Fixed Charge Coverage Ratio for the Borrower's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which the Third Party Subordinated Indebtedness is incurred would have been at least 2.0 to 1.0, determined on a Pro Forma basis as if the Third Party Subordinated Indebtedness had been incurred at the beginning of such period and the Partnership Interestsproceeds therefrom had been applied as intended to be applied (but without giving effect to the completion of any construction projects unless actual completion has been achieved).
(c) The Borrower shall not incur, including the Preferred Interestsand shall not permit any Subsidiary to incur, in accordance with the Partnership Agreement. The Partnership will not incur any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Partnership Borrower or such Subsidiary unless such Indebtedness is also contractually subordinated in right of payment to the Notes Revolving Loans, the applicable Revolving Loan Guarantees and the other Revolving Loan Obligations on substantially identical termsterms or on terms that are more favorable to the Lenders hereunder; provided, however, that no Indebtedness of the Partnership shall will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Partnership Borrower or any of its Subsidiaries solely by virtue of being unsecured. unsecured or by virtue of being secured on a junior basis.
(d) For purposes of determining compliance with this Section 4.095.6, 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 (ai) through (ix) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.095.6(b), the Partnership Borrower will be permitted to classify such item of Indebtedness as of any on the date of determination its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.095.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Equity. (a) The Partnership shall Issuer will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Partnership shall Issuer will not issue any Disqualified Stock and shall will not permit any of its Restricted Subsidiaries to issue any shares of preferred equity; provided, however, that, that the Issuers Issuer may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Issuer or any other Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue preferred equity, if the Fixed Charge Coverage Ratio for the PartnershipIssuer’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such preferred equity is issued issued, as the case may be, would have been at least 2.0 to 11.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the preferred equity had been issued, as the case may be, at the beginning of such four-quarter period. .
(b) The first paragraph provisions of this Section 4.09 shall 4.07(a) will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(a1) the incurrence by the Partnership Issuer or any of its Restricted Subsidiaries of additional Indebtedness and letters of credit and bankers’ acceptances thereunder under Credit Facilities (including the Credit Agreement and the Notes issued on the Issue Date and the Guarantees thereof) in an aggregate principal amount at any time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Issuer and its Restricted Subsidiaries thereunder) not to exceed the greater of (x) $2,500 million, (y) an amount equal to 3.5 times Consolidated Cash Flow of the Issuer for the most recently ended four full fiscal quarters of the Issuer for which internal financial statements are available and (z) 25% of Total Tangible Assets;
(2) the incurrence by the Issuer and its Restricted Subsidiaries of (i) Indebtedness represented by Indebtedness, other than the Credit Agreement and the Notes, including any Notes issued as payment of interest on the Notes in accordance with the terms of the Notes, (ii) their respective obligations arising under the Collateral Documents to the extent such obligations would represent Indebtedness and (iii) dividends payable in kind in respect outstanding on the date of the Preferred Intereststhis Indenture;
(b3) letters of credit issued under Credit Facilities, so long as such letters of credit have not been drawn upon or, if drawn upon, have been reimbursed thereafter within sixty (60) days;
(4) the incurrence by the Partnership Issuer or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings, industrial revenue bonds, purchase money obligations or other Indebtedness or preferred stock, or synthetic lease obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, development, construction, lease, installation or improvement of property (real or personal and including Capital Stock), plant or equipment used or useful in the business of the Issuer or any of its Restricted Subsidiaries (in each case, whether through the direct purchase of such assets or the Equity Interests of any Person owning such assets), in an aggregate principal amount not to exceed at any time outstanding the greater of (x) $750 million or (y) 7.5% of Total Tangible Assets;
(5) Capital Lease Obligations incurred by the Issuer or any Restricted Subsidiary in respect of any sale leaseback transaction;
(6) the incurrence by 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 refinance, replace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) or any Disqualified Stock or preferred stock that was permitted by this Indenture to be incurred under the first paragraph Section 4.07(a) hereof or clauses (1), (2), (5), (6), (11) or (12) of this Section 4.09 or clauses (a4.07(b), (b) and (h) of this paragraph;
(c7) the incurrence by the Partnership Issuer or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Partnership Issuer and any of its Restricted Subsidiaries as provided in Section 4.24 hereofSubsidiaries; provided, however, that that:
(iA) if the Issuer or any Guarantor is the obligor on such Indebtedness and the payee is not 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 and Notes, in the case of the Issuer, or the Note Guarantee, in the case of a Guarantor; and
(iiB) (Ai) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Partnership Issuer or a Restricted Subsidiary thereof or of the Issuer, and (Bii) any sale or other transfer of any such Indebtedness to a Person that is not either the Partnership Issuer or a Restricted Subsidiary thereof shall of the Issuer, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Partnership Issuer or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (c7);
(d8) the issuance by any of the Issuer’s Restricted Subsidiaries to the Issuer or to any of its Restricted Subsidiaries of shares of preferred equity; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred equity 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 equity 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 equity by such Restricted Subsidiary that was not permitted by this clause (8);
(9) the incurrence by the Partnership Issuer or any of its Restricted Subsidiaries of Hedging Obligations that are incurred other than 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 outstandingspeculative purposes;
(e10) the Guarantee guarantee by the Partnership Issuer or any of its Restricted Subsidiaries of Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer that was permitted to be incurred by another provision of this Section 4.094.07 (including Section 4.07(a)); 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;
(f11) (x) Indebtedness, Disqualified Stock or preferred equity of Persons that are acquired by the Issuer or any of its Restricted Subsidiaries or merged into a Restricted Subsidiary in accordance with the terms of this Indenture, (y) Indebtedness incurred to finance the acquisition of a Restricted Subsidiary after the date of this Indenture or a corporation merged into or consolidated with the Issuer or any Restricted Subsidiary after the date of this Indenture and (z) Indebtedness assumed or incurred in connection with the acquisition of assets, where such acquisition, merger or consolidation is permitted under the terms of this Indenture; provided that for any such Indebtedness outstanding under this clause (11) in excess of the greater of (x) $750 million and (y) 7.5% of Total Tangible Assets (as of the end of the Issuer’s most recently ended fiscal quarter for which financial statements are available) on the date such Person is acquired by the Issuer or a Restricted Subsidiary, after giving effect to such acquisition and the incurrence of such Indebtedness either:
(A) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first sentence of this Section 4.07; or
(B) the Fixed Charge Coverage Ratio would not be less than immediately prior to such acquisition;
(12) Indebtedness incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is not recourse to the Issuer or any Restricted Subsidiary of the Issuer other than a Receivables Subsidiary (except for Standard Securitization Undertakings);
(13) the incurrence by the Partnership Issuer or any of its Restricted Subsidiaries of additional Indebtedness or the issuance of Disqualified Stock or preferred equity in respect an aggregate principal amount (or accreted value, as applicable) or having an aggregate liquidation preference at any time outstanding not to exceed the greater of performance(x) $500 million and (y) 5% Total Tangible Assets (it being understood that any Indebtedness, surety Disqualified Stock or appeal bonds in preferred equity incurred pursuant to this clause (13) shall cease to be deemed incurred or outstanding for purposes of this Section 4.07 from and after the ordinary course of businessdate on which the Issuer could have incurred such Indebtedness or Disqualified Stock or preferred equity under Section 4.07(a) without reliance upon this clause (13));
(g14) standby letters of credit or bank guarantees (other than letters of credit issued under Credit Facilities permitted by clause (1) of this paragraph) securing Indebtedness having an aggregate face amount not in excess of $100 million at any time outstanding;
(15) Indebtedness supported by a letter of credit in a principal amount outstanding not in excess of the stated amount of such letter of credit otherwise permitted to be incurred under this Indenture;
(16) Guarantees of Indebtedness of contractors and suppliers of the Issuer or any of its Restricted Subsidiaries or of persons who are not Affiliates of the Issuer and with whom the Issuer or any of its Restricted Subsidiaries has an existing business relationship in support of financing or bonding arrangements for such contractors or suppliers or such other person in connection with such business relationship; provided that the obligations of the Issuer or any of the Subsidiaries pursuant to this clause (16) shall not exceed $50 million at any time outstanding;
(17) Indebtedness relating to the financing of insurance policy premiums; provided that (x) such insurance is for the benefit of the Issuer or any of its Wholly Owned Domestic Subsidiaries and (y) the aggregate principal amount outstanding of Indebtedness permitted by this clause (17) shall not exceed $100 million at any time outstanding; and
(18) all premium (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on Indebtedness permitted to be incurred under this Indenture. The Issuer will not incur, and will not permit any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of 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 shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Issuer 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 4.07, in the event that an item of proposed Indebtedness, Disqualified Stock or preferred equity meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (18) above, or is entitled to be incurred pursuant to Section 4.07(a), the Issuer will be permitted to classify such item of Indebtedness, Disqualified Stock or preferred equity on the date of its incurrence and will only be required to include the amount and type of such Indebtedness, Disqualified Stock or preferred equity in one of the above clauses, although the Issuer may divide and classify an item of Indebtedness, Disqualified Stock or preferred equity in one or more of the types of Indebtedness, Disqualified Stock or preferred equity and may later reclassify all or a portion of such item of Indebtedness, Disqualified Stock or preferred equity, in any manner that complies with this Section 4.07. The accrual of interestinterest or dividends, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms terms, the reclassification of preferred equity as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Stock, including the Preferred Interests, Stock or preferred equity in the form of additional shares of the same class of Disqualified Stock or, in the case of the Preferred Interests, a guaranteed payment by the Partnership or the allocation of gross or net income of the Partnership in accordance with the terms of the Partnership Agreement, preferred equity will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock or preferred equity for the purposes of this covenantSection 4.07; provided, however, in each such casecase (other than preferred stock that is not Disqualified Stock), that the amount thereof of any such accrual, accretion or payment is included in Fixed Charges of the Partnership Issuer as accrued (other than the reclassification of preferred equity as Indebtedness due to a change in accounting principles). Notwithstanding any other provision of this Section 4.07, the maximum amount of Indebtedness that the Issuer or the applicable any Restricted Subsidiary may incur pursuant to this Section 4.07 shall not be deemed to be exceeded solely as accrueda result of fluctuations in exchange rates or currency values. The amount of any Indebtedness outstanding as of any date will be:
(1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(h) so long as at the time of incurrence no Default or Event of Default has occurred and is continuing, the incurrence by the Partnership of FF&E Financing; provided, however, that (i2) the principal amount of such Indebtedness does not exceed the cost (including sales and excise taxes, installation and delivery charges and other direct costs of, and other direct expenses paid or charged in connection with, such purchase) of the FF&E purchased or leased with the proceeds thereof and (ii) the aggregate principal amount of such Indebtedness, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace in the case of any Indebtedness incurred pursuant to this clause, does not exceed $5 million outstanding at any timeother Indebtedness; and
(i3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(A) the issuance Fair Market Value of such assets at the date of determination; and
(B) the amount of the Partnership Interests, including the Preferred Interests, in accordance with the Partnership Agreement. The Partnership will not incur any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Partnership unless such Indebtedness is also contractually subordinated in right of payment to the Notes on substantially identical terms; provided, however, that no Indebtedness of the Partnership shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Partnership solely by virtue of being unsecured. For purposes of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (a) through (i) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.09, the Partnership will be permitted to classify such item of Indebtedness as of any date of determination in any manner that complies with this Section 4.09Person.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Equity. (a) The Partnership shall 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 the Partnership shall Company will not issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries to issue any shares of preferred equity; provided, however, that, the Issuers may incur Indebtedness .
(including Acquired Debtb) or issue Disqualified Stock, if the Fixed Charge Coverage Ratio for the Partnership’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 2.0 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period. The first paragraph of this Section 4.09 5.07(a) shall not prohibit the incurrence of any of the following items of Indebtedness (collectively, “"Permitted Debt”"):
(ai) the incurrence by the Partnership Company (and the guarantee by its Restricted Subsidiaries Subsidiaries) of revolving credit indebtedness and letters of credit under Credit Facilities with Persons that are not Affiliates of the Company in an aggregate principal amount at any one time outstanding under this clause (i) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (i), not to exceed $50.0 million less the aggregate principal amount of Indebtedness incurred pursuant to clause (iii) of this Section 5.07(b);
(ii) the incurrence by the Company, Finance Co. and the Guarantors of Indebtedness represented by the Notes, including any Notes the related Note Guarantees and the other Note Obligations to be issued as payment of interest on the Notes in accordance with the terms date of the Notes, (ii) their respective obligations arising under the Collateral Documents to the extent such obligations would represent Indebtedness and (iii) dividends payable in kind in respect of the Preferred InterestsIndenture;
(biii) the incurrence by the Partnership Company, Finance Co. and the Guarantors of Indebtedness represented by Additional Notes (and the related Subsidiary Guarantees) issued under the Indenture after the date thereof, in an aggregate principal amount at any one time outstanding under this clause (iii), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (iii), not to exceed $50.0 million less the aggregate principal amount of Indebtedness incurred pursuant to clause (i) of this Section 5.07(b);
(iv) the incurrence by the Company and the Guarantors of Indebtedness represented by the Term Loans, the related Term Loan Guarantees and the other Term Loan Obligations on the Closing Date in an aggregate principal amount not to exceed $385.0 million;
(v) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the costs associated with the construction, installation, operation, maintenance or improvement of any of the Facilities, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (v), not to exceed $50.0 million at any time outstanding;
(vi) the incurrence by the Company or any of its Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance or replace replace, Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under the first paragraph clauses (i), (ii), (iii), (iv), (v) or (vi) of this Section 4.09 or clauses (a5.07(b), (b) and (h) of this paragraph;
(cvii) the incurrence by the Partnership Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Partnership Company and any of its Restricted Subsidiaries as provided in Section 4.24 hereofSubsidiaries; provided, however, that (i) such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Notes and (ii) (A) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Partnership Company or a Restricted Subsidiary thereof or of the Company and (Bii) any sale or other transfer of any such Indebtedness to a Person that is not either the Partnership Company or a Restricted Subsidiary thereof shall of the Company will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Partnership Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (cvii); and provided, further, that any such intercompany Indebtedness must be included in the Collateral;
(dviii) the incurrence by the Partnership Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred Obligations, in connection with Permitted Debt or otherwise, in the ordinary course of business and not 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 outstandingspeculative purposes;
(e) the Guarantee by the Partnership or any of its Restricted Subsidiaries of Indebtedness permitted to be incurred by another provision of this Section 4.09;
(fix) the incurrence by the Partnership Company or any of its Restricted Subsidiaries of Indebtedness in respect of performanceworkers' compensation claims, self-insurance obligations, bankers' acceptances, and performance and surety or appeal bonds in the ordinary course of business;
(gx) the incurrence by the Company or any of its 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
(xi) the incurrence by the Company or any of its Subsidiaries of (a) Subordinated Indebtedness under the Working Capital Facility and (b) other Subordinated Indebtedness loaned to the Company or any of its Subsidiaries by an Affiliate of the Company outstanding on the Closing Date (and any accrued interest thereon). The Company will not incur, and will not permit any Subsidiary to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Company or such Subsidiary unless such Indebtedness is also contractually subordinated in right of payment to the Term Loans and the applicable Term Loan Guarantees on substantially identical terms or on terms that are more favorable to the Lenders; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company or any of its Subsidiaries solely by virtue of being unsecured or by virtue of being secured on a junior basis. For purposes of this Section 5.07, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (i) through (xi) above, 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 5.07. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms terms, and the payment of dividends on Disqualified Stock, including the Preferred Interests, Stock in the form of additional shares of the same class of Disqualified Stock or, in the case of the Preferred Interests, a guaranteed payment by the Partnership or the allocation of gross or net income of the Partnership in accordance with the terms of the Partnership Agreement, will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for the purposes of this covenantSection 5.07; provided, however, in each such case, that the amount thereof is included in Fixed Charges of the Partnership or the applicable Restricted Subsidiary Company as accrued;
(h) so long as at the time . Notwithstanding any other provision of incurrence no Default or Event of Default has occurred and is continuingthis Section 5.07, the incurrence by the Partnership of FF&E Financing; provided, however, that (i) the principal maximum amount of such Indebtedness does not exceed that the cost (including sales and excise taxes, installation and delivery charges and other direct costs of, and other direct expenses paid Company or charged in connection with, such purchase) of the FF&E purchased or leased with the proceeds thereof and (ii) the aggregate principal amount of such Indebtedness, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred Subsidiary may incur pursuant to this clause, does Section 5.07 shall not exceed $5 million outstanding at any time; and
(i) the issuance of the Partnership Interests, including the Preferred Interests, in accordance with the Partnership Agreement. The Partnership will not incur any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Partnership unless such Indebtedness is also contractually subordinated in right of payment to the Notes on substantially identical terms; provided, however, that no Indebtedness of the Partnership shall be deemed to be contractually subordinated exceeded solely as a result of fluctuations in right of payment to any other Indebtedness of the Partnership solely by virtue of being unsecured. For purposes of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (a) through (i) above, exchange rates or is entitled to be incurred pursuant to the first paragraph of this Section 4.09, the Partnership will be permitted to classify such item of Indebtedness as of any date of determination in any manner that complies with this Section 4.09currency values.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Equity. (a) The Partnership 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, otherwise with respect to (collectively, “"incur”) "), any Indebtedness (including Acquired Debt), and the Partnership Borrower shall not issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries to issue any shares of preferred equity.
(b) Section 5.06(a) shall not prohibit the incurrence of any of the following items (collectively, "Permitted Debt"):
(i) (A) the incurrence by the Borrower (and the guarantee by its Subsidiaries) of Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (i)(A) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Borrower and its Subsidiaries thereunder) not to exceed $800,000,000 less the aggregate amount of all Net Proceeds of Asset Sales, Casualty Events or Condemnation Events applied by the Borrower or any of its Subsidiaries since the Closing Date to repay any term Indebtedness under any such Credit Facilities or to repay, or cash collateralize letters of credit under, any revolving Indebtedness under any such Credit Facilities and effect a corresponding commitment reduction thereunder, and (B) the incurrence by the Borrower (and the guarantee by its Subsidiaries) of Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount outstanding under this clause (i)(B) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Borrower and its Subsidiaries thereunder) not to exceed $100,000,000 less the aggregate amount of all Net Proceeds of Asset Sales, Casualty Events and Condemnation Events applied by the Borrower or any of its Subsidiaries since the Closing Date to repay any term Indebtedness under any such Credit Facility or to repay, or cash collateralize letters of credit under, any revolving Indebtedness under any such Credit Facility and effect a corresponding commitment reduction thereunder;
(ii) the incurrence by the Borrower, CalGen Finance and the Guarantors of Indebtedness represented by the Notes, the related Note Guarantees and the other Note Obligations incurred on the Closing Date, and the exchange notes and the related Note Guarantees to be issued pursuant to the Registration Rights Agreement;
(iii) the incurrence by the Borrower or any of its Subsidiaries of Expansion Debt; provided, however, that, :
(A) any Expansion Debt incurred by the Issuers may incur Indebtedness Excluded Subsidiary is recourse only to the Expansion Assets financed with such Expansion Debt and to other Expansion Assets owned by the Excluded Subsidiary (including Acquired Debtany rights of the Excluded Subsidiary under Shared Facilities Arrangements);
(B) or issue Disqualified Stock, if the Fixed Charge Coverage Ratio for the Partnership’s 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 the Expansion Debt is incurred or such Disqualified Stock is issued would have been at least 2.0 to 11.0, determined on a pro forma Pro Forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness Expansion Debt had been incurred or the Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period. The first paragraph of this Section 4.09 shall not prohibit period and the incurrence proceeds therefrom had been applied as intended to be applied (but without giving effect to the completion of any construction projects unless actual completion has been achieved), at least 25% of the following items cost of Indebtedness (collectively, “Permitted Debt”):such Expansion Assets is financed with Equity Contributions or the proceeds of Perpetual Preferred Stock or Affiliate Subordinated Indebtedness;
(aC) if the Fixed Charge Coverage Ratio for the Borrower's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which the Expansion Debt is incurred would have been less than 2.0 to 1.0, determined on a Pro Forma basis as if the Expansion Debt had been incurred at the beginning of such period and the proceeds therefrom had been applied as intended to be applied (but without giving effect to the completion of any construction projects unless actual completion has been achieved);
(1) at least 40% of the cost of such Expansion Assets is financed with Equity Contributions or the proceeds of Perpetual Preferred Stock or Affiliate Subordinated Indebtedness; and
(2) after giving effect to such incurrence, the amount of Expansion Debt incurred pursuant to this clause (iii), together with the aggregate amount of all other Expansion Debt then outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Expansion Debt incurred pursuant to this clause (iii), does not exceed $250,000,000;
(iv) the incurrence by the Partnership and its Restricted Subsidiaries of (i) Indebtedness represented by the Notes, including any Notes issued as payment of interest on the Notes in accordance with the terms of the Notes, (ii) their respective obligations arising under the Collateral Documents to the extent such obligations would represent Indebtedness and (iii) dividends payable in kind in respect of the Preferred Interests;
(b) the incurrence by the Partnership Borrower or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance or replace replace, Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture Agreement to be incurred under the first paragraph clauses (ii), (iii), (iv) or (x) of this Section 4.09 or clauses (a5.06(b), (b) and (h) of this paragraph;
(cv) the incurrence by the Partnership Borrower or any of its Restricted Subsidiaries Guarantor of intercompany Indebtedness between or among the Partnership Borrower and any Guarantors that is subordinated in right of its Restricted Subsidiaries as provided in Section 4.24 hereofpayment to all Secured Obligations on the terms set forth on Exhibit A hereto and is not secured other than by unperfected security interests; provided, however, that (i) such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Notes and (ii) (A) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Partnership Borrower or a Restricted Subsidiary thereof or Guarantor and (B) any sale or other transfer of any such Indebtedness to a Person that is not either the Partnership Borrower or a Restricted Subsidiary thereof shall Guarantor will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Partnership Borrower or such Restricted SubsidiaryGuarantor, as the case may be, that was not permitted by this clause (cv);; and provided, further, that any such intercompany Indebtedness must be included in the Collateral.
(dvi) the incurrence by the Partnership Borrower or any of its Restricted Subsidiaries of Hedging Obligations, in connection with Permitted Debt or otherwise, in the ordinary course of business and not for speculative purposes; provided, that (A) such Hedging Obligations will have tenors that are incurred for expire on or prior to the purpose maturity date (or other expiration) of fixing the underlying Obligation being hedged, and (B) any such Hedging Obligations hedging or hedging managing interest rate risk with respect to any floating rate Indebtedness a particular series of Notes or loans under this Agreement, the First Priority Term Loan Agreement or the Revolving Loan Agreement will have tenors that is permitted by expire on or prior to the terms Stated Maturity of this Indenture to be outstandingthe applicable Notes or loans;
(e) the Guarantee by the Partnership or any of its Restricted Subsidiaries of Indebtedness permitted to be incurred by another provision of this Section 4.09;
(fvii) the incurrence by the Partnership Borrower or any of its Restricted Subsidiaries of Indebtedness in respect of performanceworkers' compensation claims, self-insurance obligations, bankers' acceptances, and performance and surety or appeal bonds in the ordinary course of business;
(gviii) the incurrence by the Borrower or any of its 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;
(ix) the incurrence by the Borrower of (a) Affiliate Subordinated Indebtedness in an aggregate principal amount not to exceed $250,000,000 at any one time outstanding and (b) Working Capital Facility Indebtedness in an aggregate principal amount not to exceed $750,000,000 at any one time outstanding; and
(x) the incurrence by the Borrower of Third Party Subordinated Indebtedness; provided, that:
(A) the Net Proceeds of the Third Party Subordinated Indebtedness are applied:
(1) to acquire all or substantially all of the assets of, or any Equity Interests in, a business that constitutes a Permitted Business, provided, that in the case of an acquisition of Equity Interests, the business is or becomes a Subsidiary of the Borrower and a Guarantor concurrently with such acquisition;
(2) to make a capital expenditure;
(3) to acquire other assets that are not classified as current assets under GAAP and that are used or useful in a Permitted Business; or
(4) any combination of the foregoing; and
(B) the Fixed Charge Coverage Ratio for the Borrower's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which the Third Party Subordinated Indebtedness is incurred would have been at least 2.0 to 1.0, determined on a Pro Forma basis as if the Third Party Subordinated Indebtedness had been incurred at the beginning of such period and the proceeds therefrom had been applied as intended to be applied (but without giving effect to the completion of any construction projects unless actual completion has been achieved).
(c) The Borrower shall not incur, and shall not permit any Subsidiary to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Borrower or such Subsidiary unless such Indebtedness is also contractually subordinated in right of payment to the Second Priority Term Loans, the applicable Second Priority Term Loan Guarantees and the other Second Priority Term Loan Obligations on substantially identical terms or on terms that are more favorable to the Lenders hereunder; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Borrower or any of its Subsidiaries solely by virtue of being unsecured or by virtue of being secured on a junior basis.
(d) For purposes of determining compliance with this Section 5.06, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (i) through (x) of Section 5.06(b), the Borrower 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 5.06. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms terms, and the payment of dividends on Disqualified Stock, including the Preferred Interests, Stock in the form of additional shares of the same class of Disqualified Stock or, in the case of the Preferred Interests, a guaranteed payment by the Partnership or the allocation of gross or net income of the Partnership in accordance with the terms of the Partnership Agreement, will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for the purposes of this covenant; providedSection 5.06. Notwithstanding any other provision of this Section 5.06, however, in each such case, the maximum amount of Indebtedness that the amount thereof is included in Fixed Charges of the Partnership Borrower or the applicable Restricted any Subsidiary as accrued;
(h) so long as at the time of incurrence no Default or Event of Default has occurred and is continuing, the incurrence by the Partnership of FF&E Financing; provided, however, that (i) the principal amount of such Indebtedness does not exceed the cost (including sales and excise taxes, installation and delivery charges and other direct costs of, and other direct expenses paid or charged in connection with, such purchase) of the FF&E purchased or leased with the proceeds thereof and (ii) the aggregate principal amount of such Indebtedness, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred may incur pursuant to this clause, does Section 5.06 shall not exceed $5 million outstanding at any time; and
(i) the issuance of the Partnership Interests, including the Preferred Interests, in accordance with the Partnership Agreement. The Partnership will not incur any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Partnership unless such Indebtedness is also contractually subordinated in right of payment to the Notes on substantially identical terms; provided, however, that no Indebtedness of the Partnership shall be deemed to be contractually subordinated exceeded solely as a result of fluctuations in right of payment to any other Indebtedness of the Partnership solely by virtue of being unsecured. For purposes of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (a) through (i) above, exchange rates or is entitled to be incurred pursuant to the first paragraph of this Section 4.09, the Partnership will be permitted to classify such item of Indebtedness as of any date of determination in any manner that complies with this Section 4.09currency values.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Equity. Interests. --------- The Partnership 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), other than Permitted Indebtedness) and the Partnership shall Company will not issue any Disqualified Stock Equity Interests and shall will not permit any of its Restricted Subsidiaries to issue any shares of preferred equityPreferred Equity Interests or Disqualified Equity Interests; provided, however, that, that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, if Equity Interests and the Company's Subsidiaries that are Guarantors may incur Indebtedness if:
(1) the Fixed Charge Coverage Ratio for the Partnership’s Company's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock Equity Interests is issued would have been at least 2.0 to 11.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock Equity Interests had been issued, as the case may be, at the beginning of such four-quarter period. The first paragraph of this Section 4.09 shall not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):; and
(a2) the incurrence by the Partnership and its Restricted Subsidiaries of (i) Indebtedness represented by the Notes, including any Notes issued as payment of interest on the Notes in accordance with the terms of the Notes, (ii) their respective obligations arising under the Collateral Documents to the extent such obligations would represent Indebtedness and (iii) dividends payable in kind in respect of the Preferred Interests;
(b) the incurrence by the Partnership or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under the first paragraph of this Section 4.09 or clauses (a), (b) and (h) of this paragraph;
(c) the incurrence by the Partnership or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Partnership and any of its Restricted Subsidiaries as provided in Section 4.24 hereof; provided, however, that (i) such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Notes and (ii) (A) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Partnership or a Restricted Subsidiary thereof or (B) any sale or other transfer of any such Indebtedness to a Person that is not either the Partnership or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Partnership or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (c);
(d) the incurrence by the Partnership or any of its Restricted Subsidiaries of Hedging Obligations that are incurred for the purpose of fixing or hedging interest rate risk with respect to any floating rate Indebtedness that is permitted by the terms of this Indenture to be outstanding;
(e) the Guarantee by the Partnership or any of its Restricted Subsidiaries of Indebtedness permitted to be incurred by another provision of this Section 4.09;
(f) the incurrence by the Partnership or any of its Restricted Subsidiaries of Indebtedness in respect of performance, surety or appeal bonds in the ordinary course of business;
(g) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms and the payment of dividends on Disqualified Stock, including the Preferred Interests, in the form of additional shares of the same class of Disqualified Stock or, in the case of the Preferred Interests, a guaranteed payment by the Partnership or the allocation of gross or net income of the Partnership in accordance with the terms of the Partnership Agreement, will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for the purposes of this covenant; provided, however, in each such case, that the amount thereof is included in Fixed Charges of the Partnership or the applicable Restricted Subsidiary as accrued;
(h) so long as at the time of incurrence no Default or Event of Default has will have occurred and is continuing, the incurrence by the Partnership of FF&E Financing; provided, however, that (i) the principal amount of such Indebtedness does not exceed the cost (including sales and excise taxes, installation and delivery charges and other direct costs of, and other direct expenses paid be continuing or charged in connection with, such purchase) of the FF&E purchased or leased with the proceeds thereof and (ii) the aggregate principal amount of such Indebtedness, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause, does not exceed $5 million outstanding at any time; and
(i) the issuance of the Partnership Interests, including the Preferred Interests, in accordance with the Partnership Agreement. The Partnership will not incur any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Partnership unless such Indebtedness is also contractually subordinated in right of payment to the Notes on substantially identical terms; provided, however, that no Indebtedness of the Partnership shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Partnership solely by virtue of being unsecured. For purposes of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (a) through (i) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.09, the Partnership will be permitted to classify such item of Indebtedness would occur as of any date of determination in any manner that complies with this Section 4.09a consequence thereof.
Appears in 1 contract
