Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stock; provided, however, that the Issuers may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stock, if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock is issued, as the case may be, would have been at least 2.25 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period. (b) Section 4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”): (1) the incurrence by the Issuers and the Guarantors, 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 the Company and its Restricted Subsidiaries thereunder) not to exceed the greater of (i) $700.0 million and (ii) $175.0 million plus 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence; (2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness; (3) the incurrence by the Issuers and the Guarantors of Indebtedness represented by the Notes to be issued on the date of this Indenture and the related Note Guarantees; (4) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance; (5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (2), (3), (4), (5), (14) or (15) of this Section 4.09(b); (6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that: (A) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and (B) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6); (7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that: (A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and (B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7); (8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations; (9) the Guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed; (10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business; (11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days; (12) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business; (13) any obligation arising from agreements of the Company or any Restricted Subsidiary of the Company 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 Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company or any Restricted Subsidiary; (14) any Permitted Acquisition Indebtedness; and (15) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15), not to exceed the greater of (i) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance. For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (15) above, or is entitled to be incurred pursuant to Section 4.09(a), the Company will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributions, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be: (a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount; (b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and (c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of: (1) the Fair Market Value of such assets at the date of determination; and (2) the amount of the Indebtedness of the other Person.
Appears in 3 contracts
Samples: Indenture (Parsley Energy, Inc.), Indenture (Parsley Energy, Inc.), Indenture (Parsley Energy, Inc.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will Issuer shall not, and will shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company Issuer will not issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any Preferred StockDisqualified Stock or preferred stock; provided, however, that the Issuers Issuer and the Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, Stock and the Guarantors Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue Preferred Stockpreferred stock, if the Fixed Charge Coverage Ratio for the CompanyIssuer’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock preferred stock is issued, as the case may be, issued would have been at least 2.25 2.00 to 1.01, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock preferred stock had been issued, as the case may be, at the beginning of such four-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) Section 4.09(a4.10(a) will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuers and the Guarantors, Issuer or any Guarantor of Indebtedness and letters of credit under Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company Issuer and its Restricted Subsidiaries the Guarantors thereunder) not to exceed the greater of (ix) $700.0 385.0 million and (iiy) $175.0 million plus 35.0% the amount of the Company’s Adjusted Consolidated Net Tangible Assets determined on Borrowing Base as of the date of such incurrence, less, in the case of both clause (x) and clause (y), the aggregate amount of all Net Proceeds of Asset Sales, applied by the Issuer or any Guarantor to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables Transactions;
(2) the incurrence by the Company and its Restricted Subsidiaries Issuer or any Guarantors of the Existing Indebtedness;
(3) the incurrence by the Issuers Issuer and the Guarantors its Restricted Subsidiaries of Indebtedness represented by the Notes to be issued on the date of this Indenture and the related Note Guarantees;
(4) the incurrence by the Company Issuer or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price price, or cost of designconstruction or improvement, construction, installation of property (real or improvement of propertypersonal), plant or equipment used in the business of the Company Issuer or any of its Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred pursuant to this clause (4), not to exceed exceed, at any time outstanding, the greater of (ix) $45.0 30.0 million and or (iiy) 3.03% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceIssuer;
(5) the incurrence by the Company Issuer or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease refinance or discharge any replace Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was is permitted by this Indenture to be incurred under Section 4.09(a4.10(a) or clauses (2), (3), (4), (5), (1415) or (1516) of this Section 4.09(b4.10(b);
(6) the incurrence by the Company Issuer or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company Issuer and any of its Restricted Subsidiaries; provided, however, that:
(Aa) if the Company Issuer or any Guarantor is the obligor on such Indebtedness, and such Indebtedness and the payee is owed to a Restricted Subsidiary that is not the Company or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the CompanyIssuer, or the Note Guarantee, in the case of a Guarantor; and
(Bb) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company Issuer or a Restricted Subsidiary of the Company thereof and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company Issuer or a Restricted Subsidiary of the Companythereof, will shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company Issuer or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company Issuer or any of its Restricted Subsidiaries of Hedging ObligationsObligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder;
(9) 8) the Guarantee by the Company Issuer or any of its Restricted Subsidiaries Subsidiary of Indebtedness of the Company Issuer or a Restricted Subsidiary of the Company to the extent Issuer that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.094.10; provided that, in the case of a Guarantee of any Restricted Subsidiary that if is not a Guarantor, such Restricted Subsidiary complies with Section 4.16;
(9) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness being guaranteed is subordinated to or pari passu in the form of additional Indebtedness with the Notessame terms, then and the Guarantee must be subordinated payment of dividends on Disqualified Stock or pari passu, as applicable, to preferred stock in the form of additional shares of the same extent class of Disqualified Stock or preferred stock will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock or preferred stock for purposes of this Section 4.10; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer as the Indebtedness guaranteedaccrued;
(10) the incurrence by the Company or any of its Restricted Issuer’s Unrestricted Subsidiaries of Non-Recourse Debt; provided, however, that if any such Indebtedness in respect ceases to be Non-Recourse Debt of self-insurance obligations or bidan Unrestricted Subsidiary, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided such event shall be deemed to constitute an incurrence of Indebtedness by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of businessIssuer that was not permitted by this clause (10);
(11) the incurrence by the Company Issuer or any of its Restricted Subsidiaries of Indebtedness constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including, without limitation, letters of credit in respect of workers’ compensation claims or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; provided, however, that, upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business;
(13) any obligation arising from agreements of the Company Issuer or any such Restricted Subsidiary of the Company providing for indemnification, adjustment of purchase price, earn outs, price or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Capital Stock of the Issuer or a Restricted Subsidiary, other than Guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary in a transaction permitted by this Indenturefor the purpose of financing such acquisition; provided that that:
(a) such obligation Indebtedness is not reflected as a liability on the face of the balance sheet of the Company Issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any Permitted Acquisition Indebtedness; andof its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) the incurrence by the Company Issuer or any Guarantor of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15), not to exceed the greater of (i) $75.0 million and million;
(ii16) 5.0% the incurrence by the Foreign Restricted Subsidiaries of the Company’s Adjusted Consolidated Net Tangible Assets determined as Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the date Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or issuanceany Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business. For purposes of determining compliance with this Section 4.094.10, in the event that an item of any proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (1522) above, or is entitled to be incurred pursuant to Section 4.09(a4.10(a), the Company Issuer will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtednessand from time to time may reclassify, in any manner that complies with this Section 4.094.10 at such time. Indebtedness under the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under of this Indenture will initially shall be deemed to have been incurred on such date in reliance on the exception provided by pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to clause (1) of the definition paragraph (b) of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributions, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock will not this Section 4.10 shall be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued covenant to the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien have been incurred on the assets of the specified Persondate such Indebtedness was first incurred until such Indebtedness is actually repaid, the lesser of:
notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other Personor otherwise periodically).
Appears in 3 contracts
Samples: Indenture (Nortek Inc), Indenture (Aigis Mechtronics, Inc.), Indenture (Mammoth-Webco, Inc.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will shall not, and will shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company will shall not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, Stock and the Guarantors Company’s Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue Preferred Stockpreferred stock, in each case, 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 such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock preferred stock is issued, as the case may be, issued would have been at least 2.25 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom). The first paragraph of this Section 4.09 shall not, as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
): (1i) the incurrence by the Issuers and the Guarantors, Company or any of its Restricted Subsidiaries of Indebtedness and letters of credit under Credit Facilities Facilities, in an aggregate principal amount at any one time outstanding under this clause (1i) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed the greater of of: (iA) $700.0 million 1,250.0 million; and (iiB) $175.0 million plus 35.030.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on as of the date of such incurrence;
; (2ii) (A) the incurrence by the Company and or any of its Restricted Subsidiaries of the Existing Indebtedness;
Indebtedness or (3B) the incurrence by the Issuers Company or any of its Restricted Subsidiaries of Indebtedness under the New Real Estate Facility (whether or not issued and outstanding as of the Guarantors Issue Date) in each case of this clause (B), in amounts contemplated by the documentation for the New Real Estate Facility at the date of closing of the LHM Acquisition; (iii) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by the Notes and the related Subsidiary Guarantees to be issued on the date Issue Date; (iv) the incurrence by the Company or any of this Indenture and the related Note Guarantees;
its Restricted Subsidiaries of Indebtedness under Floor Plan Facilities; (4v) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation construction or improvement of property, plant or equipment used in the business of the Company or any of its such Restricted SubsidiariesSubsidiary, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refund or discharge refinance any Indebtedness incurred pursuant to this clause (4v), not to exceed exceed, at any time outstanding, the greater of (i) $45.0 200.0 million and (ii) 3.02.75% of the Company’s Adjusted Consolidated Net Tangible Total Assets determined as of the date of such incurrence or issuance;
incurrence; (5vi) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease refinance or discharge any replace Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) the first paragraph of this covenant or clauses (2ii), (3iii), (4), (5), (14) or (15vi) of this Section 4.09(b);
paragraph; provided that to the extent such Permitted Refinancing Indebtedness refinances (6x) other than the Indebtedness junior to the Notes or a Guarantee, as applicable, such Refinancing Indebtedness is junior to the Notes or the Guarantee, as applicable, or (y) Disqualified Stock or preferred stock, such Refinancing Indebtedness is Disqualified Stock or preferred stock; (vii) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
that (A) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or owing to a GuarantorRestricted Subsidiary, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Subsidiary Guarantee, in the case of a Guarantor; and
and (B) (iI) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (iiII) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, Company will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6vii);
; (7viii) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations;
Obligations in the ordinary course of business and not for speculative purposes; (9ix) (A) the Guarantee guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that if the 4.09 and (B) Indebtedness being guaranteed is subordinated to incurred on behalf of, or pari passu with the Notesrepresenting guarantees of Indebtedness of, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(10) the incurrence by joint ventures of the Company or any of its Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary not to exceed for the avoidance of doubt, in the ordinary course case of business this clause (B), at any time outstanding, the greater of (x) $150.0 million and any Guarantees or letters of credit functioning as or supporting any (y) 2.0% of the foregoing bonds or obligations and workers’ compensation claims in Consolidated Total Assets as of the ordinary course date of business;
such incurrence; (11x) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient fundsfunds in the ordinary course of business, so long as provided that such Indebtedness is covered extinguished within five Business Days;
Days of its incurrence; (12xi) Obligations in respect of (A) performance, bid and surety or appeal bonds, letters of credit, completion guarantees, self-insurance obligations or workers compensation claims in the ordinary course of business and (B) agreements providing for indemnification, adjustment of purchase price, earn-outs or similar obligations incurred in connection with the acquisition or disposition of any business, assets or subsidiary; (xii) Indebtedness arising in connection with endorsement of instruments for deposit in the ordinary course of business; (xiii) Indebtedness consisting of the financing of insurance premiums; (xiv) Indebtedness consisting of Guarantees incurred in the ordinary course of business under repurchase agreements or similar agreements in connection with the financing of sales of goods in the ordinary course of business; (xv) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating Indebtedness under Mortgage Loans in an amount incurred pursuant to net oil or natural gas balancing positions arising in this clause (xv) not to exceed the ordinary course greater of business;
(13) any obligation arising from agreements $525.0 million and 7.0% of Consolidated Total Assets as of the Company or date of such incurrence at any Restricted Subsidiary of the Company 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 Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenturetime outstanding; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company or any Restricted Subsidiary;
(14) any Permitted Acquisition Indebtedness; and
(15xvi) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstandingwhich, including when taken together with all Permitted Refinancing other Indebtedness of the Company and its Restricted Subsidiaries outstanding on the date of such incurrence and incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15), xvi) does not to exceed the greater of (i) $75.0 450.0 million and (ii) 5.06.0% of the Company’s Adjusted Consolidated Net Tangible Total Assets determined as of the date of such incurrence incurrence; and (xvii) Indebtedness, Disqualified Stock or issuancePreferred Stock of (x) the Company or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company or any Restricted Subsidiary or merged into or consolidated with the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving effect to such acquisition, merger or consolidation, 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 paragraph of this Section 4.09, or (B) the Fixed Charge Coverage Ratio is greater than or equal to the Fixed Charge Coverage Ratio immediately prior to such acquisition, merger or consolidation. 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 (1i) through (15xvii) aboveof the preceding paragraph, or is and may also be entitled to be incurred in whole or in part pursuant to the first paragraph of this Section 4.09(a)4.09, the Company will be permitted to divide, divide and classify and reclassify such item of Indebtedness on the date of its incurrence, or incurrence and later redivide or divide and reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09; for the avoidance of doubt, any Incurrence of Indebtedness may, if applicable, be classified in part as being Incurred and outstanding under the first paragraph of this Section 4.09 and in part as being Incurred and outstanding under one or more categories of Permitted Debt. Indebtedness under the Credit Agreement that was outstanding on the Issue Date under Credit Facilities under clause (i) of the definition of Permitted Debt and Indebtedness that was outstanding under clause (ii)(B) of the definition of Permitted Debt as of the initial closing date on which Notes are first issued and authenticated under this Indenture of the LHM Acquisition (whether for all or less than all of the assets currently intended to be acquired) will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1i) or clause (ii)(B), as applicable, of the definition of Permitted DebtDebt and unless repaid may not be reclassified. The accrual Accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsand dividends, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, changes to amounts outstanding in respect of Hedging Obligations solely as a result of fluctuations in interest rates, the reclassification assumption or guarantee of Preferred Stock Indebtedness of a Restricted Subsidiary by the Company or Disqualified Stock as Indebtedness due to a change in accounting principles, another Restricted Subsidiary and the payment of dividends or distributions on Preferred Disqualified Stock or Disqualified Stock preferred stock of Restricted Subsidiaries in the form of additional securities shares of the same class of Preferred Disqualified Stock or Disqualified Stock preferred stock of Restricted Subsidiaries will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Disqualified Stock or Disqualified Stock preferred stock of Restricted Subsidiaries for purposes purpose of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other Person.
Appears in 2 contracts
Samples: Indenture (Asbury Automotive Group Inc), Indenture (Asbury Automotive Group Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will shall not, and will shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee or otherwise guarantee, acquire, become directly or indirectly liable, contingently or otherwise, with respect to to, or otherwise become responsible for payment of (collectively, “incur”) any Indebtedness (including Acquired Debt), Indebtedness) and the Company will not issue any Disqualified Stock and will shall not permit any of its Restricted Subsidiaries to issue any Preferred Stock; provided, however, that the Issuers may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, Issuer and the Guarantors may incur Indebtedness (including including, without limitation, Acquired DebtIndebtedness) or issue Preferred Stock and any Restricted Subsidiary may incur Acquired Indebtedness if on the date of the incurrence of such Indebtedness or the issuance of such Preferred Stock, if after giving effect to the Fixed Charge Coverage incurrence or issuance thereof, the Consolidated Leverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock is issued, as the case may be, would have been at least 2.25 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom)Company would be less than 4.5 to 1.0 if such incurrence is on or prior to December 23, as 2006, and less than 4.0 to 1.0 if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter periodincurrence is after such date.
(b) Section 4.09(a4.10(a) will shall not prohibit the incurrence of any of the following items of Indebtedness or issuances the issuance of Disqualified Stock or any of the following items of Preferred Stock, as applicable (collectively, “Permitted DebtIndebtedness”):
(1) the incurrence by the Issuers and the Guarantors, Company of Indebtedness under the Securities issued on the Issue Date and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause Guarantees thereof;
(12) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability other Indebtedness of the Company and its Restricted Subsidiaries thereunder) not to exceed the greater of (i) $700.0 million and (ii) $175.0 million plus 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined outstanding on the date of such incurrence;
(2) Issue Date after giving effect to the incurrence by the Company and its Restricted Subsidiaries of the Existing IndebtednessRestructuring;
(3) the incurrence by the Issuers and the Guarantors of Indebtedness represented by the Notes to be issued on the date of this Indenture and the related Note Guarantees;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business Interest Swap Obligations of the Company or any covering Indebtedness of its Restricted Subsidiaries, in an aggregate principal amount outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (2), (3), (4), (5), (14) or (15) of this Section 4.09(b);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and
(B) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that:that such Interest Swap Obligations are entered into to protect the Company and its Restricted Subsidiaries from fluctuations in interest rates on Indebtedness incurred otherwise in accordance with the terms hereof, to the extent the notional principal amount of such Interest Swap Obligations does not exceed the principal amount of the Indebtedness to which such Interest Swap Obligations relate;
(A4) any subsequent issuance Indebtedness under Currency Agreements; provided that in the case of Currency Agreements which relate to Indebtedness, such Currency Agreements do not increase the Indebtedness of the Company outstanding, other than as a result of fluctuations in foreign currency exchange rates or transfer by reason of Equity Interests that results fees, indemnities and compensation payable thereunder;
(5) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary for so long as such Indebtedness is held by the Company or a Restricted Subsidiary, in any such Preferred Stock being each case subject to no Lien held by a Person other than the Company or a Restricted Subsidiary of the CompanySubsidiary; and
(B) any sale or other transfer provided that if as of any such Preferred Stock to a date any Person that is not either other than the Company or a Restricted Subsidiary of the Company, will be deemed, owns or holds any such Indebtedness or holds a Lien in each case, to constitute an issuance respect of such Preferred Stock Indebtedness, such date shall be deemed the incurrence of Indebtedness not constituting Permitted Indebtedness by the issuer of such Restricted Subsidiary that was not permitted by this clause (7)Indebtedness;
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations;
(96) the Guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness of the Company or to a Restricted Subsidiary for so long as such Indebtedness is held by a Restricted Subsidiary, in each case subject to no Lien; provided that (A) any Indebtedness of the Company to the extent that the guaranteed Indebtedness was permitted any Restricted Subsidiary is unsecured and subordinated, pursuant 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 must be subordinated or pari passu, as applicablea written agreement, to the same extent Company’s obligations hereunder and under the Securities and (B) if as of any date any Person other than a Restricted Subsidiary owns or holds any such Indebtedness or any Person holds a Lien in respect of such Indebtedness, such date shall be deemed the incurrence of Indebtedness guaranteednot constituting Permitted Indebtedness by the Company;
(107) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any arising out of the foregoing bonds or obligations and workers’ compensation claims Intercompany Agreements, to the extent such Indebtedness is incurred in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of 8) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient fundsfunds in the ordinary course of business; provided, so long as however, that such Indebtedness is covered extinguished within five Business DaysDays after incurrence;
(129) the incurrence by Indebtedness of the Company or any of its Restricted Subsidiaries in respect of inperformance bonds, bankers’ acceptances, workers’ compensation claims, bid, surety or appeal bonds, payment obligations in connection with self-kind obligations relating to net oil insurance, insurance premiums or natural gas balancing positions arising similar obligations, and bank overdrafts (and letters of credit in respect thereof) in the ordinary course of business;
(1310) Indebtedness represented by Purchase Money Indebtedness and Capitalized Lease Obligations not to exceed £25.0 million at any obligation one time outstanding;
(11) Indebtedness of the Company, the Issuer or any Restricted Subsidiary to the extent that the proceeds thereof are used promptly to purchase or redeem Securities or deposited to defease the Securities pursuant to Section 8.02;
(12) Indebtedness arising from agreements of the Company or any a Restricted Subsidiary of the Company providing for indemnification, adjustment of purchase price, earn outs, price or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Capital Stock of a the Company or any Restricted Subsidiary in a transaction permitted by this IndentureSubsidiary; provided that (A) the maximum aggregate liability in respect of all such obligation Indebtedness shall at no time exceed the gross proceeds (including the Fair Market Value of non-cash consideration) actually received by (or held in escrow for later release to) the Company and its Restricted Subsidiaries in connection with such disposition (without giving effect to any subsequent changes in value) and (B) such Indebtedness is not reflected as a liability on the face of in the balance sheet of the Company or any Restricted SubsidiarySubsidiary for more than six months, either consecutively or in the aggregate (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet shall not be deemed to be reflected on such balance sheet for purposes of this clause (B));
(13) Indebtedness of the Company consisting of Subordinated Shareholder Funding;
(14) any Permitted Acquisition Refinancing Indebtedness;
(15) Acquired Indebtedness of a Restricted Subsidiary; provided that, on a pro forma basis after giving effect to the incurrence of such Acquired Indebtedness, the Consolidated Leverage Ratio of the Company would be less than 4.5 to 1.0 if such incurrence is on or prior to December 23, 2006, and less than 4.0 to 1.0 if such incurrence is after such date; and
(1516) the incurrence by additional Indebtedness of the Company or any of and its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15), not to exceed the greater of (i) $75.0 £25.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceat any one time outstanding. For purposes of determining compliance with this Section 4.09, 4.10:
(1) in the event that an item of Indebtedness or Preferred Stock meets the criteria of more than one of the categories of Permitted Debt Indebtedness or Preferred Stock described in clauses (1) through (1516) aboveof Section 4.10(b), or is entitled to be incurred pursuant to Section 4.09(a4.10(a), the Company will be permitted to dividemay, in its sole discretion, classify and reclassify such item of Indebtedness or Preferred Stock on the date of its incurrenceincurrence or, or subject to clause (2) below, later redivide or reclassify all or a portion of such item of Indebtedness, Indebtedness in any manner that complies with this Section 4.09. Indebtedness under the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause 4.10;
(12) of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsinterest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, terms and the payment of dividends or distributions on Preferred Disqualified Capital Stock or Disqualified Preferred Stock in the form of additional securities shares of the same class of Preferred Disqualified Capital Stock or Disqualified Preferred Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount4.10;
(b3) the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.10 will not be deemed to be exceeded, with respect to any outstanding Indebtedness, due solely to the result of fluctuations in the exchange rates of currencies;
(4) the amount of Indebtedness issued at a price that is less than the principal amount thereof will be equal to the amount of the Indebtedness, liability in the case of any other Indebtednessrespect thereof determined in accordance with GAAP; and
(c5) if obligations in respect of letters of credit, bankers’ acceptances or other similar instruments are incurred pursuant to any Credit Facility and the letters of credit, bankers’ acceptances or other similar instruments relate to other Indebtedness, then such other Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other Personshall not be included.
Appears in 2 contracts
Samples: Indenture (Global Crossing Uk Telecommunications LTD), Indenture (Global Crossing LTD)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors (if any) may incur Indebtedness (including Acquired Debt) or issue Preferred Stock), if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock is issued, as the case may be, would have been at least 2.25 2.0 to 1.01, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuers Company and the Guarantors, any Guarantor 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 reimbursement obligations of the Company and its Restricted Subsidiaries thereunder) not to exceed the sum of (a) the greater of (i) $700.0 250.0 million and (ii) $175.0 million plus 35.0the Borrowing Base and (b) 7% of the Company’s Adjusted Consolidated Net Tangible Assets determined revolving commitments then in effect thereunder (provided, that all such Indebtedness that is incurred in reliance on this subclause (b) consists solely of protective advances and overadvances by the date of such incurrencelenders or agent thereunder);
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers Company and the Guarantors (if any) of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture Issue Date and the Exchange Notes and the related Note GuaranteesGuarantees 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 or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted SubsidiariesSubsidiaries (provided such Indebtedness is incurred prior to or within 180 days after such purchase or completion of such design, in an aggregate principal amount outstandingconstruction, including all Permitted Refinancing installation or improvement) and Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), in an aggregate principal amount not to exceed the greater of (i) $45.0 10.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceat any time outstanding;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (2), (3), (4), (5), (14) or (153) of this Section 4.09(b) or this clause (5);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Indenture Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and
(B) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company Company, and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stockshares of preferred stock; provided, however, that:
(A) that any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) , and any sale or other transfer of any such Preferred Stock preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock preferred stock by the Company or such Restricted Subsidiary Subsidiary, as the case may be, that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging ObligationsObligations in the ordinary course of business and not for speculative purposes;
(9) the Guarantee incurrence by the Company or any of its Restricted Subsidiaries of (a) reimbursement and other customary obligations in connection with Crack Spread Hedging Support LCs issued in an aggregate stated amount, which, when taken together with the aggregate amount of Crack Spread Hedging Cash Collateral (other than any interest and income thereon) that secures obligations of the Company and such Restricted Subsidiaries that are Guarantors under all Permitted Crack Spread Hedge Agreements, does not exceed $50.0 million and (b) Hedging Obligations incurred under any Permitted Crack Spread Hedge Agreement;
(10) the guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(1011) the incurrence or provision by the Company or any of its Restricted Subsidiaries of Indebtedness (including Guarantees thereof) in respect of workers’ compensation claims, self-insurance obligations or obligations, bankers’ acceptances, indemnity, bid, plugging and abandonmentperformance, warranty, release, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business;
(1112) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered extinguished within five Business Daysbusiness days after the Company receives notice of the incurrence thereof;
(1213) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating Indebtedness to the extent that the net oil proceeds thereof are immediately deposited to defease the Notes in full or natural gas balancing positions arising discharge this Indenture, in each case, in accordance with the ordinary course terms of businessthis Indenture;
(1314) any obligation arising from agreements of the incurrence by the Company or any of its Restricted Subsidiary Subsidiaries of the Company Indebtedness arising from agreements providing for bona fide indemnification, adjustment of purchase price, earn outs, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition or acquisition of any business, asset or Subsidiary, other than Guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Capital Stock Subsidiary for the purpose of financing such acquisition; provided that (a) such Indebtedness is not reflected on the Company’s balance sheet or that of any Restricted Subsidiary of the Company (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (a)); and (b) the maximum liability in respect of any such Indebtedness incurred in connection with a disposition shall at no time exceed the aggregate gross proceeds including non-cash proceeds (the fair market value of such non-cash proceeds as determined in good faith by the Company as of the time received and without giving effect to any such subsequent changes in value) actually received by the Company and its Restricted Subsidiary in a transaction permitted connection with such disposition;
(15) the incurrence by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company or any Restricted SubsidiaryGuarantor of Indebtedness owing to Alon Israel or any of its Subsidiaries in an aggregate principal amount at any time outstanding not to exceed $50.0 million, which Indebtedness by its terms, or by the terms of any agreement or instrument pursuant to which such Indebtedness is incurred;
(14A) is expressly made subordinate in right of payment to the prior payment in full in cash of all Indenture Obligations pursuant to the subordination requirements set forth in this Indenture;
(B) provides that no payments of any Permitted Acquisition Indebtednessobligations with respect to such Indebtedness will be required to be made prior to the date that is one year after the final Stated Maturity of the Notes (other than payments of interest that comply with clause (c) below); and
(15C) the yield to maturity on such Indebtedness may not exceed 8% per annum.
(16) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (1516), not to exceed the greater $5.0 million.
(c) The Company will not incur, and will not permit any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of (i) $75.0 million and (ii) 5.0% payment to any other Indebtedness of the Company’s Adjusted Consolidated Net Tangible Assets determined as Company or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the date Notes and the applicable Note Guarantee to substantially the same extent; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of such incurrence payment to any other Indebtedness solely by virtue of being unsecured or issuance. by virtue of being secured on junior priority basis.
(d) For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (1516) aboveof Section 4.09(b), or is entitled to be incurred pursuant to Section 4.09(a), the Company will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under the Credit Agreement Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted DebtSection 4.09(b)(1). The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionspreferred stock dividends, the accretion of principal or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities shares of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided provided, in each such case, that the amount thereof shall be of any such accrual, accretion or payment is included in Fixed Charges of the Company as accrued accrued. The incurrence of an obligation to pay a premium in respect of Indebtedness arising in connection with a notice of redemption or the extent required by making of a mandatory offer to repurchase such Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09. Notwithstanding any other provision of this Section 4.09, the definition maximum amount of Indebtedness that the Company or any of its Restricted 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, and Guarantees or obligations with respect to letters of credit or similar instruments providing support to Indebtedness that is otherwise included in the determination of such term. amount of Indebtedness shall be excluded from such determination.
(e) The amount of any Indebtedness outstanding as of any date will be:
(a1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1A) the Fair Market Value of such assets at the date of determination; and
(2B) the amount of the Indebtedness of the other PersonPerson that is so secured; and
(4) in the case of a Guarantee that constitutes Indebtedness, the maximum liability under such Guarantee.
Appears in 2 contracts
Samples: Indenture (Alon Refining Krotz Springs, Inc.), Indenture (Alon USA Energy, Inc.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company and the Guarantors will not issue any Disqualified Stock and the Company will not permit any of its Restricted Subsidiaries (other than the Guarantors) to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, Company and any of the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Disqualified Stock, if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock is issued, as the case may be, issued would have been at least 2.25 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), ) as if the additional Indebtedness had been incurred incurred, or the Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuers Company and the Guarantorsits Restricted Subsidiaries of (a) Indebtedness, of Indebtedness and letters of credit and bankers’ acceptances under Credit Facilities in an aggregate principal amount at any one time outstanding under this as of any date of incurrence of any such Indebtedness (together with the aggregate amount of any Permitted Refinancing Indebtedness outstanding as of such date that was incurred pursuant to clause (11)(b) (with letters of credit being and that is not deemed to have a principal amount equal be incurred pursuant to the maximum potential liability another clause of the Company and its Restricted Subsidiaries thereunderdefinition of Permitted Debt or clause (a) above as a result of reclassification) not to exceed the greater of (ix) $700.0 1,500.0 million and (iiy) $175.0 million plus 35.0% such amount as would not cause the Consolidated Senior Secured Leverage Ratio, calculated as of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of incurrence, to exceed 3.0 to 1.0 and (b) any Permitted Refinancing Indebtedness incurred to extend, refinance, refund, renew, replace, defease or discharge any Indebtedness that was incurred pursuant to this clause (1) and was not, as of the date of incurrence of such incurrencePermitted Refinancing Indebtedness, deemed to be incurred pursuant to another clause of the definition of Permitted Debt or clause (a) above as a result of reclassification;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers Company and the Guarantors of Indebtedness represented by the Notes and Subsidiary Guarantees and the Company’s $800,000,000 7.75% Senior Notes due 2024 and the indenture related thereto and guarantees in respect thereof (in each case, to be issued on the date of this Indenture and the related Note GuaranteesIssue Date);
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation construction or improvement of property, plant or equipment used in the business of the Company or such Restricted Subsidiary (whether through the direct purchase of assets or the Equity Interests of any of its Restricted SubsidiariesPerson owning such assets), in an aggregate principal amount at any time outstanding, as of the date of incurrence of any Indebtedness pursuant to this clause (4), including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (ia) $45.0 300.0 million and (iib) 3.04.0% of the Company’s Adjusted Consolidated Net Tangible Total Assets (determined as of the date of such incurrence or issuanceincurrence);
(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 or replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (2), (3), ) or (4)) above, this clause (5), clauses (1417), (18), (20) or (1526) of this below or pursuant to Section 4.09(b4.09(a);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among owed to the Company and or any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness Indebtedness, and the payee is not the Company or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note GuaranteeSubsidiary Guarantee of such Guarantor, in the case of a Guarantor; and
(B) (i1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company thereof and (ii2) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will thereof shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness under Hedging Obligations that are not entered into for the purpose of speculation;
(8) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stockshares of preferred stock; provided, however, that:
(Aa) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; Company and
(Bb) any sale or other transfer of any such Preferred Stock preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations8);
(9) the Guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
4.09 and could have been incurred (10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business;
(13) any obligation arising from agreements of the Company or any Restricted Subsidiary of the Company 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 Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company or any Restricted Subsidiary;
(14) any Permitted Acquisition Indebtedness; and
(15) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15), not to exceed the greater of (i) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance. For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (15) above, or is entitled to be incurred pursuant to Section 4.09(a), the Company will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributions, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to the extent required by the definition of Person so Guaranteeing such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other Person.
Appears in 2 contracts
Samples: Indenture (Post Holdings, Inc.), Indenture (Post Holdings, Inc.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and neither the Company nor any Guarantor (other than Parent) will not issue any Disqualified Stock and the Company will not permit any of its other Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company and any Guarantor (other than Parent) may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stock, if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock is issued, as the case may be, would have been at least 2.25 2.5 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuers Company and the Guarantors, or any Guarantor of additional Indebtedness and (including letters of credit credit) under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed an amount equal to the greater of (ia) $700.0 million 400.0 million, less the aggregate amount of all Net Proceeds of Asset Sales applied by the Company or any of its Restricted Subsidiaries since the Issue Date to repay revolving credit Indebtedness under the Credit Facilities and effect a corresponding commitment reduction thereunder pursuant to Section 4.10 hereof and (iib) $175.0 million plus 35.030% of the Company’s Adjusted Consolidated Net Tangible Assets determined on ACNTA as of the date of such incurrence;;
(2) the incurrence by the Company and or any of its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers Company and the Guarantors of Indebtedness represented by the Notes and the related Guarantees to be issued on the date of this Indenture Issue Date and the any Exchange Notes and related Note Guarantees;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its such Restricted Subsidiaries, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 10.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceat any time outstanding;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clauses (2), (3), (4), (5), (14) or (1512) of this Section 4.09(b) or this clause (5);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and the payee a Guarantor is not the Company or a Guarantorobligee, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, or if a Guarantor is the obligor on such Indebtedness and neither the Company nor another Guarantor is the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the case Guarantee of the Company, or the Note Guarantee, in the case of a such Guarantor; and
(B) any (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company Company, and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations;
(9) 8) the Guarantee guarantee by the Company or any of its Restricted Subsidiaries the Guarantors of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent any Guarantor that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that if ;
(9) the Indebtedness being guaranteed is subordinated incurrence by the Company or any of its Restricted Subsidiaries of obligations relating to or pari passu net gas balancing positions arising in the ordinary course of business and consistent with the Notes, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteedpast practice;
(10) the incurrence by the Company or any of its Restricted Unrestricted Subsidiaries of Non-Recourse Debt of an Unrestricted Subsidiary provided, however, that if any such Indebtedness in respect ceases to be Non-Recourse Debt of self-insurance obligations or bidan Unrestricted Subsidiary, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided such event will be deemed to constitute an incurrence of Indebtedness by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of businessthat is not permitted by this clause (10);
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from indebtedness in respect of bid, performance, surety and similar bonds issued for the honoring by a bank or account of the Company and any of its Restricted Subsidiaries in the ordinary course of business, including guarantees and obligations of the Company and any of its Restricted Subsidiaries with respect to letters of credit supporting such obligations (in each other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Daysthan an obligation for money borrowed);
(12) Indebtedness of a Restricted Subsidiary incurred and outstanding on the date on which such Restricted Subsidiary was acquired by, or merged into, the Company or any Restricted Subsidiary (other than Indebtedness Incurred (a) to provide all or any portion of the funds utilized to consummate the transaction or series of related transactions pursuant to which such Restricted Subsidiary became a Restricted Subsidiary or was otherwise acquired by the Company or (b) otherwise in connection with, or in contemplation of, such acquisition); provided, however, that at the time such Restricted Subsidiary is acquired by the Company, the Company would have been able to Incur $1.00 of additional Indebtedness pursuant to Section 4.09(a) after giving effect to the incurrence of such Indebtedness pursuant to this clause (12);
(13) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business;
(13) any obligation Indebtedness arising from agreements agreement of the Company or any of its Restricted Subsidiary of the Company Subsidiaries providing for indemnification, adjustment of purchase price, earn outs, price or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; Subsidiary, provided that the maximum aggregate liability in respect of all such obligation is not reflected as a liability on indebtedness shall at no time exceed the face of the balance sheet of gross proceeds actually received by the Company or any and its Restricted Subsidiary;
(14) any Permitted Acquisition IndebtednessSubsidiaries in connection with such disposition; and
(1514) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15), not to exceed the greater of (i) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance25.0 million. For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness (including Acquired Debt) meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (1514) aboveof this Section 4.09, or is entitled to be incurred pursuant to Section 4.09(a), the Company will be permitted to divide, classify and (or later classify or reclassify in whole or in part in its sole discretion) such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09covenant. The amount of Indebtedness issued at a price that is less than the principal amount thereof will be equal to the amount of the liability in respect thereof determined in accordance with GAAP. Indebtedness under of any Person existing at the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially time such Person becomes a Restricted Subsidiary shall be deemed to have been incurred on by the Company and the Restricted Subsidiary at the time such date in reliance on the exception provided by clause (1) of the definition of Permitted DebtPerson becomes a Restricted Subsidiary. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsinterest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities shares of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09covenant; provided provided, in each such case, that the amount thereof shall be is included in Fixed Charges of the Company as accrued to the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other Personaccrued.
Appears in 2 contracts
Samples: Indenture (Energy Xxi (Bermuda) LTD), Indenture (Energy Xxi (Bermuda) LTD)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company Issuer will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company Issuer will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stock; provided, however, that the Issuers Issuer may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors any Guarantor may incur Indebtedness (including Acquired Debt) or issue Preferred Stock, if the Fixed Charge Coverage Ratio for the CompanyIssuer’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock is issued, as the case may be, would have been at least 2.25 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuers and the Guarantors, Issuer or any Restricted Subsidiary (whether as borrower or guarantor) of Indebtedness and letters of credit under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company Issuer and its Restricted Subsidiaries thereunder) not to exceed the greater greatest of (i) $700.0 million and 3.0 billion, (ii) the Borrowing Base and (iii) $175.0 500.0 million plus 35.030.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence;
(2) the incurrence by the Company Issuer and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers Issuer and the Guarantors of Indebtedness represented by (a) the Notes to be issued on the date of this Indenture Indenture, (b) the Exchange Notes issued pursuant to any Registration Rights Agreement; and the related Note (c) any Guarantees;.
(4) the incurrence by the Company Issuer or any of its Restricted Subsidiaries of Indebtedness represented by Capital Finance Lease Obligations, mortgage financings or purchase money obligationsobligations or other Indebtedness, in each case, incurred for the purpose of financing all or any part of the purchase price or other acquisition cost or cost of design, construction, installation installation, development, repair or improvement of property, plant or equipment used in the business of the Company Issuer or any of its Restricted SubsidiariesSubsidiaries (together with improvements, in an aggregate principal amount outstandingadditions, including all accessions and contractual rights relating primarily thereto), and any Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), in an aggregate principal amount, when taken together with the outstanding amount of all other Indebtedness or Permitted Refinancing Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (ia) $45.0 350.0 million and (iib) 3.05.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of at the date of such incurrence or issuanceincurrence;
(5) the incurrence by the Company Issuer or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case or Preferred Stock that was permitted by this Indenture to be incurred under Section 4.09(a) or clauses clause (2), (3), (4), (5), (14) or (15) of this Section 4.09(b);
(6) the incurrence by the Company Issuer or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company Issuer and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company Issuer or any Guarantor is the obligor on such Indebtedness and the payee is not the Company Issuer or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the CompanyIssuer, or the Note Guarantee, in the case of a Guarantor; and
(B) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company Issuer or a Restricted Subsidiary of the Company Issuer and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company Issuer or a Restricted Subsidiary of the CompanyIssuer, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company Issuer or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the CompanyIssuer’s Restricted Subsidiaries to the Company Issuer or to any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company Issuer or a Restricted Subsidiary of the CompanyIssuer; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company Issuer or a Restricted Subsidiary of the CompanyIssuer, will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company Issuer or any of its Restricted Subsidiaries of Hedging Obligations;
(9) the Guarantee guarantee by the Company Issuer or any of its Restricted Subsidiaries the Guarantors of Indebtedness of the Company Issuer or a Restricted Subsidiary of the Company Issuer to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed, and if the guarantee is by a Restricted Subsidiary that is not a Guarantor, the Indebtedness guaranteed could have otherwise been incurred by such Restricted Subsidiary under this Section 4.09;
(10) the incurrence by the Company Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees issued or provided by by, or for the Company account of, the Issuer or a Restricted Subsidiary in the ordinary course of business and any Guarantees guarantee or obligations with respect to letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business;
(11) the incurrence by the Company Issuer or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by the Company Issuer or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business;
(13) the incurrence of any obligation arising from agreements of the Company Issuer or any Restricted Subsidiary of the Company Issuer providing for indemnification, guarantees (other than guarantees of Indebtedness), adjustment of purchase price, holdbacks, earn outs, outs or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; , provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company Issuer or any Restricted Subsidiary;
(14) any Permitted Acquisition Indebtedness; andthe pledge of (or a Guaranty limited in recourse solely to) Equity Interests in an Unrestricted Subsidiary or Joint Venture held by the Issuer or a Restricted Subsidiary to secure Indebtedness of such Unrestricted Subsidiary or Joint Venture and solely to the extent such Indebtedness constitutes Non-Recourse Debt;
(15) the incurrence by the Company Issuer or any of its Restricted Subsidiaries of Permitted Acquisition Indebtedness;
(16) the incurrence by the Issuer or its Restricted Subsidiaries of Indebtedness consisting of the financing of insurance premiums in customary amounts consistent with the operations and business of the Issuer and the Restricted Subsidiaries; and
(17) the incurrence by the Issuer or any Restricted Subsidiary of additional Indebtedness or the issuance by the Company Issuer of any Disqualified Stock or by any Restricted Subsidiary of Preferred Stock in an aggregate principal amount, when taken together with the outstanding amount (or accreted value, as applicable) at any time outstanding, including of all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any other Indebtedness incurred or Disqualified Stock or Preferred Stock issued pursuant to this clause (1517), not to exceed the greater of (i) $75.0 350.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of on the date of such incurrence or issuance. Indebtedness permitted by this Section 4.09 need not be permitted solely by reference to one provision permitting such Indebtedness or Disqualified Stock or Preferred Stock but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.09. For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness or Disqualified Stock or Preferred Stock meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (1517) aboveof this Section 4.09(b), or is entitled to be incurred pursuant to Section 4.09(a), the Company Issuer will be permitted to divide, classify and reclassify such item of Indebtedness or Disqualified Stock or Preferred Stock on the date of its incurrenceincurrence or issuance, or later redivide or reclassify all or a portion of such item of IndebtednessIndebtedness or Disqualified Stock or Preferred Stock, in any manner (including by dividing and classifying such item of Indebtedness or Disqualified Stock or Preferred Stock in more than one type of Indebtedness or Disqualified Stock or Preferred Stock permitted under this Section 4.09) that complies with this Section 4.09. ; provided that Indebtedness outstanding under the Credit Agreement outstanding Facilities on the date on which Notes are first issued and authenticated under of this Indenture will initially shall be deemed to have been considered incurred on such date in reliance on the exception provided by under clause (1) of this Section 4.09(b) and may not be reclassified. The dollar equivalent principal amount of any Indebtedness denominated in a foreign currency and incurred pursuant to any dollar-denominated restriction on the definition incurrence of Indebtedness shall be calculated based on the relevant exchange rates in effect at the time of incurrence, in the case of term Indebtedness, or first committed, in the case of revolving credit Indebtedness; provided that if such Indebtedness is incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being refinanced. Notwithstanding any other provision of this Section 4.09, the maximum amount of Indebtedness that the Issuer and the Restricted Subsidiaries may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in the exchange rates of currencies. The principal amount of any Indebtedness incurred to refinance other Indebtedness, if incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such Permitted DebtRefinancing Indebtedness is denominated that is in effect on the date of such refinancing. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsdividends, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien or on the Notes in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, term and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof shall be is included in Fixed Charges of the Company Issuer as accrued to the extent required by the definition of such term. For purposes of this Section 4.09, (i) the accrual of an obligation to pay a premium in respect of Indebtedness or Disqualified Stock or Preferred Stock arising in connection with the issuance of a notice of redemption or making of a mandatory offer to purchase such Indebtedness or Disqualified Stock or Preferred Stock, and (ii) unrealized losses or charges in respect of Hedging Agreements (including those resulting from the application of FASB ASC Topic No. 815, Derivatives and Hedging) will, in the case of (i) or (ii), not be deemed to be an incurrence of Indebtedness or Disqualified Stock or Preferred Stock. Further, the accounting reclassification of any obligation or Disqualified Stock or Preferred Stock of the Issuer or any of its Restricted Subsidiaries as Indebtedness or Disqualified Stock or Preferred Stock will not be deemed an incurrence of Indebtedness or issuance of Disqualified Stock or Preferred Stock for purposes of this Section 4.09. The amount “amount” or “principal amount” of any Indebtedness or Preferred Stock or Disqualified Stock outstanding at any time of determination as of any date will beused herein shall be as set forth below or, if not set forth below, determined in accordance with GAAP:
(aA) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(bB) the principal amount of the Indebtedness, in the case of any other Indebtedness; and;
(cC) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1i) the Fair Market Value of such assets at the date of determination; and
(2ii) the amount of the Indebtedness of the other Person;
(D) in the case of any Finance Lease Obligation, the amount determined in accordance with the definition thereof;
(E) in the case of any Preferred Stock, (x) if other than Disqualified Stock, the greater of its voluntary or involuntary liquidation preference and its maximum fixed redemption price or repurchase price or (y) if Disqualified Stock, as specified in the definition thereof;
(F) in the case of any Interest Rate Agreements included in Section 4.09(b), zero;
(G) in the case of all other unconditional obligations, the amount of the liability thereof determined in accordance with GAAP; and
(H) in the case of all other contingent obligations, the maximum liability at such date of such Person. For purposes of determining any particular amount of Indebtedness, (i) guarantees of, or obligations in respect of letters of credit relating to, Indebtedness otherwise included in the determination of such amount shall not also be included and (ii) if obligations in respect of letters of credit are incurred pursuant to a Credit Facility and are being treated as incurred pursuant to clause (1) of Section 4.09(b) and the letters of credit relate to other Indebtedness, then the amount of such other Indebtedness equal to the face amount of such letters of credit shall not be included. If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred shall be equal to the greater of (x) the principal of such Indebtedness and (y) the amount that may be drawn under such letter of credit.
Appears in 2 contracts
Samples: Indenture (Range Resources Corp), Indenture (Range Resources Corp)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will shall not, and will shall not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly, create, incur, issue, assume, Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries Subsidiary to issue any Preferred StockDisqualified Stock or preferred stock; provided, however, that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors any Guarantor may incur Indebtedness (including Acquired Debt) or issue Preferred StockDisqualified Stock and any Foreign Subsidiary may incur Indebtedness, 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 such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock preferred stock is issued, as the case may be, issued would have been at least 2.25 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the preferred stock or Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness or issuances the issuance of Disqualified Stock or Preferred Stock, as applicable set forth below (collectively, “Permitted Debt”):
(1i) the incurrence by the Issuers Company and the Guarantors, any Restricted Subsidiary of Indebtedness and letters of credit under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunderi) not to exceed an amount equal to (x) $760.0 million, plus (y) an amount not in excess of (i) the greater of (ix) $700.0 500.0 million and (y) 100% of Adjusted EBITDA for the period of four fiscal quarters of the Company most recently ended prior to the calculation of such amount for which annual or quarterly financial statements, as applicable, have been delivered under Section 4.03 calculated, if the applicable Indebtedness is being incurred to finance an acquisition permitted under this Indenture, on a pro forma basis in a manner consistent with the definition of “Fixed Charge Coverage Ratio,” minus (ii) $175.0 million plus 35.0% the aggregate principal amount of all Indebtedness previously incurred pursuant to this subclause (y), less the Company’s Adjusted Consolidated aggregate amount of all Net Tangible Assets determined on Proceeds of Asset Sales applied by the date of such incurrenceCompany or any Restricted Subsidiary to repay any Indebtedness under the Credit Agreement and, if the Indebtedness repaid is revolving credit Indebtedness, to correspondingly reduce commitments with respect thereto, pursuant to Section 4.10;
(2ii) the incurrence by the Company and its any Restricted Subsidiaries Subsidiary of the Existing Indebtedness;
(3iii) the incurrence by the Issuers and the Guarantors Company of Indebtedness represented by the Notes to be issued on the date of this Indenture hereof and the related Note Guaranteesany Guarantees thereof by any Guarantor;
(4iv) the incurrence by the Company or any of its Restricted Subsidiaries Subsidiary of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation construction or improvement of property, plant or equipment used in the business of the Company or any of its such Restricted SubsidiariesSubsidiary, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred pursuant to this clause (4iv), not to exceed the greater of (i) $45.0 100.0 million and (ii) 3.03.5% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceAssets, at any time outstanding;
(5v) the incurrence by the Company or any of its the Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease refinance or discharge any replace Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (2ii), (3), (4), (5), (14iii) or (15v) of this Section 4.09(b);
(6vi) the incurrence by the Company or any of its Restricted Subsidiaries Subsidiary of intercompany Indebtedness between or among the Company and any of its Restricted SubsidiariesSubsidiary; provided, however, that:
(A1) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a GuarantorIndebtedness, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and
(B2) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6vi);
(7vii) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries Subsidiary of Hedging ObligationsObligations that are incurred for the purpose of fixing, hedging or swapping interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be outstanding or for hedging foreign currency exchange risk, in each case to the extent the Hedging Obligations are incurred in the ordinary course of the Company’s financial management and not for any speculative purpose;
(9viii) the Guarantee by the Company or any of its Restricted Subsidiaries Subsidiary of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(10ix) 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 Fixed Charges of the Company as accrued;
(x) the incurrence by the Company or any Restricted Subsidiary of its Indebtedness, including Indebtedness represented by letters of credit for the account of the Company or any Restricted Subsidiaries of Indebtedness Subsidiary, incurred in respect of workers’ compensation claims, self-insurance obligations or bid, plugging and abandonment, appeal, reimbursementobligations, performance, proposal, completion, surety and similar bonds and completion guarantees provided by the Company or a any Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any business; provided that the underlying obligation to perform is that of the foregoing bonds Company or obligations the Restricted Subsidiaries and workers’ compensation claims not that of the Company’s Unrestricted Subsidiaries; provided, further, that such underlying obligation is not in the ordinary course respect of businessborrowed money;
(11xi) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business;
(13) any obligation arising from agreements of the Company or any Restricted Subsidiary of the Company 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 Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company or any Restricted Subsidiary;
(14) any Permitted Acquisition Indebtedness; and
(15) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15xi), not to exceed $125.0 million;
(xii) the incurrence by the Company or any Restricted Subsidiary of Indebtedness, including but not limited to Indebtedness represented by letters of credit for the account of the Company or any Restricted Subsidiary, arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or Equity Interests of the Company or a Restricted Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Equity Interests for the purpose of financing such acquisition;
(xiii) the incurrence by the Company or any Restricted Subsidiary of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five (5) Business Days of incurrence;
(xiv) the issuance of preferred stock of a Restricted Subsidiary to the Company that is pledged to secure the Credit Agreement and/or the Notes, provided that any subsequent transfer that results in such preferred stock being held by a Person other than the Company or a Restricted Subsidiary will be deemed to constitute an issuance of preferred stock not permitted by this clause (xiv);
(xv) the incurrence of Acquired Debt (but not any Indebtedness incurred in connection with, or in contemplation of such other Person merging with or into, or becoming a Subsidiary of, the Company); provided, however, that on the date such Person becomes a Subsidiary or is acquired by the Company and after giving pro forma effect thereto, (x) the Company would have been entitled to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test in Section 4.09(a) or (y) the Fixed Charge Coverage Ratio would be greater than such ratio for the Company and the Restricted Subsidiaries immediately prior to such transaction;
(xvi) Guarantees by the Company or any Restricted Subsidiary of Indebtedness of any Unrestricted Subsidiary, provided that the aggregate principal amount of such Guarantees of Indebtedness of any Unrestricted Subsidiary shall not exceed the greater of (i) $75.0 million and (ii) 5.02.5% of Consolidated Tangible Assets, at any time outstanding; and
(xvii) Indebtedness consisting of obligations under any Permitted Convertible Indebtedness Call Transaction.
(c) For purposes of determining compliance with any restriction on the Company’s Adjusted Consolidated Net Tangible Assets incurrence of Indebtedness where the Indebtedness incurred is not denominated in U.S. dollars, the amount of such Indebtedness will be the U.S. Dollar Equivalent determined as of on the date of incurrence of such incurrence or issuanceIndebtedness; provided, however, that if any such Indebtedness not denominated in U.S. dollars is subject to a Hedging Obligation 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 Hedging Obligation. The principal amount of any Permitted 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 Hedging Obligation, in which case the Permitted Refinancing Indebtedness shall be determined in accordance with the preceding sentence, and (ii) the principal amount of the Permitted Refinancing Indebtedness exceeds the principal amount of the Indebtedness being refinanced, in which case the U.S. Dollar Equivalent of such excess shall be determined on the date such Permitted Refinancing Indebtedness is incurred.
(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 (1i) through (15xvii) aboveof Section 4.09(b) hereof, or is entitled to be incurred pursuant to Section 4.09(a)) hereof, the Company will shall be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially shall be deemed to have been incurred on such date in reliance on the exception provided by clause in Section 4.09(b)(i) hereof.
(1e) The Company shall not, and shall 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 definition Company or such Guarantor unless such Indebtedness is also contractually subordinated in right of Permitted Debt. The accrual of interest payment to the Notes or Preferred Stock or Disqualified Stock dividends or distributionssuch Note Guarantee on substantially identical terms; provided, the accretion or amortization of original issue discounthowever, the payment of interest on any that no Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock Company or Disqualified Stock any Guarantor will not be deemed to be an incurrence contractually subordinated in right of payment to any other Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to or any Guarantor solely by virtue of being unsecured or by virtue of the extent required by fact that the definition holders of secured Indebtedness have entered into intercreditor arrangements giving one or more of such term. The amount of any Indebtedness outstanding as of any date will be:
(a) holders priority over the accreted value of the Indebtedness, other holders in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured collateral held by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other Personthem.
Appears in 2 contracts
Samples: Indenture (Geo Group Inc), Indenture (Geo Group Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and neither the Company nor any Restricted Subsidiary will not issue any Disqualified Stock and the Company will not permit any of its other Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stock, if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock is issued, as the case may be, would have been at least 2.25 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuers Company and the Guarantors, or any Restricted Subsidiary of additional Indebtedness and (including letters of credit credit) under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed an amount equal to the greater of (ia) $700.0 million 925.0 million, less the aggregate amount of all Net Proceeds of Asset Sales applied by the Company or any of its Restricted Subsidiaries since the Issue Date to repay revolving credit Indebtedness under the Credit Facilities and effect a corresponding commitment reduction thereunder pursuant to Section 4.10 hereof and (iib) $175.0 million plus 35.030% of the Company’s Adjusted Consolidated Net Tangible Assets determined on ACNTA as of the date of such incurrence;
(2) the incurrence by the Company and or any of its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers Company and the Guarantors of Indebtedness represented by the Notes and the related Guarantees to be issued on the date of this Indenture Issue Date and any Exchange Notes and related Guarantees issued in exchange therefor pursuant to the related Note GuaranteesRegistration Rights Agreement;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its such Restricted Subsidiaries, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 20.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceat any time outstanding;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clauses (2), (3), (4), (5), (14) or (1512) of this Section 4.09(b) or this clause (5);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness Indebtedness, Disqualified Stock or preferred stock between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and the payee a Guarantor is not the Company or a Guarantorobligee, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, or if a Guarantor is the obligor on such Indebtedness and neither the Company nor another Guarantor is the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the case Guarantee of the Company, or the Note Guarantee, in the case of a such Guarantor; and
(B) any (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness Indebtedness, Disqualified Stock or preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company Company, and (ii) any sale or other transfer of any such Indebtedness Indebtedness, Disqualified Stock or preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness Indebtedness, Disqualified Stock or preferred stock by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations;
(9) 8) the Guarantee guarantee by the Company or any of its Restricted Subsidiaries the Guarantors of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent any Guarantor that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that if ;
(9) the Indebtedness being guaranteed is subordinated incurrence by the Company or any of its Restricted Subsidiaries of obligations relating to or pari passu net gas balancing positions arising in the ordinary course of business and consistent with the Notes, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteedpast practice;
(10) the incurrence by the Company or any of its Restricted Unrestricted Subsidiaries of Non-Recourse Debt of an Unrestricted Subsidiary provided, however, that if any such Indebtedness in respect ceases to be Non-Recourse Debt of self-insurance obligations or bidan Unrestricted Subsidiary, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided such event will be deemed to constitute an incurrence of Indebtedness by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of businessthat is not permitted by this clause (10);
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from in respect of bid, performance, surety and similar bonds issued for the honoring by a bank or account of the Company and any of its Restricted Subsidiaries in the ordinary course of business, including guarantees and obligations of the Company and any of its Restricted Subsidiaries with respect to letters of credit supporting such obligations (in each case other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Daysthan an obligation for money borrowed);
(12) Indebtedness, Disqualified Stock or preferred stock of a Restricted Subsidiary incurred and outstanding on the date on which such Restricted Subsidiary was acquired by, or merged into, the Company or any Restricted Subsidiary (other than Indebtedness, Disqualified Stock or preferred stock Incurred (a) to provide all or any portion of the funds utilized to consummate the transaction or series of related transactions pursuant to which such Restricted Subsidiary became a Restricted Subsidiary or was otherwise acquired by the Company or (b) otherwise in connection with, or in contemplation of, such acquisition); provided, however, that at the time such Restricted Subsidiary is acquired by the Company, the Company would have been able to incur $1.00 of additional Indebtedness pursuant to Section 4.09(a) after giving effect to the incurrence of such Indebtedness, Disqualified Stock or preferred stock pursuant to this clause (12);
(13) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business;
(13) any obligation Indebtedness arising from agreements of the Company or any of its Restricted Subsidiary of the Company Subsidiaries providing for indemnification, adjustment of purchase price, earn outs, price or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; Subsidiary, provided that the maximum aggregate liability in respect of all such obligation is not reflected as a liability on Indebtedness shall at no time exceed the face of the balance sheet of gross proceeds actually received by the Company or any and its Restricted SubsidiarySubsidiaries in connection with such disposition;
(14) any Permitted Acquisition Indebtedness; and
(15) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15), not to exceed $50.0 million; and
(15) Indebtedness to the greater of (i) $75.0 million and (ii) 5.0% of extent the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceproceeds thereof are used to finance insurance premiums. For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness (including Acquired Debt) meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (15) aboveof this Section 4.09, or is entitled to be incurred pursuant to Section 4.09(a), the Company will be permitted to divide, classify and (or later classify or reclassify in whole or in part in its sole discretion) such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09covenant. The amount of Indebtedness issued at a price that is less than the principal amount thereof will be equal to the amount of the liability in respect thereof determined in accordance with GAAP. Indebtedness under of any Person existing at the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially time such Person becomes a Restricted Subsidiary shall be deemed to have been incurred on by the Company and the Restricted Subsidiary at the time such date in reliance on the exception provided by clause (1) of the definition of Permitted DebtPerson becomes a Restricted Subsidiary. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsinterest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities shares of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09covenant; provided provided, in each such case, that the amount thereof shall be is included in Fixed Charges of the Company as accrued to the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other Personaccrued.
Appears in 2 contracts
Samples: Indenture (Energy Xxi (Bermuda) LTD), Indenture (Energy Xxi (Bermuda) LTD)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, provided that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stock), if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock preferred stock is issued, as the case may be, would have been at least 2.25 3.00 to 1.01.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock preferred stock had been issued, as the case may be, and the proceeds thereof applied at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuers and Company or any Restricted Subsidiary of the Guarantors, Company of additional Indebtedness and letters of credit under the Senior Credit Facilities Facility in an aggregate principal amount (excluding, in each case, interest (including any accrual or payment of in kind interest that may or has been added to principal) fees, costs, expenses and charges owed under the Senior Credit Facility) at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed the greater of (i) $700.0 million and (iia) $175.0 million (plus 35.0% up to an additional $15.0 million in respect of additional principal (including overadvances) under the Senior Credit Facility, as in effect on the Issue Date), less (b) the sum of (x) the aggregate amount of all repayments, optional or mandatory, of the Company’s Adjusted Consolidated principal of any term Indebtedness thereunder that have been made by the Company or any of its Restricted Subsidiaries since the Issue Date as a result of the application of any Net Tangible Assets determined on Proceeds of Asset Sales pursuant to Section 4.10(b)(l)(a) hereof and (y) the date aggregate amount of such incurrenceall commitment reductions with respect to any revolving credit extensions thereunder that have been made by the Company or any of its Restricted Subsidiaries since the Issue Date as a result of the application of any Net Proceeds of Asset Sales pursuant to Section 4.10(b)(1)(a) hereof;
(2) the incurrence by the Company and its Restricted Subsidiaries of Existing Indebtedness, including without limitation any PIK Notes (as defined in the Existing IndebtednessIndenture) issued as PIK Interest (as defined in the Existing Indenture) on the Existing Notes issued on the Original Issue Date (or issued as PIK Interest (as defined in the Existing Indenture) on PIK Notes (as defined in the Existing Indenture) issued under the Existing Indenture), and in each case, guarantees thereof;
(3) the incurrence by the Issuers Company and the Guarantors of Indebtedness represented by (i) the Notes to be issued on the date Issue Date, (ii) PIK Notes issued as PIK Interest on the Notes issued on the Issue Date (or issued as PIK Interest on PIK Notes previously issued under this subclause (ii)) and (iii) guarantees of this Indenture the Notes described in subclauses (i) and the related Note Guarantees(ii);
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred within 360 days of the acquisition or completion of construction or installation for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, or Attributable Debt relating to a sale leaseback transaction, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 7.5 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceat any time outstanding;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (2), (3), (4), (5), (14) or ), (15) and (18) of this Section 4.09(bparagraph (b);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and
(B) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stockshares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such Preferred Stock preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging ObligationsObligations in the ordinary course of business and not for speculative purposes;
(9) the Guarantee guarantee by the Company or any of its Restricted Subsidiaries the Guarantors of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee must shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, health disability or other employee benefits or property, casualty or liability insurance or self-insurance obligations, reimbursement obligations or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or with respect to commercial letters of credit functioning as or supporting any of the foregoing credit, bankers’ acceptances and performance and surety bonds or obligations and workers’ compensation claims in the ordinary course of business;
(11) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earn-out or other similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Restricted Subsidiary in accordance with the terms of this Indenture, other than Indebtedness or guarantees of Indebtedness incurred or assumed by any Person acquiring all or any portion of such business, assets or Restricted Subsidiary for the purpose of financing such acquisition; provided that the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds actually received by the Company and its Restricted Subsidiaries in connection with such disposition;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(1213) endorsements of instruments or other items of deposit;
(14) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating Indebtedness owed to net oil any current or natural gas balancing positions arising former officer, director or employee of the Company or any of its Restricted Subsidiaries in connection with the ordinary course repurchase, redemption or other acquisition or retirement of businessEquity Interests held by any such current or former officer, director or employee of the Company or any of its Restricted Subsidiaries; provided that such repurchase, redemption or other acquisition or retirement is permitted by Section 4.07(b)(5) hereof;
(1315) any obligation arising from agreements Indebtedness of a Restricted Subsidiary incurred and outstanding on or prior to the date on which such Restricted Subsidiary was acquired by the Company or any Restricted Subsidiary of or merged into the Company 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 Capital Stock of a Restricted Subsidiary in accordance with the terms of this Indenture (other than Indebtedness incurred in contemplation of, or in connection with, the transaction or series of related transactions pursuant to which such Restricted Subsidiary became a transaction permitted Restricted Subsidiary of or was otherwise acquired by this Indentureor merged into the Company or such Restricted Subsidiary); provided that after giving effect to such obligation transaction, (a) the Company would have been able to incur at least $1.00 of additional Indebtedness pursuant to Section 4.09(a) hereof and (b) such Restricted Subsidiary is (i) a Domestic Restricted Subsidiary and becomes a Guarantor or (ii) is a Foreign Restricted Subsidiary and the aggregate principal amount of Indebtedness at any time outstanding under this clause (15)(b)(ii), together with the aggregate principal amount of Indebtedness outstanding under clause (16) below, not reflected as a liability on to exceed $12.5 million;
(16) the face incurrence by Foreign Restricted Subsidiaries of the balance sheet Company of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (16), together with the aggregate principal amount outstanding pursuant to clause (15)(b)(ii) above, not to exceed the excess of (a) $15.0 million over (b) the sum of (x) the aggregate amount of all optional repayments of the principal of any term Indebtedness thereunder that have been made by the Company or any of its Restricted SubsidiarySubsidiaries since the Issue Date and (y) the aggregate amount of all commitment reductions with respect to any revolving credit extensions thereunder that have been made by the Company or any of its Restricted Subsidiaries since the Issue Date;
(1417) any Permitted Acquisition Indebtedness; and[reserved];
(1518) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (1518), not to exceed $10.0 million; and
(19) the greater incurrence by the Company and the Guarantors of Indebtedness represented by (i) Additional Notes in an aggregate principal amount not to exceed $75.0 million 25.0 million, the proceeds of which are used to finance the acquisition of a Permitted Business or a Person engaged in a Permitted Business, (ii) PIK Notes issued as PIK Interest on such Additional Notes (or issued as PIK Interest on PIK Notes previously issued under this subclause (ii)) and (iii) guarantees of the Additional Notes described in subclauses (i) and (ii).
(c) 5.0% The Company will not incur, and will not permit any Guarantor to incur, any Indebtedness (including Permitted Debt but excluding the Existing Notes) that is subordinated in right of payment to any other Indebtedness of the Company’s Adjusted Consolidated Net Tangible Assets determined as Company or such Guarantor unless such Indebtedness is also 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 subordinated in right of payment to any other Indebtedness of the date Company solely by virtue of such incurrence being unsecured or issuance. by virtue of being secured on a junior priority basis with respect to the same Collateral.
(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 (1519) above, or is entitled to be incurred pursuant to Section 4.09(a)) hereof, the Company will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09covenant. Indebtedness under the Senior Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture Facility will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionspremium, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities shares of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided provided, in each such case, that the amount thereof shall be of any such accrual, accretion or payment is included in Fixed Charges of the Company as accrued accrued. Notwithstanding any other provision of this Section 4.09, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to the extent required by the definition this Section 4.09 shall not be deemed to be exceeded solely as a result of such term. fluctuations in exchange rates or currency values.
(e) The amount of any Indebtedness outstanding as of any date will be:
(a1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1A) the Fair Market Value of such assets at the date of determination; and
(2B) the amount of the Indebtedness of the other Person.
Appears in 2 contracts
Samples: Indenture (A. M. Castle & Co.), Indenture (Total Plastics, Inc.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will shall not, and will shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), and the Company will shall not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of Preferred Stock; provided, however, that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and Restricted Subsidiaries of the Company that are Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stock, if the Fixed Charge Coverage Ratio for the Company’s 's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock is issued, as the case may be, issued would have been at least 2.25 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the such additional Indebtedness had been incurred incurred, or the Disqualified such Preferred Stock or the Preferred Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) . The provisions of the first paragraph of this Section 4.09(a) will 4.09 shall not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “"Permitted Debt”"):
(1i) the incurrence by the Issuers Company and the Guarantors, any Restricted Subsidiary that is a Guarantor of additional Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under pursuant to this clause (1i) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed an amount equal to the greater of (iA) the Borrowing Base; and (B) $700.0 million and (ii) $175.0 million plus 35.0% 700,000,000 as of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of incurrence minus (1) the aggregate amount of all Net Proceeds of Asset Sales required to be applied that are in fact applied by the Company or any of its Restricted Subsidiaries to repay permanently Indebtedness outstanding under one or more Credit Facilities (and to reduce commitments with respect thereto if the Indebtedness being repaid is revolving Indebtedness) pursuant to Section 4.10 hereof and (2) the aggregate amount of all repayments, optional or mandatory, of the principal of any such incurrenceadditional term Indebtedness (other than repayments that are concurrently reborrowed) that have actually been made since the date hereof;
(2ii) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3iii) the incurrence by the Issuers Company and the Guarantors of Indebtedness represented by the Notes to be issued on the date of this Indenture hereof and the related Note Exchange Notes to be issued pursuant to the Registration Rights Agreement (including, in each case, the Subsidiary Guarantees);
(4iv) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation construction or improvement of property, plant or equipment used in the business of the Company or any of its such Restricted SubsidiariesSubsidiary, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred pursuant to this clause (4iv), not to exceed the greater of (i) $45.0 million and (ii) 3.0exceed, in aggregate principal amount at any one time outstanding, 5% of Total Assets on a pro forma basis (including a pro forma application of the Company’s Adjusted Consolidated Net Tangible Assets determined net proceeds of that Indebtedness), as of if that Indebtedness had been incurred on the date of such incurrence or issuancecalculation;
(5v) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease refinance or discharge any replace Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under the first paragraph of this Section 4.09(a) 4.09 or clauses (2ii), (3iii), (4iv), (5), (14v) or (15xiii) of this Section 4.09(bparagraph in a substantially concurrent transaction (which incurrence shall be no earlier than 30 days prior to the refunding, refinancing or replacing of the Indebtedness being refunded, refinanced or replaced and the proceeds of the Permitted Refinancing Indebtedness shall be deposited in escrow pending application);
(6vi) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted SubsidiariesWholly Owned Subsidiaries that are Guarantors; provided, however, that:
that (A) 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 unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the NotesNotes and this Indenture, in the case of the Company, or the Note Subsidiary Guarantee, in the case of a Guarantor; and
Guarantor and (B) (iB)(1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary any of the Company its Wholly Owned Subsidiaries that are Guarantors and (ii2) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary any of the Company, will its Wholly Owned Subsidiaries that are Guarantors shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6vi);
(7vii) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging ObligationsObligations that are incurred for the purpose of (A) fixing or hedging interest rate risk with respect to any floating rate Indebtedness that is permitted by the terms of this Indenture to be outstanding or (B) hedging exposure to foreign currency fluctuations;
(9viii) the Guarantee guarantee by the Company or any of its Restricted Subsidiaries the Guarantors of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(10ix) the incurrence of Non-Recourse Debt by the Company's Unrestricted Subsidiaries, provided, however, that if any such Indebtedness ceases to be Non-Recourse Debt of an Unrestricted Subsidiary, such event shall be deemed to constitute an incurrence of Indebtedness by a Restricted Subsidiary of the Company that was not permitted by this clause (ix);
(x) 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 or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock, as the case may be, which will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock or Preferred Stock, as the case may be, for purposes of this Section 4.09; provided, in each case, that the amount thereof is included in Fixed Charges of the Company as accrued;
(xi) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations or bid, plugging performance and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business;
(11xii) the incurrence by a Receivables Subsidiary of Indebtedness that is not recourse to the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business;
(13) any obligation arising from agreements of the Company or any Restricted Subsidiary of the Company providing for indemnification, adjustment of purchase price, earn outs, or similar obligations, in each case, incurred or assumed (other than with respect to Standard Securitization Undertakings) in connection with the disposition or acquisition of any business, assets or Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company or any Restricted Subsidiary;
(14) any Permitted Acquisition IndebtednessQualified Receivables Transaction; and
(15xiii) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any other Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15xiii), not to exceed the greater of (i) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance50,000,000. 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 (1i) through (15xiii) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.09(a)4.09, the Company will shall be permitted to divide, classify and reclassify such that item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, Indebtedness in any manner that complies with this Section 4.09. Indebtedness under the Credit Agreement outstanding Facilities that are in existence on the date on which Notes are first issued and authenticated under this Indenture will initially shall be deemed to have been incurred on such that date in reliance on the exception provided by clause (1i) of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributions, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other Person.
Appears in 2 contracts
Samples: Indenture (Ames Department Stores Inc), Indenture (Ames Department Stores Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company Suburban Propane will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company Suburban Propane will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of Preferred Stock; provided, however, that the Issuers Suburban Propane may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stock, Stock if the Consolidated Fixed Charge Coverage Ratio for the CompanySuburban Propane’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 Stock is issued, as the case may be, issued would have been at least 2.25 2.0 to 1.01, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a10.10(a) will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuers Suburban Propane and the Guarantors, any of its Restricted Subsidiaries of additional 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 the Company Suburban Propane and its Restricted Subsidiaries thereunder) not to exceed the greater of (ix) $700.0 400.0 million and (iiy) $175.0 million plus 35.0% the amount of the Company’s Adjusted Consolidated Net Tangible Assets determined on Borrowing Base as of the date of such incurrence;
(2) the incurrence by the Company Suburban Propane and any of its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers and the Guarantors of Indebtedness represented by the Notes to be issued on the date of this Indenture and the related Note GuaranteesInitial Notes;
(4) the incurrence by the Company or Indebtedness of Suburban Propane and any of its Restricted Subsidiaries of Indebtedness represented by (including Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, Obligations and Acquired Debt) incurred for the purpose making of financing all expenditures for the improvement or any part repair, to the extent the improvements or repairs may be capitalized in accordance with GAAP, or additions, including by way of acquisitions of businesses and related assets, to the purchase price or cost property and assets of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of Suburban Propane and its Restricted Subsidiaries, including, without limitation, the acquisition of assets subject to operating leases or incurred by assumption in an connection with additions, including additions by way of acquisitions or capital contributions of businesses and related assets, to the property and assets of Suburban Propane and its Restricted Subsidiaries; provided, that the aggregate principal amount outstanding, including all Permitted Refinancing of Indebtedness incurred to renew, refund, refinance, replace, defease or discharge outstanding at any Indebtedness incurred time pursuant to this clause (4), may not to exceed the greater of (i) $45.0 100.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceat any one time outstanding;
(5) the incurrence by the Company or Suburban Propane and any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any discharge, Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Supplemental Indenture to be incurred under Section 4.09(a10.10(a) or clauses (2), (3), (4), (5), (14) or (155) of this Section 4.09(b10.10(b);
(6) the incurrence by the Company or Suburban Propane and any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company Suburban Propane and any of its Restricted Subsidiaries; provided, however, that:
(Aa) if the Company or any Guarantor an Issuer is the an obligor on such Indebtedness and the payee is not the Company an Issuer or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and
(Bb) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company Suburban Propane or a Restricted Subsidiary of the Company Suburban Propane and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company Suburban Propane or a Restricted Subsidiary of the CompanySuburban Propane, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company Suburban Propane or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the CompanySuburban Propane’s Restricted Subsidiaries to the Company Suburban Propane or to any of its Restricted Subsidiaries of any units or shares of Preferred Stock; provided, however, that:
(Aa) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company Suburban Propane or a Restricted Subsidiary of the CompanySuburban Propane; and
(Bb) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company Suburban Propane or a Restricted Subsidiary of the Company, Suburban Propane will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or Suburban Propane and any of its Restricted Subsidiaries of non-speculative Hedging ObligationsObligations in the ordinary course of business;
(9) the Guarantee guarantee by the Company Issuers or any of its their Restricted Subsidiaries of Indebtedness of the Company Issuers or a Restricted Subsidiary of the Company to the extent Issuers that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.0910.10; provided provided, that if the Indebtedness being guaranteed is incurred by one or both of the Issuers and is subordinated to or pari passu with the Notes, then the Guarantee must guarantee of such Indebtedness by any Restricted Subsidiary of the Issuers shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business;
(11) the incurrence by the Company Suburban Propane or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(1211) the incurrence by the Company Suburban Propane or any of its Restricted Subsidiaries of inIndebtedness arising from performance bonds, bid bonds, bankers’ acceptances, workers’ compensation, health, disability or other employee benefit claims, surety or appeal bonds, payment obligations in connection with self-kind insurance or similar obligations relating to net oil or natural gas balancing positions arising and bank overdrafts (and letters of credit in respect thereof) incurred in the ordinary course of business;
(1312) the incurrence by Suburban Propane or any obligation of its Restricted Subsidiaries of Indebtedness arising from agreements of the Company indemnities or any Restricted Subsidiary of the Company providing for indemnification, adjustment other similar obligations in respect of purchase price, earn outs, or similar obligations, in each case, incurred or assumed price adjustments in connection with the disposition of property or acquisition assets;
(13) (i) Indebtedness of Suburban Propane or any of its Restricted Subsidiaries acquired after the date hereof and (ii) Indebtedness of any businessPerson merged or consolidated with or into Suburban Propane or any of its Restricted Subsidiaries after the date hereof, assets which Indebtedness in each case, exists at the time of such acquisition, merger, consolidation or Capital Stock conversion and is not created in contemplation of a Restricted Subsidiary in a transaction such event and where such acquisition, merger or consolidation is otherwise permitted by this Supplemental Indenture; provided provided, that such obligation is the aggregate principal amount of Indebtedness under this clause (13) shall not reflected as a liability on the face of the balance sheet of the Company or at any Restricted Subsidiary;time exceed $25.0 million; and
(14) any Permitted Acquisition Indebtedness; and
(15) the incurrence by the Company Suburban Propane or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (1514), not to exceed the greater $40.0 million. The Issuers will not incur any Indebtedness (including Permitted Debt) that is contractually subordinated in right of (i) $75.0 million and (ii) 5.0% payment to any other Indebtedness of the Company’s Adjusted Consolidated Net Tangible Assets determined as Issuers unless such Indebtedness is also contractually subordinated in right of payment to the Notes on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the date Issuers solely by virtue of such incurrence being unsecured or issuanceby virtue of being secured on a first or junior Lien basis. For purposes of determining compliance with this Section 4.0910.10, 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 (1514) aboveof this Section 10.10, or is entitled to be incurred pursuant to Section 4.09(a10.10(a), the Company Issuers will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. 10.10; provided, that Indebtedness under the Credit Agreement Facilities outstanding on the date on which the Initial Notes are first were originally issued and authenticated under this Supplemental Indenture will initially be was deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted DebtDebt and cannot be so reclassified. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsinterest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities shares of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided 10.10. Notwithstanding any other provision of this Section 10.10, the maximum amount of Indebtedness that the amount thereof Suburban Propane or any Restricted Subsidiary may incur pursuant to this covenant shall not be included deemed to be exceeded solely as a result of fluctuations in Fixed Charges of the Company as accrued to the extent required by the definition of such termexchange rates or currency values. The amount of any Indebtedness outstanding as of any date will be:
(a1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1a) the Fair Market Value of such assets asset at the date of determination; , and
(2b) the amount of the Indebtedness of the other Person.
Appears in 2 contracts
Samples: First Supplemental Indenture (Suburban Propane Partners Lp), First Supplemental Indenture (Suburban Propane Partners Lp)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company Borrower and the Parent Guarantors will not, and will not permit any of its their Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company Borrower and the Parent Guarantors will not issue any Disqualified Stock and will not permit any Restricted Subsidiary of its Restricted Subsidiaries New Pyxus Topco to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Borrower and the Parent Guarantors may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Subsidiary Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stockpreferred stock, if the Fixed Charge Coverage Ratio for the CompanyNew Pyxus Topco’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 Stock preferred stock is issued, as the case may be, would have been at least 2.25 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock preferred stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a6.03(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1i) the incurrence by the Issuers and Borrower, the Guarantors, Parent Guarantors or any of their Restricted Subsidiaries of Indebtedness and letters of credit under (A) the ABL Credit Facilities Agreement in an aggregate principal amount at any one time outstanding under this clause (1A) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company Borrower, the Parent Guarantors and its their Restricted Subsidiaries thereunder) not to exceed $90.0 million, (B) the greater of Term Loan Credit Agreement in an aggregate principal amount at any time outstanding under this clause (iB) not to exceed an aggregate amount equal to $700.0 million 213,417,750 and (iiC) the First Lien Notes Indenture in an aggregate principal amount at any one time outstanding under this clause (C) not to exceed an aggregate amount equal to $175.0 million plus 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence280,843,751 (and any Permitted Refinancing Indebtedness in respect thereof);
(2ii) the incurrence by the Company Borrower, the Parent Guarantors and its their Restricted Subsidiaries of the Existing Indebtedness;
(3iii) Indebtedness created hereunder and under the other Loan Documents;
(iv) the incurrence by the Issuers and the Guarantors of Indebtedness represented by the Notes to be issued on the date of this Indenture and the related Note Guarantees;
(4) the incurrence by the Company Borrower, any Parent Guarantor or any of its their Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company Borrower, any Parent Guarantor or any of its their Restricted Subsidiaries, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4iv), not to exceed the greater of (i) $45.0 21.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceat any time outstanding;
(5v) the incurrence by the Company Borrower, any Parent Guarantor or any of its their Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture Agreement to be incurred under Section 4.09(a6.03(a) hereof or clauses (2ii), (3iii), (4iv), (5), (14v) or (15xvii) of this Section 4.09(b6.03(b);
(6vi) the incurrence by the Company Borrower, any Parent Guarantor or any of its their Restricted Subsidiaries of intercompany Indebtedness between or among the Company and Borrower, any Parent Guarantor and/or any of its their Restricted Subsidiaries; provided, howeverthat any such Indebtedness shall be, that:
(A) if to the Company extent owed by the Borrower or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations or any Guarantee thereof then due with respect to the Noteshereunder, in the case of the Company, Borrower or the Note Guarantee, in the case of a Guarantor, as applicable; and
(B) (i) provided, that if as of any subsequent issuance or transfer of Equity Interests that results in date any such Indebtedness being held by a Person other than the Company Borrower, a Parent Guarantor or a any of their Restricted Subsidiary of the Company and (ii) any sale Subsidiaries owns or other transfer of holds any such Indebtedness to a Person that is not either Indebtedness, such date shall be deemed the Company or a Restricted Subsidiary date of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company Borrower, such Parent Guarantor or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6vi);
(7vii) the issuance by any of the CompanyBorrower’s or the Parent Guarantors’ Restricted Subsidiaries to the Company Borrower, to any Parent Guarantor or to any of its their Restricted Subsidiaries of any Preferred Stockshares of preferred stock; provided, provided however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock preferred stock being held by a Person other than the Company Borrower, a Parent Guarantor or a Restricted Subsidiary of the CompanyBorrower or a Parent Guarantor; and
(B) any sale or other transfer of any such Preferred Stock preferred stock to a Person that is not either the Company Borrower, a Parent Guarantor or a Restricted Subsidiary of the Company, Borrower or a Parent Guarantor; will be deemed, in each case, to constitute an issuance of such Preferred Stock preferred stock by such Restricted Subsidiary that was not permitted by this clause (7vii);
(8) viii) the incurrence by the Company Borrower, any Parent Guarantor or any of its their Restricted Subsidiaries of Hedging ObligationsObligations entered into in order to manage existing or anticipated interest rate, exchange rate or commodity price risks and not for speculative purposes;
(9ix) the incurrence by the Borrower, any Parent Guarantor or any of their Restricted Subsidiaries of Indebtedness owing under documentary or standby letters of credit for the purchase of goods or other merchandise generally;
(a) Indebtedness in respect of OECD accounts receivable financings with recourse against the Borrower, any Parent Guarantor or any of their Restricted Subsidiaries in an aggregate amount not to exceed $50.0 million at any time outstanding and (b) non-OECD accounts receivable financings with recourse against the Borrower, any Parent Guarantor or any of their Restricted Subsidiaries in an aggregate amount not to exceed $50.0 million at any time outstanding;
(xi) the Guarantee by the Company Borrower, any Parent Guarantor or any of its their Restricted Subsidiaries of Indebtedness of the Company Borrower, any Parent Guarantor or a any of their Restricted Subsidiary of the Company Subsidiaries to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.096.03; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the NotesLoans, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(10xii) the incurrence by the Company Borrower, any Parent Guarantor or any of its their Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations or bidobligations, plugging bankers’ acceptances, performance and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business;
(11xiii) the incurrence by the Company Borrower, any Parent Guarantor or any of its their Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Daysowing under overdraft facilities in connection with cash management arrangements;
(12xiv) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business;
(13) any obligation arising from agreements of the Company or any Restricted Subsidiary of the Company 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 Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company or any Restricted Subsidiary;
(14) any Permitted Acquisition Indebtedness; and
(15) the incurrence by the Company or any of its Restricted Foreign Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15), outstanding not to exceed the greater of (ia) $75.0 875 million and (b) the sum of (x) 65% of Eligible Inventory, plus (y) 65% of Permitted Advances on Purchases of Tobacco, plus (z) 85% of Eligible Receivables, and any Guarantees of such Indebtedness by the Borrower or any Parent Guarantor;
(xv) Guarantees by the Borrower, any Parent Guarantor or any of their Restricted Subsidiaries which are incurred in the ordinary course of business in an aggregate amount not to exceed $250.0 million in the aggregate at any time outstanding;
(xvi) Guarantees by the Borrower, any Parent Guarantor or any of their Restricted Subsidiaries which are incurred in the ordinary course of business for the purpose of carrying unsold tobacco inventories held against Confirmed Orders and other Guarantees by the Borrower, any Parent Guarantor or any of their Restricted Subsidiaries incurred in the ordinary course of business with respect to Uncommitted Inventories in an aggregate amount not to exceed the amount of such Uncommitted Inventories;
(xvii) the incurrence by the Borrower or any Guarantor of unsecured Indebtedness or Junior Lien Debt in an aggregate principal amount not to exceed $50.0 million at any time outstanding; and
(xviii) the incurrence of Indebtedness solely by Restricted Subsidiaries of the Borrower and the Parent Guarantors that own no assets or property other than the Specified Business, in an aggregate principal amount not to exceed $50.0 million at any time outstanding; provided, that such Indebtedness (i) shall not be subject to any interest that is payable in cash (and interest in respect of such Indebtedness may only be payable in kind), (ii) 5.0% shall have a final maturity date and a Weighted Average Life to Maturity, in each case, that is at least 91 days after the final maturity date of the Company’s Adjusted Consolidated Net Tangible Assets determined as Loans, (iii) shall not be guaranteed by the Borrower, the Parent Guarantors or any of their Restricted Subsidiaries other than a Restricted Subsidiary that owns no assets or property other than the Specified Business, (iv) shall be secured solely by equity interests of entities, and any assets of such entities, in each case solely to the extent constituting the Specified Business, and (v) shall have covenants (if any) and events of default that apply solely to the Specified Business; provided, further, that the Borrower, the Parent Guarantors and their Restricted Subsidiaries shall not make any payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness incurred pursuant to this clause (xviii) prior to the stated maturity thereof, except from (x) cash generated by the ordinary course operations of the date Specified Business (which shall not include proceeds from any Investment in the Specified Business by the Borrower, any Parent Guarantor or any of their Restricted Subsidiaries) and (y) proceeds of an Asset Sale of all or a portion of the Specified Business. The Borrower and the Parent Guarantors 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 the Borrower, the Parent Guarantors or such incurrence Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Credit Facility and the Guarantees thereof on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Borrower, any Parent Guarantor or issuanceany Subsidiary Guarantor solely by virtue of being unsecured or by virtue of being secured on junior priority basis. For purposes of determining compliance with this Section 4.096.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1i) through (15xviii) above, or is entitled to be incurred pursuant to Section 4.09(a)6.03(a) hereof, the Company Borrower will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.096.03. Indebtedness under the Credit Agreement outstanding on the date on which First Lien Notes are first issued and authenticated under this Indenture will initially shall be deemed to have been incurred on such date in reliance on under the exception provided by clause (1i)(A) of the definition of Permitted DebtDebt and may not be reclassified. Indebtedness under the ABL Credit Agreement may be incurred solely under clause (i)(B) of the definition of Permitted Debt and may not be reclassified. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionspreferred stock dividends, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock preferred stock or Disqualified Stock in the form of additional securities shares of the same class of Preferred Stock preferred stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock preferred stock or Disqualified Stock for purposes of this Section 4.09covenant; provided provided, in each such case, that the amount thereof shall be of any such accrual, accretion or payment is included in Fixed Charges of Pyxus Holdings as accrued. For purposes of determining compliance with any U.S. dollar-denominated restriction on the Company incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be utilized, calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred. Notwithstanding any other provision of this Section 6.03, the maximum amount of Indebtedness that the Borrower, any Parent Guarantor or any Restricted Subsidiary may incur pursuant to this Section 6.03 shall not be deemed to be exceeded solely as accrued to the extent required by the definition a result of such termfluctuations in exchange rates or currency values. The amount of any Indebtedness outstanding as of any date will be:
(ai) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(bii) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(ciii) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1A) the Fair Market Value of such assets at the date of determination; and
(2B) the amount of the Indebtedness of the other Person.
Appears in 2 contracts
Samples: Term Loan Credit Agreement (Pyxus International, Inc.), Term Loan Credit Agreement (Pyxus International, Inc.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectivelyin any such case, “incur”"INCUR") any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, PROVIDED that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Mirror Note Issuers and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stockpreferred stock, if the Fixed Charge Coverage Ratio for the Company’s 's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock preferred stock is issued, as the case may be, issued would have been at least 2.25 2.5 to 1.01, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the preferred stock or Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuers and the Guarantors, 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 ; PROVIDED FURTHER that a Restricted Subsidiary may issue preferred stock to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed the greater of (i) $700.0 million and (ii) $175.0 million plus 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers and the Guarantors of Indebtedness represented by the Notes to be issued on the date of this Indenture and the related Note Guarantees;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (2), (3), (4), (5), (14) or (15) of this Section 4.09(b);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and
(B) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Wholly Owned Restricted Subsidiary of the Company, will be deemed, or in each case, to constitute an incurrence a transaction or series of such Indebtedness by the Company or related transactions consisting of a sale of such Restricted Subsidiary; PROVIDED that immediately after giving effect to such sale, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the Company’s Restricted Subsidiaries to neither the Company or to nor any of its Restricted Subsidiaries of owns any Preferred Stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations;
(9) the Guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business;
(13) any obligation arising from agreements of the Company or any Restricted Subsidiary of the Company 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 Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company or any Restricted Subsidiary;
(14) any Permitted Acquisition Indebtedness; and
(15) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15), not to exceed the greater of (i) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance. For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (15) above, or is entitled to be incurred pursuant to Section 4.09(a), the Company will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that sale complies with this Section 4.09. Indebtedness under the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributions, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other Person4.10.
Appears in 2 contracts
Samples: Indenture (Paramount Resources LTD), Indenture (Paramount Resources LTD)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stockpreferred stock, if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock preferred stock is issued, as the case may be, would have been at least 2.25 2.0 to 1.01, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock preferred stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuers Company and the Guarantors, its Restricted 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 reimbursement obligations of the Company and its Restricted Subsidiaries thereunder) not to exceed the greater of (i) $700.0 million and (ii) $175.0 million plus 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence30.0 million;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers Company and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and the Exchange Notes and the related Note GuaranteesGuarantees 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 or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 5.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceat any time outstanding;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clauses (2), (3), (4), (5), (1412) or (1516) of this Section 4.09(b) or this clause (5);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and
(B) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company Company, and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stockshares of preferred stock; provided, however, that:
(A) that any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) , and any sale or other transfer of any such Preferred Stock preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging ObligationsObligations in the ordinary course of business;
(9) the Guarantee guarantee by the Company or any of its Restricted Subsidiaries the Guarantors of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.094.09(b); provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations or bidobligations, plugging bankers’ acceptances, performance and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by the Company or any Guarantor of Indebtedness in connection with the acquisition of assets or a new Restricted Subsidiary (including Acquired Debt); provided that the principal amount of such Indebtedness, together with any other outstanding Indebtedness incurred pursuant to this clause (12) and all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (12), does not exceed $15.0 million;
(13) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind Indebtedness to the extent that the net proceeds thereof are immediately deposited to defease or discharge the Notes in full, in each case, in accordance with the terms of this Indenture;
(14) the incurrence by the Company’s Foreign Subsidiaries of customary commercial letters of credit, “bank guarantees” or similar obligations relating to net oil or natural gas balancing positions arising in the ordinary course of businessbusiness consistent with past practices;
(13) any obligation arising from agreements of the Company or any Restricted Subsidiary of the Company 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 Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company or any Restricted Subsidiary;
(14) any Permitted Acquisition Indebtedness; and
(15) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness arising from agreements providing for bona fide indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the issuance acquisition or disposition of any business, asset or Subsidiary, other than Guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition; provided that (a) such Indebtedness is not reflected on the Company’s balance sheet or that of any Restricted Subsidiary of the Company (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (15)(a)); and (b) the maximum assumable liability in respect of any such Indebtedness incurred in connection with a disposition shall at no time exceed the aggregate gross proceeds including non-cash proceeds (the fair market value of such non-cash proceeds being measured at the time received and without giving effect to any such subsequent changes in value) actually received by the Company and its Restricted Subsidiary in connection with such disposition; and
(16) the incurrence by the Company or any of any Disqualified Stock its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (1516), not to exceed the greater of (i) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance. For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (15) above, or is entitled to be incurred pursuant to Section 4.09(a), the Company will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributions, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other Person15.0 million.
Appears in 2 contracts
Samples: Indenture (CPM Holdings, Inc.), Indenture (CPM Holdings, Inc.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will Issuer shall not, and will shall not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company Issuer will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries Subsidiary to issue any shares of Disqualified Stock or any shares of Preferred Stock; provided, however, that the Issuers Issuer and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) Stock or issue Preferred Stock, if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding as of the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock is issued, as the case may be, would have been at least 2.25 2.00 to 1.01.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a) will hereof shall not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1i) the incurrence by the Issuers Issuer and the Guarantors, its Restricted Subsidiaries of Indebtedness and letters of credit under Credit Facilities Facilities, excluding the Senior Interim Loan Credit Agreement, in an aggregate principal amount at any one time outstanding under this clause (1i) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunderface amount thereof) not to exceed $3,900.0 million, less the greater aggregate amount of (i) $700.0 million all Net Proceeds of Asset Sales applied by the Issuer or any Restricted Subsidiary since the Acquisition Closing Date to repay any term Indebtedness under a Credit Facility or to repay any revolving credit Indebtedness under a Credit Facility and (ii) $175.0 million plus 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrenceeffect a corresponding commitment reduction thereunder pursuant to Section 4.10;
(2ii) the incurrence by the Company Issuer and its Restricted Subsidiaries of the Existing Indebtedness;
(3iii) (a) the incurrence by the Issuers Issuer and the Guarantors of Indebtedness represented by the Notes to be issued on the date of this Indenture and the related Note Guarantees, and (b) Indebtedness under the Senior Interim Loan Credit Agreement in an amount not to exceed $1,100 million less the aggregate principal amount of the Notes plus any additional Loans issued as PIK Interest and any Exchange Notes issued in exchange for any Loans and any additional Exchange Notes issued as PIK Interest thereon;
(4iv) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by (including Capital Lease Obligations), mortgage financings or purchase money obligations, in each case, Disqualified Stock and Preferred Stock incurred for by the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company Issuer or any of its Restricted Subsidiaries, to finance the purchase, lease or improvement of property (real or personal) or equipment that is used or useful in a Permitted Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets, in an aggregate principal amount outstandingamount, including all together with any Permitted Refinancing Indebtedness incurred to renewin respect thereof and all other Indebtedness, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to Disqualified Stock and/or Preferred Stock issued and outstanding under this clause (4), iv) not to exceed the greater of (i) $45.0 125.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined at any time outstanding; so long as of such Indebtedness exists at the date of such incurrence purchase, lease or issuanceimprovement, or is created within 270 days thereafter;
(5v) the incurrence by the Company Issuer or any of its Restricted Subsidiaries Subsidiary of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clauses (2ii), (3iii), (4iv), (5v), (14xiii), (xv), (xxi), (xxii) or and (15xxiii) of this Section 4.09(b)) including additional Indebtedness incurred to pay premiums and fees in connection therewith;
(6vi) the incurrence by the Company Issuer or any of its Restricted Subsidiaries Subsidiary of intercompany Indebtedness between or among the Company Issuer and any of its Restricted SubsidiariesSubsidiary; provided, however, that:
(A1) if the Company Issuer or any Guarantor is the obligor on such Indebtedness and the payee is not the Company Issuer or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or Notes and the Note Guarantee, in the case of a GuarantorGuarantees; and
(B) (i2) any (A) subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company Issuer or a Restricted Subsidiary of the Company and Issuer, or (iiB) any sale or other transfer of any such Indebtedness to a Person that is not either the Company Issuer or a Restricted Subsidiary of the CompanyIssuer, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company Issuer or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6vi);
(7vii) the issuance by any of the CompanyIssuer’s Restricted Subsidiaries to the Company Issuer or to any Restricted Subsidiary of its Restricted Subsidiaries shares of any Preferred Stock; provided, however, that:
that any (A1) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company Issuer or a Restricted Subsidiary of the Company; and
Issuer, or (B2) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company Issuer or a Restricted Subsidiary of the CompanyIssuer, will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7vii);
(8) viii) the incurrence by the Company Issuer or any Restricted Subsidiary of Hedging Obligations in the ordinary course of business and not for speculative purposes;
(1) the guarantee by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations;
(9) the Guarantee by the Company or any of its Restricted Subsidiaries Guarantors of Indebtedness of the Company Issuer or a Restricted Subsidiary of the Company to the extent Issuer that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee must shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteedguaranteed and (2) any guarantee by a Restricted Subsidiary that is not a Guarantor of Indebtedness of another Restricted Subsidiary that is not a Guarantor that was permitted to be incurred by another provision of this Section 4.09;
(10x) the incurrence Indebtedness incurred by the Company Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or constituting reimbursement obligations with respect to letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims issued in the ordinary course of business, including letters of credit in respect of workers’ compensation claims, health, disability or other employee benefits, or property, casualty or liability insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(11xi) the incurrence by the Company Issuer or any of its Restricted Subsidiaries Subsidiary of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Daysbusiness days;
(12xii) the incurrence by the Company receivables or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising factoring arrangements in the ordinary course of business;
(13xiii) any obligation Indebtedness arising from agreements of the Company Issuer or any a Restricted Subsidiary of the Company providing for indemnification, adjustment of purchase price, earn outs, earnouts or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Capital Stock a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Restricted Subsidiary in a transaction permitted by this Indenturefor the purpose of financing such acquisition; provided that provided, however, that
(1) such obligation Indebtedness is not reflected as a liability on the face of the balance sheet of the Company Issuer or any Restricted SubsidiarySubsidiary prepared in accordance with GAAP (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (xiii)(1)) and
(2) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including noncash proceeds (the fair market value of such noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and the Restricted Subsidiaries in connection with such disposition;
(14xiv) Indebtedness of the Issuer or any Permitted Acquisition Indebtedness; andRestricted Subsidiary consisting of (1) the financing of insurance premiums or (2) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(15xv) Indebtedness, Disqualified Stock or Preferred Stock of (1) the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (2) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that, in the case of this clause (xv)(2) such Indebtedness, Disqualified Stock or preferred stock is not incurred in contemplation of such acquisition or merger; provided further that after giving effect to such acquisition or merger, 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 Section 4.09(a) or
(B) the Fixed Charge Coverage Ratio of the Issuer and its Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition or merger;
(xvi) [intentionally omitted];
(xvii) obligations in respect of performance, bid, appeal and surety bonds and completion guarantees provided by the Issuer or any Restricted Subsidiary in the ordinary course of business;
(xviii) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary to future, current or former officers, directors and employees thereof, their respective estates, spouses or former spouses, in each case to finance the purchase or redemption of Equity Interests of the Issuer or any direct or indirect parent company of the Issuer to the extent described in Section 4.07(b)(iv);
(xix) customer deposits and advance payments received in the ordinary course of business from customers for goods purchased in the ordinary course of business;
(xx) Indebtedness incurred by a Restricted Subsidiary in connection with bankers’ acceptances, discounted bills of exchange or the discounting or factoring of receivables for credit management purposes, in each case incurred or undertaken in the ordinary course of business on arm’s length commercial terms on a recourse basis;
(xxi) Indebtedness, Disqualified Stock or Preferred Stock of the Issuer or any Restricted Subsidiary (including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (xxi)) equal to 200% of the net cash proceeds received by the Issuer since immediately after the Acquisition Closing Date from the issue or sale of Equity Interests of the Issuer or cash contributed to the capital of the Issuer (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Issuer or any of its Subsidiaries) to the extent such net cash proceeds or cash have not been applied pursuant to Section 4.07(a)(3)(ii) to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof);
(xxii) the incurrence by the Company or any of its Restricted Foreign Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstandingoutstanding pursuant to this clause (xxii), including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15xxii), not to exceed $125.0 million (or the greater equivalent thereof, measured at the time of each incurrence, in applicable foreign currency); and
(ixxiii) $75.0 million and (ii) 5.0% Indebtedness, Disqualified Stock or Preferred Stock of the Company’s Adjusted Consolidated Net Tangible Assets determined as Issuer or any Restricted Subsidiary in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of the date of such incurrence all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred pursuant to this clause (xxiii), including any Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or issuancedischarge any Indebtedness incurred pursuant to this clause (xxiii), does not at any one time outstanding exceed $150.0 million. For purposes of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1i) through (15xxiii) above, or is entitled to be incurred pursuant to Section 4.09(a), the Company Issuer will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under the Credit Agreement Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture Issue Date will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of “Permitted Debt”. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsinterest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities shares of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided . Notwithstanding any other provision of this Section 4.09, the maximum amount of Indebtedness that the amount thereof Issuer or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be included deemed to be exceeded solely as a result of fluctuations in Fixed Charges of the Company as accrued to the extent required by the definition of such termexchange rates or currency values. The amount of any Indebtedness outstanding as of any date will be:
(a1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;; and
(b2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other Person.
Appears in 2 contracts
Samples: Indenture (Allison Transmission Holdings Inc), Indenture (Allison Transmission Holdings Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will Issuer shall not, and will shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company Issuer will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Issuer may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, Stock and the Guarantors its Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue Preferred Stockpreferred stock, if the Issuer’s 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 such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock preferred stock is issued, as the case may be, would have been at least 2.25 1.1 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock preferred stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a4.3(a) will hereof shall not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuers Issuer and the GuarantorsGuarantor of the Notes and the Note Guarantee in the aggregate principal amount to be issued on the Closing Date and any Permitted Refinancing Indebtedness that is incurred to renew, refund, refinance, replace, defease, extend or discharge any other Indebtedness incurred pursuant to this clause (1);
(2) the incurrence by the Issuer or any of its Restricted Subsidiaries of the Existing Indebtedness and any Indebtedness that is incurred pursuant to or in lieu of a commitment in existence as of the Closing Date;
(3) the incurrence by the Issuer or any of its Restricted Subsidiaries of (A) Indebtedness and letters of credit (and reimbursement obligations with respect thereto) under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (13) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company Issuer and its Restricted Subsidiaries thereunder) not to exceed the greater of (i) $700.0 million 5.0 billion and (iiB) $175.0 million plus 35.0% Indebtedness and letters of credit (and reimbursement obligations with respect thereto) under Credit Facilities secured on a junior priority basis by some or all of the Company’s Adjusted Consolidated Net Tangible Assets determined on collateral securing Indebtedness under Credit Facilities contemplated by clause (A) of this clause (3) in an aggregate principal amount at any one time outstanding under this clause (3)(B) (with letters of credit being deemed to have a principal amount equal to the date maximum potential liability of such incurrence;
(2) the incurrence by the Company Issuer and its Restricted Subsidiaries of the Existing Indebtedness;
(3thereunder) the incurrence by the Issuers and the Guarantors of Indebtedness represented by the Notes not to be issued on the date of this Indenture and the related Note Guaranteesexceed $3.0 billion;
(4) the incurrence by the Company Issuer or any of its Restricted Subsidiaries of Indebtedness represented by by, or incurred in connection with, Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing (or reimbursing the Issuer or any of its Restricted Subsidiaries for) all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment (including, without limitation, airport, maintenance, training and office facilities, ground support equipment and tooling) used in the business of the Company Issuer or any of its Restricted Subsidiaries, in an aggregate principal amount outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance;
(5) the incurrence by the Company Issuer or any of its Restricted Subsidiaries of (A) Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, extend, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a4.3(a) hereof or clauses (2), (3), (4), (5), (146), (13), (20), (21), (24) or (1525) of this Section 4.09(b)4.3(b) hereof and (B) Permitted Refinancing Indebtedness secured by aircraft, airframes, engines, spare parts, flight simulators, flight training devices or other assets replacing, renewing, refunding, extending, refinancing, defeasing or discharging any other Indebtedness of the Issuer or any of its Restricted Subsidiaries that was secured by aircraft, airframes, engines, spare parts, flight simulators, flight training devices or other assets;
(6) the incurrence by the Company Issuer or any of its Restricted Subsidiaries of Indebtedness, Disqualified Stock or preferred stock (including Acquired Debt) (A) as part of, or to finance, the acquisition (including by way of merger) of any Permitted Business, (B) incurred in connection with, or as a result of, the merger, consolidation or amalgamation of any Person (including the Issuer or any of its Restricted Subsidiaries) that owns a Permitted Business with or into the Issuer or a Restricted Subsidiary of the Issuer, or into which the Issuer or a Restricted Subsidiary of the Issuer is merged, consolidated or amalgamated, or (C) that is an outstanding obligation of a Person that owns a Permitted Business at the time that such Person is acquired by the Issuer or a Restricted Subsidiary of the Issuer and becomes a Restricted Subsidiary of the Issuer;
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and Issuer and/or any of its Restricted Subsidiaries; provided, however, that:
(A) 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 unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and
(B) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) 8) the issuance by any Restricted Subsidiaries of the Company’s Restricted Subsidiaries Issuer to the Company Issuer or to any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that:
(A) any subsequent issuance or transfer shares of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7)preferred stock;
(8) 9) the incurrence by the Company Issuer or any of its Restricted Subsidiaries of Hedging ObligationsObligations in the ordinary course of business;
(910) the Guarantee by the Company Issuer or any Restricted Subsidiary of its Restricted Subsidiaries the Issuer of Indebtedness of the Company Issuer or a Restricted Subsidiary of the Company Issuer to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.094.3; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the such Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(1011) the incurrence by the Company Issuer or any of its Restricted Subsidiaries of Indebtedness or reimbursement obligations in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, performance bonds and surety bonds in the ordinary course of business (including, without limitation, in respect of customs obligations, landing fees, taxes, airport charges, overfly rights and any other obligations to airport and governmental authorities);
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of selfany overdrafts and related liabilities arising from treasury, depository and cash management services or in connection with any automated clearing house transfers of funds;
(13) Indebtedness (A) constituting credit support or financing from aircraft or engine manufacturers or their affiliates or (B) incurred to finance the acquisition of aircraft, airframes, engines, spare parts, flight simulators, flight training devices, QEC Kits or other operating assets; provided that no Indebtedness may be incurred in reliance on subsection (B) of this clause (13) more than twenty-insurance four months after such acquisition;
(14) Indebtedness issued to current or former directors, consultants, managers, officers and employees and their spouses or estates (a) to purchase or redeem Capital Stock of the Issuer issued to such director, consultant, manager, officer or employee in an aggregate principal amount not to exceed $10.0 million in any twelve-month period or (b) pursuant to any deferred compensation plan approved by the Board of Directors of the Issuer;
(15) reimbursement obligations in respect of standby or bid, plugging and abandonment, appeal, reimbursement, performance, documentary letters of credit or banker’s acceptances;
(16) surety and similar appeal bonds and completion guarantees provided by that do not secure judgments that constitute an Event of Default;
(17) Indebtedness of the Company Issuer or a any of its Restricted Subsidiary Subsidiaries to credit card processors in connection with credit card processing services incurred in the ordinary course of business of the Issuer and its Restricted Subsidiaries;
(18) the incurrence by a Receivables Subsidiary of Indebtedness in a Qualified Receivables Transaction that is without recourse to the Issuer or to any Guarantees other Restricted Subsidiary of the Issuer or letters their assets (other than such Receivables Subsidiary and its assets and, as to the Issuer or any other Restricted Subsidiary of credit functioning as the Issuer, other than Standard Securitization Undertakings) and is not guaranteed by any such Person;
(19) the incurrence of Indebtedness of the Issuer or supporting any of its Restricted Subsidiaries owed to one or more Persons in connection with the foregoing bonds or obligations and workers’ compensation claims financing of insurance premiums in the ordinary course of business;
(1120) the incurrence of obligations under the Co-Branded Agreement to the extent such obligations may be deemed to constitute Indebtedness of the Issuer or any of its Restricted Subsidiaries;
(21) the incurrence by the Company Issuer or the Guarantor (or, in the case of the “Co-Branded Secured Obligations” (as defined in the Credit Agreement as in effect on the Closing Date), any Restricted Subsidiary of the Issuer) of Indebtedness and letters of credit (and reimbursement obligations with respect thereto) secured by a Lien on the “Collateral” (as defined in the Credit Agreement as in effect on the Closing Date) that is junior to the Liens securing the “Obligations” (as defined in the Credit Agreement as in effect on the Closing Date) (including, without limitation, the “Co-Branded Secured Obligations”), and Permitted Refinancing Indebtedness that is incurred to renew, refund, refinance, replace, defease, extend or discharge any other Indebtedness incurred pursuant to this clause (21);
(22) Indebtedness arising from agreements of the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business;
(13) any obligation arising from agreements of the Company or any Restricted Subsidiary of the Company providing for indemnification, adjustment of purchase price, earn outs, price or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition or acquisition of any business, assets or Capital Stock of a Restricted Subsidiary in a transaction permitted by this IndentureSubsidiary; provided that the maximum assumable liability in respect of all such obligation is not reflected as a liability on Indebtedness shall at no time exceed the face gross proceeds, including non-cash proceeds (the Fair Market Value of such non-cash proceeds being measured at the balance sheet of time received and without giving effect to any subsequent changes in value) actually received by the Company Issuer or any of its Restricted SubsidiarySubsidiaries in connection with such disposition;
(1423) Indebtedness of the Issuer or any Permitted Acquisition Indebtedness; andof its Restricted Subsidiaries consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business and consistent with past practices of the Issuer or the applicable Restricted Subsidiary of the Issuer;
(1524) the incurrence by the Company Issuer or any of its Restricted Subsidiaries of additional Indebtedness that is either (A) unsecured and expressly contractually subordinated to the prior payment in full in cash of all Notes and Guarantor Obligations on terms not materially less favorable to the Holders of the Notes than those customary at the time of incurrence (determined in good faith by a senior financial officer of the Issuer) for senior subordinated “high yield” debt securities or (B) unsecured, pari passu with all Notes and Guarantor Obligations and convertible into common stock of the issuance by Issuer; provided that the Company of any Disqualified Stock in an aggregate principal amount of Indebtedness incurred pursuant to clauses (or accreted value, as applicableA) at any time outstandingand (B) together, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, extend, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (1524), does not exceed $1.5 billion at any time outstanding; and
(25) the incurrence by the Issuer or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable), including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, extend, defease or discharge any Indebtedness incurred pursuant to this clause (25), not to exceed the greater of (i) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance3.0 billion, at any time outstanding. For purposes of determining compliance with this Section 4.094.3, in the event that if an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described set forth in clauses (1) through (1525) above, of Section 4.3(b) hereof or is entitled to be incurred pursuant to Section 4.09(a)4.3(a) hereof, the Company Issuer will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under 4.3; provided that (A) all “Junior Secured Debt” (as defined in the Credit Agreement outstanding as in effect on the date on which Notes are first issued and authenticated under this Indenture Closing Date) will initially at all times be deemed to have been incurred on such date in reliance on the exception provided by clause Section 4.3(b)(21) hereof and (B) the term “Existing Indebtedness” will not include any Indebtedness that is permitted to be incurred under clauses (1), (3) or (21) of Section 4.3(b) hereof. None of the following will constitute an incurrence of Indebtedness or an issuance of preferred stock or Disqualified Stock for purposes of this Section 4.3:
(1) of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributions, preferred stock dividends;
(2) the accretion or amortization of original issue discount, discount (“OID”);
(3) the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, ;
(4) the reclassification of Preferred Stock or Disqualified Stock preferred stock as Indebtedness due to a change in accounting principles, and ; and
(5) the payment of dividends or distributions on Preferred Stock preferred stock or Disqualified Stock in the form of additional securities shares of the same class of Preferred Stock preferred stock or Disqualified Stock will Stock. For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be utilized, calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred. Notwithstanding any other provision of this Section 4.3, the maximum amount of Indebtedness that the Issuer or any of its Restricted Subsidiaries may incur pursuant to this Section 4.3 shall not be deemed to be an incurrence exceeded solely as a result of Indebtedness fluctuations in exchange rates or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to the extent required by the definition of such termcurrency values. The amount of any Indebtedness outstanding as of any date will be:
(a1) the accreted value of the IndebtednessIndebtedness as of such date, in the case of any Indebtedness issued with original issue discountOID;
(b2) the principal amount of the IndebtednessIndebtedness as of such date, in the case of any other Indebtedness; and
(c3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1A) the Fair Market Value of such assets at the date as of determinationsuch date; and
(2B) the amount of the Indebtedness of the other PersonPerson as of such date.
Appears in 2 contracts
Samples: Fourth Supplemental Indenture (United Airlines, Inc.), Supplemental Indenture (United Airlines, Inc.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will shall not, and will shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), ) and the Company will shall not issue any Disqualified Stock and will shall not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, Stock and the Guarantors any Guarantor may incur Indebtedness (including Acquired Debt) or issue Preferred Stock, preferred stock if the Fixed Charge Consolidated 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 such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock is issued, as the case may be, issued would have been at least 2.25 2 to 1.01, or the ratio of the Consolidated Indebtedness less Unrestricted Cash to Consolidated Tangible Net Worth of the Company is less than 3 to 1, 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 incurred, or the Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) . The first paragraph of this Section 4.09(a) will 4.09 shall not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1i) the incurrence by the Issuers Company and the Guarantors, Guarantors of Indebtedness and letters of credit or Disqualified Stock under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause not to exceed the greater of (1a) $1.0 billion or (b) the amount of the Borrowing Base as of the date of such incurrence (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries the Guarantors thereunder) not to exceed the greater of (i) $700.0 million and (ii) $175.0 million plus 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence);
(2ii) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3iii) the incurrence by the Issuers Company and the Guarantors of Indebtedness represented by the Notes (including any PIK Notes or the accretion of any interest) and the related Note Guarantees to be issued on the date of this Indenture and the related Note GuaranteesIndenture;
(4iv) the incurrence by the Company or a Restricted Subsidiary of Indebtedness or Disqualified Stock (1) in connection with the acquisition of assets or a new Subsidiary or (2) to finance the purchase, lease or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets); provided that, in the case of clause (1), such Indebtedness or Disqualified Stock was incurred by the prior owner of such assets or the Company or such Restricted Subsidiary prior to such acquisition by the Company or a Restricted Subsidiary and was not incurred in connection with, or in contemplation of, such acquisition by the Company or a Restricted Subsidiary and in the case of clause (2), any such Indebtedness incurred may not exceed the cost of such property or equipment; and provided that the principal amount (or accreted value, as applicable) of such Indebtedness, together with any other outstanding Indebtedness incurred pursuant to this clause (iv) and including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any other Indebtedness incurred pursuant to this clause (iv) does not exceed the greater of (x) $75.0 million or (y) 2.5% of Total Assets;
(v) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance;
(5) the incurrence by the Company or any of its Restricted Subsidiaries Guarantor of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease refinance or discharge any replace Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) the first paragraph hereof or clauses (2ii), (3iii), (4iv), (5ix), (14xv), (xvi), (xvii), (xviii) or (15xix) of this Section 4.09(b)paragraph;
(6vi) the incurrence by the Company or any of its Restricted Subsidiaries Subsidiary of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, provided that:
: (A) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a GuarantorIndebtedness, such Indebtedness must be unsecured and is expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and
and (B) (i1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company thereof, and (ii2) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Companythereof, will shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6vi);
(7vii) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries Guarantor of Hedging ObligationsObligations 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;
(9viii) the Guarantee guarantee by the Company or any of its Restricted Subsidiaries Guarantor of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteedcovenant;
(10ix) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business;
(13) any obligation arising from agreements of the Company or any Restricted Subsidiary of the Company 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 Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company or any Restricted Subsidiary;
(14) any Permitted Acquisition Indebtedness; and
(15) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15ix), not to exceed $50.0 million (it being understood that any Indebtedness incurred under this clause (ix) shall cease to be deemed incurred or outstanding for purposes of this clause (ix) but shall be deemed to be incurred for purposes of the first paragraph of this Section 4.09 from and after the first date on which the Company could have incurred such Indebtedness under the first paragraph of this Section 4.09 without reliance upon this clause (ix));
(x) Non-Recourse Financing incurred by the Company or any Restricted Subsidiary for the acquisition, development and/or improvement of real property or any infrastructure related thereto;
(xi) the incurrence by the Company or any Restricted Subsidiary of direct obligations to repay or guarantee shortfalls in payments of bond financing issued by community development districts and local government districts to construct infrastructure improvements (“CDD Obligations”), provided that the aggregate amount of all CDD Obligations of the Company and its Restricted Subsidiaries that is due and payable at any one time does not exceed the greater of (ix) $75.0 million or (y) 2.5% of Total Assets;
(xii) the incurrence by the Company and the Restricted Subsidiaries of Indebtedness in connection with letters of credit (including, without limitation, letters of credit in respect of workers’ compensation claims or self insurance), Indebtedness with respect to reimbursement type obligations regarding workers compensation claims, escrow agreements, bankers’ acceptances and surety and performance bonds (in each case to the extent that such incurrence does not result in the incurrence of any obligation to repay any obligation relating to borrowed money), all in the ordinary course of business;
(xiii) shares of preferred stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an issuance of shares of preferred stock;
(xiv) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided that such Indebtedness is not reflected on the balance sheet of the Company or any Restricted Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (xiv));
(xv) Indebtedness incurred by the Company or any Restricted Subsidiary pursuant to any Construction Loan, provided that (A) at the time the Construction Loan is entered into or amended to include a new project or projects, as the case may be, the Construction Loan is not in excess of 85% of the estimated total cost of the projects under such Construction Loan taken as a whole, including land at fair market value, interest and soft costs (net of unrestricted deposits) and (iiB)(1) 5.0at the time any Construction Loan is entered into that relates to a single project, there are Valid Purchase Contracts Proceeds in excess of 65% of the maximum Construction Loan amount taken as a whole or (2) at the time any Construction Loan is entered into that relates to more than one project or if an existing Construction Loan is amended to include a new project or projects, there are Valid Purchase Contracts Proceeds in excess of 70% of the maximum Construction Loan amount taken as a whole; provided, that in the event a Default or Event of Default has occurred and is continuing or would be caused thereby, this clause (xv) shall be unavailable to enter into a new Construction Loan or amend an existing Construction Loan to include a new project or projects;
(xvi) Indebtedness incurred by the Company or any of its Restricted Subsidiaries pursuant to Construction Loans existing as of the Issue Date up to the limits of such Construction Loan existing on the Issue Date
(xvii) the incurrence by the Company and its Restricted Subsidiaries of the Second Lien Notes (and any interest paid-in kind through the accretion of such interest or the issuance of additional Second Lien Notes);
(xviii) the incurrence by the Company and the Restricted Subsidiaries of Indebtedness secured by third-priority Liens, which may be in the form of Additional Notes, in an amount up to $200.0 million to be exchanged for certain of the Company’s Adjusted Consolidated Net Tangible Assets determined as Existing Notes (and any interest paid-in kind through the accretion of such interest or the issuance of additional notes); and
(xix) the incurrence by the Company and the Restricted Subsidiaries of unsecured Indebtedness to be exchanged for certain of the date Company’s Existing Notes (and any interest paid-in kind through the accretion of such incurrence interest or issuancethe issuance of additional notes). 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 (1i) through (15xix) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.09(a)4.09, the Company will be permitted to divide, classify (and reclassify later reclassify) in whole or in part such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, incurrence in any manner that complies with this Section 4.09. Indebtedness under the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) Accrual of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsinterest, the accretion or amortization of original issue discount, discount or the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock terms will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided provided, in each such case, that the amount thereof is included in Consolidated Interest Incurred of the Company. Indebtedness outstanding and not repaid under the Credit Facilities on the Issue Date shall be included in Fixed Charges deemed to have been incurred under clause (i) of the Company as accrued to the extent required by the definition second paragraph of such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other Personthis Section 4.09.
Appears in 2 contracts
Samples: Indenture (Valimar Home & Land Company, LLC), Indenture (Wci Communities Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stock; provided, however, that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue Preferred Stock, if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock is issued, as the case may be, would have been at least 2.25 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuers Company and the Guarantors, Restricted 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 the Company and its Restricted Subsidiaries thereunder) not to exceed the greater greatest of (i) $700.0 million and 550.0 million, (ii) $175.0 million plus 35.032.5% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence and (iii) the Borrowing Base at the time of incurrence;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers Company and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and the related Note GuaranteesIndenture;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 65.0 million and (ii) 3.03.75% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (2), (3), (4), (5), (14) or (15) of this Section 4.09(b);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and
(B) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging ObligationsObligations in the ordinary course of business and not for speculative purposes;
(9) the Guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business;
(13) any obligation arising from agreements of the Company or any Restricted Subsidiary of the Company 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 Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company or any Restricted Subsidiary;
(14) any Permitted Acquisition Indebtedness; and
(15) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15), not to exceed exceed, at any one time outstanding, the greater of (i) $75.0 65.0 million and (ii) 5.03.75% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance. For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (15) above, or is entitled to be incurred pursuant to Section 4.09(a), the Company will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributions, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other Person.
Appears in 2 contracts
Samples: Indenture (Extraction Oil & Gas, Inc.), Indenture (Extraction Oil & Gas, Inc.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company Partnership will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company Partnership will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stock; provided, however, that the Issuers may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stock, if the Fixed Charge Coverage Ratio for the CompanyPartnership’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 Stock is issued, as the case may be, would have been at least 2.25 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuers Partnership and the Guarantors, any Guarantor 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 the Company Partnership and its Restricted Subsidiaries thereunder) not to exceed the greater of (ix) $700.0 150.0 million and (iiy) $175.0 million plus 35.015.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on as of the date of such incurrence;
(2) the incurrence by the Company Partnership and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and the related Note GuaranteesIndenture;
(4) the incurrence by the Company Partnership or any of its Restricted Subsidiaries of (i) Indebtedness represented of any Person in existence on the date such Person becomes a Restricted Subsidiary as a result of an acquisition by the Partnership or any Restricted Subsidiary or (ii) Indebtedness of the Partnership or any Restricted Subsidiary incurred to finance the acquisition, construction, development, design or improvement of any assets (real or personal), including Capital Lease Obligations, mortgage financings or financings, industrial revenue bonds, purchase money obligations, Disqualified Stock, synthetic lease obligations and any Indebtedness assumed in each case, incurred for connection with the purpose acquisition of financing all any such assets (real or personal) or secured by a Lien on any part of such assets before the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in acquisition thereof; provided that the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount outstanding, including all Permitted Refinancing of Indebtedness incurred to renew, refund, refinance, replace, defease or discharge outstanding at any Indebtedness incurred pursuant to time and permitted by this clause (4), ) shall not to exceed the greater of (ix) $45.0 140.0 million and (iiy) 3.015% of the Company’s Adjusted Consolidated Net Tangible Assets (determined as at the time of the date of such incurrence or issuanceincurrence);
(5) the incurrence by the Company Partnership or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clauses clause (2), (3), (4), (5), (1412), (13) or (1518) of this Section 4.09(b);
(6) the incurrence by the Company Partnership or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company Partnership and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company Partnership or any Guarantor is the obligor on such Indebtedness and the payee is not the Company Partnership or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the CompanyPartnership, or the Note Guarantee, in the case of a Guarantor; and
(B) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company Partnership or a Restricted Subsidiary of the Company Partnership and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company Partnership or a Restricted Subsidiary of the CompanyPartnership, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company Partnership or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the CompanyPartnership’s Restricted Subsidiaries to the Company Partnership or to any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company Partnership or a Restricted Subsidiary of the CompanyPartnership; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company Partnership or a Restricted Subsidiary of the CompanyPartnership, will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company Partnership or any of its Restricted Subsidiaries of Hedging ObligationsObligations not for speculative purposes;
(9) the Guarantee by the Company Partnership or any of its Restricted Subsidiaries the Guarantors of Indebtedness of the Company Partnership or a Restricted Subsidiary of the Company Partnership to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed Guaranteed is subordinated to or pari passu with the Notes, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteedGuaranteed;
(10) the incurrence by the Company Partnership or any of its Restricted Subsidiaries of Indebtedness in respect connection with one or more standby or trade-related letters of self-credit, performance bonds, bid bonds, appeal bonds, bankers acceptances, insurance obligations obligations, workers’ compensation claims, health or bid, plugging and abandonment, appeal, reimbursement, performanceother types of social security benefits, surety and bonds, completion guarantees or other similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary obligations, including self-bonding arrangements, in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or pursuant to self-insurance obligations and workers’ compensation claims not in connection with the ordinary course borrowing of businessmoney or the obtaining of advances;
(11) the incurrence by the Company Partnership or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) Indebtedness of the incurrence by the Company Partnership or any of its Restricted Subsidiaries of in-kind obligations relating Subsidiary incurred in connection with any sale and leaseback transaction, provided the Attributable Debt with respect to net oil or natural gas balancing positions arising all sale and leaseback transactions in the ordinary course aggregate at any one time outstanding shall not exceed the greater of business(x) $25.0 million and (y) 2.5% of Consolidated Net Tangible Assets (determined at the time of incurrence of such Attributable Debt);
(13) any obligation the incurrence by the Partnership or its Restricted Subsidiaries of Permitted Acquisition Indebtedness;
(14) the incurrence by the Partnership or its Restricted Subsidiaries of Indebtedness arising from agreements of the Company Partnership or any Restricted Subsidiary of the Company Subsidiaries providing for indemnification, adjustment of purchase price, earn outs, earnouts or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition or acquisition of any business, assets or Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company or any Restricted Subsidiary;
(14) any Permitted Acquisition Indebtedness; and
(15) the incurrence by the Company Partnership or its Restricted Subsidiaries of Indebtedness consisting of the financing of insurance premiums;
(16) the incurrence by the Partnership or its Restricted Subsidiaries of Indebtedness that is contractually subordinated in right of payment to the Notes or to any Note Guarantee in an aggregate principal amount not to exceed at any one time outstanding $25.0 million;
(17) the incurrence by the Partnership or any of its Restricted Subsidiaries of liability in respect of Indebtedness of any Unrestricted Subsidiary of the Partnership or any Joint Venture but only to the extent that such liability is the result of the Partnership’s or any such Restricted Subsidiary’s being a general partner or member of, or owner of an Equity Interest in, such Unrestricted Subsidiary or Joint Venture and not as guarantor of such Indebtedness and provided that after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (17) and then outstanding does not exceed $25.0 million; and
(18) the incurrence by the Partnership or any Guarantor of additional Indebtedness or the issuance by the Company Partnership of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred or Disqualified Stock issued to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (1518), not to exceed the greater of (ix) $75.0 million and (iiy) 5.07.5% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of on the date of such incurrence or issuance. The Partnership 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 Partnership or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes or the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Partnership or any Guarantor solely by virtue of being unsecured or by virtue of being secured on a junior priority basis. For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (1518) above, or is entitled to be incurred pursuant to Section 4.09(a)) hereof, the Company Partnership will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under the Credit Agreement Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted DebtSection 4.09(b)(1). The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsdividends, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided provided, in each such case, that the amount thereof shall be is included in Fixed Charges of the Company Partnership as accrued to the extent required by the definition of such term. For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be utilized, calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred. Notwithstanding any other provision of this covenant, the maximum amount of Indebtedness that the Partnership or any Restricted Subsidiary may incur pursuant to this covenant shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other Person.
Appears in 2 contracts
Samples: Indenture (SunCoke Energy Partners, L.P.), Indenture (SunCoke Energy Partners, L.P.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will shall not, and will shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), and the Company will shall not issue any Disqualified Stock and will shall not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company or its Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stockpreferred stock, if the Fixed Charge Coverage Ratio for the Company’s 's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock preferred stock is issued, as the case may be, issued would have been at least 2.25 2.0 to 1.01, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the preferred stock or Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) . The first paragraph of this Section 4.09(a) will 4.09 shall not prohibit the incurrence of any of the following items of Indebtedness or issuances the issuance of Disqualified Stock or Preferred Stock, as applicable set forth below (collectively, “"Permitted Debt”"):
(1) the incurrence by the Issuers Company and the Guarantors, any Restricted 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 the Company and its Restricted Subsidiaries thereunder) not to exceed the greater of (i) $700.0 million and (ii) $175.0 million plus 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence715.0 million;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers Company and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and the related Note GuaranteesIssue Date;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation construction or improvement of property, plant or equipment used in the business of the Company or any of its such Restricted SubsidiariesSubsidiary, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 25.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceat any time outstanding;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease refinance or discharge any replace Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under the first paragraph of this Section 4.09(a) 4.09 or clauses (2), (3), (4), (5), (14) or (1512) of this Section 4.09(b)paragraph;
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries or the refinancing or replacement of existing intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
: (Aa) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a GuarantorIndebtedness, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and
and (Bb) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging ObligationsObligations 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 or for hedging foreign currency exchange risk, in each case to the extent the Hedging Obligations are incurred in the ordinary course of business and not for any speculative purpose;
(9) 8) the Guarantee guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that if ;
(9) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness being guaranteed is subordinated to or pari passu in the form of additional Indebtedness with the Notessame terms, then and the Guarantee must be subordinated or pari passu, as applicable, to payment of dividends on Disqualified Stock in the form of additional shares of the same extent class of Disqualified Stock shall 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 Fixed Charges of the Company as the Indebtedness guaranteedaccrued interest;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness, including Indebtedness represented by letters of credit for the account of the Company or any Restricted Subsidiary, incurred in respect of workers' compensation claims, self-insurance obligations or bid, plugging and abandonment, appeal, reimbursementobligations, performance, proposal, completion, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims its Restricted Subsidiaries in the ordinary course of business; provided, that the underlying obligation to perform is that of the Company and its Restricted Subsidiaries and not that of the Company's Unrestricted Subsidiaries; provided further, that such underlying obligation is not in respect of borrowed money;
(11) the incurrence issuance of Series B Preferred Stock by the Company or any solely for the purpose of its Restricted Subsidiaries the payment of Indebtedness arising from dividends to the honoring by a bank or other financial institution holders of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Daysthe Series B Preferred Stock made in accordance with the Company's Amended and Restated Charter;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business;
(13) any obligation arising from agreements of the Company or any Restricted Subsidiary of the Company 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 Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company or any Restricted Subsidiary;
(14) any Permitted Acquisition Indebtedness; and
(15) the incurrence by the Company or any of its Restricted Subsidiaries Guarantors of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (1512), not to exceed $60.0 million;
(13) the greater incurrence by the Company or any of (i) $75.0 million and (ii) 5.0% its Restricted Subsidiaries of Indebtedness, including but not limited to Indebtedness represented by letters of credit for the account of the Company’s Adjusted Consolidated Net Tangible Assets determined as Company or any Restricted Subsidiary, arising from agreements of the date Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or Equity Interests of the Company or a Restricted Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Equity Interests for the purpose of financing such acquisition;
(14) the incurrence by the Company or issuanceany Restricted Subsidiary of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five business days of incurrence;
(15) the incurrence by the Company or a Restricted Subsidiary of Qualified Trust Indebtedness the proceeds of which are used to finance a Restricted Payment permitted by clauses (6) or (12) of the second paragraph of Section 4.07 hereof; and
(16) the incurrence by the Company of indebtedness expressly subordinated to the Notes not to exceed an aggregate principal amount of $2.9 million in satisfaction of the Stockholder Litigation. The Company shall not incur any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Company unless such Indebtedness is also contractually subordinated in right of payment to the Notes on substantially identical terms; provided, however, that no Indebtedness of the Company shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured. For purposes of determining compliance with the provisions in this Indenture relating to 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 (1516) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.09(a)4.09, the Company will shall be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under the Credit Agreement Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially shall be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributions, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other Person.
Appears in 2 contracts
Samples: Supplemental Indenture (Cca Properties of America LLC), Supplemental Indenture (Corrections Corp of America)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will Issuers shall not, and will shall not permit any of its their Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), ) and the Company will Issuers shall not issue any Disqualified Stock and will shall not permit any of its their Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company or any Guarantor may incur Indebtedness (including Acquired Debt) or issue shares of Disqualified Stock, Stock or preferred stock if (i) no Default or Event of Default shall have occurred and be continuing at the Guarantors may incur time of or as consequence of the incurrence of any such Indebtedness or the issuance of any such Disqualified Stock and (including Acquired Debtii) or issue Preferred Stock, if the Fixed Charge Coverage Ratio for the Company’s 's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock is issued, as the case may be, issued would have been at least 2.25 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred incurred, or the Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) . The provisions of the first paragraph of this Section 4.09(a) will 4.9 shall not prohibit apply to the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “"Permitted Debt”"):
(1i) the incurrence by the Issuers Company (and the guarantee thereof by the Guarantors, ) of Indebtedness and letters of credit under one or more Senior Credit Facilities in an Facilities; provided that the aggregate principal amount at any one time outstanding under this clause (1) of all Indebtedness (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) outstanding under all Senior Credit Facilities after giving effect to such incurrence does not exceed an amount equal to exceed the greater of (x) $275.0 million less the aggregate amount of all repayments of any term Indebtedness and all commitment reductions of any revolving Indebtedness, in each case, under one or more Senior Credit Facilities pursuant to clause (i) $700.0 million of the third paragraph of the covenant described in Section 4.10 hereof and (y) the Company's Borrowing Base;
(ii) the incurrence by the Issuers of Indebtedness represented by the Notes and the Guarantees thereof by the Guarantors in an aggregate principal amount of $175.0 110.0 million plus 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined outstanding on the date of such incurrencethis Indenture;
(2iii) the incurrence by a Restricted Subsidiary that is a Foreign Subsidiary and is not a Guarantor of the Notes in an amount at any one time outstanding that does not exceed (x) $3.0 million plus (y) the Borrowing Base of such Restricted Subsidiary; provided, that none of the Company or any other such Restricted Subsidiary shall be obligated, directly or indirectly, to pay principal, premium, interest or other amounts thereon or in respect thereof (including by way of net worth requirements, equity keepwells, etc.);
(iv) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers and the Guarantors of other Indebtedness represented by the Notes to be issued outstanding on the date of this Indenture and the related Note Guaranteesfor so long as such Indebtedness remains outstanding;
(4v) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital (including Capitalized Lease Obligations) to finance the purchase, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation lease or improvement of property, plant property (real or personal) or equipment used in (whether through the business direct purchase of assets or the Company or Capital Stock of any of its Restricted Subsidiaries, Person owning such assets) in an aggregate principal amount outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), outstanding not to exceed the greater of (ix) $45.0 10.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (2y), (3), (4), (5), (14) or (15) of this Section 4.09(b);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and
(B) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations;
(9) the Guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business;
(13) any obligation arising from agreements of the Company or any Restricted Subsidiary of the Company 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 Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company or any Restricted Subsidiary;
(14) any Permitted Acquisition Indebtedness; and
(15) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15), not to exceed the greater of (i) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance. For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (15) above, or is entitled to be incurred pursuant to Section 4.09(a), the Company will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributions, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other Person.
Appears in 2 contracts
Samples: Indenture (Alliance Laundry Holdings LLC), Indenture (Alliance Laundry Holdings LLC)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will shall not, and will shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), ) and the Company will shall not issue any Disqualified Stock and will shall not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, provided that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, Stock and the Guarantors any Guarantor may incur Indebtedness (including Acquired Debt) or issue Preferred Stock, preferred stock if the Fixed Charge Consolidated Coverage Ratio for the Company’s 's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock is issued, as the case may be, issued would have been at least 2.25 2 to 1.01, or the ratio of the Consolidated Indebtedness less Unrestricted Cash to Consolidated Tangible Net Worth of the Company is less than 3 to 1, 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 incurred, or the Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) . The first paragraph of this Section 4.09(a) will 4.09 shall not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “"Permitted Debt”"):
(1i) the incurrence by the Issuers Company and the Guarantors, Guarantors of Indebtedness and letters of credit or Disqualified Stock under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause not to exceed the greater of (1a) $450.0 million or (b) the amount of the Borrowing Base as of the date of such incurrence (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries the Guarantors thereunder) not to exceed the greater of (i) $700.0 million and (ii) $175.0 million plus 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence);
(2ii) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3iii) the incurrence by the Issuers Company and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and the Exchange Notes and the related Note GuaranteesGuarantees to be issued pursuant to the Registration Rights Agreement;
(4iv) the incurrence by the Company or a Restricted Subsidiary of Indebtedness or Disqualified Stock (1) in connection with the acquisition of assets or a new Subsidiary or (2) to finance the purchase, lease or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets); provided that, in the case of clause (1), such Indebtedness or Disqualified Stock was incurred by the prior owner of such assets or the Company or such Restricted Subsidiary prior to such acquisition by the Company or a Restricted Subsidiary and was not incurred in connection with, or in contemplation of, such acquisition by the Company or a Restricted Subsidiary and in the case of clause (2), any such Indebtedness incurred may not exceed the cost of such property or equipment; and provided that the principal amount (or accreted value, as applicable) of such Indebtedness, together with any other outstanding Indebtedness incurred pursuant to this clause (iv) and including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any other Indebtedness incurred pursuant to this clause (iv) does not exceed $30.0 million;
(v) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance;
(5) the incurrence by the Company or any of its Restricted Subsidiaries Guarantor of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease refinance or discharge any replace Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) the first paragraph hereof or clauses (2ii), (3iii), (4iv), (5ix), (14xv) or (15xvi) of this Section 4.09(b)paragraph;
(6vi) the incurrence by the Company or any of its Restricted Subsidiaries Subsidiary of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, provided that:
: (A) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a GuarantorIndebtedness, such Indebtedness must be unsecured and is expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; andand (B)
(B) (i1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company thereof, and (ii2) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Companythereof, will shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6vi);
(7vii) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries Guarantor of Hedging ObligationsObligations 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;
(9viii) the Guarantee guarantee by the Company or any of its Restricted Subsidiaries Guarantor of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteedcovenant;
(10ix) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business;
(13) any obligation arising from agreements of the Company or any Restricted Subsidiary of the Company 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 Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company or any Restricted Subsidiary;
(14) any Permitted Acquisition Indebtedness; and
(15) the incurrence by the Company or any of its Restricted Subsidiaries Guarantor of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15ix), not to exceed $20.0 million (it being understood that any Indebtedness incurred under this clause (ix) shall cease to be deemed incurred or outstanding for purposes of this clause (ix) but shall be deemed to be incurred for purposes of the greater first paragraph of this Section 4.09 -45- from and after the first date on which the Company could have incurred such Indebtedness under the first paragraph of this Section 4.09 without reliance upon this clause (iix));
(x) $75.0 million and (ii) 5.0Non-Recourse Financing incurred by the Company or any Restricted Subsidiary for the acquisition, development and/or improvement of real property or any infrastructure related thereto; provided that such Non-Recourse Financing is at the date of acquisition or the commencement of the development and/or improvement at least 70% of the Company’s Adjusted Consolidated Net Tangible Assets determined estimated cost of the assets so acquired, developed or improved;
(xi) the incurrence by the Company or any Restricted Subsidiary of direct obligations to repay or guarantee shortfalls in payments of bond financing issued by community development districts and local government districts to construct infrastructure improvements ("CDD Obligations"), provided that the aggregate amount of all CDD Obligations of the Company and its Restricted Subsidiaries that is due and payable at any one time does not exceed $10.0 million;
(xii) the incurrence by the Company and the Restricted Subsidiaries of Indebtedness in connection with letters of credit (including, without limitation, letters of credit in respect of workers' compensation claims or self insurance), Indebtedness with respect to reimbursement type obligations regarding workers compensation claims, escrow agreements, bankers' acceptances and surety and performance bonds (in each case to the extent that such incurrence does not result in the incurrence of any obligation to repay any obligation relating to borrowed money), all in the ordinary course of business;
(xiii) shares of preferred stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an issuance of shares of preferred stock;
(xiv) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided that such Indebtedness is not reflected on the balance sheet of the Company or any Restricted Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (xiv));
(xv) Indebtedness incurred by the Company or any Restricted Subsidiary pursuant to any Construction Loan, provided that (A) at the time the Construction Loan is entered into or amended to include a new project or projects, as the case may be, the Construction Loan is not in excess of 85% of the estimated total cost of the projects under such Construction Loan taken as a whole, including land at fair market value, interest and soft costs (net of unrestricted deposits) and (B)(1) at the time any Construction Loan is entered into that relates to a single project, there are Valid Purchase Contracts Proceeds in excess of 65% of the maximum Construction Loan amount taken as a whole or (2) at the time any Construction Loan is entered into that relates to more than one project or if an existing Construction Loan is amended to include a new project or projects, there are Valid Purchase Contracts Proceeds in excess of 70% of the maximum Construction Loan amount taken as a whole; provided that under clause(B)(2), for each individual project there are Valid Purchase Contract Proceeds for such project in excess of 30% of the maximum Construction Loan amount for such project, and provided, further, that in the event a Default or Event of Default has occurred and is continuing or would be caused thereby, this clause (xv) shall be unavailable to enter into a new Construction Loan or amend an existing Construction Loan to include a new project or projects; and
(xvi) Indebtedness incurred by the Company or any of its Restricted Subsidiaries pursuant to Construction Loans existing as of the date Issue Date up to the limits of such incurrence or issuanceConstruction Loan existing on the Issue Date. 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 (1i) through (15xvi) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.09(a)4.09, the Company will be permitted to divide, classify (and reclassify later reclassify) in whole or in part such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, incurrence in any manner that complies with this Section 4.09. Indebtedness under the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) Accrual of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsinterest, the accretion or amortization of original issue discount, discount or the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock terms will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided provided, in each such case, that the amount thereof is included in Consolidated Interest Incurred of the Company. Indebtedness outstanding and not repaid under the Credit Facilities on the Issue Date shall be included in Fixed Charges deemed to have been incurred under clause (i) of the Company as accrued to the extent required by the definition second paragraph of such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other Personthis Section 4.09.
Appears in 2 contracts
Samples: Indenture (Communities Home Builders Inc), Indenture (Wci Communities Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company Issuer will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly or directly liable, contingently or otherwise, with respect to (collectively, collectively “incur”) any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and Issuer will not permit any of its Restricted Subsidiaries to issue any shares of Preferred Stock; provided, however, that the Issuers Issuer and any Restricted Subsidiary that is a Guarantor may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors any Restricted Subsidiary that is a Guarantor may incur Indebtedness (including Acquired Debt) or issue Preferred Stock, Stock if the Fixed Charge Coverage Ratio for the CompanyIssuer’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock is issued, as the case may be, issued would have been at least 2.25 2.0 to 1.01, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) (the “Coverage Ratio Exception”), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) Section 4.09(a4.10(a) will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1) the existence of Indebtedness under the Credit Agreement together with the incurrence by of the Issuers guarantees thereunder and the Guarantors, issuance and creation of Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the maximum potential liability face amount thereof), up to an aggregate principal amount, together with amounts outstanding under a Qualified Securitization Financing incurred pursuant to clause (17) below, of $1,550.0 million outstanding at any one time, less the Company amount of all mandatory principal payments (with respect to revolving borrowings and its Restricted Subsidiaries thereunderletters of credit, only to the extent revolving commitments are correspondingly reduced) not to exceed actually made by the greater borrower thereunder in respect of (i) $700.0 million and (ii) $175.0 million plus 35.0% of the Company’s Adjusted Consolidated Indebtedness thereunder with Net Tangible Assets determined on the date of such incurrenceProceeds from Asset Sales;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers Issuer and the Guarantors of Indebtedness represented by the Notes to be Securities (including any Guarantee) issued on the date Issue Date;
(3) Existing Indebtedness (other than Indebtedness described in clauses (1) and (2) of this Indenture and the related Note GuaranteesSection 4.10(b));
(4) the incurrence Indebtedness (including Capitalized Lease Obligations) incurred by the Company Issuer or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease ObligationsSubsidiary to finance the purchase, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation lease or improvement of property, plant property (real or personal) or equipment that is used or useful in a Permitted Business (whether through the business direct purchase of assets or the Company or Capital Stock of any of its Restricted Subsidiaries, Person owning such assets) in an aggregate principal amount outstandingthat, including when aggregated with the principal amount of all Permitted Refinancing other Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness then outstanding and incurred pursuant to this clause (4), does not to exceed the greater of (ix) $45.0 50.0 million and (iiy) 3.04.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceAssets;
(5) the incurrence Indebtedness incurred by the Company Issuer or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (2), (3), (4), (5), (14) or (15) of this Section 4.09(b);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due Subsidiary constituting reimbursement obligations with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and
(B) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations;
(9) the Guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims issued in the ordinary course of business, including without limitation letters of credit in respect of workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers’ compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(116) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business;
(13) any obligation arising from agreements of the Company Issuer or any a Restricted Subsidiary of the Company providing for indemnification, adjustment of purchase price, earn outs, price or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, however, that (A) such Indebtedness is not reflected on the balance sheet of the Issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (A)) and (B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including noncash proceeds (the fair market value of such noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and any Restricted Subsidiaries in connection with such disposition;
(7) Indebtedness of the Issuer owed to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owed to and held by the Issuer or any Restricted Subsidiary; provided, however, that (A) any subsequent issuance or transfer of any Capital Stock or any other event that results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any subsequent transfer of any such Indebtedness (except to the Issuer or a Restricted Subsidiary) shall be deemed, in each case, to constitute the incurrence of such Indebtedness by the issuer thereof and (B) if the Issuer is the obligor on such Indebtedness, such Indebtedness is expressly subordinated to the prior payment in full in cash of all obligations of the Issuer with respect to the Securities;
(8) shares of Preferred Stock of a Restricted Subsidiary issued to the Issuer or a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Issuer or a Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of Preferred Stock;
(9) Hedging Obligations of the Issuer or any Restricted Subsidiary (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting (A) interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be outstanding or (B) exchange rate risk with respect to any currency exchange;
(10) obligations in respect of performance and surety bonds and performance and completion guarantees provided by the Issuer or any Restricted Subsidiary or obligations in respect of letters of credit related thereto, in each case in the ordinary course of business or consistent with past practice;
(11) Indebtedness of the Issuer or any Restricted Subsidiary or Preferred Stock of any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference which, when aggregated with the principal amount and liquidation preference of all other Indebtedness and Preferred Stock then outstanding and incurred pursuant to this clause (11), does not at any one time outstanding exceed $150.0 million (it being understood that any Indebtedness or Preferred Stock incurred pursuant to this clause (11) shall cease to be deemed incurred or outstanding for purposes of this clause (11) but shall be deemed incurred for the purposes of Section 4.10(a) from and after the first date on which the Issuer or such Restricted Subsidiary could have incurred such Indebtedness or Preferred Stock under Section 4.10(a) without reliance on this clause (11));
(12) any guarantee by the Issuer or a Guarantor of Indebtedness or other obligations of the Issuer or any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by the Issuer or such Restricted Subsidiary is permitted under the terms of this Indenture; provided that if such Indebtedness is by its express terms subordinated in right of payment to the Securities or the Guarantee of such Restricted Subsidiary, as applicable, any such guarantee of such Guarantor with respect to such Indebtedness shall be subordinated in right of payment to such Guarantor’s Guarantee with respect to the Securities substantially to the same extent as such Indebtedness is subordinated to the Securities or the Guarantee of such Restricted Subsidiary, as applicable;
(13) the incurrence by the Issuer or any Restricted Subsidiary of Indebtedness or Preferred Stock that serves to refund or refinance any Indebtedness incurred as permitted by Section 4.10(a) and clauses (2), (3) and (4) above, this clause (13) and clause (14) below or any Indebtedness issued to so refund or refinance such Indebtedness including additional Indebtedness incurred to pay premiums and fees in connection therewith (the “Refinancing Indebtedness”) prior to its respective maturity; provided, however, that such Refinancing Indebtedness (A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of the Indebtedness being refunded or refinanced, (B) to the extent such Refinancing Indebtedness refinances Indebtedness subordinated or pari passu to the Securities, such Refinancing Indebtedness is subordinated or pari passu to the Securities at least to the same extent as the Indebtedness being refinanced or refunded, (C) shall not include (x) Indebtedness or Preferred Stock of a Subsidiary that is not a Guarantor that refinances Indebtedness or Preferred Stock of the Issuer or (y) Indebtedness or Preferred Stock of the Issuer or a Restricted Subsidiary that refinances Indebtedness or Preferred Stock of an Unrestricted Subsidiary, (D) shall not be in a transaction permitted principal amount in excess of the principal amount of, premium, if any, accrued interest on, and related fees and expenses of, the Indebtedness being refunded or refinanced and (E) shall not have a stated maturity date prior to the Stated Maturity of the Indebtedness being refunded or refinanced; and provided, further, that subclauses (A), (B) and (E) of this clause (13) will not apply to any refunding or refinancing of any Senior Debt;
(14) Indebtedness or Preferred Stock of Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that such obligation Indebtedness or Preferred Stock is not reflected as a liability on incurred in connection with or in contemplation of such acquisition or merger; and provided, further, that after giving effect to such incurrence of Indebtedness either (A) the face Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the balance sheet of Coverage Ratio Exception or (B) the Company or any Restricted SubsidiaryFixed Charge Coverage Ratio would be greater than immediately prior to such acquisition;
(14) any Permitted Acquisition Indebtedness; and
(15) Indebtedness arising from the honoring by a bank or financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit;
(17) Indebtedness incurred by a Securitization Subsidiary in a Qualified Securitization Financing that is not recourse to the Issuer or any Restricted Subsidiary of the Issuer other than a Securitization Subsidiary (except for Standard Securitization Undertakings);
(18) the incurrence by of (A) Non-Recourse Acquisition Financing Indebtedness and (B) Non-Recourse Product Financing Indebtedness;
(19) Contribution Indebtedness;
(20) (a) if the Company or any of its Restricted Subsidiaries Issuer could incur $1.00 of additional Indebtedness pursuant to the Coverage Ratio Exception after giving effect to such borrowing, Indebtedness of Foreign Subsidiaries of the Issuer not otherwise permitted hereunder or (b) if the issuance by Issuer could not incur $1.00 of additional Indebtedness pursuant to the Company Coverage Ratio Exception hereof after giving effect to such borrowing, Indebtedness of any Disqualified Stock in an Foreign Subsidiaries of the Issuer incurred for working capital purposes, provided, however, that the aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing of Indebtedness incurred to renewunder this clause (20) which, refund, refinance, replace, defease or discharge any when aggregated with the principal amount of all other Indebtedness then outstanding and incurred or Disqualified Stock issued pursuant to this clause (1520), does not to exceed the greater of (ix) $75.0 100.0 million and (iiy) 5.010% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date Foreign Subsidiaries; and
(21) Indebtedness consisting of such incurrence promissory notes issued by the Issuer or issuance. any Guarantor to current or former officers, directors and employees or their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdco permitted by Section 4.11.
(c) For purposes of determining compliance with this Section 4.094.10, 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 (1521) above, or is entitled to be incurred pursuant to Section 4.09(a)the first paragraph of this covenant, the Company Issuer will be permitted to divide, classify and later reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09covenant, and such item of Indebtedness will be treated as having been incurred pursuant to only one of such categories. Accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness will not be deemed to be an incurrence of Indebtedness for purposes of this covenant. Notwithstanding the foregoing, Indebtedness under the Credit Agreement outstanding on the date on which Notes Securities are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of “Permitted Debt” in Section 4.10(b) and the Issuer shall not be permitted to reclassify all or any portion of such Indebtedness. The accrual maximum amount of interest or Preferred Stock or Disqualified Stock dividends or distributions, Indebtedness that the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due Issuer and its Restricted Subsidiaries may incur pursuant to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock will this covenant shall not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued exceeded, with respect to the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, solely as a result of fluctuations in the case exchange rate of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other Personcurrencies.
Appears in 2 contracts
Samples: Indenture (Warner Alliance Music Inc), Indenture (LEM America, Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and will not permit Neither AREP nor any of its Restricted Subsidiaries to, directly or indirectly, Guarantor shall create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), and the Company will not neither AREP nor any Guarantor shall issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stock; provided, however, that the Issuers AREP or any Guarantor may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and if immediately after giving effect to the Guarantors may incur incurrence of additional Indebtedness (including Acquired Debt) or issue Preferred Stock, if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such issuance of Disqualified Stock or such Preferred Stock is issued, as the case may be, would have been at least 2.25 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional ratio of the aggregate principal amount of all outstanding Indebtedness had (excluding Indebtedness incurred pursuant to clauses (4), (7) and (8) of Section 4.09(b) and any Hedging Obligations of AREP's Subsidiaries that are not Guarantors) of AREP and its Subsidiaries (including any Guarantor) on a consolidated basis determined in accordance with GAAP (including an amount of Indebtedness equal to the principal amount of any Guarantees by AREP or its Subsidiaries (including any Guarantor) of any Indebtedness of a Person (that is not AREP or a Subsidiary) to the extent such Guarantees were not included in computing AREP's or its Subsidiaries' (including any Guarantor's) outstanding Indebtedness) to the Tangible Net Worth of AREP and its Subsidiaries (including any Guarantor) on a consolidated basis, would have been incurred or the Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter periodless than 1.75 to 1.
(b) The provisions of Section 4.09(a) will shall not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “"Permitted Debt”"):
(1) the incurrence by the Issuers and the Guarantors, of Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at AREP or any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed the greater of (i) $700.0 million and (ii) $175.0 million plus 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers and the Guarantors Guarantor of Indebtedness represented by the Notes to be issued on the date of this Indenture and the related Note GuaranteesExchange Notes to be issued pursuant to the Registration Rights Agreement;
(42) the incurrence by the Company AREP or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance;
(5) the incurrence by the Company or any of its Restricted Subsidiaries Guarantor of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease refinance or discharge any replace Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (21), (3), (4), (5), (142) or (159) of this Section 4.09(b)) or any Existing Indebtedness;
(63) the incurrence by the Company AREP or any of its Restricted Subsidiaries Guarantor of intercompany Indebtedness between or among the Company AREP and any of its Restricted Subsidiaries; provided, however, that:
Subsidiaries (Aincluding AREH) if or the Company or issuance of Disqualified Stock by any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and
(B) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6)AREP;
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations;
(9) the Guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(104) the incurrence by the Company AREP or any Guarantor of its Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary Hedging Obligations that are incurred in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary normal course of business;
(115) the incurrence by the Company AREP or any of its Restricted Subsidiaries Guarantor of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(126) the incurrence by the Company AREP or any Guarantor of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of businessExisting Indebtedness;
(137) any obligation Indebtedness arising from agreements of the Company any agreement entered into by AREP or any Restricted Subsidiary of the Company AREH providing for indemnification, purchase price 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 Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company or any Restricted Subsidiaryan asset sale;
(14) 8) Indebtedness of AREP or any Permitted Acquisition IndebtednessGuarantor attributable to Bad Boy Guarantees; and
(159) the incurrence by the Company AREP or any of its Restricted Subsidiaries Guarantor of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (159), not to exceed $10.0 million at any one time outstanding. Neither AREP nor any Guarantor shall incur any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of AREP or any Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the greater Notes and the Note Guarantee, as applicable, on substantially identical terms; provided, however, that no Indebtedness of AREP or any Guarantor shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of AREP or any Guarantor for purposes of this paragraph solely by virtue of being unsecured or secured to a lesser extent or on a junior Lien basis.
(i) $75.0 million any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than AREP or a Subsidiary of AREP (including any Guarantor) and (ii) 5.0% any sale or other transfer of the Company’s Adjusted Consolidated Net Tangible Assets determined as any such Indebtedness to a Person that is not either AREP or a Subsidiary of the date AREP (including any Guarantor) shall be deemed, in each case, to constitute an incurrence of such incurrence Indebtedness by AREP or issuanceany Guarantor, that is not intercompany Indebtedness; provided that in the case of clause (a), that no restriction on the payment of principal, interest or other obligations in connection with such intercompany Indebtedness shall be required by such subordinated terms except during the occurrence and continuation of a Default or Event of Default. For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (159) above, above or is entitled to be incurred pursuant to Section 4.09(a), in each case, as of the Company will be permitted to dividedate of incurrence thereof, AREP shall, in its sole discretion, classify and (or later reclassify in whole or in part, in its sole discretion) such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. 4.09 and such Indebtedness under the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially shall be deemed to have treated as having been incurred on pursuant to such date in reliance on clauses or Section 4.09(a), as the exception provided case may be, designated by clause (1) of the definition of Permitted DebtAREP. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsinterest, the accretion or amortization of original issue discount, the payment of interest or Other Liquidated Damages on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities shares of the same class of Preferred Stock or Disqualified Stock will shall not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided . Notwithstanding any other provision of Section 4.09, the maximum amount of Indebtedness that the amount thereof AREP or any Guarantor may incur pursuant to Section 4.09 shall not be included deemed to be exceeded solely as a result of fluctuations in Fixed Charges of the Company as accrued to the extent required by the definition of such termexchange rates or currency values. The amount of any Indebtedness outstanding as of any date will shall be:
(a1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1A) the Fair Market Value of such assets at the date of determination; and
(2B) the amount of the Indebtedness of the other Person.
Appears in 2 contracts
Samples: Indenture (American Real Estate Partners L P), Indenture (American Real Estate Holdings L P)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stock or Disqualified Stock; provided, however, that the Issuers may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue Preferred Stock or Disqualified Stock, if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock is issued, as the case may be, would have been at least 2.25 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuers and the Guarantors, any Restricted Subsidiary of additional Indebtedness and letters of credit under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed the greater of (i) $700.0 750.0 million and (ii) $175.0 400.0 million plus 35.035% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness or any Permitted Acquisition Indebtedness;
(3) the incurrence by the Issuers and the Subsidiary Guarantors of Indebtedness represented by the Notes to be issued on the date of this Indenture Indenture, any Exchange Notes issued in exchange therefor and the related Note Guarantees;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 25.0 million and (ii) 3.02.5% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of on the date of such incurrence or issuanceincurrence;
(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, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) or clauses clause (2), (3), (4), (5), (14) or (1511) of this Section 4.09(b);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Subsidiary Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Subsidiary Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Subsidiary Guarantor; and
(B) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging ObligationsObligations in the ordinary course of business;
(9) the Guarantee by the Company Issuers or any of its Restricted Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business;
(13) any obligation arising from agreements of the Company or any Restricted Subsidiary of the Company 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 Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company or any Restricted Subsidiary;
(14) any Permitted Acquisition Indebtedness; and
(1511) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (1511), not to exceed the greater of (i) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance. For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (1511) above, or is entitled to be incurred pursuant to Section 4.09(a), the Company will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. ; provided that Indebtedness under the Credit Agreement Facilities outstanding on as of the date on which Notes are first issued and authenticated under of this Indenture after giving effect to the use of proceeds of the initial offering of the Notes will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributions, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof shall be is included in Fixed Charges of the Company as accrued to the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other Person.
Appears in 2 contracts
Samples: Indenture (Jones Energy, Inc.), Indenture (Jones Energy, Inc.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will shall not, and will shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company will shall not issue any Disqualified Stock and will shall not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or and the Company may issue Disqualified Stock, Stock and the Guarantors any Restricted Subsidiary may incur Indebtedness issue preferred stock (including Acquired DebtDisqualified Stock) or issue Preferred Stock, if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock preferred stock is issued, as the case may be, issued would have been at least 2.25 2.0 to 1.01, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock preferred stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) . The first paragraph of this Section 4.09(a) 4.03 will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1a) the incurrence by the Issuers Company and the Guarantors, its Restricted Subsidiaries of additional Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1a) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed the greater of (i) $700.0 million and (ii) $175.0 million plus 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence2.75 billion;
(2b) Existing Indebtedness;
(c) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers and the Guarantors of Indebtedness represented by the Notes and the related Subsidiary Guarantees to be issued on the date of this Indenture and the related Note GuaranteesIssue Date;
(4d) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation construction or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiariessuch Subsidiary, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred pursuant to this clause (4d), not to exceed the greater of (i) $45.0 100.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceat any time outstanding;
(5e) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease refinance or discharge any replace Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this the Indenture to be incurred under the first paragraph of this Section 4.09(a4.03 (excluding 8.125% Notes repurchased pursuant to the tender offer therefor launched by the Company substantially concurrently with the initial offering of the Notes) or clauses (2b), (3c), (4d), (5j), (14m), (n) or this clause (15e) of this Section 4.09(b)paragraph;
(6f) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and
(B) that (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the CompanySubsidiary, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6f);
(7g) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging ObligationsObligations that are incurred for the purpose of fixing or hedging (i) interest rate risk with respect to any Indebtedness that is permitted by the terms of the Indenture to be outstanding or (ii) exchange rate risk with respect to obligations under any agreement or Indebtedness, or with respect to any asset, of such Person that is payable or denominated in a currency other than U.S. Dollars;
(9h) the Guarantee by the Company or any of its the Restricted Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed4.03;
(10i) 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 preferred stock (including Disqualified Stock) in the form of additional shares of the same class of preferred stock (including Disqualified Stock) will not be deemed to be an incurrence of Indebtedness or an issuance of preferred stock (including Disqualified Stock) for purposes of this Section 4.03; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued;
(j) the issuance of Convertible Subordinated Debentures and/or the issuance of Convertible Preferred Stock in an aggregate principal amount (with the liquidation value of the Convertible Preferred Stock being treated as its principal amount for this purpose) not to exceed $750.0 million at any one time outstanding pursuant to this clause (j), plus the issuance of any related securities issued by a subsidiary trust or similar financing vehicle in connection therewith;
(k) Indebtedness of the Company or any Restricted Subsidiary consisting of its Restricted Subsidiaries of Indebtedness guarantees, indemnities, hold backs or obligations in respect of self-insurance purchase price adjustments in connection with the acquisition or disposition of assets, including, without limitation, shares of Capital Stock of Restricted Subsidiaries, or contingent payment obligations incurred in connection with the acquisition or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided disposition of assets which are contingent on the performance of the assets acquired or disposed of;
(l) Indebtedness represented by (i) letters of credit for the account of the Company or a any Restricted Subsidiary in or (ii) other obligations to reimburse third parties pursuant to any surety bond or other similar arrangements, to the ordinary course of business and any Guarantees or extent that such letters of credit functioning and other obligations, as or supporting any of the foregoing bonds or obligations and case may be, are intended to provide security for workers’ compensation claims claims, payment obligations in connection with self-insurance, in connection with participation in government reimbursement or other programs or other similar requirements in the ordinary course of business;
(11m) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business;
(13) any obligation arising from agreements of the Company or any Restricted Subsidiary of Indebtedness to the Company providing for indemnification, adjustment extent the proceeds thereof are used to purchase Notes pursuant to a Change 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 Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company or any Restricted Subsidiary;
(14) any Permitted Acquisition IndebtednessControl Offer; and
(15n) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or (which may include, but is not limited to, Indebtedness of the issuance by types referred to in the Company of any Disqualified Stock foregoing clauses (a) through (m)) in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15n), not to exceed $200.0 million.
(o) the greater incurrence by the Company and its Restricted Subsidiaries of the Indebtedness under the 364-Day Credit Facility in an aggregate principal amount at any one time outstanding under this clause (io) not to exceed (a) $75.0 million and 1.9 billion minus (iib) 5.0% amounts applied to repay Indebtedness under the 364-day Credit Facility, including with net proceeds from the Concurrent Financing Transactions;
(p) Indebtedness of a Restricted Subsidiary outstanding on the date on which such Restricted Subsidiary was acquired by the Company or otherwise became a Restricted Subsidiary (other than Indebtedness incurred as consideration in, or to provide all or any portion of the Company’s Adjusted Consolidated Net Tangible Assets determined as funds or credit support utilized to consummate, the transaction or series of transactions pursuant to which such Restricted Subsidiary became a Subsidiary of the date Company or was otherwise acquired by the Company), provided that after giving effect thereto, (a) the Company would be permitted to incur at least $1 of such incurrence additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test in the first paragraph above, or issuance(b) the Fixed Charge Coverage Ratio would be no worse than immediately prior thereto. For purposes of determining compliance with this Section 4.094.03, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1a) through (15n) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.09(a)4.03, the Company will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.094.03. Indebtedness under the Credit Agreement Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture hereunder will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1a) of the definition of Permitted Debt. The accrual Company will not permit any of interest its Subsidiaries (other than Purchasing) to Guarantee the 3.25% Convertible Senior Debentures due 2035 or Preferred Stock or Disqualified Stock dividends or distributionsany Permitted Refinancing Indebtedness incurred in respect thereof pursuant to clause (5) of the immediately preceding paragraph, the accretion or amortization of original issue discount, the payment of interest on except that any such Permitted Refinancing Indebtedness not secured may be Guaranteed by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due Guarantor on a basis subordinated to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other PersonGuarantor’s Subsidiary Guarantee.
Appears in 2 contracts
Samples: Fifth Supplemental Indenture (Omnicare Inc), Fourth Supplemental Indenture (Omnicare Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stockpreferred stock, if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock preferred stock is issued, as the case may be, would have been at least 2.25 2.0 to 1.01, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock preferred stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuers Company and the Guarantors, any of its Restricted Subsidiaries of additional Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with 1)(with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed $300.0 million less (a) the greater aggregate amount of (i) $700.0 million and (ii) $175.0 million plus 35.0% all Net Proceeds of Asset Sales applied by the Company’s Adjusted Consolidated Net Tangible Assets determined on Company or any of its Restricted Subsidiaries since the date of such incurrencethis Indenture to repay any term Indebtedness under a Credit Facility or to repay any revolving credit Indebtedness under a Credit Facility and effect a corresponding commitment reduction thereunder pursuant to Section 4.10 hereof and (b) less the amount of any Indebtedness of a Receivables Subsidiary outstanding under clause (13) below;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers Company and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and the Exchange Notes and the related Note GuaranteesGuarantees 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 or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of propertyproperty (real or personal), plant or equipment used in the business of the Company or any of its Restricted SubsidiariesSubsidiaries (whether through the direct acquisition of such assets or the acquisition of Equity Interests of any Person owning such assets), in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred under clause (5) below to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (ia) $45.0 15.0 million and at any time outstanding or (iib) 3.02.5% of Total Assets (measured at the Company’s Adjusted Consolidated Net Tangible Assets determined as time of the date each incurrence of any such Indebtedness and giving pro forma effect to such incurrence or issuanceand the use of proceeds thereof);
(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, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clauses (2), (3), (4), (5), (1410) or (15) of this Section 4.09(b);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(Aa) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and
(B) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stockshares of preferred stock; provided, however, that:
(Aa) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(Bb) any sale or other transfer of any such Preferred Stock preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging ObligationsObligations (other than for speculative purposes);
(9) the Guarantee guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee must shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business;
(13) any obligation arising from agreements of the Company or any Restricted Subsidiary of the Company 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 Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company or any Restricted Subsidiary;
(14) any Permitted Acquisition Indebtedness; and
(15) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15), not to exceed the greater of (i) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance. For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (15) above, or is entitled to be incurred pursuant to Section 4.09(a), the Company will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributions, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other Person.
Appears in 2 contracts
Samples: Indenture (Innophos Investment Holdings, Inc.), Indenture (Innophos, Inc.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company Borrower Agent and the Parent Guarantors will not, and will not permit any of its their Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company Parent Guarantors and the Borrower Agent will not issue any Disqualified Stock and will not permit any of its their Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Borrowers and the Parent Guarantors may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors and Specified Foreign Subsidiaries may incur Indebtedness (including Acquired Debt) or issue Preferred Stockpreferred stock, if the Fixed Charge Coverage Ratio for the CompanyPyxus Topco’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 Stock preferred stock is issued, as the case may be, would have been at least 2.25 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock preferred stock had been issuedissued (and all payments that would have been due with respect to such Indebtedness or preferred stock were paid and included in Fixed Charges to the extent applicable), as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a10.03(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1i) the incurrence by the Issuers and the Guarantorsany Parent Guarantor, any Borrower or any of their Restricted Subsidiaries of Indebtedness and letters of credit under (A) the Exit Term Loan Credit Facilities Agreement and (B) the Exit Notes Indenture in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunderi) not to exceed an aggregate amount equal to $607,000,000, plus any interest that is paid in kind (and, in the greater case of each of the foregoing clauses (iA) $700.0 million and (iiB), any Permitted Refinancing Indebtedness in respect thereof) $175.0 million plus 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence(collectively, “Permitted Exit Financing Indebtedness”);
(2ii) the incurrence by the Company Parent Guarantors, the Borrowers and its their Restricted Subsidiaries of the Existing Indebtedness;
(3iii) Indebtedness created hereunder and under the other Loan Documents;
(iv) the incurrence by the Issuers and the Guarantors of Indebtedness represented by the Notes to be issued on the date of this Indenture and the related Note Guarantees;
(4) the incurrence by the Company any Parent Guarantor, any Borrower or any of its their Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company any Parent Guarantor, any Borrower or any of its their Restricted Subsidiaries, in an aggregate principal amount outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4)amount, not to exceed the greater of (i) $45.0 21.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceat any time outstanding;
(5v) the incurrence by the Company any Parent Guarantor, any Borrower or any of its their Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture Agreement to be incurred under Section 4.09(a10.03(a) hereof or clauses (2ii), (3iii), (4iv), (5), (14v) or (15xvii) of this Section 4.09(b10.03(b);
(6vi) the incurrence by the Company or any Borrower, any Parent Guarantor and/or any of its their Restricted Subsidiaries of intercompany Indebtedness between or among from the Company and Borrower Agent, any of its Parent Guarantor and/or any other Restricted Subsidiaries; provided, however, that:
(A) if that any such Indebtedness shall be to the Company extent owed by the Borrower Agent or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations or any Guarantee thereof then due with respect to the Noteshereunder, in the case of the Company, Borrower Agent or the Note Guarantee, in the case of a Guarantor, as applicable; and
(B) (i) any subsequent issuance or transfer of Equity Interests provided, that results in any such Indebtedness being held by a intercompany indebtedness incurred under intercompany notes existing on the Closing Date shall be permitted so long as such intercompany notes are so expressly subordinated within 30 days after the Closing Date; provided, further, that if as of any date any Person other than the Company any Parent Guarantor, any Borrower or a any of their Restricted Subsidiary of the Company and (ii) any sale Subsidiaries owns or other transfer of holds any such Indebtedness to a Person that is not either Indebtedness, such date shall be deemed the Company or a Restricted Subsidiary date of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company such Parent Guarantor, such Borrower or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6vi);
(7vii) the issuance by any of the CompanyParent Guarantors’ or any Borrower’s Restricted Subsidiaries to the Company any Parent Guarantor, to any Borrower or to any of its their Restricted Subsidiaries of any Preferred Stockshares of preferred stock; provided, provided however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock preferred stock being held by a Person other than the Company a Parent Guarantor, a Borrower or a Restricted Subsidiary of the Companya Parent Guarantor or a Borrower; and
(B) any sale or other transfer of any such Preferred Stock preferred stock to a Person that is not either the Company a Parent Guarantor, a Borrower or a Restricted Subsidiary of the Company, a Parent Guarantor or a Borrower; will be deemed, in each case, to constitute an issuance of such Preferred Stock preferred stock by such Restricted Subsidiary that was not permitted by this clause (7vii);
(8) viii) the incurrence by the Company any Borrower, any Parent Guarantor or any of its their Restricted Subsidiaries of Hedging ObligationsObligations entered into in order to manage existing or anticipated interest rate, exchange rate or commodity price risks and not for speculative purposes;
(9ix) the incurrence by any Borrower, any Parent Guarantor or any of their Restricted Subsidiaries of Indebtedness owing under documentary or standby letters of credit for the purchase of goods or other merchandise generally;
(a) Indebtedness in respect of OECD accounts receivable financings with recourse against any Parent Guarantor, any Borrower or any of their Restricted Subsidiaries in an aggregate amount not to exceed $50.0 million at any time outstanding and (b) non-OECD accounts receivable financings with recourse against any Parent Guarantor or any of their Restricted Subsidiaries (other than a Borrower) in an aggregate amount not to exceed $50.0 million at any time outstanding;
(xi) the Guarantee by the Company any Parent Guarantor, any Borrower or any of its their Restricted Subsidiaries of Indebtedness of the Company any Parent Guarantor, any Borrower or a Restricted Subsidiary of the Company any Parent Guarantor or any Borrower to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.0910.03; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the NotesLoans, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(10xii) the incurrence by the Company any Parent Guarantor, any Borrower or any of its their Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations or bidobligations, plugging bankers’ acceptances, performance and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business;
(11xiii) the incurrence by the Company any Parent Guarantor, any Borrower or any of its their Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or owing under overdraft facilities in connection with cash management arrangements and 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 DaysBank Product Obligations;
(12xiv) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business;
(13) any obligation arising from agreements of the Company or any Restricted Subsidiary of the Company 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 Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company or any Restricted Subsidiary;
(14) any Permitted Acquisition Indebtedness; and
(15) the incurrence by the Company or any of its Restricted Foreign Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15), outstanding not to exceed the greater of (ia) $75.0 975 million and (iib) 5.0the sum of (x) 65% of Eligible Inventory, plus (y) 65% of Permitted Advances on Purchases of Tobacco, plus (z) 85% of Eligible Receivables, and any Guarantees of such Indebtedness by the Company’s Adjusted Consolidated Net Tangible Assets determined Borrower Agent;
(xv) unsecured Guarantees by any Parent Guarantor, any Borrower or any Restricted Subsidiary which are incurred in the ordinary course of business in an aggregate amount not to exceed $250.0 million in the aggregate at any time outstanding;
(xvi) Guarantees by any Parent Guarantor, any Borrower or any Restricted Subsidiary which are incurred in the ordinary course of business for the purpose of carrying unsold tobacco inventories held against Confirmed Orders and other Guarantees by any Parent Guarantor, any Borrower or any Restricted Subsidiary incurred in the ordinary course of business with respect to Uncommitted Inventories in an aggregate amount not to exceed the amount of such Uncommitted Inventories; and
(xvii) the incurrence by any Borrower, any Guarantor or any Specified Foreign Subsidiary of unsecured Indebtedness or Junior Lien Debt in an aggregate principal amount not to exceed $50.0 million at any time outstanding. Other than in connection with the exchange of Existing Exit Notes and Existing Exit Term Loans with New Notes and New Term Loans, as applicable, the Borrower Agent and the Parent Guarantors 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 the date Borrower Agent or such Guarantor unless such Indebtedness is also contractually subordinated in right of such incurrence payment to the ABL Facility and the Guarantees thereof on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Borrower Agent or issuanceany Guarantor solely by virtue of being unsecured or by virtue of being secured on junior priority basis. For purposes of determining compliance with this Section 4.0910.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1i) through (15xvii) above, or is entitled to be incurred pursuant to Section 4.09(a10.03(a), hereof, the Company Borrower Agent will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.0910.03. Permitted Exit Financing Indebtedness may be incurred solely under the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1i) of the definition of Permitted DebtDebt and may not be reclassified. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionspreferred stock dividends, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock preferred stock or Disqualified Stock in the form of additional securities shares of the same class of Preferred Stock preferred stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock preferred stock or Disqualified Stock for purposes of this Section 4.09covenant; provided provided, in each such case, that the amount thereof shall be of any such accrual, accretion or payment is included in Fixed Charges of the Company Borrower Agent as accrued accrued. For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be utilized, calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred. Notwithstanding any other provision of this Section 10.03, the maximum amount of Indebtedness that any Parent Guarantor, any Borrower or any Restricted Subsidiary may incur pursuant to the extent required by the definition this Section 10.03 shall not be deemed to be exceeded solely as a result of such termfluctuations in exchange rates or currency values. The amount of any Indebtedness outstanding as of any date will be:
(ai) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(bii) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(ciii) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1A) the Fair Market Value of such assets at the date of determination; and
(2B) the amount of the Indebtedness of the other Person.
Appears in 2 contracts
Samples: Abl Credit Agreement (Pyxus International, Inc.), Abl Credit Agreement (Pyxus International, Inc.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company and the Guarantors will not issue any Disqualified Stock and the Company will not permit any of its Restricted Subsidiaries (other than the Guarantors) to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company and any of the Guarantors may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors may incur Indebtedness if either (including Acquired Debta) or issue Preferred Stock, if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock is issued, as the case may be, issued would have been at least 2.25 2.0 to 1.0 or (b) the Consolidated Leverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been no more than 6.0 to 1.0, in the case of each of clauses (a) and (b), 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 or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuers Company and the Guarantorsits Restricted Subsidiaries of (a) Indebtedness, of Indebtedness and letters of credit and bankers’ acceptances under Credit Facilities in an aggregate principal amount at any one time outstanding as of any date of incurrence of any such Indebtedness (together with the aggregate amount of any Permitted Refinancing Indebtedness outstanding as of such date that was incurred pursuant to clause (1)(b) and that is not deemed to be incurred pursuant to another clause of the definition of Permitted Debt or clause (a) above as a result of reclassification) not to exceed the sum of (x) $ 2,400.0 million plus (y) the maximum amount such that, after giving pro forma effect to the incurrence thereof, the Consolidated Senior Secured Leverage Ratio, calculated as of the date of incurrence, would not exceed 3.5 to 1.0 (it being understood that any amounts available pursuant to clause (y) shall be deemed to be used prior to utilization of any amounts under clause (x)), and (b) any Permitted Refinancing Indebtedness incurred to extend, refinance, refund, renew, replace, defease or discharge any Indebtedness that was incurred pursuant to this clause (1) (with letters and was not, as of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed the greater of (i) $700.0 million and (ii) $175.0 million plus 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of incurrence of such incurrencePermitted Refinancing Indebtedness, deemed to be incurred pursuant to another clause of the definition of Permitted Debt or clause (a) above as a result of reclassification;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers Company and the Guarantors of Indebtedness represented by the Notes and Subsidiary Guarantees to be issued on the date of this Indenture and the related Note GuaranteesIssue Date;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings, other real estate financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation construction or improvement of property, plant or equipment used in the business of the Company or such Restricted Subsidiary (whether through the direct purchase of assets or the Equity Interests of any of its Restricted SubsidiariesPerson owning such assets), in an aggregate principal amount at any time outstanding, as of the date of incurrence of any Indebtedness pursuant to this clause (4), including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (ia) $45.0 550.0 million and (iib) 3.040.0% of Consolidated Cash Flow (for the Company’s Adjusted Consolidated Net Tangible Assets period of the four most recent consecutive fiscal quarters for which internal financial statements are available) (determined as of the date of such incurrence or issuanceincurrence);
(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 or replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (2), (3), ) or (4)) above, this clause (5), clauses (1417), (18), (20), (26) or (1527) of this below or pursuant to Section 4.09(b4.09(a);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among owed to the Company and or any of its Restricted Subsidiaries; provided, however, that:;
(A) if the Company or any Guarantor is the obligor on such Indebtedness Indebtedness, and the payee is not the Company or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note GuaranteeSubsidiary Guarantee of such Guarantor, in the case of a Guarantor; and
(B) (i1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company thereof and (ii2) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will thereof shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness under Hedging Obligations that are not entered into for the purpose of speculation (8) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stockshares of preferred stock; provided, however, that:
(Aa) any subsequent issuance or transfer of Equity Interests (other than the incurrence of a Permitted Lien) that results in any such Preferred Stock preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; Company and
(Bb) any sale or other transfer of any such Preferred Stock preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock preferred stock by such Restricted Subsidiary that was not permitted by this clause (7)8);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations;
(9) the Guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business;
(13) any obligation arising from agreements of the Company or any Restricted Subsidiary of the Company 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 Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company or any Restricted Subsidiary;
(14) any Permitted Acquisition Indebtedness; and
(15) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15), not to exceed the greater of (i) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance. For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (15) above, or is entitled to be incurred pursuant to Section 4.09(a), the Company will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributions, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Samples: Indenture (Post Holdings, Inc.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will shall not, and will shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”"INCUR") any Indebtedness (including Acquired Debt), ) and that the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; providedPROVIDED, howeverHOWEVER, that the Issuers Company or any Guarantor may incur Indebtedness (including Acquired Debt) or issue shares of Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stock, Stock if the Fixed Charge Coverage Ratio for the Company’s 's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock is issued, as the case may be, issued would have been at least 2.25 2.00 to 1.01.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred incurred, or the Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a) will shall not prohibit apply to the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”"PERMITTED DEBT"):
(1i) the incurrence by the Issuers Company and the GuarantorsGuarantors of Indebtedness represented by the Notes and the Subsidiary Guarantees;
(ii) the incurrence by the Company of term Indebtedness under the New Credit Facility and related Guarantees under the New Credit Facility; PROVIDED that the aggregate principal amount of all term Indebtedness outstanding under the New Credit Facility after giving effect to such incurrence, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any other Indebtedness incurred pursuant to this clause (ii) does not exceed an amount equal to $50.0 million less the aggregate amount of all repayments, optional or mandatory (other than repayments in connection with the incurrence of Permitted Refinancing Indebtedness), of the principal of any term Indebtedness and under the New Credit Facility that have been made since the date hereof;
(iii) the incurrence by the Company of revolving credit Indebtedness under the New Credit Facility, 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 the Company and its Restricted Subsidiaries thereunder) not and related Guarantees under the New Credit Facility; PROVIDED that the aggregate principal amount of all revolving Indebtedness (with letters of credit being deemed to exceed have a principal amount equal to the greater of (i) $700.0 million and (ii) $175.0 million plus 35.0% maximum potential liability of the Company’s Adjusted Consolidated Net Tangible Assets determined on Company and its Restricted Subsidiaries thereunder) outstanding under the date of New Credit Facility after giving effect to such incurrence, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any other Indebtedness incurred pursuant to this clause (iii), does not exceed $35.0 million, less the amount outstanding under clause (xiv) below and the aggregate amount of Asset Sale proceeds applied to repay and permanently reduce the availability of revolving credit Indebtedness under the New Credit Facility pursuant to Section 4.10;
(2iv) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers and the Guarantors of Indebtedness represented by the Notes to be issued on the date of this Indenture and the related Note Guarantees;
(4v) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, Hedging Obligations that are incurred in each case, incurred the normal course of business for the purpose of financing all fixing or hedging currency, commodity or interest rate risk (including with respect to any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount outstanding, including all Permitted Refinancing floating rate Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance;
(5) the incurrence that is permitted by the Company or any terms of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(aoutstanding) or clauses (2), (3), (4), (5), (14) or (15) in connection with the conduct of this Section 4.09(b)their respective businesses and not for speculative purposes;
(6vi) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its a Restricted SubsidiariesSubsidiary or between one Restricted Subsidiary and another; providedPROVIDED, howeverHOWEVER, that:
that (Aa) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a GuarantorIndebtedness, such Indebtedness must be unsecured and is expressly subordinated in liquidation to the prior payment in full in cash of all Obligations then due with respect to the NotesNotes and this Indenture; (b) if a Restricted Subsidiary, in the case of the Company, or the Note Guarantee, in the case of that is not a Guarantor, is the obligor on such Indebtedness, such Indebtedness owning to the Company or any Guarantor, together with all intercompany Indebtedness owing from all Restricted Subsidiaries that are not Guarantors to the Company or a Guarantor, does not exceed $5.0 million in aggregate principal amount at any time outstanding; and
and (Bc) (iA) any subsequent event or issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (iiB) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will Guarantor shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6vi);
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations;
(9vii) the Guarantee by the Company or any of its Restricted Subsidiaries the Guarantors of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided PROVIDED, that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee must of any Indebtedness of a Restricted Subsidiary that is not or is no longer a Guarantor shall be subordinated deemed a Restricted Investment at the time of such Guarantee or pari passu, as applicable, at the time such Restricted Subsidiary's Guarantor status terminates in an amount equal to the same maximum principal amount so guaranteed, for so long as, and to the extent as the Indebtedness guaranteedthat, such Guarantee remains outstanding;
(10viii) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar or advance payment bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business appeal and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of businesssurety bonds;
(11ix) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness arising from in exchange for, or the honoring net proceeds of which are used to refund or replace Indebtedness that was permitted 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 Daysthis Indenture to be incurred;
(12x) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business;
(13) any obligation arising from agreements of the Company or any Restricted Subsidiary of the Company 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 Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company or any Restricted Subsidiary;
(14) any Permitted Acquisition Indebtedness; and
(15) the incurrence by the Company or any of its Restricted Subsidiaries Guarantors of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any other Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15x), not to exceed the greater difference of (ia) $75.0 15.0 million and less (iib) 5.0% the outstanding aggregate principal amount incurred pursuant to clause (xi) below;
(xi) the incurrence by Restricted Subsidiaries that are not Guarantors of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any other Indebtedness incurred pursuant to this clause (xi) not to exceed $5.0 million;
(xii) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case incurred for the purpose of financing all or any part of the Company’s Adjusted Consolidated Net Tangible Assets determined as purchase price or cost of construction or improvement of property, plant or equipment used in the business of the date Company or such Restricted Subsidiary, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace Indebtedness incurred pursuant to this clause (xii), not to exceed $5.0 million at any time outstanding; PROVIDED, HOWEVER, that the Company and its Restricted Subsidiaries may incur any amount of additional Indebtedness of the type specified above in this clause (xii) so long as the sole recourse of the obligee with respect to such Indebtedness is to the property financed and any accessions and additions thereto, replacements and substitutions therefor and the proceeds (including insurance proceeds thereof);
(xiii) the issuance by a Restricted Subsidiary that is a Guarantor of preferred stock to the Company or to any of its Restricted Subsidiaries that are Guarantors; PROVIDED, HOWEVER, that any subsequent event or issuance or transfer of any Equity Interests that results in the owner of such preferred stock ceasing to be the Company or any of its Restricted Subsidiaries that are Guarantors or any subsequent transfer of such preferred stock to a Person, other than the Company or one of its Restricted Subsidiaries that are Guarantors, shall be deemed to be an issuance of preferred stock by such Subsidiary that was not permitted by this clause (xiii);
(xiv) the incurrence by Foreign Subsidiaries that are not holding companies or issuanceby Axiohm S.A. of Indebtedness under the New Credit Facility or any Permitted Refinancing Indebtedness; PROVIDED, HOWEVER, that the aggregate principal amount of outstanding Indebtedness incurred pursuant to this clause (xiv) does not exceed $15.0 million at any time; and PROVIDED, FURTHER, that out of the total Indebtedness permitted pursuant to this clause (xiv), no more than $5.0 million of Indebtedness can be incurred by any such Foreign Subsidiary that is not Axiohm S.A.; and
(xv) the incurrence by a Restricted Subsidiary that is a Foreign Subsidiary and is not a Guarantor of Indebtedness in an amount not to exceed the Borrowing Base of such Restricted Subsidiary; PROVIDED, that none of the Company or any other such Restricted Subsidiary shall be obligated, directly or indirectly, to pay principal, premium, interest or other amounts thereon or in respect thereof (including by way of net worth requirements, equity keepwells etc.). For purposes of determining compliance with this Section 4.09covenant, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1i) through (15xv) above, above or is entitled to be incurred pursuant to the first paragraph of this Section 4.09(a)4.09, the Company will be permitted to divideshall, in its sole discretion, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. 4.09 and such item of Indebtedness under the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have treated as having been incurred on pursuant to only one of such date in reliance on clauses or pursuant to the exception provided by clause (1) first paragraph hereof. Accrual of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsinterest, the accretion or amortization of original issue discount, accreted value and the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will OI Group shall not, and will shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) with respect to any Indebtedness (including Acquired Debt), and the Company will OI Group shall not issue any Disqualified Stock and will OI Group shall not permit any of its Restricted Subsidiaries to issue any Preferred StockDisqualified Stock or preferred stock; provided, however, that the Issuers OI Group and any of its Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or and may issue Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) Stock or issue Preferred Stockpreferred stock, if the Fixed Charge Coverage Ratio for the CompanyOI Group’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 Stock preferred stock is issued, as the case may be, issued would have been at least 2.25 2.00 to 1.01.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred incurred, or the Disqualified Stock or the Preferred Stock had preferred stock has been issued, as the case may be, at the beginning of such four-quarter period.
(b) . The first paragraph of this Section 4.09(a) will 4.13 shall not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuers and the Guarantors, OI Group or its Restricted Subsidiaries of Indebtedness and letters of credit under Credit Facilities (and the incurrence of Guarantees thereof) in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company OBGC and its Restricted Subsidiaries thereunder) not to exceed $4.5 billion (of which not more than $3.0 billion of such Indebtedness shall be incurred by Restricted Subsidiaries (for the greater avoidance of (i) $700.0 million and (ii) $175.0 million plus 35.0% of doubt, other than the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence) that are not Guarantors);
(2) the incurrence by the Company OI Group and its any Restricted Subsidiaries Subsidiary of the OI Group of Existing Indebtedness;
(3) the incurrence by OI Group, the Issuers Company and the Guarantors of Indebtedness represented by the Notes to be and the related Guarantees issued on the date of this Indenture and the related Note GuaranteesIssue Date;
(4) the incurrence by the Company OI Group or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceAssets;
(5) the incurrence by OI Group or any of its Restricted Subsidiaries of Indebtedness incurred to finance all or any part of the Company purchase price or cost of construction or improvement of property, plant or equipment used in the business of OI Group or such Restricted Subsidiary, in an aggregate principal amount at any time outstanding, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (5), not to exceed 5.0% of Tangible Assets, as measured after giving effect to such transaction;
(6) the incurrence by OI Group or any of its Restricted Subsidiaries of Indebtedness in exchange for, or the proceeds of which are or shall be used to refund, refinance or replace, OI Inc. Indebtedness, provided that, except with respect to the OI Inc. 2018 Debentures which are not subject to this proviso, such new Indebtedness would qualify as Permitted Refinancing Indebtedness had the OI Inc. Indebtedness being exchanged, refunded, refinanced or replaced been an obligation of OI Group or such Restricted Subsidiary;
(7) the incurrence by OI Group or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are or shall be used to renew, refund, refinance, replace, defease refinance or discharge any replace Indebtedness (other than intercompany Intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under the first paragraph of this Section 4.09(a) 4.13 or clauses (2), (3), (4), (5), (146) or (157) of this Section 4.09(b)paragraph;
(6) 8) the incurrence by the Company OI Group or any of its Restricted Subsidiaries of intercompany Intercompany Indebtedness between or among the Company OI Group and any of its Restricted SubsidiariesSubsidiaries and with respect to OI Group only, between OI Group and OI Inc.; provided, however, that:
(Aa) if OI Group, the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a GuarantorIndebtedness, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note GuaranteeGuarantees of the Notes, in the case of OI Group or a Guarantor;
(b) any incurrence by OI Group of Intercompany Indebtedness to OI Inc. after the Issue Date shall be in exchange for cash loans or advances from OI Inc. in the ordinary course of business consistent with past practices; and
(B) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company OI Group or a Restricted Subsidiary of the Company thereof and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company OI Group or a Restricted Subsidiary of the Companythereof, will shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company OI Group or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6)8);
(79) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company OI Group or any of its Restricted Subsidiaries of Hedging Obligations;
(910) provided that so long as no Default shall have occurred or be continuing or would be caused thereby, the incurrence by any Foreign Subsidiary of OI Group of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed $300.0 million;
(11) (i) the Guarantee by the Company or any of its Restricted Subsidiaries the Guarantors of Indebtedness of the Company OI Group or a any Restricted Subsidiary of OI Group and (ii) the Guarantee by any Foreign Subsidiary other than the Company to the extent of Indebtedness of OI Group or any Restricted Subsidiary of OI Group, in each case, that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days4.13;
(12) the incurrence by accrual of interest, the Company accretion or amortization of original issue discount, the payment of interest on any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising Indebtedness in the ordinary course form of businessadditional 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 shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.13 or an issuance of Disqualified Stock; provided, in each such case, that the amount thereof is included in Fixed Charges of OI Group as accrued;
(13) any obligation arising from agreements of the Company or any Restricted Subsidiary of the Company 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 Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company or any Restricted Subsidiary;
(14) any Permitted Acquisition Indebtedness; and
(15) the incurrence by the Company OI Group or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (1513), not to exceed $300.0 million;
(14) Indebtedness arising from agreements of OI Group or a Restricted Subsidiary of OI Group providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the greater disposition of any business, assets or a Subsidiary, other than Guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, however, that (i) $75.0 million such Indebtedness is not reflected on the balance sheet of OI Group or any such Restricted Subsidiary of OI Group (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet shall not be deemed to be reflected on such balance sheet for purposes of this clause (i)) and (ii) 5.0% the maximum assumable liability in respect of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of all such incurrence or issuance. For purposes of determining compliance with this Section 4.09, in the event Indebtedness that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (15) above, or is entitled permitted to be incurred pursuant to Section 4.09(a), the Company will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (114) of shall at no time exceed the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributions, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:
gross proceeds including noncash proceeds (a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets noncash proceeds being measured at the date time received and without giving effect to any subsequent changes in value) actually received by OI Group and its Restricted Subsidiaries in connection with such disposition;
(15) the incurrence by OI Group or any of determinationits Restricted Subsidiaries of Indebtedness incurred or deemed incurred or cash consideration received from the sale of accounts receivable by OI Group or any of its Restricted Subsidiaries or a special purpose vehicle established by any of them to purchase and sell such receivables;
(16) obligations in respect of performance and surety bonds and completion guarantees provided by OI Group or any of its Restricted Subsidiaries in the ordinary course of business;
(17) Indebtedness incurred by OI Group or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including without limitation letters of credit in respect of workers’ compensation claims, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence; and
(218) the incurrence by OI Group or any of its Restricted Subsidiaries of Acquired Debt, in an aggregate principal amount of the at any time outstanding, including all Permitted Refinancing Indebtedness of the other Person.incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause
Appears in 1 contract
Samples: Indenture (Owens-Illinois Group Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stockpreferred stock, if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock preferred stock is issued, as the case may be, would have been at least 2.25 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock preferred stock had been issued, as the case may be, at the beginning of such four-four- quarter period.
(b) The provisions of Section 4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1i) the incurrence by the Issuers Company and the Guarantors, any Guarantor of additional Indebtedness and letters of credit under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1i) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries any Guarantor thereunder) not to exceed $75.0 million less (x) the greater amount of Indebtedness incurred by Foreign Subsidiaries outstanding under clause (ixxi) $700.0 million below, and (iiy) $175.0 million plus 35.0% the amount of Indebtedness outstanding under clause (xix) below except to the extent subject to a Lien permitted by item (25) of the Company’s Adjusted Consolidated Net Tangible Assets determined on definition of “Permitted Liens,” and (z) the date amount of such incurrenceIndebtedness outstanding under clause (xx) below;
(2ii) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3iii) the incurrence by the Issuers Company and the Guarantors of Indebtedness represented by (A) the Notes and the related Note Guarantees, to be issued on the date of this Indenture (or to be issued in connection with the Rights Offering) and the (B) any Additional Notes and related Note Guarantees, as the case may be, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (iii), provided that the aggregate outstanding principal amount at any time under this clause (iii)(B),shall not exceed an amount equal to $50.0 million, less the aggregate principal amount of any Notes issued in the Rights Offering; and provided, further, that fifty percent (50%) of proceeds raised in excess of $35 million from the Rights Offering and any Additional Notes shall be used to make an offer to repurchase Notes at 100% of the aggregate principal amount thereof;
(4iv) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease ObligationsObligations (other than Deemed Capitalized Leases), mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted SubsidiariesSubsidiaries (whether through (a) the direct purchase of such assets or (b) the purchase of the Capital Stock of a Person owning such assets (but no other material assets) the result of which is that such Person becomes a Subsidiary of the Company or another Restricted Subsidiary) and related financing costs, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4iv), not to exceed the greater of $15.0 million at any time outstanding, and in each case at arms-length and on market terms (i) $45.0 million and (ii) 3.0% as determined by an Officer of the CompanyCompany in such Officer’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuancereasonable discretion);
(5v) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (2ii), (3iii), (4iv), (5), (14v) or (15xii) of this Section 4.09(b);
(6vi) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) 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 unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and
(B) (i1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (ii2) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6vi);
(7vii) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stockshares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such Preferred Stock preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock preferred stock by such Restricted Subsidiary that was not permitted by this clause (7vii);
(8) viii) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging ObligationsObligations in the ordinary course of business to protect the Company and its Restricted Subsidiaries against bona fide risk arising out of fluctuation in interest rates, currency exchange rates or commodity prices and not for speculative purposes;
(9ix) the Guarantee guarantee by the Company or any of its Restricted Subsidiaries the Guarantors of Indebtedness of the Company (excluding the guarantee of Indebtedness incurred by a Foreign Subsidiary under clause (xxi) of this Section 4.09(b)) or a Restricted Subsidiary of the Company and the guarantee by any Foreign Subsidiary of Indebtedness of another Foreign Subsidiary, in each case, to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Note Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business;
(13) any obligation arising from agreements of the Company or any Restricted Subsidiary of the Company 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 Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company or any Restricted Subsidiary;
(14) any Permitted Acquisition Indebtedness; and
(15) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15), not to exceed the greater of (i) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance. For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (15) above, or is entitled to be incurred pursuant to Section 4.09(a), the Company will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributions, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Samples: Indenture (I/O Marine Systems, Inc.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will shall not, and will shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company will shall not issue any Disqualified Stock and will shall not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stockpreferred stock, if the Fixed Charge Coverage Leverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are publicly available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock preferred stock is issued, as the case may be, would have been at least 2.25 no greater than 7.0 to 1.01, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock preferred stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuers Company and the Guarantors, any Guarantor of Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with 1)(with letters of credit being deemed to have a principal amount equal to the maximum potential liability face amount thereunder whether or not drawn and revolving credit facilities measured at entry of such facility, not at the Company and its Restricted Subsidiaries thereunderdate of drawdown) not to exceed the greater of (ix) $700.0 20.0 million and or (iiy) $175.0 million plus 35.050% of Consolidated Cash Flow for the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrencemost recently ended four full fiscal quarters for which financial statements are publicly available;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers Company and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and the Exchange Notes and the related Note GuaranteesGuarantees 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 or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement or lease of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance15.0 million;
(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, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clauses (2), (3), (4), (5), (8), (9), (13), (14) or (15) of this Section 4.09(b);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and
(B) (i1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (ii2) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stockshares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such Preferred Stock preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging ObligationsObligations in the ordinary course of business;
(9) the Guarantee guarantee by the Company or any of its Restricted Subsidiaries the Guarantors of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee must shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations or bidobligations, plugging and abandonmentbankers’ acceptances, appeal, reimbursementcompletion guarantees (including related letters of credit), performance, surety surety, appeal and other similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by the Company or any Restricted Subsidiary of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business;
(13) any obligation Indebtedness arising from agreements of the Company or any such Restricted Subsidiary of the Company providing for indemnification, adjustment of purchase price, earn outs, price or similar obligationsobligation, in each case, incurred or assumed in connection with the acquisition or disposition or acquisition of any business, assets or Capital Stock of a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition;
(13) the incurrence by the Company or any Restricted Subsidiary of Indebtedness constituting reimbursement obligations with respect to letters of credit issued in a transaction permitted the ordinary course of business, including, without limitation, letters of credit to procure raw materials;
(14) the incurrence by Foreign Subsidiaries of the Company of Indebtedness in the ordinary course of business for working capital purposes in an amount not to exceed $5.0 million at any time outstanding;
(15) the incurrence by the Company or any Restricted Subsidiary of Second Lien Debt for the sole purpose of repurchasing, redeeming or otherwise acquiring or retiring for value the Subordinated Notes outstanding on the date of this Indenture; provided that the First Lien Leverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are publicly available immediately preceding the date of such obligation is not reflected as incurrence, would have been no greater than 4.5 to 1.0, determined on a liability on the face pro forma basis (including a pro forma application of the balance sheet net proceeds therefrom), as if such incurrence had occurred at the beginning of the Company or any Restricted Subsidiary;
(14) any Permitted Acquisition Indebtednesssuch four-quarter period; and
(1516) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (1516), not to exceed the greater $35.0 million. The Company shall not incur, and shall not permit any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of (i) $75.0 million and (ii) 5.0% payment to any other Indebtedness of the Company’s Adjusted Consolidated Net Tangible Assets determined as Company 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 will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the date Company solely by virtue of such incurrence being unsecured or issuanceby virtue of being secured on a first or junior Lien basis. 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 (1516) above, above or is entitled to be incurred pursuant to Section 4.09(a)) hereof, the Company will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsinterest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities shares of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided . Notwithstanding any other provision of this Section 4.09, the maximum amount of Indebtedness that the amount thereof Company or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be included deemed to be exceeded solely as a result of fluctuations in Fixed Charges of the Company as accrued to the extent required by the definition of such termexchange rates or currency values. The amount of any Indebtedness outstanding as of any date will be:
(a1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1A) the Fair Market Value of such assets at the date of determination; and
(2B) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Samples: Indenture (Ziff Davis Holdings Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will shall not, and will shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), ) and that the Company will shall not issue any Disqualified Stock and will shall not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue shares of Disqualified Stock, Stock and any of the Guarantors Company's Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue Preferred Stock, if the Company's Fixed Charge Coverage Ratio for the Company’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 or such Preferred Stock is issued, as the case may be, issued would have been at least 2.25 2.00 to 1.01, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred incurred, or the Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) . The provisions of the first paragraph of this Section 4.09(a) will 4.09 shall not prohibit apply to the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “"Permitted Debt”"):
(1i) the incurrence by the Issuers and Company or its Restricted Subsidiaries of term Indebtedness under the GuarantorsCredit Facility, 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 the Company and its Restricted Subsidiaries thereunder) not and related Guarantees under the Credit Facility; provided that the aggregate principal amount of all term Indebtedness and letters of credit of the Company and its Restricted Subsidiaries (with letters of credit being deemed to exceed have a principal amount equal to the greater maximum potential liability of the Company and its Restricted Subsidiaries thereunder) outstanding under the Credit Facility after giving effect to such incurrence, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any other Indebtedness incurred pursuant to this clause (i) does not exceed an amount equal to $550.0 million;
(ii) the incurrence by the Company or its Restricted Subsidiaries of revolving credit Indebtedness under the Credit Facility, letters of credit (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) and related Guarantees under the Credit Facility; provided that the aggregate principal amount of all revolving Indebtedness and letters of credit of the Company and its Restricted Subsidiaries (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) outstanding under the Credit Facility after giving effect to such incurrence, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any other Indebtedness incurred pursuant to this clause (ii), does not exceed $700.0 million less the aggregate amount of Asset Sale proceeds applied by the Company and (ii) $175.0 million plus 35.0% its Restricted Subsidiaries to permanently reduce the availability of revolving credit Indebtedness under the Company’s Adjusted Consolidated Net Tangible Assets determined on Credit Agreements pursuant to the date provisions of such incurrenceSection 4.10 hereof;
(2iii) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3iv) the incurrence by the Issuers Company and the Guarantors of Indebtedness represented by the Notes Senior Notes, the Senior Subordinated Notes, the Senior Subsidiary Guarantees and the Subordinated Subsidiary Guarantees limited in aggregate principal amount, without duplication, to be issued on the date of amounts outstanding under this Senior Note Indenture and the related Senior Subordinated Note GuaranteesIndenture as of their respective dates;
(4v) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, case incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation construction or improvement of property, plant or equipment used in the business of the Company or any of its such Restricted SubsidiariesSubsidiary, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge any replace Indebtedness incurred pursuant to this clause (4v), not to exceed the greater of (i) $45.0 million and (ii) 3.05% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceTotal Assets;
(5vi) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (2), (3), (4), (5), (14) or (15) of this Section 4.09(b);
(6vii) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
that (Ai) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a GuarantorIndebtedness, such Indebtedness must be unsecured and is expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the NotesSenior Note and this Senior Note Indenture, in the case (ii) if a Restricted Subsidiary of the CompanyCompany is the obligor on such Indebtedness, or such Indebtedness is expressly subordinated to the Note Guarantee, prior payment in the case full in cash of a Guarantor; and
such Restricted Subsidiary's Senior Subsidiary Guarantee and (B) (iiii)(A) any subsequent event or issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (iiB) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will Company shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6vii);
(7viii) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging ObligationsObligations that are incurred in the normal course of business for the purpose of fixing or hedging currency, commodity or interest rate risk (including with respect to any Indebtedness that is permitted by the terms of this Senior Note Indenture to be outstanding in connection with the conduct of their respective businesses and not for speculative purposes);
(9) the Guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(10ix) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in the ordinary course of business solely in respect of self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and bonds, completion or performance guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or standby letters of credit functioning as or issued for the purpose of supporting any workers' compensation liabilities of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries Subsidiaries, to the extent that such incurrence does not result in the incurrence of Indebtedness arising from any obligation for the honoring by a bank or other financial institution payment of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Daysborrowed money to others;
(12x) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business;
(13) any obligation Indebtedness arising from agreements of the Company or any a Restricted Subsidiary of the Company providing for indemnification, adjustment of purchase price, earn outs, price or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Capital Stock of a Subsidiary;
(xi) the incurrence by a Restricted Subsidiary of the Company of Indebtedness in a transaction permitted by this Indentureconnection with and in contemplation of, the concurrent disposition of such Restricted Subsidiary to the stockholders of the Company; provided that such obligation disposition occurs concurrently with such incurrence and following such disposition, neither the Company nor any of its Restricted Subsidiaries has any liability with respect to such Indebtedness;
(xii) the incurrence by a Securitization Entity of Indebtedness in a Qualified Securitization Transaction that is not reflected as a liability on Non-Recourse Debt with respect to the face Company and its other Restricted Subsidiaries (except for Standard Securitization Undertakings and Limited Originator Recourse);
(xiii) the guarantee by the Company or any of the balance sheet Restricted Subsidiaries of Indebtedness of the Company or any a Restricted Subsidiary;
(14) any Permitted Acquisition IndebtednessSubsidiary of the Company that was permitted to be incurred by another provision of this Section 4.09; and
(15xiv) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any other Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15xiv), not to exceed the greater of (i) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuancemillion. 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 (1i) through (15xiv) above, above as of the date of incurrence thereof or is entitled to be incurred pursuant to the first paragraph of this Section 4.09(a)4.09 as of the date of incurrence thereof, the Company will be permitted to divideshall, in its sole discretion, classify and or reclassify such item of Indebtedness on as of the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, incurrence thereof in any manner that complies with this Section 4.09 and such item of Indebtedness shall be treated as having been incurred pursuant to only one of such clauses or pursuant to the first paragraph of this Section 4.09. Indebtedness under the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) Accrual of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsinterest, the accretion or amortization of original issue discount, accreted value and the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Samples: Senior Note Indenture (Ball Corp)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stockpreferred stock, if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock preferred stock is issued, as the case may be, would have been at least 2.25 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock preferred stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuers Company and the Guarantors, any Guarantor 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 the Company and its Restricted Subsidiaries amount drawable thereunder) not to exceed the greater exceed, as of (i) $700.0 million and (ii) $175.0 million plus 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the any date of such incurrence;, $250.0 million.
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers Company and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantee to be issued on the date of this Supplemental Indenture and the related Note Guaranteesor thereafter as provided in this Supplemental Indenture;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease ObligationsObligations (other than Deemed Capitalized Leases), mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed exceed, as of any date of incurrence, the greater of (ix) $45.0 85.0 million and (iiy) 3.04.25% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the such date of such incurrence or issuanceincurrence;
(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, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Supplemental Indenture to be incurred under Section 4.09(a) hereof or clauses (2), (3), (4), (5), (14) or (1521) of this Section 4.09(b);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and
(B) (i1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (ii2) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stockshares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such Preferred Stock preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness consisting of Hedging ObligationsObligations or Treasury Management Arrangements in the ordinary course of business;
(9) the Guarantee guarantee by the Company or any of its Restricted Subsidiaries the Guarantors of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance, self-insurance obligations or obligations, bankers’ acceptances, performance, bid, plugging and abandonmentsurety, appeal, reimbursement, performance, surety remediation and similar bonds and completion guarantees Guarantees (not for borrowed money) provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) Indebtedness of any Person incurred and outstanding on or prior to the incurrence by date on which such Person became a Restricted Subsidiary of the Company or was acquired by, or merged into or arranged or consolidated with, the Company or any of its Restricted Subsidiaries (other than Indebtedness incurred in contemplation of, or in connection with, the transaction or series of in-kind obligations relating related transactions pursuant to net oil which such Person became a Restricted Subsidiary of or natural gas balancing positions arising was otherwise acquired by the Company); provided, however, that on the date that such Person became a Restricted Subsidiary or was otherwise acquired by the Company, either: (a) the Company would have been able to incur $1.00 of additional Indebtedness pursuant to Section 4.09(a) hereof after giving effect to the incurrence of such Indebtedness pursuant to this clause (12); or (b) the Fixed Charge Coverage Ratio of the Company and its Restricted Subsidiaries would have been greater than such ratio immediately prior to such acquisition, merger, arrangement or consolidation, in each case after giving effect to the ordinary course incurrence of businesssuch Indebtedness pursuant to this clause (12);
(13) Indebtedness consisting of unpaid insurance premiums owed to any obligation Person providing property, casualty, liability or other insurance to the Company or any Restricted Subsidiary in any fiscal year, pursuant to reimbursement or indemnification obligations to such Person; provided that such Indebtedness is incurred only to defer the cost of such unpaid insurance premiums for such fiscal year and is outstanding only during such fiscal year;
(14) Indebtedness of the Company, to the extent the net proceeds thereof are substantially concurrently (a) used to purchase Notes tendered in connection with a Change of Control Offer or (b) deposited to defease the Notes pursuant to Articles 8 hereof or pursuant to Article 11 hereof;
(15) Indebtedness arising from agreements of the Company or any a Restricted Subsidiary of the Company providing for indemnification, adjustment of purchase price, earn outs, earn-outs or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Capital Stock of a Restricted Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Capital Stock of a Subsidiary for the purpose of financing such acquisition;
(16) Indebtedness arising in connection with endorsement of instruments for deposit in the ordinary course of business;
(17) Indebtedness owed to a transaction permitted Person controlled or supervised by this Indenture; provided that such obligation is not reflected and acting as a liability on the face an agency or instrumentality of the balance sheet United States of America, Canada or Mexico in connection with the settlement or other resolution of any claim or dispute which may arise from time to time with any such agency;
(18) Indebtedness related to surety bonds or cash collateral posted by the Company or any of its Restricted Subsidiaries from time to time in order to secure reclamation obligations;
(19) Indebtedness of the Company or any of its Restricted SubsidiarySubsidiaries consisting of take-or-pay obligations contained in supply arrangements incurred in the ordinary course of business;
(1420) Indebtedness representing deferred compensation to employees of the Company or any Permitted Acquisition Indebtednessof its Restricted Subsidiaries in the ordinary course of business; and
(1521) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (1521), not to exceed exceed, as of any date of incurrence, the greater of (ix) $75.0 110.0 million and (iiy) 5.05.5% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the such date of incurrence. The Company 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 Company or such incurrence Guarantor unless such Indebtedness will be contractually subordinated in right of payment to the Notes and the applicable Note Guarantee to at least the same extent as such other Indebtedness; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or issuanceby virtue of being secured on a junior priority basis. For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (1521) above, or is entitled to be incurred pursuant to Section 4.09(a)) hereof, the Company will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. , Indebtedness under the Credit Agreement Facilities outstanding on the date on which the Notes are first issued and authenticated under this Supplemental Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionspreferred stock dividends, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock preferred stock or Disqualified Stock in the form of additional securities shares of the same class of Preferred Stock preferred stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock preferred stock or Disqualified Stock for purposes of this Section 4.09; provided provided, in each such case, that the amount thereof shall be is included in Fixed Charges of the Company as accrued accrued. For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be utilized, calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred. Notwithstanding any other provision of this Section 4.09, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to the extent required by the definition this Section 4.09 shall not be deemed to be exceeded solely as a result of such termfluctuations in exchange rates or currency values. The amount of any Indebtedness outstanding as of any date will be:
(a22) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b23) with respect to contingent obligations, the maximum liability upon the occurrences of the contingency giving rise to the obligations;
(24) with respect to Hedging Obligations, the net amount payable, if any, by such Persons of such Hedging Obligations terminated at that time due to default by such Persons
(25) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c26) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1A) the Fair Market Value of such assets at the date of determination; and
(2B) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, to create, incur, issue, assume, Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stock; provided, however, that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stock, if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock is issued, as the case may be, would have been at least 2.25 to 1.01.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuers Company and the Guarantors, any Guarantor 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 the Company and its Restricted Subsidiaries Guarantors thereunder) not to exceed the greater of (ia) $700.0 million 1.3 billion and (iib) $175.0 million plus 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on as of the date of such incurrence;
(2) the incurrence by the Company and its Restricted Subsidiaries of (a) the Existing Indebtedness and (b) any Permitted Acquisition Indebtedness;
(3) the incurrence by the Issuers Company and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture hereof and the Exchange Notes and the related Note GuaranteesGuarantees 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 or purchase money obligationsobligations or other Indebtedness, in each case, incurred for the purpose of financing all or any part of the purchase price price, other acquisition cost or cost of design, construction, installation installation, development, repair or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease defease, discharge or discharge otherwise retire for value, in whole or in part, any Indebtedness incurred pursuant to this clause (4), not to exceed at any time outstanding the greater of (ia) $45.0 50.0 million and (iib) 3.02.5% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceincurrence;
(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, replace, defease defease, discharge or discharge otherwise retire for value, in whole or in part, any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture hereby to be incurred under Section 4.09(a) or clauses (2), (3), (4), (5), (148), (13), (15) or (1516) of this Section 4.09(b);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(Ai) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Guarantor, if such Indebtedness must be is not unsecured and expressly subordinated in right of payment to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor, then the incurrence of such Indebtedness; and
(Bii) (iA) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (iiB) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, will be deemed to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that:
(Aa) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(Bb) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations;
(9) the Guarantee by the Company or any of its Restricted Subsidiaries the Guarantors of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09covenant; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteedguaranteed (or, at the Company’s election, to a greater extent);
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations and other social security or similar legislation, old age pension or public liability obligations, statutory obligations, government contracts, trade contracts, regulatory obligations, leases, utility contracts and similar obligations, bid, plugging and abandonment, appeal, reimbursement, performance, tender, surety and similar bonds and completion guarantees provided by by, or for the account of, the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees Guarantees, contingent reimbursement obligations, bank guarantees or letters of credit functioning as or as, supporting any or issued to assure payment or performance of the foregoing bonds or obligations and workers’ compensation compensation, health, disability or other benefits, unemployment or other insurance claims in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business;
(13) any obligation arising from agreements of the Company or any Restricted Subsidiary of the Company providing for indemnification, contribution, adjustment of purchase price, earn earn-outs, holdbacks, deferred compensation or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Capital Stock of a Restricted Subsidiary in a transaction permitted hereby;
(14) the incurrence by this Indenture; provided that such obligation is not reflected as a liability on the face Company or any of its Restricted Subsidiaries of Indebtedness in respect of the balance sheet financing of insurance premiums with the providers of such insurance or their Affiliates in the ordinary course of business;
(15) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness representing deferred compensation to employees of the Company or any Restricted SubsidiarySubsidiary of the Company incurred in the ordinary course of business (including those incurred in connection with any acquisition);
(14) any Permitted Acquisition Indebtedness; and
(1516) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (1516), not to exceed the greater of (i) $75.0 150.0 million and (ii) 5.04.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance;
(17) the incurrence by the Company or any of its Restricted Subsidiaries of obligations relating to net Hydrocarbon balancing positions arising in the ordinary course of business; and
(18) the incurrence by the Company or any of its Restricted Subsidiaries of liability in respect of Indebtedness of any Unrestricted Subsidiary or any Joint Venture but only if such liability is the result of (a) the Company’s or any such Restricted Subsidiary’s being a general partner or member of, or owner of an Equity Interest in, such Unrestricted Subsidiary or Joint Venture and not as guarantor of such Indebtedness if, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (18)(a) and then outstanding does not exceed $25.0 million, or (b) the pledge of (or a Guarantee limited in recourse solely to) Equity Interests in such Unrestricted Subsidiary or Joint Venture held by the Company or such Restricted Subsidiary to secure Non-Recourse Debt. The Company 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 Company 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 (or, at the Company’s election, to a greater extent); provided, however, that no Indebtedness will be considered contractually subordinated in right of payment to any other Indebtedness solely by virtue of being unsecured, secured with different collateral or to a greater or lesser extent or priority or by virtue of structural subordination, maturity date or being guaranteed by less than all guarantors of such other Indebtedness. For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1Section 4.09(b)(1) through (1518) above, or is entitled to be incurred pursuant to Section 4.09(a), the Company will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09covenant. Indebtedness under the Credit Agreement Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture hereunder will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsdividends, the accretion of principal, accreted value or liquidation preference, the amortization of original issue discount or debt discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same termsIndebtedness, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock, the obligation to pay a premium in respect of Indebtedness or Preferred Stock or Disqualified Stock arising in connection with the issuance of a notice of redemption or the making of a mandatory change of control offer or asset sale offer for such Indebtedness or Preferred Stock or Disqualified Stock, increases in the amount of Indebtedness outstanding solely as a result of fluctuations in exchange rates or currency values, unrealized losses or charges in respect of Hedging Obligations, and the reclassification of Preferred Stock as Indebtedness due to a change in accounting principles, in each case will not be deemed not to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09covenant; provided that the amount thereof shall be is included in Fixed Charges of the Company as accrued to the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Samples: Indenture (Diamondback Energy, Inc.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will Issuer shall not, and will shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”"INCUR") any Indebtedness (including Acquired Debt), and the Company Issuer will not issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any Preferred StockDisqualified Stock or preferred stock; provided, however, that the Issuers may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, Issuer and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred StockDisqualified Stock and the Guarantors may issue preferred stock, if the Fixed Charge Coverage Ratio for the Company’s Issuer's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock preferred stock is issued, as the case may be, issued would have been at least 2.25 2.00 to 1.01, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock preferred stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.09(a4.10(a) will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”"PERMITTED DEBT"):
(1a) the incurrence by the Issuers and the Guarantors, Issuer or any Guarantor of Indebtedness and letters of credit under Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company Issuer and its Restricted Subsidiaries the Guarantors thereunder) not to exceed $1.0 billion and (b) the incurrence by the Issuer or any Guarantor of additional Indebtedness under Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Issuer and the Guarantors thereunder) not to exceed the greater of amount, if any, by which (ix) $700.0 million and (ii) $175.0 million plus 35.0% the amount of the Company’s Adjusted Consolidated Net Tangible Assets determined on Borrowing Base as of the date of such incurrence exceeds (y) the aggregate amount of Indebtedness permitted to be incurred pursuant to the immediately preceding clause (a) as of the date of such incurrence, less, in the case of clause (a), the aggregate amount of all Net Proceeds of Asset Sales, applied by the Issuer or any Guarantor to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13(b)(1) and, in the case of each of clauses (a) and (b), less amounts outstanding under any Qualified Receivables Transactions;
(2) the incurrence by the Company and its Restricted Subsidiaries Issuer or any Guarantors of the Existing Indebtedness;
(3) the incurrence by the Issuers Issuer and the Guarantors its Restricted Subsidiaries of Indebtedness represented by the Notes to be issued on the date of this Indenture and related Note Guarantees, the Exchange Notes and the related Note Guarantees to be issued pursuant to the Registration Rights Agreement; and any Exchange Notes issued by the Issuer in exchange for Additional Notes, if any, issued in compliance with this Indenture and pursuant to a registered exchange offer and the related Note Guarantees;
(4) the incurrence by the Company Issuer or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price price, or cost of designconstruction or improvement, construction, installation of property (real or improvement of propertypersonal), plant or equipment used in the business of the Company Issuer or any of its Restricted Subsidiaries, Subsidiaries (whether through the direct acquisition of such assets or the acquisition of Equity Interests of any Person owning such assets) in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred pursuant to this clause (4), not to exceed exceed, at any time outstanding, the greater of (ix) $45.0 30.0 million and or (iiy) 3.03% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceIssuer;
(5) the incurrence by the Company Issuer or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease refinance or discharge any replace Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was is permitted by this Indenture to be incurred under Section 4.09(a4.10(a) or clauses (2), (3), (4), (5), (1415) or (1516) of this Section 4.09(b4.10(b);
(6) the incurrence by the Company Issuer or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company Issuer and any of its Restricted Subsidiaries; provided, however, that:
(Aa) if the Company Issuer or any Guarantor is the obligor on such Indebtedness, and such Indebtedness and the payee is owed to a Restricted Subsidiary that is not the Company or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the CompanyIssuer, or the Note Guarantee, in the case of a Guarantor; and
(B) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company Issuer or a Restricted Subsidiary of the Company thereof and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company Issuer or a Restricted Subsidiary of the Companythereof, will shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company Issuer or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company Issuer or any of its Restricted Subsidiaries of Hedging ObligationsObligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder;
(9) 8) the Guarantee by the Company Issuer or any of its Restricted Subsidiaries Subsidiary of Indebtedness of the Company Issuer or a Restricted Subsidiary of the Company to the extent Issuer that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.094.10; provided that, in the case of a Guarantee of any Restricted Subsidiary that if is not a Guarantor, such Restricted Subsidiary complies with Section 4.16;
(9) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness being guaranteed is subordinated to or pari passu in the form of additional Indebtedness with the Notessame terms, then and the Guarantee must be subordinated payment of dividends on Disqualified Stock or pari passu, as applicable, to preferred stock in the form of additional shares of the same extent class of Disqualified Stock or preferred stock will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock or preferred stock for purposes of this Section 4.10; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer as the Indebtedness guaranteedaccrued;
(10) the incurrence by the Company or any of its Restricted Issuer's Unrestricted Subsidiaries of Non-Recourse Debt; provided, however, that if any such Indebtedness in respect ceases to be Non-Recourse Debt of self-insurance obligations or bidan Unrestricted Subsidiary, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided such event shall be deemed to constitute an incurrence of Indebtedness by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of businessIssuer that was not permitted by this clause (10);
(11) the incurrence by the Company Issuer or any of its Restricted Subsidiaries of Indebtedness constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including, without limitation, letters of credit in respect of workers' compensation claims or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers' compensation claims or self-insurance; provided, however, that, upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business;
(13) any obligation arising from agreements of the Company Issuer or any such Restricted Subsidiary of the Company providing for indemnification, adjustment of purchase price, earn outs, price or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Capital Stock of the Issuer or a Restricted Subsidiary, other than Guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary in a transaction permitted by this Indenturefor the purpose of financing such acquisition; provided that that:
(a) such obligation Indebtedness is not reflected as a liability on the face of the balance sheet of the Company Issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including noncash proceeds (the fair market value of those noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any of the Issuer's Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any Permitted Acquisition Indebtedness; andof its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) the incurrence by the Company Issuer or any Guarantor of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15), not to exceed the greater of (i) $75.0 million and million;
(ii16) 5.0% the incurrence by the Foreign Restricted Subsidiaries of the Company’s Adjusted Consolidated Net Tangible Assets determined as Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the date Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under clause (1), shall not exceed the maximum amount permitted under clause (1);
(18) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(19) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(20) the incurrence of Indebtedness of the Issuer or issuanceany Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(21) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business. For purposes of determining compliance with this Section 4.094.10, in the event that an item of any proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (1521) above, or is entitled to be incurred pursuant to Section 4.09(a4.10(a), the Company Issuer will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtednessand from time to time may reclassify, in any manner that complies with this Section 4.094.10 at such time. Indebtedness under the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under of this Indenture will initially shall be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributions, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due pursuant to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other Person4.10(b)(1).
Appears in 1 contract
Samples: Indenture (Nortek Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stockpreferred stock, if the Fixed Charge Coverage Ratio for the Company’s 's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock preferred stock is issued, as the case may be, would have been at least 2.25 2.0 to 1.01, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock preferred stock had been issued, as the case may be, and the proceeds thereof applied at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “"Permitted Debt”"):
(1) (a) the incurrence by the Issuers Company and the Guarantors, any Guarantor of additional 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 the Company and its Restricted Subsidiaries thereunder1)(a) not to exceed $85.0 million less the greater aggregate amount of (i) $700.0 million and (ii) $175.0 million plus 35.0% all Net Proceeds of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers and the Guarantors of Indebtedness represented by the Notes to be issued on the date of this Indenture and the related Note Guarantees;
(4) the incurrence Asset Sales applied by the Company or any of its Restricted Subsidiaries of since the Issue Date to permanently repay any term Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (2), (3), (4), (5), (14) or (15) of this Section 4.09(b);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and
(B) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations;
(9) the Guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09Credit Facility; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries amount of Indebtedness in respect of self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business;
(13) any obligation arising from agreements of the Company or any Restricted Subsidiary of the Company 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 Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company or any Restricted Subsidiary;
(14) any Permitted Acquisition Indebtedness; and
(15) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15), not to exceed the greater of (i) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance. For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (15) above, or is entitled to be incurred pursuant to Section 4.09(a), the Company will Credit Facilities in accordance with this clause (1)(a) shall be in addition to any Indebtedness permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under be incurred pursuant to the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date Facilities in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributions, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principleson, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:
accordance with, clauses (a4) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
and (b15) the principal amount of the Indebtedness, in the case of any other Indebtednessbelow; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Samples: Indenture (Stanadyne Corp)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company Parent will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company Parent will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Parent may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors Company and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or and issue Preferred Stockpreferred stock, if the Fixed Charge Coverage Ratio for the CompanyParent’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock preferred stock is issued, as the case may be, would have been at least 2.25 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock preferred stock had been issued, as the case may be, at the beginning of such four-quarter period; provided, however, that the aggregate amount of Indebtedness (including Acquired Debt) and preferred stock that the Parent’s non-Guarantor Restricted Subsidiaries (other than the Company) may incur under this paragraph shall not exceed the greater of (x) $50.0 million and (y) 7.50% of Parent’s Consolidated Tangible Net Worth at any time outstanding; provided, further, that a change in GAAP that results in an obligation of the Parent or any of the Parent’s Restricted Subsidiaries that exists at the time of such change, and is not theretofore classified as Indebtedness, becoming Indebtedness shall not be deemed an incurrence of such Indebtedness.
(b) The provisions of Section 4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuers Company and the GuarantorsGuarantors of additional Indebtedness, of including revolving credit Indebtedness, term loan Indebtedness and letters of credit credit, under one or more Credit Facilities in an Facilities, including, without limitation, the Credit Agreement, provided that immediately after giving pro forma affect to such incurrence (including pro forma application of the net proceeds therefrom), the aggregate principal amount at any one time incurred pursuant to this clause (1) and then outstanding shall not exceed the greater of (x) $300.0 million and (y) 75.0% of the Borrowing Base; provided that in the event that the Company or a Guarantor enters into or increases commitments under a revolving credit facility or a deferred-draw term loan facility for which it elects to incur the Indebtedness under this clause (1) (with letters of credit being deemed to have a principal ), the amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed Borrowing Base will be determined on the greater of (i) $700.0 million and (ii) $175.0 million plus 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined date such revolving credit facility or deferred-draw term loan facility is entered into or on the date of such incurrenceincrease in commitments (assuming that the full amount thereof has been borrowed as of such date), and, if such test is satisfied with respect thereto at such time, any borrowing or reborrowing thereunder will be permitted irrespective of the amount of the Borrowing Base at the time of any borrowing or reborrowing (other than to the extent the Company or a Guarantor utilizes this clause (1) to incur other Indebtedness);
(2) the incurrence by the Company and Parent or any of its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers Company and the Guarantors of Indebtedness represented by the Notes to be issued on the date of this Indenture and the related Note Guarantees;
(4) the incurrence by the Company Parent or any of its Restricted Subsidiaries of Indebtedness represented by (including Acquired Debt, Capital Lease ObligationsObligations (other than Deemed Capitalized Leases), mortgage financings or purchase money obligations), Disqualified Stock and preferred stock, in each case, incurred for the purpose of financing all or any part of the purchase price price, lease or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company Parent or any of its Restricted Subsidiaries, in an aggregate principal amount at any time outstanding, including all Permitted Refinancing Indebtedness Indebtedness, Disqualified Stock and preferred stock incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (4), not to exceed the greater of (ix) $45.0 50.0 million and (iiy) 3.07.50% of the CompanyParent’s Adjusted Consolidated Tangible Net Tangible Assets determined as of the date of such incurrence or issuanceWorth;
(5) the incurrence by the Company Parent or any of the its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clauses (2Sections 4.09(b)(2), (34.09(b)(3), 4.09(b)(5) or 4.09(b)(16) hereof, including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (4including reasonable tender premiums), (5), (14) or (15) of this Section 4.09(b)defeasance costs and fees in connection therewith;
(6) the incurrence by the Company Parent or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company Parent and any of its Restricted Subsidiaries; provided, however, that:
(A) 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 unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and
(B) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company Parent or a Restricted Subsidiary of the Company Parent and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company Parent or a Restricted Subsidiary of the CompanyParent, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company Parent or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the CompanyParent’s Restricted Subsidiaries to the Company Parent or to any of its the Parent’s Restricted Subsidiaries of any Preferred Stockshares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock preferred stock being held by a Person other than the Company Parent or a Restricted Subsidiary of the CompanyParent; and
(B) any sale or other transfer of any such Preferred Stock preferred stock to a Person that is not either the Company Parent or a Restricted Subsidiary of the CompanyParent, will be deemed, in each case, to constitute an issuance of such Preferred Stock preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company Parent or any of its Restricted Subsidiaries of Hedging ObligationsObligations in the ordinary course of business;
(9) the Guarantee guarantee by the Company Parent or any of its Restricted Subsidiaries of Indebtedness of the Company Parent or a Restricted Subsidiary of the Company Parent to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated in right of payment to or pari passu with the Notes, then the Guarantee must be subordinated in right of payment or pari passu, as applicable, to the same extent as the Indebtedness being guaranteed;
(10) the incurrence by the Company Parent or any of its Restricted Subsidiaries of obligations relating to net gas balancing positions;
(11) the incurrence by the Parent or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, insurance premium finance agreements, self-insurance obligations or obligations, bankers’ acceptances, bid, plugging and abandonment, appeal, reimbursement, performance, performance and surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or similar obligations and workers’ compensation claims or in the ordinary course respect of businessawards or judgments not resulting in an Event of Default;
(1112) the incurrence by the Company Parent or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Daysbusiness days or arising in connection with endorsements of instruments for deposit;
(1213) the incurrence by the Company or any Indebtedness, other than in respect of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising borrowed money and incurred in the ordinary course of business;
business (13) any obligation arising from agreements including customer deposits and advance payments received; take-or-pay obligations contained in supply arrangements; and open accounts extended by suppliers on normal trade terms in connection with purchases of goods and services which are not overdue for a period of more than 90 days or, if overdue for more than 90 days, as to which a dispute exists and adequate reserves in conformity with GAAP have been established on the books of the Company Parent or any a Restricted Subsidiary of the Company 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 Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company or any Restricted SubsidiaryParent);
(14) Indebtedness representing deferred compensation to employees of the Parent, the Company or any Permitted Acquisition Indebtedness; andother Restricted Subsidiary of the Parent;
(15) the incurrence by the Company or any of its Restricted Foreign Subsidiaries of additional the Parent of Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstandingoutstanding pursuant to this clause (15) not to exceed $15.0 million (or the equivalent thereof, measured at the time of each incurrence, in the applicable foreign currency), including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15Section 4.09(b)(15), not to exceed the greater of (i) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance. For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (15) above, or is entitled to be incurred pursuant to Section 4.09(a), the Company will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributions, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Samples: Indenture (Forestar Group Inc.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company and any Guarantor may incur Indebtedness (including Acquired Debt) or issue Disqualified StockStock or preferred stock if the Leverage Ratio at the time (the “Calculation Time”) at which such additional Indebtedness is incurred or (if applicable) such Disqualified Stock or preferred stock is issued would have been no greater than 4.25 to 1.00, and the Guarantors may incur Indebtedness determined on a pro forma basis (including Acquired Debta pro forma application of the net proceeds therefrom) or issue Preferred Stock, as if the Fixed Charge Coverage Ratio for additional Indebtedness had been incurred or (if applicable) the Disqualified Stock or preferred stock had been issued at the beginning of the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock is issued, as Calculation Time (the case may be, would have been at least 2.25 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom“Leverage Ratio Test”), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuers and the Guarantors, 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 the Company and its Restricted Subsidiaries thereunder) not to exceed the greater of (i) $700.0 million and (ii) $175.0 million plus 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(32) the incurrence by the Issuers Company and the Guarantors of (a) Indebtedness represented by the Notes to be and the related Note Guarantees issued on the date of this Indenture and (b) Indebtedness represented by the Exchange Notes and the related Note GuaranteesGuarantees to be issued pursuant to the Registration Rights Agreement;
(43) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount outstandingat any time outstanding under this clause (3), including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (43), not to exceed the greater of (i) $45.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of amount outstanding on the date of such incurrence or issuancethis Indenture plus $150.0 million;
(54) 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, replace, defease or discharge any Indebtedness (other than intercompany IndebtednessIndebtedness and, to the extent such Permitted Refinancing Indebtedness would prevent Impsat Colombia from at any time becoming a Guarantor, the Colombia Notes) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clauses (1), (2), (3), (4), (513), (14), (16), (17) or (1518) of this Section 4.09(b);
(65) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and
(B) that (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (65);
(76) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any shares of Qualified Preferred Stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such Preferred Stock preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock preferred stock by such Restricted Subsidiary that was not permitted by this clause (6);
(7)) Indebtedness arising from agreements of the Company or a Restricted Subsidiary of the Company providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred in connection with the disposition of any business, assets or Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition; provided that the maximum aggregate liability in respect of all such Indebtedness will at no time exceed the gross proceeds (including the Fair Market Value of non-cash consideration) actually received by (or held in escrow for later release to) the Company and such Restricted Subsidiary in connection with such disposition;
(8) the incurrence by the Company or any of its Restricted Subsidiaries Subsidiary of Hedging ObligationsObligations in the ordinary course of business and not for speculative purposes;
(9) the Guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the NotesNotes or any Note Guarantee, then the Guarantee must shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations or bidobligations, plugging and abandonmentbankers’ acceptances, appeal, reimbursement, performanceperformance bonds, surety bonds and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by Indebtedness of the Company or any of its Restricted Subsidiaries consisting of in(x) the financing of insurance premiums or (y) take-kind or-pay obligations relating to net oil or natural gas balancing positions arising contained in supply arrangements in the ordinary course of business;
(13) any obligation arising from agreements Acquired Debt of the Company or any Restricted Subsidiary of the Company 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 Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company or any Restricted Subsidiary;
(14) any Permitted Acquisition Indebtedness; and
(15) the incurrence by the Company or any of its Restricted Subsidiaries assumed or acquired in connection with a transaction governed by, and effected in accordance with, Section 5.01 hereof; provided, however, that such Indebtedness was not incurred in connection with, or in contemplation of, such transaction;
(14) Indebtedness of additional Indebtedness a Restricted Subsidiary of the Company incurred and outstanding on or prior to the issuance date on which such Restricted Subsidiary was acquired by the Company (other than Indebtedness incurred in contemplation of, or in connection with, the transaction or series of any Disqualified Stock related transactions pursuant to which such Restricted Subsidiary became a Restricted Subsidiary of the Company) in an aggregate principal amount (or accreted value, as applicable) at any time outstandingoutstanding pursuant to this clause (14), including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (1514), not to exceed $25.0 million;
(15) the greater incurrence by the Company or any Guarantor of additional revolving credit Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (i15) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and the Guarantors thereunder) not to exceed $75.0 million and million;
(ii16) 5.0% the incurrence by the Company or any Guarantor of Indebtedness owing to any Unrestricted Subsidiary in an aggregate principal amount at any time outstanding pursuant to this clause (16), including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million; provided that any Indebtedness outstanding under this clause (16) is not secured by a Lien;
(17) the incurrence by the Company or any Guarantor of any Deeply Subordinated Debt in an aggregate principal amount (or accreted value, as applicable) at any time outstanding pursuant to this clause (17), including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (17), not to exceed $150.0 million; and
(18) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding pursuant to this clause (18), including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (18), not to exceed $35.0 million.
(c) Notwithstanding the foregoing, the counterparty in respect of any Hedging Obligation secured by a Lien entered into by the Company or any of its Restricted Subsidiaries may not be an Affiliate of the Company’s Adjusted Consolidated Net Tangible Assets determined as Company or any such Restricted Subsidiary.
(d) The Company 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 date Company or such Guarantor unless such Indebtedness is also contractually subordinated in right of such incurrence payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company or issuance. any Guarantor solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(e) 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 (1518) aboveof Section 4.09(b) hereof, or is entitled to be incurred pursuant to Section 4.09(a)) hereof, the Company will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsinterest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Disqualified Stock or Disqualified Stock preferred stock in the form of additional securities shares of the same class of Preferred Disqualified Stock or Disqualified Stock preferred stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Disqualified Stock or Disqualified Stock preferred stock for purposes of this Section 4.09; provided provided, in each such case, that the amount thereof shall be of any such accrual, accretion, amortization or payment (other than with respect to Deeply Subordinated Debt) is included in Fixed Charges of the Company as accrued and that any such outstanding additional Indebtedness or Disqualified Stock or preferred stock is counted as Indebtedness for purposes of determining the Leverage Ratio.
(f) With respect to any U.S. dollar-denominated restriction on the extent required by incurrence of Indebtedness, the definition U.S. dollar equivalent principal amount (or accreted value, as applicable) of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term Indebtedness, or first committed, in the case of revolving credit Indebtedness; provided that if such Indebtedness is incurred to renew, refund, refinance, replace, defease or discharge other Indebtedness denominated in a foreign currency, and such renewal, refunding, refinancing, replacement, defeasance or discharge would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date thereof, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount (or accreted value, as applicable) of such term. Indebtedness does not exceed the principal amount (or accreted value, as applicable) of such Indebtedness being renewed, refunded, refinanced, replaced, defeased or discharged.
(g) Notwithstanding any other provision of this Section 4.09, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary of the Company may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in currency exchange rates or currency values.
(h) The amount of any Indebtedness outstanding as of any date will be:
(a1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1A) the Fair Market Value of such assets at the date of determination; and
(2B) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Samples: Indenture (Global Crossing LTD)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company Borrower and the Parent Guarantors will not, and will not permit any of its their Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company Parent Guarantors and the Borrower will not issue any Disqualified Stock and will not permit any of its their Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Borrower and the Parent Guarantors may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors and Specified Foreign Subsidiaries may incur Indebtedness (including Acquired Debt) or issue Preferred Stockpreferred stock, if the Fixed Charge Coverage Ratio for the CompanyNew Pyxus Topco’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 Stock preferred stock is issued, as the case may be, would have been at least 2.25 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock preferred stock had been issued, as the case may be, at the beginning of such four-quarter period.
(ba) The provisions of Section 4.09(a10.03(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1i) the incurrence by any Parent Guarantor, the Issuers and the Guarantors, Borrower or any of their Restricted Subsidiaries of Indebtedness and letters of credit under (A) the Exit Term Loan Credit Facilities Agreement in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunderA) not to exceed the greater of (i) $700.0 million 213,417,750 and (iiB) the Exit Notes Indenture in an aggregate principal amount at any one time outstanding under this clause (B) not to exceed an aggregate amount equal to $175.0 million plus 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence280,843,751 (and any Permitted Refinancing Indebtedness in respect thereof) (collectively, “Permitted Exit Financing Indebtedness”);
(2ii) the incurrence by the Company Parent Guarantors, the Borrower and its their Restricted Subsidiaries of the Existing Indebtedness;
(3iii) Indebtedness created hereunder and under the other Loan Documents;
(iv) the incurrence by any Parent Guarantor, the Issuers and the Guarantors of Indebtedness represented by the Notes to be issued on the date of this Indenture and the related Note Guarantees;
(4) the incurrence by the Company Borrower or any of its their Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of any Parent Guarantor, the Company Borrower or any of its their Restricted Subsidiaries, in an aggregate principal amount outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4)amount, not to exceed the greater of (i) $45.0 21.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceat any time outstanding;
(5v) the incurrence by any Parent Guarantor, the Company Borrower or any of its their Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture Agreement to be incurred under Section 4.09(a10.03(a) hereof or clauses (2ii), (3iii), (4iv), (5), (14v) or (15xvii) of this Section 4.09(b10.03(b);
(6vi) the incurrence by the Company or Borrower, any Parent Guarantor and/or any of its their Restricted Subsidiaries of intercompany Indebtedness between or among the Company and Borrower, any Parent Guarantor and/or any of its their Restricted Subsidiaries; provided, however, that:
(A) if that any such Indebtedness shall be to the Company extent owed by the Borrower or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations or any Guarantee thereof then due with respect to the Noteshereunder, in the case of the Company, Borrower or the Note Guarantee, in the case of a Guarantor, as applicable; and
(B) (i) any subsequent issuance or transfer of Equity Interests provided, that results in any such Indebtedness being held by a intercompany indebtedness incurred under intercompany notes existing on the Closing Date shall be permitted so long as such intercompany notes are so expressly subordinated within 30 days after the Closing Date; provided, further, that if as of any date any Person other than any Parent Guarantor, the Company Borrower or a any of their Restricted Subsidiary of the Company and (ii) any sale Subsidiaries owns or other transfer of holds any such Indebtedness to a Person that is not either Indebtedness, such date shall be deemed the Company or a Restricted Subsidiary date of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by such Parent Guarantor, the Company Borrower or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6vi);
(7vii) the issuance by any of the CompanyParent Guarantors’ or the Borrower’s Restricted Subsidiaries to any Parent Guarantor, to the Company Borrower or to any of its their Restricted Subsidiaries of any Preferred Stockshares of preferred stock; provided, provided however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock preferred stock being held by a Person other than a Parent Guarantor, the Company Borrower or a Restricted Subsidiary of a Parent Guarantor or the CompanyBorrower; and
(B) any sale or other transfer of any such Preferred Stock preferred stock to a Person that is not either a Parent Guarantor, the Company Borrower or a Restricted Subsidiary of a Parent Guarantor or the Company, Borrower; will be deemed, in each case, to constitute an issuance of such Preferred Stock preferred stock by such Restricted Subsidiary that was not permitted by this clause (7vii);
(8) viii) the incurrence by the Company Borrower, any Parent Guarantor or any of its their Restricted Subsidiaries of Hedging ObligationsObligations entered into in order to manage existing or anticipated interest rate, exchange rate or commodity price risks and not for speculative purposes;
(9ix) the incurrence by the Borrower, any Parent Guarantor or any of their Restricted Subsidiaries of Indebtedness owing under documentary or standby letters of credit for the purchase of goods or other merchandise generally;
(a) Indebtedness in respect of OECD accounts receivable financings with recourse against any Parent Guarantor, the Borrower or any of their Restricted Subsidiaries in an aggregate amount not to exceed $50.0 million at any time outstanding and (b) non-OECD accounts receivable financings with recourse against any Parent Guarantor, the Borrower or any of their Restricted Subsidiaries in an aggregate amount not to exceed $50.0 million at any time outstanding;
(xi) the Guarantee by any Parent Guarantor, the Company Borrower or any of its their Restricted Subsidiaries of Indebtedness of any Parent Guarantor, the Company Borrower or a Restricted Subsidiary of any Parent Guarantor or the Company Borrower to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.0910.03; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the NotesLoans, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(10xii) the incurrence by any Parent Guarantor, the Company Borrower or any of its their Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations or bidobligations, plugging bankers’ acceptances, performance and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business;
(11xiii) the incurrence by any Parent Guarantor, the Company Borrower or any of its their Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Daysowing under overdraft facilities in connection with cash management arrangements;
(12xiv) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business;
(13) any obligation arising from agreements of the Company or any Restricted Subsidiary of the Company 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 Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company or any Restricted Subsidiary;
(14) any Permitted Acquisition Indebtedness; and
(15) the incurrence by the Company or any of its Restricted Foreign Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15), outstanding not to exceed the greater of (ia) $75.0 875 million and (b) the sum of (x) 65% of Eligible Inventory, plus (y) 65% of Permitted Advances on Purchases of Tobacco, plus (z) 85% of Eligible Receivables, and any Guarantees of such Indebtedness by the Borrower;
(xv) Guarantees by any Parent Guarantor, the Borrower or any Restricted Subsidiary which are incurred in the ordinary course of business in an aggregate amount not to exceed $250.0 million in the aggregate at any time outstanding;
(xvi) Guarantees by any Parent Guarantor, the Borrower or any Restricted Subsidiary which are incurred in the ordinary course of business for the purpose of carrying unsold tobacco inventories held against Confirmed Orders and other Guarantees by any Parent Guarantor, the Borrower or any Restricted Subsidiary incurred in the ordinary course of business with respect to Uncommitted Inventories in an aggregate amount not to exceed the amount of such Uncommitted Inventories; and
(xvii) the incurrence by the Borrower, any Guarantor or any Specified Foreign Subsidiary of unsecured Indebtedness or Junior Lien Debt in an aggregate principal amount not to exceed $50.0 million at any time outstanding.
(xviii) the incurrence of Indebtedness solely by Restricted Subsidiaries that own no assets or property other than the Specified Business, in an aggregate principal amount not to exceed $50.0 million at any time outstanding plus the aggregate amount of interest on such Indebtedness paid in kind and added to the principal amount thereof; provided, that such Indebtedness (i) shall not be subject to any interest that is payable in cash (and interest in respect of such Indebtedness may only be payable in kind), (ii) 5.0% shall have a final maturity date and a Weighted Average Life to Maturity, in each case, that is at least 91 days after the final maturity date of the Company’s Adjusted Consolidated Net Tangible Assets determined as Loans, (iii) shall not be guaranteed by any Parent Guarantor, the Borrower or any other Restricted Subsidiary other than a Restricted Subsidiary that owns no assets or property other than the Specified Business, (iv) shall be secured solely by equity interests of entities, and any assets of such entities, in each case solely to the extent constituting the Specified Business, and (v) shall have covenants (if any) and events of default that apply solely to the Specified Business; provided, further, that the Parent Guarantors, the Borrower and their Restricted Subsidiaries shall not make any payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness incurred pursuant to this clause (xviii) prior to the stated maturity thereof, except from (x) cash generated by the ordinary course operations of the date Specified Business (which shall not include proceeds from any Investment in the Specified Business by any Parent Guarantor, the Borrower or any Restricted Subsidiary) and (y) proceeds of an Asset Sale of all or a portion of the Specified Business. The Borrower and the Parent Guarantors 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 the Borrower or such incurrence Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the ABL Facility and the Guarantees thereof on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Borrower or issuanceany Guarantor solely by virtue of being unsecured or by virtue of being secured on junior priority basis. For purposes of determining compliance with this Section 4.0910.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1i) through (15xvii) above, or is entitled to be incurred pursuant to Section 4.09(a)10.03(a) hereof, the Company Borrower will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.0910.03. Indebtedness under the Credit Agreement outstanding on the date on which Exit Notes are first issued and authenticated under this Indenture will initially shall be deemed to have been be incurred on such date in reliance on under the exception provided by clause (1i)(B) of the definition of Permitted DebtDebt and may not be reclassified. Indebtedness under the Exit Term Loan Credit Agreement may be incurred solely under clause (i)(A) of the definition of Permitted Debt and may not be reclassified. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionspreferred stock dividends, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock preferred stock or Disqualified Stock in the form of additional securities shares of the same class of Preferred Stock preferred stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock preferred stock or Disqualified Stock for purposes of this Section 4.09covenant; provided provided, in each such case, that the amount thereof shall be of any such accrual, accretion or payment is included in Fixed Charges of the Company Borrower as accrued accrued. For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be utilized, calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred. Notwithstanding any other provision of this Section 10.03, the maximum amount of Indebtedness that any Parent Guarantor, the Borrower or any Restricted Subsidiary may incur pursuant to the extent required by the definition this Section 10.03 shall not be deemed to be exceeded solely as a result of such termfluctuations in exchange rates or currency values. The amount of any Indebtedness outstanding as of any date will be:
(ai) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(bii) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(ciii) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1A) the Fair Market Value of such assets at the date of determination; and
(2B) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Samples: Exit Abl Credit Agreement (Pyxus International, Inc.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will OI Group shall not, and will shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) with respect to any Indebtedness (including Acquired Debt), and the Company will OI Group shall not issue any Disqualified Stock and will OI Group shall not permit any of its Restricted Subsidiaries to issue any Preferred StockDisqualified Stock or preferred stock; provided, however, that the Issuers OI Group and any of its Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or and may issue Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) Stock or issue Preferred Stockpreferred stock, if the Fixed Charge Coverage Ratio for the CompanyOI Group’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 Stock preferred stock is issued, as the case may be, issued would have been at least 2.25 2.00 to 1.01.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred incurred, or the Disqualified Stock or the Preferred Stock preferred stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) . The first paragraph of this Section 4.09(a) will 4.13 shall not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuers and the Guarantors, OI Group or its Restricted Subsidiaries of Indebtedness and letters of credit under Credit Facilities (and the incurrence of Guarantees thereof) in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed $4.5 billion (of which not more than $2.75 billion of such Indebtedness shall be incurred by Restricted Subsidiaries (for the greater avoidance of (i) $700.0 million and (ii) $175.0 million plus 35.0% of doubt, other than the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence) that are not Guarantors);
(2) the incurrence by the Company OI Group and its any Restricted Subsidiaries Subsidiary of OI Group of the Existing Indebtedness;
(3) the incurrence by OI Group, the Issuers Company and the Guarantors of Indebtedness represented by the Notes and the related Guarantees to be issued on the date of this Indenture Issue Date and the Exchange Securities and the related Note GuaranteesGuarantees to be issued pursuant to the Registration Rights Agreement;
(4) the incurrence by the Company OI Group or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceAssets;
(5) the incurrence by OI Group or any of its Restricted Subsidiaries of Indebtedness incurred to finance all or any part of the Company purchase price or cost of construction or improvement of property, plant or equipment used in the business of OI Group or such Restricted Subsidiary, in an aggregate principal amount at any time outstanding, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (5), not to exceed 5.0% of Tangible Assets, as measured after giving effect to such transaction;
(6) provided that so long as no Default shall have occurred or be continuing or would be caused thereby, the incurrence by OI Group or any of its Restricted Subsidiaries of Indebtedness in exchange for, or the proceeds of which are or shall be used to refund, refinance or replace the OI Inc. Senior Notes;
(7) the incurrence by OI Group or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are or shall be used to renew, refund, refinance, replace, defease refinance or discharge any replace Indebtedness (other than intercompany Intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under the first paragraph of this Section 4.09(a) 4.13 or clauses (2), (3), (4), (5), (146) or (157) of this Section 4.09(b)paragraph;
(6) 8) the incurrence by the Company OI Group or any of its Restricted Subsidiaries of intercompany Intercompany Indebtedness between or among the Company OI Group and any of its Restricted SubsidiariesSubsidiaries and with respect to OI Group only, between OI Group and OI Inc.; provided, however, that:
(Aa) if OI Group, the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a GuarantorIndebtedness, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note GuaranteeGuarantees of the Notes, in the case of OI Group or a Guarantor;
(b) any incurrence by OI Group of Intercompany Indebtedness to OI Inc. after the Issue Date shall be in exchange for cash loans or advances from OI Inc. in the ordinary course of business consistent with past practices; and
(B) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company OI Group or a Restricted Subsidiary of the Company thereof and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company OI Group or a Restricted Subsidiary of the Companythereof, will shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company OI Group or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6)8);
(79) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company OI Group or any of its Restricted Subsidiaries of Hedging Obligations;
(910) provided that so long as no Default shall have occurred or be continuing or would be caused thereby, the incurrence by any Foreign Subsidiary of OI Group of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed $300.0 million, in addition to the $2.75 billion of Indebtedness that may be incurred under clause (1) of this paragraph;
(11) (i) the Guarantee by the Company or any of its Restricted Subsidiaries the Guarantors of Indebtedness of the Company OI Group or a any Restricted Subsidiary of OI Group and (ii) the Company to the extent Guarantee by any Foreign Subsidiary of Indebtedness of OI Group or any Restricted Subsidiary of OI Group, in each case, that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days4.13;
(12) the incurrence by accrual of interest, the Company accretion or amortization of original issue discount, the payment of interest on any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising Indebtedness in the ordinary course form of businessadditional 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 shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.13 or an issuance of Disqualified Stock; provided, in each such case, that the amount thereof is included in Fixed Charges of OI Group as accrued;
(13) any obligation arising from agreements of the Company or any Restricted Subsidiary of the Company 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 Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company or any Restricted Subsidiary;
(14) any Permitted Acquisition Indebtedness; and
(15) the incurrence by the Company OI Group or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (1513), not to exceed $300.0 million;
(14) Indebtedness arising from agreements of OI Group or a Restricted Subsidiary of OI Group providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the greater disposition of any business, assets or a Subsidiary, other than Guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, however, that (i) $75.0 million such Indebtedness is not reflected on the balance sheet of OI Group or any such Restricted Subsidiary of OI Group (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet shall not be deemed to be reflected on such balance sheet for purposes of this clause (i)) and (ii) the maximum assumable liability in respect of all such Indebtedness that is permitted to be incurred pursuant to this clause (14) shall at no time exceed the gross proceeds including noncash proceeds (the Fair Market Value of such noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by OI Group and its Restricted Subsidiaries in connection with such disposition;
(15) the incurrence by OI Group or any of its Restricted Subsidiaries of Indebtedness incurred or deemed incurred or cash consideration received from the sale of accounts receivable by OI Group or any of its Restricted Subsidiaries or a special purpose vehicle established by any of them to purchase and sell such receivables;
(16) obligations in respect of performance and surety bonds and completion guarantees provided by OI Group or any of its Restricted Subsidiaries in the ordinary course of business;
(17) Indebtedness incurred by OI Group or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including without limitation letters of credit in respect of workers’ compensation claims, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence; and
(18) the incurrence by OI Group or any of its Restricted Subsidiaries of Acquired Debt, in an aggregate principal amount at any time outstanding, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (18), not to exceed 5.0% of Tangible Assets, as measured after giving effect to the Company’s Adjusted Consolidated Net Tangible Assets determined as transaction for which the Acquired Debt was incurred. The Company shall not incur any Indebtedness (including Permitted Debt) after the Issue Date that is contractually subordinated in right of payment to any other Indebtedness of the Company unless such Indebtedness is also contractually subordinated in right of payment to the Notes on substantially similar terms; provided, however, that no Indebtedness of the Company shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured. OI Group shall not, and shall not permit any Guarantor to, incur any Indebtedness (including Permitted Debt) after the date of this Indenture that is contractually subordinated in right of payment to any other Indebtedness of OI Group or the Guarantors, as the case may be, unless such incurrence Indebtedness is also contractually subordinated in right of payment to the obligations under the Notes or issuanceGuarantees of the Notes on substantially similar terms; provided, however, that no Indebtedness of OI Group or the Guarantors shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of OI Group or the Guarantors solely by virtue of being unsecured. For purposes of determining compliance with this Section 4.094.13, in the event that an item of any proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (1518) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.09(a)4.13, the Company will shall be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrenceincurrence in any manner that complies with this Section 4.13, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under the Credit Agreement Facilities outstanding on the date Issue Date on which Notes are first issued and authenticated under this Indenture will initially shall be deemed to have been incurred on such date in reliance on the exception provided by clause clauses (1) or (2) of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributions, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other PersonDebt above.
Appears in 1 contract
Samples: Indenture (Owens Illinois Group Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company Xxxxxxx will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) Incur any Indebtedness (including Acquired Debt), and the Company Issuer and Xxxxxxx will not issue any preferred stock or Disqualified Stock Stock, respectively, and Xxxxxxx will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Xxxxxxx may incur Incur Indebtedness (including Acquired Debt) or issue preferred stock or Disqualified Stock, and the Issuer and the Subsidiary Guarantors may incur Incur Indebtedness (including Acquired Debt) or issue Preferred preferred stock or Disqualified Stock, if the Fixed Charge Coverage Ratio for the Company’s Xxxxxxx’x most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred Incurred or such Disqualified Stock or such Preferred Stock preferred stock is issued, as the case may be, issued would have been at least 2.25 2.5 to 1.01, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred Incurred or the preferred stock or Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Paragraph (a) of this Section 4.09(a) 4.09 will not prohibit the incurrence Incurrence of any Indebtedness by the Issuer or any of the following items Guarantors under or in respect of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuers and the Guarantors, 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 and letters of guarantee being deemed to have a principal amount equal to the maximum potential liability of the Company Xxxxxxx and its Restricted Subsidiaries thereunder) not to exceed the greater of:
(A) Cdn$300 million, less the aggregate amount of all Net Proceeds of Asset Sales that have been applied by Xxxxxxx or any of its Restricted Subsidiaries since the Issue Date to permanently repay any term Indebtedness under a Credit Facility pursuant to Section 4.10 hereof and less the aggregate amount of all commitment reductions with respect to any revolving credit borrowings under a Credit Facility that have been made by Xxxxxxx or any of its Restricted Subsidiaries since the Issue Date as a result of the application of Net Proceeds of Asset Sales pursuant to Section 4.10 hereof; and
(iB) $700.0 million and (ii) $175.0 Cdn$150 million plus 35.030% of the Company’s Adjusted Consolidated Net Tangible Assets determined on as of the last day of the fiscal quarter for which internal financial statements are available immediately preceding the date of on which such incurrenceIndebtedness is Incurred;
(2) the incurrence by the Company and its Restricted Subsidiaries Existing Indebtedness (other than Indebtedness described under clause (1), (3) or (6) of the Existing Indebtednessthis Section 4.09(b));
(3) the incurrence by the Issuers Notes and the Guarantors of Indebtedness represented by the Notes related Guarantees to be issued on the date of this Indenture and the related Note GuaranteesIssue Date;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred Incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation construction or improvement of property, plant or equipment used in the business of the Company Issuer or any of its Restricted Subsidiariessuch Guarantor, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred Incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred Incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 US$25.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceat any time outstanding;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease refinance or discharge any replace Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred Incurred under Section 4.09(a) or clauses (2), (3), (4), (5), (14) or (1513) of this Section 4.09(b);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company Xxxxxxx and any of its Restricted Subsidiaries, including the intercompany Indebtedness referred to in the last sentence of the definition of “Existing Indebtedness”; provided, however, that:
(A) if the Company Issuer or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a GuarantorIndebtedness, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the CompanyIssuer, or the Note Guarantee, in the case of a Guarantor; and
(B) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company Xxxxxxx or a Restricted Subsidiary of the Company Xxxxxxx and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company Xxxxxxx or a Restricted Subsidiary of the CompanyXxxxxxx, will xxxx be deemed, in each case, to constitute an incurrence Incurrence of such Indebtedness by the Company Xxxxxxx or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) Hedging Obligations, provided that such Hedging Obligations were Incurred in the issuance by any ordinary course of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is business and not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7)for speculative purposes;
(8) the incurrence guarantee by the Company Issuer or any of its Restricted Subsidiaries of Hedging Obligations;
(9) the Guarantee by the Company or any of its Restricted Subsidiaries Guarantors of Indebtedness of Xxxxxxx or the Company Issuer or a another Restricted Subsidiary of the Company to the extent Xxxxxxx that the guaranteed Indebtedness was permitted to be incurred Incurred by another provision of this Section 4.09; provided that if ;
(9) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness being guaranteed is subordinated to or pari passu in the form of additional Indebtedness with the Notessame terms, then and the Guarantee must be subordinated or pari passu, as applicable, to payment of dividends on Disqualified Stock in the form of additional shares of the same extent 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 Fixed Charges of Xxxxxxx as the Indebtedness guaranteedaccrued;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations or bidand Obligations under Oil and Gas Hedging Contracts, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary that such Contracts were entered into in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of businessnot for speculative purposes;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions production imbalances arising in the ordinary course of business;
(1312) any obligation arising from agreements standby letters of the Company credit, guarantees, performance or any Restricted Subsidiary of the Company providing for indemnification, adjustment of purchase price, earn outs, surety bond or similar other reimbursement obligations, in each case, incurred or assumed issued in the ordinary course of business and not in connection with the disposition borrowing of money or acquisition the obtaining of any businessan advance or credit (other than advances or credit for goods and services in the ordinary course of business and on terms and conditions that are customary in the Oil and Gas Business, assets and other than the extension of credit represented by such letter of credit, guarantee or Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company performance or any Restricted Subsidiarysurety bond itself);
(1413) any Permitted Acquisition Indebtedness; and
(15) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred Incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred or Disqualified Stock issued Incurred pursuant to this clause (1513), not to exceed US$30.0 million;
(14) Indebtedness of Xxxxxxx or the greater Issuer to the extent that the net proceeds thereof are promptly (A) used to purchase Notes tendered in a Change of Control Offer or (iB) $75.0 million deposited to defease or to satisfy and discharge the Notes; and
(ii15) 5.0% Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the Company’s Adjusted Consolidated Net Tangible Assets determined ordinary course of business; provided, however, that such Indebtedness is extinguished within five Business Days after receipt of notice of its Incurrence by the Issuer or Guarantor, as of the date of such incurrence or issuanceapplicable. 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 (15) above, or is entitled to be incurred Incurred pursuant to Section 4.09(a), Xxxxxxx or the Company applicable Restricted Subsidiary will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, in whole or later redivide or reclassify all or a portion of such item of Indebtedness, in part in any manner that complies with the applicable part of this Section 4.09, including by allocation to more than one other type of Indebtedness. In addition, any Indebtedness originally classified as Incurred pursuant to clauses (1) through (15) above may later be reclassified by the Issuer such that it will be deemed as having been Incurred pursuant to another of such clauses to the extent that such reclassified Indebtedness could be Incurred pursuant to such new clause at the time of such reclassification. Notwithstanding the foregoing, Indebtedness under the Credit Agreement Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture Issue Date will initially be deemed to have been incurred Incurred on such date in reliance on the exception provided by clause (1) of the definition this Section 4.09(b). Notwithstanding any other provision of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsthis Section 4.09, the accretion or amortization maximum amount of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due that may be Incurred pursuant to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock this Section 4.09 will not be deemed to be an incurrence of exceeded with respect to any outstanding Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued due solely to the extent required by the definition result of such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, fluctuations in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other Personcurrency exchange rates.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will Parent shall not, and will shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), ) and that the Company Parent's Restricted Subsidiaries will not issue any Disqualified Stock and will not permit any shares of its preferred stock (other than to the Parent or a Wholly Owned Restricted Subsidiaries to issue any Preferred Stock; providedSubsidiary of the Parent), however, provided that the Issuers may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, Parent and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stock, if the Fixed Charge Consolidated Interest Coverage Ratio for the Company’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 Stock is issued, as the case may be, would have been at least 2.25 2.0 to 1.01, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.09(a) . The provisions of the first paragraph of this covenant will not prohibit apply to the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “"Permitted Debt”"):
(1i) the incurrence by the Issuers Parent and the Guarantors, Guarantors of Indebtedness under (a) this Agreement and letters (b) Capital Lease Obligations and purchase money financing in respect of credit under Credit Facilities in an property, plant and equipment, provided that the aggregate principal amount at any one time outstanding under of Indebtedness incurred pursuant to this clause (1i) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) shall not to exceed at any time outstanding the greater of (i1) $700.0 230.0 million and (ii2) $175.0 million plus 35.0the sum of (A) 80% of the Company’s Adjusted Consolidated Net Tangible Assets determined consolidated accounts receivable of the Parent as shown on the date Parent's most recent balance sheet, plus (B) 60% of such incurrencethe consolidated inventory of the Parent as shown on the Parent's most recent balance sheet, plus (C) 50% of the consolidated property, plant and equipment, net of depreciation, of the Parent as shown on the Parent's most recent balance sheet;
(2ii) the incurrence by the Company Parent and the Subsidiary Guarantors of Indebtedness represented by the Senior Notes, the Subsidiary Guarantees and the Indenture;
(iii) the incurrence by the Parent and its Restricted Subsidiaries of the Existing Indebtedness;
(3iv) the incurrence by the Issuers Parent and the Guarantors of additional Indebtedness in an aggregate amount not to exceed $10.0 million at any time outstanding;
(v) the incurrence by the Parent and the Guarantors of Indebtedness represented in connection with the acquisition of assets or a new Restricted Subsidiary, provided that such Indebtedness was incurred by the Notes prior owner of such assets or such Restricted Subsidiary prior to be issued on such acquisition by the date of this Indenture Parent and the related Note Guarantees;
(4) the incurrence Guarantors and was not incurred in connection with, or in contemplation of, such acquisition by the Company or any Parent and the Guarantors, and provided further that the aggregate amount of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), v) does not to exceed the greater of (i) $45.0 5.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceat any time outstanding;
(5vi) the incurrence by the Company or any of Parent and its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinancerefinance or replace Indebtedness that was permitted to be incurred by the first paragraph, replace, defease or discharge any Indebtedness by clauses (other than intercompany Indebtednessii) through (ix) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (2), (3), (4), (5), (14) or (15) second paragraph of this Section 4.09(b)1.7;
(6vii) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company Parent and any of its Restricted Subsidiaries; provided, however, that:
(A) 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 unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and
(B) (i) provided that any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company Parent or a Restricted Subsidiary of the Company Subsidiary, and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company Parent or a Restricted Subsidiary of the CompanySubsidiary, will shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company Parent or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7viii) the issuance incurrence by any of the Company’s Restricted Subsidiaries to the Company or to any of Parent and its Restricted Subsidiaries of Hedging Obligations that are incurred for the purpose of fixing or hedging (a) interest rate risk with respect to any Preferred Stock; provided, however, that:Indebtedness that is permitted by the terms of this Section 1.7 to be outstanding or (b) foreign currency risk;
(Aix) any subsequent issuance or transfer the incurrence of Equity Interests that results in any such Preferred Stock being held Indebtedness by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such Preferred Stock to a Person Parent that is not either a Guarantor in an aggregate amount not to exceed the Company or a Restricted Subsidiary sum of (a) 80% of the Company, will be deemed, in each case, to constitute an issuance accounts receivable of such Preferred Stock by Subsidiary as shown on such Restricted Subsidiary's most recent balance sheet, plus (b) 60% of the inventory of such Subsidiary that was not permitted by this clause as shown on such Subsidiary's most recent balance sheet, plus (7)c) 50% of the property, plant and equipment, net of depreciation, of such Subsidiary as shown on such Subsidiary's most recent balance sheet;
(8) x) the incurrence guarantee by the Company Parent or any of its Restricted Subsidiaries of Hedging Obligations;
(9) the Guarantee by the Company or any of its Restricted Subsidiaries Guarantor of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.091.7; provided and
(xi) Indebtedness of a Receivables Subsidiary that if is not recourse to the Parent or any of its Restricted Subsidiaries (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction. For purposes of determining the amount of any Indebtedness of any Person under this Section 1.7, (a) there shall be no double counting of direct obligations, guarantees and reimbursement obligations for letters of credit; (b) the principal amount of any Indebtedness of such Person arising by reason of such Person having granted or assumed a Lien on its property to secure Indebtedness of another Person shall be the lower of the fair market value of such property and the principal amount of such Indebtedness outstanding (or committed to be advanced) at the time of determination; (c) the amount of any Indebtedness of such Person arising by reason of such Person having guaranteed Indebtedness of another Person where the amount of such guarantee is limited to an amount less than the principal amount of the Indebtedness being so guaranteed is subordinated to or pari passu with the Notes, then the Guarantee must shall be subordinated or pari passu, such amount as applicable, to the same extent as the so limited; (d) Indebtedness guaranteed;
(10) the incurrence shall not include a nonrecourse pledge by the Company Parent or any of its Restricted Subsidiaries of Indebtedness Investments in respect of self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or any Person that is not a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business;
(13) any obligation arising from agreements of the Company or any Restricted Subsidiary of the Company providing for indemnification, adjustment Parent to secure the Indebtedness of purchase price, earn outs, or similar obligations, in each case, incurred or assumed in connection with such Person; and (e) Indebtedness of the disposition or acquisition of any business, assets or Capital Stock Parent and its Restricted Subsidiaries shall not include Indebtedness of a Restricted Subsidiary whose assets consist solely of partnership or similar interests in a transaction permitted by this Indenture; provided another person that such obligation is not reflected a Restricted Subsidiary of the Parent, where the obligations with respect to such Indebtedness arise as a liability on matter of law from the face of the balance sheet of the Company or any Restricted Subsidiary;
(14) any Permitted Acquisition Indebtedness; and
(15) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15), not to exceed the greater of (i) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date obligations of such incurrence or issuanceother Person. For purposes of determining compliance with this Section 4.091.7, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1i) through (15x) above, above or is entitled to be incurred pursuant to the first paragraph of this Section 4.09(a)1.7, the Company will be permitted to divideParent shall, in its sole discretion, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. 1.7 and such item of Indebtedness under the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have treated as having been incurred on pursuant to only one of such date in reliance on clauses or pursuant to the exception provided by clause (1) first paragraph hereof. Accrual of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsinterest, the accretion or amortization of original issue discount, accredit value and the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other Person1.7.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stockpreferred stock, if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock preferred stock is issued, as the case may be, would have been at least 2.25 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock preferred stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a4.08(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuers Company and the Guarantors, any Guarantor of (a) additional Indebtedness and letters of credit under Credit Facilities and (b) additional Indebtedness arising pursuant to royalty financing payments, customer deposits or advance payments (including pursuant to any factoring arrangements) in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed exceed, at any time outstanding, the greater of (ix) $700.0 US$25.0 million and (iiy) $175.0 million plus 35.07.5% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrenceAssets;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers Company and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and the related Note GuaranteesIssue Date;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed exceed, at any time outstanding, the greater of (ix) $45.0 US$7.5 million and (iiy) 3.02.25% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceAssets;
(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, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a4.08(a) hereof or clauses (2) (other than the Existing Financing Agreements), (3), (4), ) (5), (14) or (1510) of this Section 4.09(b4.08(b);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and
(B) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stockshares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; andor
(B) any sale or other transfer of any such Preferred Stock preferred stock to a Person that is not either neither the Company or nor a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging ObligationsObligations in the ordinary course of business;
(9) the Guarantee guarantee by the Company or any of its Restricted Subsidiaries the Guarantors of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.094.08; provided provided, that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(10) Indebtedness of the Company or any of its Restricted Subsidiaries constituting Acquired Debt; provided, that such Acquired Debt is not incurred in contemplation of the related acquisition or merger; provided, further, that, after giving effect to such acquisition and the incurrence of Indebtedness, either (i) the Company would be permitted to incur at least US$1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.08(a) or (ii) the Company would have had a Fixed Charge Coverage Ratio not less than the actual Fixed Charge Coverage Ratio for the Company pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.08(a);
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of (A) workers’ compensation claims, health, disability or other employee benefits, self-insurance obligations, bankers’ acceptances, performance and surety bonds in the ordinary course of business, (B) performance bonds, bank guarantees or similar obligations for or bidin connection with pledges, plugging and abandonmentdeposits or payments made or given in relation to such performance bonds, appeal, reimbursement, performance, surety and bank guarantees or similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary instruments in the ordinary course of business in connection with or to secure statutory, regulatory or similar obligations, including obligations under mining, health, safety, affected local community or aboriginal people’s benefits, reclamation, mine closure or other environmental obligations or in relation to infrastructure arrangements owned or provided to or applied for by the Company or any of its Restricted Subsidiaries and any Guarantees or (C) letters of credit functioning as issued or supporting any incurred to support the purchase of the foregoing bonds or obligations supplies and workers’ compensation claims equipment, including fuel, in the ordinary course of businessbusiness of the Company and its Restricted Subsidiaries;
(1112) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Daysbusiness days;
(1213) Indebtedness arising from agreements of the Company or any Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred in connection with any acquisition or disposition of any business, assets or a Subsidiary of the Company in accordance with the terms of this Indenture, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition; provided, that the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds actually received by the Company and its Restricted Subsidiaries in connection with such disposition;
(14) the incurrence by the Company or any of its Restricted Subsidiaries of inobligations consisting of take-kind or-pay obligations relating to net oil or natural gas balancing positions arising contained in supply arrangements incurred in the ordinary course of businessbusiness (other than in connection with the types of obligations described in Section 4.08(b)(1)(b) hereof);
(1315) any obligation arising from agreements Indebtedness of the Company or any of its Restricted Subsidiary of the Company 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 Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company or any Restricted Subsidiary;
(14) Subsidiaries arising pursuant to any Permitted Acquisition IndebtednessTax Reorganization; and
(1516) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (1516), not to exceed the greater of (ix) $75.0 US$15.0 million and (iiy) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as Assets.
(c) The Company 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 date Company 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, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company or such incurrence Guarantor solely by virtue of being unsecured, by virtue of being secured on a junior priority basis or issuanceby virtue of the fact that the holders of any secured Indebtedness have entered into intercreditor agreements giving one or more such holders priority over the other holders in the collateral held by them. The Company will not incur, and will not permit any Restricted Subsidiary of the Company to incur, any Indebtedness arising pursuant to streaming transaction payments (excluding, for the avoidance of doubt, obligations or payments pursuant to the Glencore Agreement).
(d) For purposes of determining compliance with this Section 4.094.08, in the event that an item of Indebtedness meets the criteria of more than one of the categories clauses of Permitted Debt described in clauses (1) through (1516) aboveof Section 4.08(b), or is entitled to be incurred pursuant to Section 4.09(a4.08(a), the Company will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt4.08. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionspreferred stock dividends, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock preferred stock or Disqualified Stock operating leases as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock preferred stock or Disqualified Stock in the form of additional securities shares of the same class of Preferred Stock preferred stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock preferred stock or Disqualified Stock for purposes of this Section 4.094.08; provided provided, in each such case, that the amount thereof shall be is included in Fixed Charges of the Company as accrued accrued. For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be utilized, calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred. Notwithstanding any other provision of this Section 4.08, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to the extent required by the definition this Section 4.08 shall not be deemed to be exceeded solely as a result of such term. fluctuations in exchange rates or currency values.
(e) The amount of any Indebtedness outstanding as of any date will be:
(a1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1A) the Fair Market Value of such assets at the date of determination; and
(2B) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Samples: Indenture
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company Issuer will not, and will not permit any of its Restricted Subsidiaries (other than, so long as any GCUK Notes are outstanding, GCUK Telecom and its Subsidiaries) to, directly or indirectly, create, incur, issue, assume, Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) Incur any Indebtedness (including Acquired Debt), ) and the Company Issuer will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries (other than, so long as any GCUK Notes are outstanding, GCUK Telecom and its Subsidiaries) to issue any Preferred Stock; provided, however, that the Issuers may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) or issue shares of Preferred Stock, if provided that 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 such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock is issuedIssuer may Incur Indebtedness, as the case may be, would have been at least 2.25 to 1.0, determined on a pro forma basis and any other Credit Party (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 Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuers and the Guarantors, 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 the Company and its Restricted Subsidiaries thereunder) not to exceed the greater of (i) $700.0 million and (ii) $175.0 million plus 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers and the Guarantors of Indebtedness represented by the Notes to be issued on the date of this Indenture and the related Note Guarantees;
(4) the incurrence by the Company other than GCUK or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease ObligationsSubsidiaries) may Incur Indebtedness, mortgage financings or purchase money obligations, in each case, incurred at any time after the date upon which at least one complete fiscal quarter has elapsed subsequent to the Issue Date for the purpose of financing all or any part which financial statements of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of Issuer are available if:
(i) $45.0 million and (ii) 3.0% of the CompanyIssuer’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used Leverage Ratio is less than 3.00 to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (2), (3), (4), (5), (14) or (15) of this Section 4.09(b);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor1; and
(Bii) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that:
(A) any subsequent issuance or transfer expressly subordinated in right of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations;
(9) the Guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary of the Company payment to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to Issuer’s or pari passu with the Notes, then the Guarantee must be subordinated or pari passusuch other Credit Party’s, as applicable, obligations under this Indenture, (B) does not require or permit payment of principal thereon prior to the same extent as date that is 91 days after the Indebtedness guaranteed;
(10) the incurrence by the Company or any Stated Maturity of its Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business;
(13) any obligation arising from agreements of the Company or any Restricted Subsidiary of the Company 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 Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company or any Restricted Subsidiary;
(14) any Permitted Acquisition Indebtedness; and
(15) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15), not to exceed the greater of (i) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance. For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (15) above, or is entitled to be incurred pursuant to Section 4.09(a), the Company will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributions, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the IndebtednessNotes, (C) may not at the option of the holder thereof be required to be repurchased, redeemed, retired, repaid, prepaid or called prior to the date 91 days after the date on which the Notes mature and (D) is not convertible or exchangeable into any security or instrument that does not comply with the restrictions in the case of foregoing sub-clauses (A), (B) and (C); provided that this clause (ii) shall not prohibit the Issuer or any other Indebtedness; and
Credit Party from Incurring Indebtedness with change of control repurchase, redemption or prepayment provisions similar to those contained in Section 4.15 hereof with respect to any Indebtedness otherwise permitted hereunder (cit being understood that no subordinated Indebtedness may be repurchased, redeemed or prepaid prior to the Change of Control Payment Date referred to in paragraph (a) in respect of Indebtedness of another Person secured Section 4.15 hereof, except as otherwise permitted by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other Personthis Indenture).
Appears in 1 contract
Samples: Indenture (Global Crossing LTD)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will shall not, and will shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), and the Company will shall not issue any Disqualified Stock and will shall not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that that, if no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof, the Issuers Company and any of its Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or the Company may issue Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stock, Stock if the Fixed Charge Coverage Ratio for the Company’s 's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock is issued, as the case may be, issued would have been at least 2.25 2.0 to 1.01, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.. The first paragraph of this Section 4.09 shall not prohibit:
(b) Section 4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1i) the incurrence by the Issuers and the Guarantors, Company or any of its Restricted Subsidiaries of additional Indebtedness and letters of credit under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1i) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed $370 million less the greater sum of (i) $700.0 million and (ii) $175.0 million plus 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of all permanent principal payments with respect to such incurrenceIndebtedness in accordance with Section 4.10;
(2ii) the incurrence by the Company and its Restricted Subsidiaries of (a) Existing Indebtedness (other than the Existing Indebtedness2008 Notes) and (b) the 2008 Notes;
(3iii) the incurrence by the Issuers and the Guarantors Company of Indebtedness represented by the Notes to be issued on the date of this Indenture (other than Additional Notes) and the related Note GuaranteesExchange Notes issued in exchange therefor and any Subsidiary Guarantees of the foregoing;
(4iv) the incurrence by the Company Company, Cinemark USA, Inc. or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose respect of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceCapitalized Leases;
(5v) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease refinance or discharge any replace Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under the first paragraph of this Section 4.09(a) or clauses (2ii)(a), (3iii), (4), (5), (14iv) or (15v) of this Section 4.09(b)paragraph;
(6vi) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(Aa) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a GuarantorIndebtedness, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Subsidiary Guarantee, in the case of a Guarantor; and
(B) (i1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (ii2) any sale or other transfer of any such Indebtedness to a Person that is not either neither the Company or a Restricted Subsidiary of the Company, will Company shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6vi);
(7vii) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company Company, Cinemark USA, Inc. or any of its Restricted Subsidiaries of Hedging Obligations;
(9viii) the Guarantee by the Company or any a Restricted Subsidiary of its Restricted Subsidiaries the Company of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09Section; provided that if in the event such Indebtedness that is being guaranteed is subordinated to or (a) pari passu with the NotesNotes or a Subsidiary Guarantee, as the case may be, then the related Guarantee must shall rank equally in right of payment to the Notes or Subsidiary Guarantee, as the case may be, or (b) subordinated to the Notes or a Subsidiary Guarantee, as the case may be, then the related Guarantee shall be subordinated in right of payment to the Notes or pari passusuch Subsidiary Guarantee, as applicable, to the same extent as the Indebtedness guaranteedcase may be;
(10ix) 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 shall not be deemed to be an incurrence by of Indebtedness or an issuance of Disqualified Stock for purposes of this Section; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company or any as accrued;
(x) Indebtedness arising from agreements of its Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earn-out or other similar obligations, in each case, incurred or assumed in connection with the ordinary course disposition of business any business, assets or a Restricted Subsidiary, other than Guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Restricted Subsidiary for the purpose of financing such acquisition; provided that the maximum aggregate liability in respect of all such Indebtedness shall at no time exceed the gross proceeds actually received by the Company and any Guarantees its Restricted Subsidiaries in connection with such disposition;
(xi) Indebtedness supported by one or more letters of credit functioning as or supporting incurred under a Credit Facility in accordance with and pursuant to clause (i); provided the amount of Indebtedness permitted to be incurred under this clause (xi) relating to any such letter of credit shall not exceed the amount of the foregoing bonds letter of credit provided for therein; provided, further, that, upon any reduction, cancellation or obligations and workers’ compensation claims termination of the applicable letter of credit, there shall be deemed to be an incurrence of Indebtedness under this Indenture equal to the excess of the amount of such Indebtedness outstanding immediately after such reduction, cancellation or termination over the remaining stated amount, if any, of such letter of credit or the stated amount of any letter of credit issued in the ordinary course replacement of businesssuch letter of credit;
(11xii) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising funds in the ordinary course of business; provided, however, that such Indebtedness is extinguished within ten Business Days of incurrence;
(13xiii) any obligation arising from agreements Indebtedness represented by property, liability and workers' compensation insurance, performance bonds (which may be in the form of letters of credit) for construction contracts let by the Company and its Restricted Subsidiaries in the ordinary course of business (provided that to the extent that such performance bonds secure Indebtedness, such Indebtedness is otherwise permitted under this Section), surety bonds and appeal bonds (which, in each case, may be in the form of letters of credit) required in the ordinary course of business or in connection with the enforcement of rights or claims of the Company or any Restricted Subsidiary of the Company 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 Capital Stock of a Restricted Subsidiary judgments that do not result in a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face Default or an Event of the balance sheet of the Company or any Restricted Subsidiary;
(14) any Permitted Acquisition IndebtednessDefault; and
(15xiv) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15), outstanding not to exceed $25.0 million. Neither the greater of (i) $75.0 million and (ii) 5.0% Company nor any Restricted Subsidiary shall incur any Indebtedness under the preceding paragraph if the proceeds thereof are used, directly or indirectly, to refinance any Indebtedness subordinated to the Notes or any Subsidiary Guarantee unless such Indebtedness shall be subordinated to the Notes or such Subsidiary Guarantee to at least the same extent as such subordinated Indebtedness. No Restricted Subsidiary of the Company’s Adjusted Consolidated Net Tangible Assets determined as Company that is not a Guarantor may incur any Indebtedness if the proceeds are used to refinance Indebtedness of the date Company (other than a refinancing of such incurrence or issuanceall the Notes). For purposes of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness (including Acquired Debt) meets the criteria of more than one of the categories of Permitted Debt described in clauses (1i) through (15xiv) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.09(a)4.09, the Company will shall be permitted to divide, classify and (or later classify or reclassify in whole or in part in its sole discretion) such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under Notwithstanding any other provision of this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsSection, the accretion maximum amount of Indebtedness that the Company or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due Restricted Subsidiary may incur pursuant to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock will this Section shall not be deemed to be an incurrence exceeded solely as a result of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, fluctuations in the case exchange rate of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other Personcurrencies.
Appears in 1 contract
Samples: Indenture (Cinemark Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any "incur")any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company or any Guarantor may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors any Guarantor may incur Indebtedness (including Acquired Debt) or issue Preferred Stockpreferred stock, if the Fixed Charge Coverage Ratio for the Company’s 's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock preferred stock is issued, as the case may be, issued would have been at least 2.25 2.0 to 1.01, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the preferred stock or Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “"Permitted Debt”):"): 57
(1) the incurrence by the Issuers and the Guarantors, Company or any Guarantor of Indebtedness and letters of credit under Credit Facilities Facilities, in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries the Guarantors thereunder) not to exceed $550.0 million, less the greater aggregate amount of (i) $700.0 million and (ii) $175.0 million plus 35.0% all Net Proceeds of Asset Sales applied by the Company’s Adjusted Consolidated Net Tangible Assets determined on Company or any of its Restricted Subsidiaries since the date of such incurrencethis Indenture to repay term Indebtedness under a Credit Facility or to repay revolving credit Indebtedness and effect a corresponding commitment reduction thereunder, in each case, pursuant to Section 4.10 hereof;
(2) the incurrence by the Company and its Restricted Subsidiaries the Guarantors of the Existing Indebtedness;
(3) the incurrence by the Issuers and the Guarantors Company of Indebtedness represented by the Initial Notes to be issued on the date of this Indenture and the related Note GuaranteesExchange Notes;
(4) the incurrence by the Company of the Senior Term Loan;
(5) the incurrence by the Company or any of its Restricted Subsidiaries Guarantor of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligationsobligations (including borrowings under a Credit Facility) or Acquired Debt, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation development, maintenance, upgrade or improvement of property, plant plant, equipment or equipment assets (in each case whether through the direct purchase of assets or through the purchase of Capital Stock of the Person owning such assets) used in the business of the Company or any of its Restricted Subsidiariessuch Guarantor, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange forexceed, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (2), (3), (4), (5), (14) or (15) of this Section 4.09(b);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and
(B) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations;
(9) the Guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business;
(13) any obligation arising from agreements of the Company or any Restricted Subsidiary of the Company 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 Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company or any Restricted Subsidiary;
(14) any Permitted Acquisition Indebtedness; and
(15) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15), not to exceed the greater of (ix) $75.0 10.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance. For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (15) above, or is entitled to be incurred pursuant to Section 4.09(ay), the Company will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributions, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Samples: Indenture (Simmons Co /Ga/)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Subsidiary Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stockpreferred stock, if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock preferred stock is issued, as the case may be, would have been at least 2.25 2.0 to 1.01, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock preferred stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuers Company and the Guarantors, any Subsidiary Guarantor 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 the Company and its Restricted Subsidiaries thereunder) not to exceed the greater of (i) $700.0 million 125.0 million, less the aggregate amount of all Net Proceeds of Asset Sales applied by the Company or any of its Restricted Subsidiaries since the date of this Indenture to (a) repay any term Indebtedness under a Credit Facility or (b) repay any revolving credit Indebtedness under a Credit Facility and effect a corresponding commitment reduction thereunder, in each of cases (a) and (b) pursuant to Section 4.10 hereof and (ii) $175.0 million plus 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrenceBorrowing Base;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers Company and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and the Exchange Notes and the related Note GuaranteesGuarantees 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 or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 5.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceat any time outstanding;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clauses (2), (3), (4), (5), (14) or (1513) of this Section 4.09(b);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and
(B) (i1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (ii2) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stockshares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such Preferred Stock preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging ObligationsObligations made other than for speculative purposes;
(9) the Guarantee guarantee by the Company or any of its Restricted Subsidiaries the Guarantors of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu ranked equally with the Notes, then the Guarantee must shall be subordinated or pari passurank equally, as applicable, to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations or bidobligations, plugging bankers’ acceptances, performance and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business;
(13) any obligation Indebtedness arising from agreements of the Company or any a Restricted Subsidiary of the Company providing for indemnification, adjustment of purchase price, earn outs, earn-outs or similar obligations, in each case, case incurred or assumed in connection with the acquisition or disposition or acquisition of any business, assets or Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company in accordance with the terms of this Indenture, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition; provided that, with respect to any such disposition, the maximum aggregate liability in respect of all such Indebtedness shall at no time exceed the gross proceeds actually received by the Company and its Restricted Subsidiary;
(14) any Permitted Acquisition IndebtednessSubsidiaries in connection with such disposition; and
(1513) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (1513), not to exceed the greater $15.0 million. The Company will not incur, and will not permit any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of (i) $75.0 million and (ii) 5.0% payment to any other Indebtedness of the Company’s Adjusted Consolidated Net Tangible Assets determined as Company or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the date 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 such incurrence payment to any other Indebtedness solely by virtue of being unsecured or issuanceby virtue of being secured on a first or junior Lien basis. 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 (1513) above, above or is entitled to be incurred pursuant to Section 4.09(a)) hereof, the Company will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under the Credit Agreement Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsinterest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock preferred stock as Indebtedness due to a change in accounting principles, principles and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities shares of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided provided, in each such case, that the amount thereof shall be of any such accrual, accretion or payment is included in Fixed Charges of the Company as accrued accrued. Notwithstanding any other provision of this Section 4.09, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to the extent required by the definition this Section 4.09 shall not be deemed to be exceeded solely as a result of such termfluctuations in exchange rates or currency values. The amount of any Indebtedness outstanding as of any date will be:
(a1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1A) the Fair Market Value of such assets at the date of determination; and
(2B) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”,” with “incurrence” having a correlative meaning) any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company may incur Indebtedness (including Acquired Debt) or and issue Disqualified Stock, and the Guarantors Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or and issue Preferred Stockpreferred stock, if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock preferred stock is issued, as the case may be, would have been at least 2.25 to 1.0, determined on a pro forma basis (including a 48 Eleventh Supplemental Indenture pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock preferred stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Notwithstanding the foregoing, Section 4.09(a10.11(a) will not prohibit the incurrence of any of the following (the items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, described below in this Section 10.11(b) being referred to collectively as applicable (collectively, “Permitted Debt”):
(1i) the incurrence by the Issuers Company and the Guarantors, any Restricted Subsidiary of Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1i) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed the greater of (ix) $700.0 million 1.1 billion and (iiy) $175.0 million plus 35.020% of the Company’s Adjusted Consolidated Net Tangible Assets Assets, determined on as of the date of the incurrence of such incurrenceIndebtedness after giving pro forma effect to such incurrence and the application of the proceeds therefrom;
(2ii) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3iii) the incurrence by the Issuers Company and the Guarantors of Indebtedness represented by the Notes or the Guarantees of the Notes, to be issued incurred by the Company or any of the Guarantors on the date Issue Date of this Indenture and the related Note GuaranteesNotes;
(4iv) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4iv), not to exceed the greater of (i) $45.0 50.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceat any time outstanding;
(5v) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, or Indebtedness (other than intercompany Indebtedness) or preferred stock of a Restricted Subsidiary, in each case that was permitted by this Indenture to be incurred or issued under Section 4.09(a10.11(a) or clauses clause (2ii), (3iii), (4iv), (5), (14v) or (15x) of this Section 4.09(b10.11(b);
(6vi) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
that (A) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and
(B) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (iiB) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6vi);; 49 Eleventh Supplemental Indenture
(7vii) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stockshares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the CompanySubsidiary; and
(B) any sale or other transfer of any such Preferred Stock preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the CompanySubsidiary, will be deemed, in each case, to constitute an issuance of such Preferred Stock preferred stock by such Restricted Subsidiary that was not permitted by this clause (7vii);
(8) viii) the incurrence of obligations of the Company or a Restricted Subsidiary pursuant to Interest Rate and Currency Xxxxxx, in each case entered into in the ordinary course of business for the purpose of limiting risks that arise in the ordinary course of business of the Company and its Restricted Subsidiaries;
(ix) the guarantee by the Company or any of its Restricted Subsidiaries of Hedging Obligations;
(9) the Guarantee by the Company or any of its Restricted Subsidiaries Guarantors of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09covenant; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee must guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(10x) Permitted Acquisition Indebtedness;
(xi) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12xii) Indebtedness consisting of the financing of insurance premiums in customary amounts consistent with the operations and business of the Company and the Restricted Subsidiaries;
(xiii) the incurrence by the Company or any Restricted Subsidiary of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business;
(13) any obligation Indebtedness arising from agreements of the Company or any of its Restricted Subsidiary of the Company Subsidiaries providing for indemnification, adjustment of purchase price, earn outs, price or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; Subsidiary, provided that the maximum aggregate liability in respect of all such obligation is not reflected as a liability on Indebtedness shall at no time exceed the face of gross proceeds actually received by the balance sheet of Company and its Restricted Subsidiaries in connection with such disposition;
(xiv) the incurrence by the Company or any Restricted Subsidiary;
(14) Subsidiary of Indebtedness arising from Guarantees of Indebtedness of joint ventures at any Permitted Acquisition Indebtednesstime outstanding not to exceed the greater of $50.0 million and 1.0% of Adjusted Consolidated Net Tangible Assets determined as of the date of incurrence of such Indebtedness after giving pro forma effect to such incurrence and the application of proceeds thereof; and
(15xv) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstandingthat, including when taken together with all Permitted Refinancing other Indebtedness incurred to renew, refund, refinance, replace, defease of the Company outstanding on the date 50 Eleventh Supplemental Indenture of such incurrence (other than Indebtedness permitted by clauses (i) through (xiv) above or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15Section 10.11(a), ) does not to exceed the greater of (ix) $75.0 million and (ii) 5.02.5% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of incurrence of such incurrence or issuance. Indebtedness and (y) $125.0 million.
(c) For purposes of determining compliance with this Section 4.0910.11, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1i) through (15xv) aboveof Section 10.11(b), or is entitled to be incurred pursuant to Section 4.09(a10.11(a), the Company will be permitted to divide, divide and classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or divide and reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt10.11. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsinterest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities shares of the same class of Preferred Stock or Disqualified Stock will not be deemed not to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09covenant; provided provided, in each such case, that the amount thereof shall be of any such accrual, accretion or payment is included in Fixed Charges of the Company as accrued to accrued.
(d) For purposes of determining compliance with any U.S. dollar-denominated restriction on the extent required by incurrence of Indebtedness and issuance of preferred stock, the definition of such term. The U.S. dollar-equivalent principal amount of any Indebtedness outstanding as of any denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date will be:
(a) the accreted value of the Indebtednesssuch Indebtedness was incurred, in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the term Indebtedness, or first committed, in the case of any other revolving credit Indebtedness; and
(c) provided that if such Indebtedness is incurred to refinance other Indebtedness denominated in respect of Indebtedness of another Person secured by a Lien foreign currency, and such refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) such refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being refinanced. Notwithstanding any other provision of this Section 10.11, the maximum amount of Indebtedness that the Company may incur pursuant to this Section 10.11 shall not be deemed to be exceeded solely as a result of fluctuations in the exchange rate of currencies. The principal amount of any Permitted Refinancing Indebtedness incurred to refinance other Indebtedness, if incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such Permitted Refinancing Indebtedness is denominated that is in effect on the date of the other Personsuch refinancing.
Appears in 1 contract
Samples: Eleventh Supplemental Indenture (Plains Exploration & Production Co)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired DebtIndebtedness), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company or any Guarantor may incur Indebtedness (including Acquired DebtIndebtedness) or the Company may issue Disqualified Stock, Stock and the Guarantors any Guarantor may incur Indebtedness (including Acquired Debt) or issue Preferred Stockshares of preferred stock, if the Fixed Charge Coverage Ratio for the Company’s 's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock preferred stock is issued, as the case may be, issued would have been at least 2.25 2.0 to 1.01, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock preferred stock had been issued, as the case may be, at the beginning of such four-quarter period.;
(b) Notwithstanding the foregoing, Section 4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “"Permitted Debt”Indebtedness"):
(1) the incurrence by the Issuers and Company or any of the Guarantors, Guarantors of Indebtedness and letters of credit under Credit Facilities Facilities, in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries the Guarantors thereunder) not to exceed the greater of of:
(i) $700.0 50.0 million less the aggregate amount of all Net Proceeds of Asset Sales applied by the Company or any of its Restricted Subsidiaries since March 3, 2004 to repay term Indebtedness under a Credit Facility or to repay revolving credit Indebtedness and effect a corresponding commitment reduction under a Credit Facility, in each case, pursuant to Section 4.10 hereof; or
(ii) $175.0 million plus 35.0% the amount of the Company’s Adjusted Consolidated Net Tangible Assets determined on Borrowing Base as of the date of such incurrence;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers and the Guarantors Company of Indebtedness represented by (i) the notes to be issued in exchange for the 6.750% Senior Notes due March 15, 2014 issued by the Company on March 3, 2004 pursuant to the registration rights agreement of the same date and any related Subsidiary Guarantees; and (ii) the notes to be issued on the date of this Indenture and the Exchange Notes to be issued pursuant to the Registration Rights Agreement and any related Note Subsidiary Guarantees;
(4) the incurrence by the Company or any of its Restricted Subsidiaries Subsidiary of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation construction or improvement of property, plant or equipment used in the business of the Company or any of its such Restricted SubsidiariesSubsidiary, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred pursuant to this clause (4), not to exceed exceed, at any time outstanding, the greater of (i) $45.0 US$10.0 million and (ii) 3.02% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceCompany;
(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, replace, defease refinance or discharge any replace Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under clause (a) of Section 4.09(a) 4.09 hereof or clauses (2), (3), (4), (5), (14) or (1513) of this Section 4.09(b);
(6) the incurrence by the Company of Indebtedness to, or the issuance of Disqualified Stock to, any Wholly Owned Restricted Subsidiary of the Company or the incurrence by any Restricted Subsidiary of the Company of Indebtedness to, or the 57 issuance of preferred stock to, the Company or any Wholly Owned Restricted Subsidiary of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted SubsidiariesCompany; provided, however, that:
(Ai) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not owing by the Company or a Guarantor, such Indebtedness Guarantor to a Wholly Owned Restricted Subsidiary of the Company must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Subsidiary Guarantee, in the case of a Guarantor; and
(Bii) (iA) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness Indebtedness, Disqualified Stock or preferred stock being held by a Person other than the Company or a Wholly Owned Restricted Subsidiary of the Company and (iiB) any sale or other transfer of any such Indebtedness Indebtedness, Disqualified Stock or preferred stock to a Person that is not either the Company or a Wholly Owned Restricted Subsidiary of the Company, ; will be deemed, in each case, to constitute an incurrence of such Indebtedness or issuance of Disqualified Stock or preferred stock by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging ObligationsObligations in the ordinary course of business and not for speculative purposes;
(9) 8) the Guarantee guarantee by the Company or any of its Restricted Subsidiaries the Guarantors of Indebtedness of the Company or a Restricted Subsidiary Guarantor of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that if ;
(9) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness being guaranteed is subordinated to or pari passu in the form of additional Indebtedness with the Notessame terms, then and the Guarantee must be subordinated payment of dividends on Disqualified Stock or pari passu, as applicable, to preferred stock in the form of additional shares of the same extent class of Disqualified Stock or preferred stock will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock or preferred stock for purposes of this Section 4.09; provided, in each such case, that the amount thereof is included in the Fixed Charges of the Company as the Indebtedness guaranteedaccrued;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations or statutory obligations, bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar appeal bonds and completion guarantees provided by the Company or a Restricted Subsidiary trade and standby letters of credit, in each case entered into in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of businessconsistent with past practice;
(11) the incurrence by Indebtedness of the Company or any Restricted Subsidiary consisting of its Restricted Subsidiaries guarantees, indemnities or obligations in respect of Indebtedness arising from purchase price adjustments in connection with the honoring by a bank acquisition or other financial institution disposition of a checkassets, draft or similar instrument inadvertently drawn against insufficient fundsincluding, so long as such Indebtedness is covered within five Business Dayswithout limitation, Equity Interests, in accordance with the provisions of this Indenture;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating Indebtedness to net oil fund a purchase by the Company or natural gas balancing positions arising a Restricted Subsidiary of Xxxxx'x interest in the ordinary course High Level Project pursuant to a Right of business;
First Refusal initiated by Xxxxx or the Buy/Sell Option; provided, that (13i) (x) the Company or such Restricted Subsidiary has accepted an offer from any obligation arising Person, other than the Company or a Restricted Subsidiary, to purchase the interest in the High Level Project that is acquired from agreements Grant at a concurrent closing for an amount not less than the purchase price payable to Grant; and (y) such Indebtedness is repaid in full at such concurrent closing from the transfer of the interest in the High Level Project purchased from Grant at such closing; or (ii) there shall not have been a decrease in the rating of the Notes by any Rating Agency by one or more Rating Categories that occurs within 90 days (which period shall be extended so long as the rating of the Notes is under publicly announced consideration for a possible downgrade by any Rating Agency) after the date of the later of (A) notice to the public or the Rating Agencies of the intention of the Company or any of its Restricted Subsidiary of Subsidiaries to incur Indebtedness to fund such a purchase or (B) the Company 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 Capital Stock of a Restricted Subsidiary in a transaction permitted incurrence by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company or any of its Restricted Subsidiary;
(14) any Permitted Acquisition IndebtednessSubsidiaries of Indebtedness to fund such a purchase; and
(1513) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (1513), not to exceed the greater US$50.0 million.
(c) The Company will not, and will not permit any Guarantor to, incur any Indebtedness (including Permitted Indebtedness) that is contractually subordinated in right of (i) $75.0 million and (ii) 5.0% payment to any other Indebtedness of the Company’s Adjusted Consolidated Net Tangible Assets determined as Company or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes or the applicable Subsidiary Guarantee on substantially identical terms; provided, however, that Indebtedness of the date Company or a Guarantor will not be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company or such incurrence or issuance. 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 Indebtedness described in clauses (1) through (1513) aboveof Section 4.09(b) hereof, or is entitled to be incurred pursuant to Section 4.09(a)) hereof, the Company will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, Indebtedness in any manner that complies with this Section 4.09. Indebtedness under the Credit Agreement Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on pursuant to the exception provided by clause (1) of the definition category of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributions, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien described in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:
(a4.09(b)(1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other Personhereof.
Appears in 1 contract
Samples: Indenture (Ainsworth Lumber Co LTD)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stockpreferred stock, if the Fixed Charge Company’s Consolidated 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 such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock is issued, as the case may be, would have been be at least 2.25 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock preferred stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Indebtedness, Disqualified Stock or Preferred Stock, as applicable Restricted Subsidiary preferred stock (collectively, “Permitted Debt”):
(1) the incurrence by the Issuers and the Guarantors, of Indebtedness and letters of credit the Company or any of its Restricted Subsidiaries 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 the greater of (ix) $700.0 million 500.0 million, less the aggregate amount of all Net Proceeds of Asset Sales applied by the Company or any of its Restricted Subsidiaries since the Issue Date to repay any term Indebtedness under a Credit Facility incurred in reliance on this clause (1) or to repay any revolving credit Indebtedness under a Credit Facility incurred in reliance on this clause (1) and effect a corresponding commitment reduction thereunder to the extent required by Section 4.10 hereof or (iiy) $175.0 million plus 35.0% the Borrowing Base as of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence;
(2) Existing Indebtedness other than Indebtedness in existence under clauses (1) and (3) and (16) of this Section 4.09(b) on the incurrence by the Company and its Restricted Subsidiaries of the Existing IndebtednessIssue Date;
(3) the incurrence by the Issuers Company and the Guarantors of Indebtedness represented by the Notes to be issued on the date of this Indenture and the related Note GuaranteesGuarantees issued on the Issue Date and the Exchange Notes and the related Note Guarantees to be issued in exchange therefor 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 or purchase money or other obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount at any one time outstanding, including all Permitted Refinancing Indebtedness indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (ix) $45.0 150.0 million and (iiy) 3.05.5% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceAssets;
(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, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clauses clause (2), (3), (4), (5), (1412), (13) or (15) of this Section 4.09(b);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(Aa) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and
(Bb) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, ; will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stockshares of preferred stock; provided, however, that:
(Aa) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(Bb) any sale or other transfer of any such Preferred Stock preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, ; will be deemed, in each case, at the time of such subsequent issuance, sale or transfer to constitute an issuance of such Preferred Stock preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging ObligationsObligations in the ordinary course of business and not for speculative purposes;
(9) the Guarantee by the Company or any of its Restricted Subsidiaries Restrictive Subsidiary of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that, in the case of a Guarantee of any Restricted Subsidiary that if the Indebtedness being guaranteed is subordinated to or pari passu not a Guarantor, such Restricted Subsidiary complies with the Notes, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteedSection 4.16;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations or bidobligations, plugging bankers’ acceptances, performance and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) (x) Acquired Debt of a Restricted Subsidiary incurred and outstanding on or prior to the incurrence date on which such Restricted Subsidiary was acquired by the Company or any of its Restricted Subsidiaries of in-kind obligations relating and (y) Indebtedness incurred to net oil finance an acquisition, merger, consolidation or natural gas balancing positions arising amalgamation; provided, however, that in the ordinary course case of businessclauses (x) and (y), on the date of such acquisition, merger, consolidation or amalgamation, either (a) the Company would have been able to incur $1.00 of additional Indebtedness pursuant to Section 4.09(a) hereof, or (b) the Consolidated Coverage Ratio of the Company and the Restricted Subsidiaries is equal to or greater than immediately prior to the acquisition of such Restricted Subsidiary, in each case after giving effect to the incurrence of such Indebtedness pursuant to this clause (12);
(13) the incurrence by non-guarantor Subsidiaries of Indebtedness in an aggregate amount at any obligation time outstanding pursuant to this clause (13), including all indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (13), not to exceed the greater of (x) $150.0 million and (y) 5.5% of the Consolidated Tangible Assets of such non-guarantor Subsidiaries;
(14) the incurrence of Indebtedness arising from agreements of the Company or any of its Restricted Subsidiary of the Company Subsidiaries providing for indemnification, adjustment of purchase price, earn outs, price or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Capital Stock of a Restricted Subsidiary in a transaction permitted by this IndentureSubsidiary; provided that the maximum aggregate liability in respect of all such obligation is not reflected as a liability on Indebtedness shall at no time exceed the face of the balance sheet of gross proceeds actually received by the Company or any and its Restricted Subsidiary;
(14) any Permitted Acquisition IndebtednessSubsidiaries in connection with such disposition; and
(15) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or Disqualified Stock or the issuance by any of the Company Company’s Restricted Subsidiaries of any Disqualified Stock shares of preferred stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15), not to exceed the greater of (i) $75.0 150.0 million and (ii) 5.05.5% of Consolidated Tangible Assets; and
(16) the Company’s Adjusted Consolidated Net Tangible Assets determined as incurrence by the Company and the Guarantors of Indebtedness under the date of such incurrence or issuanceSpinco Term Loan Agreement in an aggregate amount not to exceed $212.0 million. For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness proposed Indebtedness, Disqualified Stock or preferred stock meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (1516) above, or is entitled to be incurred pursuant to Section 4.09(a)) hereof, the Company will be permitted to divide, classify and reclassify such item of Indebtedness Indebtedness, Disqualified Stock or preferred stock on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, Disqualified Stock or preferred stock in any manner that complies with this Section 4.09. Indebtedness under the Credit Agreement Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture (after giving effect to the issuance of the Notes, the application of the proceeds thereof and the incurrence of any Indebtedness under Credit Facilities on such date) will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) (and in the case of the Spinco Term Loan Agreement, clause (16)) of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsinterest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities shares of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided provided, in each such case, that the amount of any such accrual, accretion or payment is included in Consolidated Interest Expense of the Company as accrued. For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness where the Indebtedness to be incurred is denominated in a different currency, (1) the amount of such Indebtedness shall be the U.S. Dollar Equivalent determined on the date of the incurrence of such Indebtedness and (2) in the case of any Permitted Refinancing Indebtedness incurred in the same currency as the Indebtedness being refinanced, the principal amount thereof shall be included in Fixed Charges the U.S. Dollar Equivalent of the Company as accrued Indebtedness being refinanced, except to the extent required by that the definition principal amount of the Permitted Refinancing Indebtedness exceeds the principal amount of the Indebtedness being refinanced, in which case the U.S. Dollar Equivalent of such termexcess principal amount shall be determined on the date such Permitted Refinancing Indebtedness is incurred. Notwithstanding any other provision of this Section 4.09, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values subsequent to the incurrence of such Indebtedness.
(c) The amount of any Indebtedness outstanding as of any date will be:
(a1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1a) the Fair Market Value of such assets at the date of determination; and
(2b) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Samples: Indenture (Axiall Corp/De/)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will shall not, and will shall not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries Subsidiary to issue any Preferred StockDisqualified Stock or preferred stock; provided, however, that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors any Guarantor may incur Indebtedness (including Acquired Debt) or issue Preferred StockDisqualified Stock and any Foreign Subsidiary may incur Indebtedness, 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 such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock preferred stock is issued, as the case may be, issued would have been at least 2.25 2.0 to 1.01, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the preferred stock or Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness or issuances the issuance of Disqualified Stock or Preferred Stock, as applicable set forth below (collectively, “Permitted Debt”):
(1i) the incurrence by the Issuers Company and the Guarantors, any Restricted Subsidiary of Indebtedness and letters of credit under the Credit Facilities Agreement in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder4.09(b)(i) not to exceed $525.0 million, less the greater aggregate amount of (i) $700.0 million and (ii) $175.0 million plus 35.0% all Net Proceeds of Asset Sales applied by the Company’s Adjusted Consolidated Net Tangible Assets determined on Company or any Restricted Subsidiary to repay any Indebtedness under the date of such incurrenceCredit Agreement and, if the Indebtedness repaid is revolving credit Indebtedness, to correspondingly reduce commitments with respect thereto, pursuant to Section 4.10;
(2ii) the incurrence by the Company and its any Restricted Subsidiaries Subsidiary of the Existing Indebtedness;
(3iii) the incurrence by the Issuers and the Guarantors Company of Indebtedness represented by the Notes to be issued on the date of this Indenture hereof and the related Note Guaranteesany Guarantees thereof by any Guarantor;
(4iv) the incurrence by the Company or any of its Restricted Subsidiaries Subsidiary of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation construction or improvement of property, plant or equipment used in the business of the Company or any of its such Restricted SubsidiariesSubsidiary, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred pursuant to this clause (44.09(b)(iv), not to exceed the greater of (i) $45.0 20.0 million and (ii) 3.05.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceAssets, at any time outstanding;
(5v) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease refinance or discharge any replace Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (2ii), (3iii), (4v), (5), (14) or (15xi) of this Section 4.09(b);
(6vi) the incurrence by the Company or any of its Restricted Subsidiaries Subsidiary of intercompany Indebtedness between or among the Company and any of its Restricted SubsidiariesSubsidiary; provided, however, that:
(A1) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a GuarantorIndebtedness, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and
(B2) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, Subsidiary; will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (64.09(b)(vi);
(7vii) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries Subsidiary of Hedging ObligationsObligations that are incurred for the purpose of fixing, hedging or swapping interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be outstanding or for hedging foreign currency exchange risk, in each case to the extent the Hedging Obligations are incurred in the ordinary course of the Company’s financial management and not for any speculative purpose;
(9viii) the Guarantee by the Company or any of its Restricted Subsidiaries Subsidiary of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(10ix) 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 Fixed Charges of the Company as accrued;
(x) the incurrence by the Company or any Restricted Subsidiary of its Indebtedness, including Indebtedness represented by letters of credit for the account of the Company or any Restricted Subsidiaries of Indebtedness Subsidiary, incurred in respect of workers’ compensation claims, self-insurance obligations or bid, plugging and abandonment, appeal, reimbursementobligations, performance, proposal, completion, surety and similar bonds and completion guarantees provided by the Company or a any Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any business; provided that the underlying obligation to perform is that of the foregoing bonds Company or obligations its Restricted Subsidiaries and workers’ compensation claims not that of the Company’s Unrestricted Subsidiaries; provided further that such underlying obligation is not in the ordinary course respect of businessborrowed money;
(11xi) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business;
(13) any obligation arising from agreements of the Company or any Restricted Subsidiary of the Company 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 Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company or any Restricted Subsidiary;
(14) any Permitted Acquisition Indebtedness; and
(15) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15xi), not to exceed $50.0 million;
(xii) the greater incurrence by the Company or any Restricted Subsidiary of (i) $75.0 million and (ii) 5.0% Indebtedness, including but not limited to Indebtedness represented by letters of credit for the account of the Company’s Adjusted Consolidated Net Tangible Assets determined as Company or any Restricted Subsidiary, arising from agreements of the date Company or a Restricted Subsidiary providing for indemnification, adjustment of such incurrence purchase price or issuance. For purposes of determining compliance with this Section 4.09similar obligations, in each case, incurred or assumed in connection with the event that an item disposition of any business, assets or Equity Interests of the Company or a Restricted Subsidiary, other than guarantees of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (15) above, or is entitled to be incurred pursuant to Section 4.09(a), the Company will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify by any Person acquiring all or a any portion of such item business, assets or Equity Interests for the purpose of Indebtedness, in financing such acquisition;
(xiii) the incurrence by the Company or any manner that complies with this Section 4.09. Restricted Subsidiary of Indebtedness under arising from the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributions, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured honoring by a Lien in the form bank or other financial institution of additional Indebtedness with the same termsa check, the reclassification of Preferred Stock draft or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:
similar instrument (a) the accreted value of the Indebtedness, except in the case of any daylight overdrafts) drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness issued with original issue discount;is extinguished within five Business Days of incurrence; or
(bxiv) the principal amount issuance of preferred stock of a Restricted Subsidiary to the IndebtednessCompany that is pledged to secure the Credit Agreement, provided that any subsequent transfer that results in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured such preferred stock being held by a Lien on Person other than the assets Company or a Restricted Subsidiary will be deemed to constitute an issuance of the specified Person, the lesser of:
preferred stock not permitted by this clause (1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other Personxiv).
Appears in 1 contract
Samples: Indenture (Geo Group Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company and the Guarantors will not issue any Disqualified Stock and the Company will not permit any of its Restricted Subsidiaries (other than the Guarantors) to issue any Preferred Stockshares of preferred stock or preferred shares; provided, however, that the Issuers may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and any of the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Disqualified Stock, if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock is issued, as the case may be, issued would have been at least 2.25 2.0 to 1.0, determined on a pro forma basis 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 or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuers Company and the Guarantorsits Restricted Subsidiaries of (a) Indebtedness, of Indebtedness and letters of credit and bankers’ acceptances under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters as of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed the greater of (i) $700.0 million and (ii) $175.0 million plus 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the any date of incurrence of any such incurrenceIndebtedness (together with the aggregate
(a) as a result of reclassification;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers and the Guarantors of Indebtedness represented by the Notes to be and Note Guarantees issued on the date of this Indenture and the related Note GuaranteesIssue Date;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings Obligations or purchase money obligations, including obligations in respect of mortgage, industrial revenue bond, industrial development bond and similar financings, including in connection with any Sale and Leaseback Transaction, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of designor refinancing the acquisition, replacement, construction, installation installation, repair or improvement of property, plant fixed or equipment used in the business of the Company or any of its Restricted Subsidiariescapital assets, in an aggregate principal amount at any time outstanding, as of the date of incurrence of any Indebtedness pursuant to this clause (4), including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (ia) $45.0 175.0 million and (iib) 3.07.0% of the Company’s Adjusted Consolidated Net Tangible Total Assets (determined as of the date of such incurrence or issuanceincurrence);
(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 or replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (2), (3), ) or (4)) above, this clause (5), clauses (1416), (17), (19), (25), (26) or (1527) of this below or pursuant to Section 4.09(b4.09(a);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among owed to the Company and or any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company Issuers or any Guarantor is the obligor on such Indebtedness Indebtedness, and the payee is not one of the Company Issuers or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the CompanyIssuers, or the Note GuaranteeGuarantee of such Guarantor, in the case of a Guarantor; and
(B) (i1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company thereof and (ii2) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will thereof shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness under Hedging Obligations that are not entered into for the purpose of speculation;
(8) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stockpreferred shares or shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; Company and
(B) any sale or other transfer of any such Preferred Stock preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock preferred stock or preferred shares by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations8);
(9) the Guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary or joint venture of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09 and could have been incurred (in compliance with this Section 4.09; provided that if ) by the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteedPerson so Guaranteeing such Indebtedness;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds, so long as such Indebtedness is covered within five Business Daysfunds in the ordinary course of business;
(1211) the incurrence of Indebtedness of the Company or any of its Restricted Subsidiaries in respect of security for workers’ compensation claims, payment obligations in connection with self-insurance, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers’ compensation claims provided to the Company or any of its Restricted Subsidiaries, bankers’ acceptances, indemnities including through letters of credit, cash collateralization, performance, surety and similar bonds and completion guarantees provided by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business; provided that the underlying obligation to perform is that of the Company and its Restricted Subsidiaries and not that of the Company’s Unrestricted Subsidiaries; and provided further that such underlying obligation is not in respect of borrowed money;
(1312) any obligation arising from the incurrence of Indebtedness that may be deemed to arise as a result of agreements of the Company or any Restricted Subsidiary of the Company providing for indemnification, adjustment of deferred purchase priceprice adjustments, earn outs, earn-out or similar obligationsObligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, business or assets of the Company or Capital Stock any Restricted Subsidiary or Equity Interests of a Restricted Subsidiary in a transaction permitted by this IndentureSubsidiary; provided that (a) any amount of such obligation is not reflected as a liability Obligations included on the face of the balance sheet of the Company or any Restricted SubsidiarySubsidiary shall not be permitted under this clause (12) and (b) the maximum aggregate liability in respect of all such Obligations outstanding under this clause (12) shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of such non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and the Restricted Subsidiaries in connection with such disposition;
(13) Indebtedness incurred under commercial letters of credit issued for the account of the Company or any of its Restricted Subsidiaries in the ordinary course of business (and not for the purpose of, directly or indirectly, incurring Indebtedness or providing credit support or a similar arrangement in respect of Indebtedness); or Indebtedness of the Company or any of its Restricted Subsidiaries under letters of credit and bank guarantees backstopped by letters of credit under the Credit Facilities;
(14) any Permitted Acquisition pledges, deposits or payments made or given in the ordinary course of business in connection with or to secure statutory, regulatory or similar obligations, including obligations under health, safety or environmental obligations, or arising from guarantees to suppliers, lessors, licenses, contractors, franchisees or customers of obligations, other than Indebtedness; and, made in the ordinary course of business;
(15) the incurrence of Indebtedness by the Company or any of its Restricted Subsidiaries issued to current or former officers, directors, managers, consultants and employees, or their respective estates, executors, administrators, heirs, legatees, distributees, spouses or former spouses in connection with the redemption or purchase of additional Capital Stock, to the extent permitted by Section 4.07(b)(5);
(16) the incurrence by any Foreign Subsidiary of Indebtedness or and/or the issuance guarantee by the Company and/or any of any Disqualified Stock its Restricted Subsidiaries of such Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, as of the date of incurrence of any Indebtedness pursuant to this clause (16), including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (1516), not to exceed the greater of (ia) $75.0 million and (iib) 5.03.0% of the Company’s Adjusted Consolidated Net Tangible Total Assets (determined as of the date of such incurrence);
(17) the incurrence by the Company or issuance. For purposes any of determining compliance with this Section 4.09its Restricted Subsidiaries of any Capitalized Lease Obligation resulting from a Sale and Leaseback Transaction in an aggregate principal amount at any time outstanding, in the event that an item of Indebtedness meets the criteria of more than one as of the categories date of incurrence of any Indebtedness pursuant to this clause (17), including all Permitted Debt described in clauses (1) through (15) aboveRefinancing Indebtedness incurred to refund, refinance or is entitled to be replace any Indebtedness incurred pursuant to Section 4.09(athis clause (17), not to exceed the Company will be permitted to divide, classify greater of (a) $75.0 million and reclassify such item (b) 3.0% of Indebtedness on Consolidated Total Assets (determined as of the date of its incurrence);
(18) Indebtedness in respect of Receivables Program Obligations;
(19) the incurrence of Acquired Debt or other Indebtedness incurred in connection with, or later redivide in contemplation of, an acquisition (including by way of merger or reclassify all consolidation) by the Company or a portion any of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributions, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09its Restricted Subsidiaries; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued after giving Pro Forma Effect to the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:
acquisition, either (a) the accreted value Company’s Fixed Charge Coverage Ratio immediately following such acquisition and incurrence (including a pro forma application of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
net proceeds therefrom) would be at least 2.0 to 1.0 or (b) the principal amount Company’s pro forma Fixed Charge Coverage Ratio would be equal to or greater than the actual Fixed Charge Coverage Ratio of the IndebtednessCompany immediately prior to such acquisition and incurrence;
(20) Indebtedness incurred by the Company or any Restricted Subsidiary of the Company to the extent that the net proceeds thereof are promptly deposited to defease, redeem or to satisfy and discharge the Notes;
(21) Indebtedness of the Company or any Restricted Subsidiary of the Company consisting of obligations to pay insurance premiums or take-or-pay obligations contained in supply arrangements incurred in the case ordinary course of any other Indebtedness; andbusiness;
(c22) Indebtedness in respect of overdraft facilities, employee credit card programs and other cash management arrangements in the ordinary course of business;
(23) Indebtedness representing deferred compensation to employees of the Company and its Restricted Subsidiaries incurred in the ordinary course of business;
(24) cash management obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case in connection with deposit accounts;
(25) the incurrence of Indebtedness by any Restricted Subsidiary of the Company that is not a Guarantor (other than the Co-Issuer), and/or the guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness of another Person secured by a Lien on the assets any joint venture of the specified PersonCompany or any of its Restricted Subsidiaries, the lesser of:
in an aggregate principal amount (1or accreted value, as applicable) the Fair Market Value at any time outstanding, as of such assets at the date of determinationincurrence of any Indebtedness pursuant to this clause (25), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (25), not to exceed the greater of (a) $50.0 million and (b) 2.0% of Consolidated Total Assets (determined as of the date of incurrence);
(26) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, as of the date of incurrence of any Indebtedness pursuant to this clause (26), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (26), not to exceed the greater of (a) $100.0 million and (b) 4.0% of Consolidated Total Assets (determined as of the date of incurrence); and
(2) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Samples: Indenture (Herbalife Nutrition Ltd.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will shall not, and will shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) Incur any Indebtedness (including Acquired Debt), ) and the Company will not issue any Disqualified Stock and will shall not permit any of its Restricted Subsidiaries to issue any shares of Preferred Stock; providedPROVIDED, howeverHOWEVER, that the Issuers Company and its Restricted Subsidiaries may incur Incur Indebtedness (including Acquired Debt) or issue shares of Disqualified Stock, Stock and the Guarantors Company's Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue Preferred Stock, if the Fixed Charge Coverage Ratio for the Company’s 's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred Incurred or such Disqualified Stock or such Preferred Stock is issued, as the case may be, issued would have been at least 2.25 1.75 to 1.01, if such Indebtedness is Incurred or such Disqualified Stock or Preferred Stock is issued on or prior to November 30, 1999, and 2.00 to 1, if such Indebtedness is Incurred or such Disqualified Stock or Preferred Stock is issued thereafter, 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 Incurred, or the Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Notwithstanding Section 4.09(a) will not prohibit the incurrence of any of 4.03(a), the following items Incurrences of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable are permitted (collectively, “"Permitted Debt”Indebtedness"):
(1i) the incurrence Incurrence by the Issuers Company or any of its Restricted Subsidiaries of term and the Guarantors, of revolving 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 undrawn face amount thereof) under Credit Facilities; PROVIDED that the aggregate principal amount of the Company and its Restricted Subsidiaries thereunderall Indebtedness outstanding pursuant to this Section 4.03(b)(i) after giving effect to such Incurrence does not exceed an amount equal to exceed the greater of (i) $700.0 million and 250.0 million;
(ii) $175.0 million plus 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence;
(2) the incurrence Incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3iii) the incurrence Incurrence by the Issuers Company of Indebtedness represented by the Securities (other than any Additional Securities) and by the Subsidiary Guarantors of Indebtedness represented by the Notes to be issued on the date of this Indenture and the related Note Security Guarantees;
(4iv) the incurrence Incurrence by the Company or any of its Restricted Subsidiaries of (A) Acquired Debt or (B) Indebtedness represented by (including Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred ) for the purpose of financing or refinancing all or any part of the lease, purchase price or cost of design, construction, installation construction or improvement of property, plant any property (real or equipment personal) or other assets that are used or useful in the business of the Company or such Restricted Subsidiary (whether through the direct purchase of assets or the Capital Stock of any of its Restricted SubsidiariesPerson owning such assets and whether such Indebtedness is owed to the seller or Person carrying out such construction or improvement or to any third party), in an aggregate principal amount outstandingfor all Indebtedness Incurred pursuant to this Section 4.03(b)(iv), at the date of such Incurrence (including all Permitted Refinancing Indebtedness incurred Incurred to renew, refund, refinance, replace, defease refinance or discharge replace any other Indebtedness incurred Incurred pursuant to this clause (4Section 4.03(b)(iv), ) not to exceed the greater of (i) $45.0 million and (ii) 3.0an amount equal to 10.0% of Total Assets; PROVIDED that, in the Company’s Adjusted Consolidated Net Tangible Assets determined as case of Indebtedness exceeding $2.0 million Incurred pursuant to this Section 4.03(b)(iv), such Indebtedness exists at the date of such incurrence purchase or issuancetransaction or is created within 180 days thereafter;
(5v) the incurrence Incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease refinance or discharge any replace Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted to be Incurred by this Indenture to be incurred under Section 4.09(a) or clauses (2), (3), (4), (5), (14) or (15) of this Section 4.09(b4.03(b);
(6vi) the incurrence Incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries, including any Indebtedness arising in connection with a Receivables Facility; providedPROVIDED, howeverHOWEVER, that:
that (A) 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 unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and
(B) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (iiB) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will shall be deemed, in each case, to constitute an incurrence Incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6Section 4.03(b)(vi);
(7vii) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence Incurrence by the Company or any of its Restricted Subsidiaries of Hedging ObligationsObligations that are Incurred (A) for the purpose of fixing or hedging interest rate risk with respect to any floating rate Indebtedness that is permitted by this Section 4.03 to be outstanding or (B) for the purpose of fixing or hedging currency exchange rate risk or commodity price risk Incurred in the ordinary course of business;
(9viii) the Guarantee by the Company or any of its Restricted Subsidiaries the Subsidiary Guarantors of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred 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 must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed4.03;
(10ix) the incurrence Incurrence of Indebtedness secured by or financing Receivables (including any such Indebtedness under the Credit Facilities), PROVIDED that the aggregate principal amount of such Indebtedness Incurred pursuant to this Section 4.03(b)(ix) does not, at any time, exceed an amount equal to $75.0 million less the aggregate Receivable Financing Amount of all Receivables Facilities of the Company and its Restricted Subsidiaries;
(x) the Incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in under (or constituting reimbursement obligations with respect to) letters of self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performancecredit, surety and bonds or similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary instruments issued in connection with the ordinary course of business and any Guarantees or a Permitted Business, including letters of credit functioning as in respect of workers' compensation claims, self-insurance, and insurance written by MIICA in connection with a Permitted Business; PROVIDED, HOWEVER, that upon the drawing of such letters of credit or supporting any of the foregoing bonds or other instrument, such obligations and workers’ compensation claims in the ordinary course of businessare reimbursed within 30 days following such drawing;
(11xi) the incurrence Incurrence by Foreign Subsidiaries of Indebtedness for working capital purposes, and by the Company or any of its Restricted Subsidiaries of Guarantees of Indebtedness arising from of Foreign Subsidiaries or foreign joint ventures, PROVIDED that the honoring by a bank or other financial institution aggregate principal amount of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business;
(13) any obligation arising from agreements and of the Company or Indebtedness so Guaranteed at any Restricted Subsidiary time outstanding does not exceed 5% of the Company 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 Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company or any Restricted Subsidiary;
(14) any Permitted Acquisition IndebtednessTotal Assets; and
(15xii) the incurrence Incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or (which may comprise Indebtedness under the issuance by the Company of any Disqualified Stock New Credit Facility) in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued outstanding pursuant to this clause (15), Section 4.03(b)(xii) not to exceed the greater of (i) an amount equal to $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance35.0 million. For purposes of determining compliance with this Section 4.094.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt Indebtedness described in clauses (1i) through (15) above, or is entitled to be incurred pursuant to Section 4.09(a), the Company will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributions, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other Person.through
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will and Holdings shall not, and will shall not permit any of its Restricted their respective Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), and the Company will shall not issue any Disqualified Stock and will shall not permit any of its Restricted their respective Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that (i) the Issuers Company may incur Indebtedness (including Acquired Debt) or issue shares of Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stock, Stock if the Fixed Charge Coverage Ratio of the Company for the Company’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 or such Preferred Stock is issued, as the case may be, issued would have been at least 2.25 1.75 to 1.01, if such incurrence or issuance is on or prior to December 15, 1999 or 2.0 to 1, if such incurrence or issuance is after December 15, 1999, 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 incurred, or the Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period and (ii) Holdings may incur Indebtedness (including Acquired Debt) or issue shares of Disqualified Stock if the Fixed Charge Coverage Ratio of Holdings for 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 is issued would have been at least 1.75 to 1, if such incurrence or issuance is on or prior to December 15, 1999, or 2.0 to 1, if such incurrence or issuance is after December 15, 1999, 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 Preferred Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) . The provisions for the first paragraph of this Section 4.09(a) 4.09 will not prohibit apply to the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “"Permitted Debt”):"), each of which shall be given independent effect:
(1i) the incurrence by the Issuers Company, Holdings and their respective Subsidiaries of Indebtedness (including letters of credit), or guarantees of such Indebtedness, pursuant to the term loan portion of the New Credit Facility; provided that, after giving pro forma effect to any such incurrence and the Guarantorsapplication of the proceeds therefrom, of Indebtedness and letters of credit under Credit Facilities in an the aggregate principal amount at any one time of all Indebtedness of the Company, Holdings and their Subsidiaries outstanding under this clause the term loan portion of the New Credit Facility does not exceed $100.0 million less the aggregate amount of all Net Proceeds of Asset Sales applied to permanently repay any such Indebtedness pursuant to Section 4.10 hereof;
(1ii) the incurrence by the Company, Holdings and their respective Subsidiaries of Indebtedness (including letters of credit), or guarantees of such Indebtedness, pursuant to the revolving loan portion of the New Credit Facility (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company Company, Holdings and its Restricted their Subsidiaries thereunder); provided that, after giving pro forma effect to any such incurrence and the application of the proceeds therefrom, the aggregate principal amount of all Indebtedness (including letters of credit) of the Company, Holdings and their Subsidiaries outstanding under the revolving loan portion of the New Credit Facility does not to exceed the greater of (ix) $700.0 75.0 million and less the aggregate amount of all Net Proceeds of Asset Sales applied to permanently repay any such Indebtedness pursuant to Section 4.10 hereof; or (iiy) $175.0 million plus 35.0% the amount of the Company’s Adjusted Consolidated Net Tangible Assets determined on the Borrowing Base as of any date of such incurrence;
(2iii) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers and the Guarantors of Indebtedness represented by the Notes to be issued on (other than any Additional Notes), the date incurrence by Holdings of this Indenture and the related Note Holdings Guarantee or the incurrence by any Restricted Subsidiary of Subsidiary Guarantees;
(4iv) the incurrence by the Company Company, Holdings or any of its Restricted their Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, case incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation construction or improvement of property, plant or equipment used in the business of the Company Company, Holdings or any of its Restricted Subsidiariessuch Subsidiary, in an aggregate principal amount not to exceed $5.0 million at any time outstanding;
(v) the incurrence by any corporation that becomes a Subsidiary of the Company after the Issue Date of Acquired Debt, including all Permitted Refinancing which Indebtedness incurred to renewis existing at the time such corporation becomes a Subsidiary; provided, refundhowever, refinancethat (A) either (x) the principal amount (or accreted value, replaceas applicable) of such Acquired Debt, defease or discharge together with any other outstanding Indebtedness incurred pursuant to this clause (4iv), does not exceed $5.0 million since the Issue Date or (y) immediately after giving effect to exceed such corporation becoming a Subsidiary, Holdings could incur at least $1.00 of additional Indebtedness (other than Permitted Debt) in accordance with this Indenture (B) such Indebtedness is without recourse to the greater Company, Holdings or to any of (i) $45.0 million their respective Subsidiaries or to any of their respective properties or assets other than Person becoming a Subsidiary or its properties and assets and (iiC) 3.0% such Indebtedness was not incurred as a result of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date or in connection with or in contemplation of such incurrence or issuanceentity becoming a Subsidiary;
(5vi) the incurrence by the Company Company, Holdings or any of its Restricted their Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refundextend, refinance, renew, replace, defease or discharge any refund, Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (2), (3), (4), (5), (14) or (15) of this Section 4.09(b)incurred;
(6vii) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company Company, Holdings and any of its their respective Wholly Owned Restricted Subsidiaries; provided, however, that:
that (Ai) if the Company or any Guarantor Holdings is the obligor on such Indebtedness and the payee is not the Company or a GuarantorIndebtedness, such Indebtedness must be unsecured and is expressly subordinated subordinate to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and
Notes and (Bii) (iA) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company Company, Holdings or a Wholly Owned Restricted Subsidiary of the Company and (iiB) any sale or other transfer of any such Indebtedness to a Person that is not either the Company Company, Holdings or a Wholly Owned Restricted Subsidiary of the Company, will shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company Company, Holdings or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7viii) the issuance Indebtedness of an Unrestricted Subsidiary owed to and held by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company Holdings or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such Preferred Stock to a Person Subsidiary, provided that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock by Holdings or such Restricted Subsidiary that was not is permitted by to make an investment in such Unrestricted Subsidiary under this clause (7)Indenture at the time such Indebtedness is incurred in an amount equal to the principal amount of such Indebtedness;
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations;
(9) the Guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(10ix) the incurrence by the Company or Holdings of Hedging Obligations that are incurred for the purpose of fixing or hedging currency risk or interest rate risk with respect to any floating rate Indebtedness that is permitted by the terms of its Restricted this Indenture to be outstanding;
(x) the incurrence by Unrestricted Subsidiaries of Non-Recourse Debt, provided, however, that if any such Indebtedness ceases to be Non-Recourse Debt of an Unrestricted Subsidiary, such event shall be deemed to constitute an incurrence of Indebtedness by a Restricted Subsidiary;
(xi) Indebtedness incurred in respect of self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Company, Holdings and the Restricted Subsidiary Subsidiaries in the ordinary course of business business, and any Guarantees or refinancings thereof;
(xii) Indebtedness for letters of credit functioning as or supporting any of the foregoing bonds or obligations and relating to workers’ ' compensation claims and self-insurance or similar requirements in the ordinary course of business;
(11xiii) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from guarantees of Indebtedness of the honoring by a bank Company, Holdings or any Subsidiary or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business;
(13) any obligation arising from agreements of the Company Company, Holdings or any Restricted a Subsidiary of the Company providing for indemnification, adjustment of purchase price, earn outs, price or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Capital Stock Subsidiary, other than guarantees of a Restricted Indebtedness incurred by any person acquiring all or any portion of such business, assets or Subsidiary in a transaction permitted by this Indenture; for the purpose of financing such acquisition, provided that the maximum aggregate liability in respect of all such obligation is not reflected as a liability on Indebtedness shall at no time exceed the face of gross proceeds actually received by the balance sheet of the Company or any Restricted SubsidiaryCompany, Holdings and their Subsidiaries in connection with such disposition;
(14xiv) the issuance by Holdings, on the Issue Date, of shares of Holdings Preferred Stock, with an aggregate liquidation value of up to $17.6 million and the issuance of additional shares of Holdings Preferred Stock as dividends on outstanding shares of Holdings Preferred Stock subsequent to the Issue Date in accordance with the terms of the Holdings Preferred Stock;
(xv) the incurrence of Exchange Notes issued (a) in exchange for all, but not less than all, of the outstanding Holdings Preferred Stock in accordance with the terms of the Holdings Preferred Stock as in effect on the Issue Date, if immediately prior to giving effect to the incurrence of such Exchange Notes, the Fixed Charge Coverage Ratio of Holdings would have been at lease 2.0 to 1 pursuant to the Fixed Charge Ratio test set forth in clause (ii) of the proviso of the first paragraph of this Section; provided that, in calculating such Fixed Charge Coverage Ratio of Holdings, no effect shall be given to clause (ii) of the definition of "Consolidated Net Income" and (b) as interest on Exchange Notes originally issued in compliance with this Indenture;
(xvi) the incurrence by Holdings of Qualified Subordinated Indebtedness in an aggregate principal amount not to exceed $5.0 million at any Permitted Acquisition Indebtednesstime outstanding; and
(15xvii) the incurrence by the Company Company, Holdings or any of its Restricted their Subsidiaries of additional Indebtedness or the issuance (in addition to Indebtedness permitted by the Company any other clause of any Disqualified Stock this paragraph) in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15), outstanding not to exceed the greater of (i) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance20.0 million. For purposes of determining compliance with this Section 4.09covenant, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1i) through (15xvii) above, above or is entitled to be incurred pursuant to Section 4.09(a)the first paragraph of this covenant, the Company will be permitted to divideshall, in its sole discretion, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. covenant and such item of Indebtedness under the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have treated as having been incurred on pursuant to only one of such date in reliance on clauses or pursuant to the exception provided by clause (1) of the definition of Permitted Debtfirst paragraph hereof. The accrual Accrual of interest or Preferred Stock or Disqualified Stock dividends or distributions, and the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock accreted value will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other Personcovenant.
Appears in 1 contract
Samples: Indenture (Desa Holdings Corp)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will shall not, and will shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company will shall not issue any Disqualified Stock and will shall not permit any of its Restricted Subsidiaries to issue any Preferred StockDisqualified Stock or shares of preferred stock; provided, however, that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue shares of Disqualified Stock, and the Guarantors any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or ), issue Preferred Stockshares of Disqualified Stock and issue shares of preferred stock, if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock preferred stock is issued, as the case may be, issued would have been at least 2.25 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock preferred stock had been issued, as the case may be, at the beginning of such four-quarter period.. The first paragraph of this Section 4.09 shall not prohibit:
(b) Section 4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1i) the incurrence by the Issuers and the Guarantors, Company or any of its Restricted Subsidiaries of Indebtedness and letters of credit under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1i) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed $1,570.0 million less the greater sum of (i) $700.0 million and (ii) $175.0 million plus 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of all permanent principal payments with respect to such incurrenceIndebtedness in accordance with Section 4.10;
(2ii) the incurrence by the Company and its Restricted Subsidiaries of the Existing IndebtednessIndebtedness (other than Indebtedness described in clauses (i) and (iii);
(3iii) the incurrence by the Issuers Company and the Guarantors any Guarantor of Indebtedness represented by the Notes to be issued on the date of this Indenture (other than Additional Notes) and the related Note GuaranteesExchange Notes issued in exchange therefor and any Subsidiary Guarantees of the foregoing;
(4iv) the incurrence Indebtedness (including Capital Lease Obligations other than Deemed Capitalized Leases), Disqualified Stock and preferred stock incurred by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligationsto finance the purchase, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation lease or improvement of property, plant property (real or personal) or equipment (other than software) that is used or useful in a Permitted Business (but excluding the business purchase of Capital Stock of any Person), provided that the Company or any aggregate amount of its Restricted SubsidiariesIndebtedness, in an aggregate principal amount outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness Disqualified Stock and preferred stock incurred pursuant to this clause (4), iv) when aggregated with the then outstanding amount of such obligations under clause (v) incurred to refinance such obligations initially incurred in reliance on this clause (iv) does not to exceed the greater of (i) $45.0 million and (ii) 3.02.0% of the Company’s Adjusted Consolidated Net Tangible Assets (determined as of the date time of such incurrence or issuanceincurrence) at any time outstanding;
(5v) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease refinance or discharge any replace Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under this clause (v), the first paragraph of this Section 4.09(a) 4.09 or clauses (2ii), (3iii), (4iv), (5), (14x) or (15xvi) of this Section 4.09(b)paragraph and related interest, premiums, fees and other Obligations;
(6vi) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness Indebtedness, Disqualified Stock or preferred stock between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(Aa) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a GuarantorIndebtedness, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Subsidiary Guarantee, in the case of a Guarantor; and
(B) (i1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness Indebtedness, Disqualified Stock or preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company and (ii2) any sale or other transfer of any such Indebtedness Indebtedness, Disqualified Stock or preferred stock (but for the avoidance of doubt excluding the grant of a Permitted Lien thereon) to a Person that is not either neither the Company or nor a Restricted Subsidiary of the Company, will Company shall be deemed, in each case, to constitute an incurrence of such Indebtedness Indebtedness, Disqualified Stock or preferred stock by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6vi);
(7vii) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations;
(9viii) the Guarantee by the Company or any a Restricted Subsidiary of its Restricted Subsidiaries the Company of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09Section; provided that if in the event such Indebtedness that is being guaranteed is subordinated to or (a) pari passu with the NotesNotes or a Subsidiary Guarantee, as the case may be, then the related Guarantee must shall rank equally in right of payment to the Notes or Subsidiary Guarantee, as the case may be, or (b) subordinated to the Notes or a Subsidiary Guarantee, as the case may be, then the related Guarantee shall be subordinated in right of payment to the Notes or pari passusuch Subsidiary Guarantee, as applicable, to the same extent as the Indebtedness guaranteedcase may be;
(10ix) the accrual of interest 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, the payment of dividends on Disqualified Stock or preferred stock in the form of additional shares of the same class of Disqualified Stock or preferred stock and the incurrence by the Company of unrealized losses or any of its Restricted Subsidiaries of Indebtedness charges in respect of self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performance, surety Hedging Obligations (including those resulting from the application of FAS 133 and similar bonds and completion guarantees provided by provisions), in each case will be deemed not to be an incurrence of Indebtedness or an issuance of Disqualified Stock or preferred stock for purposes of this covenant;
(x) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earn-out or other similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or a Restricted Subsidiary, other than Guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Restricted Subsidiary for the purpose of financing such acquisition; provided that the maximum aggregate liability in respect of all such Indebtedness shall at no time exceed the fair market value of the consideration actually received (or, in the ordinary course case of business an acquisition, paid) by the Company and any Guarantees its Restricted Subsidiaries in connection with such transaction;
(xi) Indebtedness supported by one or more letters of credit functioning as or supporting incurred under a Credit Facility in accordance with and pursuant to clause (i) of this paragraph; provided the amount of Indebtedness permitted to be incurred under this clause (xi) relating to any such letter of credit shall not exceed the amount of the foregoing bonds letter of credit provided for therein; provided further, that upon any reduction, cancellation or obligations and workers’ compensation claims termination of the applicable letter of credit, there shall be deemed to be an incurrence of Indebtedness under this Indenture equal to the excess of the amount of such Indebtedness outstanding immediately after such reduction, cancellation or termination over the remaining stated amount, if any, of such letter of credit or the stated amount of any letter of credit issued in the ordinary course replacement of businesssuch letter of credit;
(11xii) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising funds in the ordinary course of business; provided, however, that such Indebtedness is extinguished within ten Business Days of incurrence;
(13xiii) any obligation arising from agreements Indebtedness represented by property, liability and workers’ compensation insurance, completion guarantees, performance bonds (provided that to the extent that such performance bonds secure Indebtedness, such Indebtedness is otherwise permitted under this Section), surety bonds, appeal bonds and other obligations (which, in each case, may be in the form of or secured by letters of credit), in each case required or incurred in the ordinary course of business or in connection with the enforcement of rights or claims of the Company or any Restricted Subsidiary of the Company 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 Capital Stock of a Restricted Subsidiary judgments that do not result in a transaction permitted by this Indenture; provided that Default or an Event of Default and all reimbursement obligations under such obligation is not reflected as a liability on the face letters of the balance sheet of the Company or any Restricted Subsidiarycredit;
(14) any Permitted Acquisition Indebtedness; and
(15xiv) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Indebtedness, Disqualified Stock or preferred stock that is not secured by a Lien in an aggregate principal amount (or accreted valuevalue or liquidation preference, as applicable) at any time outstanding, including all outstanding not to exceed $50.0 million;
(xv) Construction Indebtedness and Permitted Refinancing Indebtedness incurred in respect thereof in an aggregate principal amount that does not exceed $100.0 million at any time outstanding;
(xvi) Indebtedness, Disqualified Stock or preferred stock of (x) the Company or a Restricted Subsidiary incurred to renewfinance an acquisition or (y) Persons that are acquired by the Company or any Restricted Subsidiary or merged into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving effect to such acquisition or merger, refundeither
(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, refinanceor
(b) the Fixed Charge Coverage Ratio is equal to or greater than such ratio immediately prior to such acquisition or merger;
(xvii) Indebtedness of the Company or any of its Restricted Subsidiaries to an Unrestricted Subsidiary for money borrowed; provided that such Indebtedness is subordinated in right of payment to the Notes or such Restricted Subsidiary’s Subsidiary Guarantee, replace, defease the Weighted Average Life to Maturity of such Indebtedness is greater than the Weighted Average Life to Maturity of the Notes and the holders of such Indebtedness are not permitted to accelerate such Indebtedness or discharge exercise any other remedies with respect thereto until 91 days after the Stated Maturity of the Notes; and
(xviii) Indebtedness incurred by the Company or Disqualified Stock issued pursuant any Restricted Subsidiary with respect to this clause (15), Digital Projector Financing in an aggregate principal amount incurred not to exceed the greater of (i) $75.0 70.0 million and during the period from the Issue Date to the first anniversary thereof; (ii) 5.0% $70.0 million during the period from the first anniversary of the Company’s Adjusted Consolidated Net Tangible Assets determined as Issue Date to the second anniversary of the date Issue Date; and (iii) $60.0 million after the second anniversary of the Issue Date, provided that any unused or repaid amounts may be carried forward and used in subsequent periods without limitation. Neither the Company nor any Restricted Subsidiary shall incur any Indebtedness under the preceding paragraph if the proceeds thereof are used, directly or indirectly, to refinance any Indebtedness subordinated to the Notes or any Subsidiary Guarantee unless such incurrence Indebtedness shall be subordinated to the Notes or issuancesuch Subsidiary Guarantee to at least the same extent as such subordinated Indebtedness. No Restricted Subsidiary of the Company that is not a Guarantor may incur any Indebtedness if the proceeds are used to refinance Indebtedness of the Company or a Guarantor (other than a refinancing of all the Notes). For purposes of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness (including Acquired Debt) meets the criteria of more than one of the categories of Permitted Debt described in clauses (1i) through (15xviii) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.09(a)4.09, the Company will shall be permitted to divide, classify and (or later classify or reclassify in whole or in part in its sole discretion) such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. , provided that all Indebtedness under the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially Issue Date shall be deemed to have been incurred on the Issue Date pursuant to clause (i) above and the Company shall not be permitted to later reclassify all or any portion of such date in reliance Indebtedness under the Credit Agreement outstanding on the exception provided by clause (1) Issue Date. Notwithstanding any other provision of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsthis Section, the accretion maximum amount of Indebtedness that the Company or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due Restricted Subsidiary may incur pursuant to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock will this Section shall not be deemed to be an incurrence exceeded solely as a result of Indebtedness or an issuance fluctuations in the exchange rate of Preferred Stock or currencies. The principal amount of any Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued or a Restricted Subsidiary, or preferred stock of a Restricted Subsidiary that is not a Guarantor, will be equal to the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value greater of the Indebtednessmaximum mandatory redemption or repurchase price (not including, in either case, any redemption or repurchase premium) or the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
liquidation preference thereof. This Indenture does not treat (1) the Fair Market Value of such assets at the date of determination; and
unsecured Indebtedness as subordinated to secured Indebtedness merely because it is unsecured, (2) Senior Debt that is secured Indebtedness as subordinated to any other Senior Debt that is secured Indebtedness merely because it has a junior priority with respect to the amount same collateral, (3) any Indebtedness as subordinated to any other Indebtedness merely because of the maturity date, order of payment or order of application of funds or (4) Indebtedness that is not Guaranteed as subordinated to Indebtedness that is Guaranteed merely because of the other Personsuch Guarantee.
Appears in 1 contract
Samples: Indenture (Cinemark Holdings, Inc.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company Partnership will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company Partnership will not issue any Disqualified Stock Stock, and the Partnership will not permit any of its Restricted Subsidiaries (other than a Guarantor) to issue any Preferred Stock; provided, however, that the Issuers Partnership and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue Preferred Stock, if the Fixed Charge Coverage Ratio if, for the CompanyPartnership’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 Stock is issued, as the case may be, Fixed Charge Coverage Ratio would have been at least 2.25 2.00 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):) or the issuance of any Disqualified Stock or Preferred Stock described below:
(1) the incurrence by the Issuers and the Guarantors, Partnership or any of its Restricted Subsidiaries of additional Indebtedness (including guarantees and letters of credit credit) under one or more Credit Facilities in an Facilities, provided that, after giving effect to any such incurrence, the aggregate principal amount at any one time outstanding of all Indebtedness incurred under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company Partnership and its Restricted Subsidiaries thereunder) and then outstanding at any one time does not to exceed the greater of (ia) $700.0 52.5 million and (iib) $175.0 million plus 35.025.0% of the CompanyPartnership’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence;
(2) the incurrence by the Company Partnership and its Restricted Subsidiaries the Guarantors of Indebtedness represented by the Existing IndebtednessInitial Notes and the related Note Guarantees;
(3) the incurrence by the Issuers Partnership or its Restricted Subsidiaries of the Existing Indebtedness other than Indebtedness described in clauses (1) and the Guarantors of Indebtedness represented by the Notes to be issued on the date (2) of this Indenture and the related Note GuaranteesSection 4.09(b);
(4) the incurrence by the Company Partnership or any of its Restricted Subsidiaries of Indebtedness (including Indebtedness represented by Capital Lease Obligations, Attributable Debt, mortgage financings or purchase money obligations) or the issuance by the Partnership or any of its Restricted Subsidiaries of Disqualified Stock or the issuance by any Restricted Subsidiary of Preferred Stock, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation installation, repair or improvement of propertyproperty (real or personal), plant or equipment or other assets used in the business of the Company Partnership or such Restricted Subsidiary (whether through the direct purchase of assets or the Capital Stock of any of its Restricted Subsidiaries, in an aggregate principal amount outstandingPerson owning such assets), including all Permitted Refinancing Indebtedness incurred to renew, refundextend, refinance, renew, replace, defease or discharge refund any Indebtedness incurred pursuant to this clause (4), provided that after giving effect to any such incurrence, the principal amount of all Indebtedness incurred pursuant to this clause (4) and then outstanding does not to exceed the greater of (ia) $45.0 20.0 million and (iib) 3.010.0% of the CompanyPartnership’s Adjusted Consolidated Net Tangible Assets determined as of at the date time of such incurrence or issuanceincurrence;
(5) the incurrence by the Company Partnership or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renewto, refundextend, refinance, renew, replace, defease or discharge any refund Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred (or Disqualified Stock or Preferred Stock permitted to be issued) under Section 4.09(a) hereof or clauses (2), (3), (4), (5), (1412) or (1518) of this Section 4.09(b) or this subclause 4.09(b)(5);
(6) the incurrence by the Company Partnership or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company Partnership and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor Partnership is the obligor on such Indebtedness and the payee a Guarantor is not the Company or a Guarantorobligee, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, or if a Guarantor is the obligor on such Indebtedness and neither the Partnership nor another Guarantor is the obligee, such Indebtedness must be unsecured and expressly subordinated to the prior payment in the case full in cash of the Company, or all Obligations with respect to the Note Guarantee, in the case Guarantee of a such Guarantor; and
(B) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company Partnership or a Restricted Subsidiary of the Company Partnership and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either neither the Company or Partnership nor a Restricted Subsidiary of the Company, Partnership will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company Partnership or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6subclause 4.09(b)(6);
(7) the incurrence by the Partnership or any of its Restricted Subsidiaries of obligations under Hedging Contracts in the ordinary course of business and not for speculative purposes;
(8) the guarantee by the Partnership or any of its Restricted Subsidiaries of Indebtedness of the Partnership or any of its Restricted Subsidiaries that was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to the Notes, then the guarantee must be subordinated to the same extent as the Indebtedness being guaranteed;
(9) the incurrence by the Partnership or any of its Restricted Subsidiaries of obligations relating to net Hydrocarbon balancing positions arising in the ordinary course of business;
(10) the incurrence by the Partnership or any of its Restricted Subsidiaries of Indebtedness in respect of bid, performance, surety and similar bonds issued for the account of the Partnership and any of its Restricted Subsidiaries in the ordinary course of business, including guarantees and obligations of the Partnership or any of its Restricted Subsidiaries with respect to letters of credit supporting such obligations (in each case other than an obligation for money borrowed);
(11) the issuance by any of the CompanyPartnership’s Restricted Subsidiaries to the Company Partnership or to any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company Partnership or a Restricted Subsidiary of the CompanyPartnership; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company Partnership or a Restricted Subsidiary of the CompanyPartnership, will shall be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7subclause 4.09(b)(11);
(8) 12) Acquired Debt incurred by the Partnership or a Restricted Subsidiary, provided that, after giving effect to the related merger or acquisition transaction, on a pro forma basis, either (a) the Partnership would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.09(a) hereof or (b) the Fixed Charge Coverage Ratio for the Partnership would be equal to or greater than immediately prior to such transactions;
(13) the incurrence by the Company Partnership or any of its Restricted Subsidiaries of Hedging Obligationsadditional Indebtedness, provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness, including all Permitted Refinancing Indebtedness incurred to extend, refinance, renew, replace, defease or refund any Indebtedness incurred under this clause (13), does not exceed the greater of $30.0 million and 15.0% of the Partnership’s Consolidated Net Tangible Assets;
(914) the Guarantee Indebtedness incurred by the Company Partnership or any of its Restricted Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary of the Company Partnership to the extent that the guaranteed Indebtedness was permitted net proceeds thereof are promptly deposited to be incurred by another provision of defease or to satisfy and discharge the Notes in accordance with this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteedIndenture;
(1015) Indebtedness of the incurrence by the Company Partnership or any of its Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds Partnership consisting of obligations to pay insurance premiums or take-or-pay obligations and workers’ compensation claims contained in supply arrangements, including, without limitation, long-term off-take contracts for Hydrocarbons, incurred in the ordinary course of business;
(1116) the incurrence by the Company or Indebtedness in respect of any bankers’ acceptance, bank guarantees, letter of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a checkcredit, draft warehouse receipt or similar instrument inadvertently drawn against insufficient fundsfacilities, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind and reinvestment obligations relating to net oil or natural gas balancing positions arising related thereto, entered into in the ordinary course of business;
(1317) Guarantees (a) incurred in the ordinary course of business in respect of obligations of (or to) suppliers, customers, franchisees, lessors and licensees that, in each case, are non-Affiliates or (b) otherwise constituting Investments not prohibited hereunder;
(18) Indebtedness issued by the Partnership or any obligation arising from agreements of its Restricted Subsidiaries to any current, future or former director, officer, consultant or employee of the Company Partnership, the General Partner, any direct or indirect parent of the Partnership or any Restricted Subsidiary of the Company providing for indemnification, adjustment of purchase price, earn outsPartnership, or similar obligationstheir estates or the beneficiaries of such estates to finance the purchase, in each caseredemption, incurred acquisition or assumed in connection with the disposition or acquisition retirement for value of any business, assets or Capital Stock of a Restricted Subsidiary in a transaction Equity Interests permitted by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company or any Restricted Subsidiary;
(14Section 4.07(b)(5) any Permitted Acquisition Indebtedness; and
(15) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock hereof, in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refundextend, refinance, renew, replace, defease or discharge refund any Indebtedness incurred or Disqualified Stock issued pursuant to under this clause (1518), not to exceed $5.0 million as of any date of incurrence;
(19) Indebtedness incurred in connection with any Sale and Leaseback Transaction not relating to the greater Principal Properties and any refinancing, refunding, renewal or extension of any such Indebtedness, provided that, except to the extent otherwise permitted hereunder, the principal amount of any such Indebtedness is not increased above the principal amount thereof outstanding immediately prior to such refinancing, refunding, renewal or extension and the direct and contingent obligors with respect to such Indebtedness are not changed;
(i20) $75.0 million Indebtedness in respect of overdraft facilities, employee credit card programs and other cash management arrangements in the ordinary course of business;
(ii21) 5.0% Indebtedness representing deferred compensation to employees of the Company’s Adjusted Consolidated Net Tangible Assets determined as Partnership (or any direct or indirect parent of the date Partnership) and its Restricted Subsidiaries incurred in the ordinary course of such incurrence or issuancebusiness; and
(22) cash management obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case in connection with deposit accounts. For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness (including Acquired Debt), Disqualified Stock or Preferred Stock meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (1522) aboveof Section 4.09(b), or is entitled to be incurred pursuant to Section 4.09(a)) hereof, the Company Partnership will be permitted to divide and classify (or later divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all in whole or a portion of in part in its sole discretion) such item of Indebtedness, Disqualified Stock or Preferred Stock in any manner that complies with this Section 4.094.09 (including in part pursuant to one or more clauses and/or in part pursuant to Section 4.09(a) hereof). Any Indebtedness under the Credit Agreement outstanding on the date on which Notes are first issued hereof shall be considered incurred under Section 4.09(b)(1) hereof and authenticated under this Indenture will initially may not be deemed to have been incurred on such date in reliance on the exception provided by clause later reclassified.
(1c) of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsinterest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities shares of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided , provided, in each such case, that the amount thereof shall be is included in Fixed Charges of the Company Partnership as accrued accrued. Further, the accounting reclassification of any obligation of the Partnership or any of its Restricted Subsidiaries as Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09.
(d) For purposes of determining any particular amount of Indebtedness, any Guarantees, Liens or obligations with respect to letters of credit, in each case, supporting Indebtedness otherwise included in the determination of such particular amount, will not be included. In addition, notwithstanding any other provision of this Section 4.09, the maximum amount of Indebtedness that may be incurred pursuant to this covenant will not be deemed to be exceeded, with respect to any outstanding Indebtedness, due solely to the extent required by result of fluctuations in the definition exchange rates of such termcurrencies. The principal amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the incurred to refinance other Indebtedness, if incurred in a different currency from the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtednessbeing refinanced, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien shall be calculated based on the assets of currency exchange rate applicable to the specified Person, the lesser of:
(1) the Fair Market Value of currencies in which such assets at respective Indebtedness is denominated that is in effect on the date of determination; and
(2) the amount of the Indebtedness of the other Personsuch refinancing.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of Preferred Stock; provided, however, that the Issuers Company and the Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stock, if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock is issued, as the case may be, would have been at least 2.25 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a3.3(a) will hereof shall not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuers Company and the Guarantors, any Restricted Subsidiary of additional 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 the Company and its Restricted Subsidiaries thereunder) not to exceed the greater of (ia) $700.0 600.0 million and (iib) an amount equal to the sum of (A) $175.0 300.0 million plus 35.0(B) 10% of the Company’s Adjusted Consolidated Net Tangible Assets determined on as of the date of the incurrence of such incurrenceIndebtedness after giving pro forma effect to such incurrence and the application of the proceeds therefrom;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers Company and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and the related Note GuaranteesIndenture;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 50.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceat any time outstanding;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) the first paragraph of this covenant or clauses (2), (3), (4), (5), (14) or (1511) of this Section 4.09(b3.3(b) or this clause (5);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(Ai) 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 unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and
(Bii) (ia) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (iib) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, Company will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any shares of Preferred Stock; provided, however, that:
(Ai) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(Bii) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging ObligationsObligations in the ordinary course of business;
(9) the incurrence by the Company or any of its Restricted Subsidiaries of obligations relating to net gas balancing positions arising in the ordinary course of business and consistent with past practice;
(10) the Guarantee by the Company or any of its Restricted Subsidiaries the Guarantors of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09covenant; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the NotesNotes (in the case of the Company) or a Note Guarantee (in the case of a Guarantor), then the Guarantee must shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business;
(13) any obligation arising from agreements of the Company or any Restricted Subsidiary of the Company 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 Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company or any Restricted Subsidiary;
(14) any Permitted Acquisition Indebtedness; and
(15) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15), not to exceed the greater of (i) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance. For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (15) above, or is entitled to be incurred pursuant to Section 4.09(a), the Company will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributions, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Samples: Indenture (Mariner Energy Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), ) and that the Company will shall not issue any Disqualified Stock and will shall not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that (a) the Issuers Company and any Guarantor may incur Indebtedness (including Acquired Debt), (b) the Company may issue shares of Disqualified Stock or issue Disqualified Stock, and the Guarantors (c) a Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue Preferred Stock, if if, in each case, the Company's Fixed Charge Coverage Ratio for the Company’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 or such Preferred Stock is issued, as the case may be, issued would have been at least 2.25 to 1.01, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred incurred, or the Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.09(a) will . The provisions of the first paragraph of this covenant shall not prohibit apply to the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “"Permitted Debt”"):
(1i) the incurrence by the Issuers Company and the Guarantors, Guarantors of Indebtedness represented by the Notes and the Subsidiary Guarantees;
(ii) the incurrence by the Company of Indebtedness and letters of credit under pursuant to any Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) Facility (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and thereunder) in an aggregate principal amount not to exceed $75,000,000, less the sum of (a) the amount of Purchase Money Indebtedness incurred by the Company or any of its Restricted Subsidiaries thereunderunder clause (vi) not to exceed the greater of (i) $700.0 million below and outstanding and (iib) $175.0 million plus 35.0% the aggregate amount of all proceeds of Assets Sales that have been applied since the Company’s Adjusted Consolidated Net Tangible Assets determined on Issue Date to permanently reduce the date outstanding amount of such incurrenceIndebtedness pursuant to Section 4.10 hereof;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers and the Guarantors of Indebtedness represented by the Notes to be issued on the date of this Indenture and the related Note Guarantees;
(4iii) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceExisting Indebtedness;
(5iv) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refundextend, refinance, renew, replace, defease or discharge any refund, Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this the Indenture to be incurred under Section 4.09(a) or clauses (2), (3), (4), (5), (14) or (15) of this Section 4.09(b)incurred;
(6v) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
that (Ai) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a GuarantorIndebtedness, such Indebtedness must be unsecured and is expressly subordinated subordinate to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and
Notes and (Bii) (iA) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (iiB) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations;
(9) the Guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(10vi) the incurrence by the Company or any of its Restricted Subsidiaries of Purchase Money Indebtedness, in an aggregate principal amount (or amount of Capital Lease Obligations), including all Permitted Refinancing Indebtedness in respect of self-insurance obligations incurred to refund, refinance or bidreplace Purchase Money Indebtedness incurred pursuant to this clause (vi), plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and not to exceed $45,000,000 at any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of businesstime outstanding;
(11vii) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from obligations in the honoring by a bank or other financial institution ordinary course of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as business under (A) trade letters of credit which are to be repaid in full not more than one year after the date on which such Indebtedness is covered within five Business Daysoriginally incurred to finance the purchase of goods by the Company or a Restricted Subsidiary of the Company; (B) standby letters of credit issued for the purpose of supporting (1) workers' compensation liabilities of the Company or any of its Restricted Subsidiaries, or (2) performance, payment, deposit or surety obligations of the Company or any of its Restricted Subsidiaries; and (C) bid, advance payment and performance bonds and surety bonds of the Company and its Restricted Subsidiaries, and refinancings thereof;
(12viii) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind (x) Financial Hedging Obligations that are incurred for the purpose of fixing or hedging interest rate risk (including with respect to any floating rate Indebtedness that is permitted by the terms of the Indenture to be outstanding), but only to the extent such obligations relating do not exceed 105% of the aggregate principal amount of the Indebtedness to net oil or natural gas balancing positions arising which such obligations relate, and (y) Currency Hedging Obligations in connection with the conduct of the Permitted Business in currencies other than the United States Dollar, and, in the case of clauses (x) and (y) not for speculative purposes and incurred in the ordinary course of businessbusiness consistent with prudent business practices;
(13ix) any obligation arising from agreements of the guarantee by the Company or any Restricted Subsidiary of the Company 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 Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company or any Restricted Subsidiary;
(14) any Permitted Acquisition Indebtedness; and
(15) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15), not to exceed the greater of (i) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance. For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (15) above, or is entitled was permitted to be incurred pursuant to Section 4.09(a), the Company will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributions, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other Person.by
Appears in 1 contract
Samples: Indenture (Gulfmark Offshore Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock), and the Guarantors Company's Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue Preferred Stockpreferred stock, if the Fixed Charge Coverage Ratio for the Company’s 's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock preferred stock is issued, as the case may be, issued would have been at least 2.25 2.0 to 1.01, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock preferred stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “"Permitted Debt”"):
(1) the incurrence by the Issuers Company and the Guarantors, any of its Restricted Subsidiaries of Indebtedness and letters of credit under the New Senior Credit Facilities Facility in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed $100.0 million less the greater aggregate amount of (i) $700.0 million and (ii) $175.0 million plus 35.0% all commitment reductions with respect to any revolving credit borrowings that have been made by the Company or any of the Company’s Adjusted Consolidated Net Tangible Assets determined on its Restricted Subsidiaries since the date of such incurrencethis Indenture;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers Company and the Guarantors of Indebtedness represented by the Notes and the related Subsidiary Guarantees to be issued on the date of this Indenture and the Exchange Notes and the related Note GuaranteesSubsidiary Guarantees to be issued pursuant to the Registration Rights Agreement;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness of Tilia assumed as part of the Acquisition; provided that such Indebtedness was not incurred in connection with or in contemplation of the Acquisition;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in an amount not to exceed $15.0 million pursuant to promissory notes issued to the shareholders of Tilia in payment of a portion of the consideration for the Acquisition; provided that such Indebtedness is subordinated to the Notes to at least the same extent as the Notes are subordinated to Senior Debt;
(6) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation construction or improvement of property, plant or equipment used in the business of the Company or any of its such Restricted SubsidiariesSubsidiary, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred pursuant to this clause (46), not to exceed the greater of (i) $45.0 10.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceat any time outstanding;
(57) 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, replace, defease refinance or discharge any replace Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (2), (3), (4), (5), (146), (7) or (1512) of this Section 4.09(b);
(6) 8) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a GuarantorIndebtedness, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Subsidiary Guarantee, in the case of a Guarantor; and
(B) (i1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company thereof and (ii2) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Companythereof, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6)8);
(79) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging ObligationsObligations that are incurred for the purpose of fixing, swapping or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be outstanding;
(910) the Guarantee guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business;
(11) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on Disqualified Stock in the form of additional shares of the same class of Disqualified Stock shall not be deemed to be an incurrence by 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 Fixed Charges of the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;accrued; and
(12) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business;
(13) any obligation arising from agreements of the Company or any Restricted Subsidiary of the Company 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 Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company or any Restricted Subsidiary;
(14) any Permitted Acquisition Indebtedness; and
(15) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (1512), not to exceed the greater of (i) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance25.0 million. For purposes of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (1512) above, or is entitled to be incurred pursuant to Section 4.09(a), the Company will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under the New Senior Credit Agreement Facility outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributions, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Samples: Indenture (Alltrista Corp)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, Stock and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stock), if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock preferred stock is issued, as the case may be, would have been at least 2.25 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock preferred stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a4.08(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuers Company and the Guarantors, Guarantors of additional 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 the Company and its Restricted Subsidiaries thereunder) not to exceed the greater of (ia) $700.0 million 20.0 million, less the aggregate amount of all permanent commitment reductions with respect to any revolving credit borrowings under a Credit Facility that have been made by the Company or any of its Restricted Subsidiaries since the date of this Indenture and (iib) $175.0 million plus 35.019.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on Assets, but in no event more than $30.0 million; provided, however, that in no event shall the date aggregate principal amount of Indebtedness under such incurrenceCredit Facilities that is not revolving credit borrowings exceed $8.0 million;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers Company and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture (but not any Additional Notes for the avoidance of doubt) and the Exchange Notes and the related Note GuaranteesGuarantees 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 or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of of, or to lease property, plant plant, equipment or equipment other assets (including Capital Stock) used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), ) at any time outstanding not to exceed the greater of (i) $45.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance5.0 million;
(5) Indebtedness (including Acquired Debt) of (x) the Company or any Guarantor incurred or issued to finance an acquisition of all or substantially all of the assets of another Person (whether through merger, consolidation, the direct purchase of such assets or the acquisition of Capital Stock of the person owning such assets) or (y) Persons that are acquired by the Company or a Guarantor; provided that after giving effect to the incurrence of such Indebtedness, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (5), and such acquisition, merger or consolidation (in each case with such pro forma adjustments as are contemplated by the definition of “Fixed Charge Coverage Ratio”), the Company would have been able to incur $1.00 of additional Indebtedness pursuant to the first paragraph of this covenant after giving effect to the incurrence of such Indebtedness pursuant to this clause (5);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of Indebtedness between or among the Company or and/or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case Subsidiaries) that was permitted by this Indenture to be incurred under Section 4.09(a4.08(a) hereof or clauses (2), (3), (4), (5), (146), (15) or (1516) of this Section 4.09(b4.08(b);
(67) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and and/or any of its Restricted Subsidiaries; provided, however, that:
(A) 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 unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note GuaranteeGuarantee of such Guarantor, in the case of a Guarantor; and
(B) any (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and Company, or (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, Company will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (67);
(7) 8) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stockshares of preferred stock; provided, however, thatthat any:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; andor
(B) any sale or other transfer of any such Preferred Stock preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock preferred stock by such Restricted Subsidiary that was not permitted by this clause (7)8);
(8) 9) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging ObligationsObligations in the ordinary course of business and not for speculative purposes;
(910) the Guarantee by the Company or any of its Restricted Subsidiaries the Guarantors of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.094.08; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Note Guarantee must shall be subordinated or pari passu, as applicable, to other Indebtedness of the Guarantor to the same extent as the Indebtedness guaranteed;
(1011) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, insurance contracts, self-insurance obligations or bidobligations, plugging bankers’ acceptances, performance and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion other similar guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims not constituting Indebtedness in the ordinary course of business;
(1112) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence Days following receipt by the Company or any such Restricted Subsidiary of its Restricted Subsidiaries of in-kind obligations relating to net oil notice or natural gas balancing positions arising in the ordinary course of businesssuch event;
(13) any obligation arising from agreements of the Company or any Restricted Subsidiary of the Company 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 Capital Stock of a Restricted Subsidiary (including, without limitation, assets acquired by a Restricted Subsidiary of the Company and any Person that, as a result of such transaction, becomes a Restricted Subsidiary of the Company) in a transaction permitted by this Indenture; , provided that the maximum liability in respect of all such obligation is not reflected as Indebtedness incurred in connection with a liability on disposition shall at no time exceed the face gross proceeds including noncash proceeds (the Fair Market Value of such noncash proceeds being measured at the balance sheet of time received and without giving effect to any subsequent changes in value) actually received by the Company or any and its Restricted SubsidiarySubsidiaries in connection with such disposition;
(14) Indebtedness of the Company or a Restricted Subsidiary to the extent that the net proceeds thereof are promptly deposited to effect Legal Defeasance or Covenant Defeasance of the Notes or to effect satisfaction and discharge of this Indenture;
(15) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate amount at any time outstanding pursuant to this clause (15), including all Permitted Acquisition IndebtednessRefinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (15), not to exceed $8.0 million (or the equivalent thereof, measured at the time of each incurrence, in applicable foreign currency); and
(1516) the incurrence by the Company or any of its Restricted Subsidiaries the Guarantors of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (1516), not to exceed the greater $10.0 million. The Company will not incur, and will not permit any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of (i) $75.0 million and (ii) 5.0% payment to any other Indebtedness of the Company’s Adjusted Consolidated Net Tangible Assets determined as Company 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 will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the date Company solely by virtue of such incurrence being unsecured or issuanceby virtue of being secured on a junior Lien basis. For purposes of determining compliance with this Section 4.094.08, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (1516) aboveappearing above in this Section 4.08(b), or is entitled to be incurred pursuant to Section 4.09(a4.08(a), the Company will be permitted to divide, classify and reclassify divide such item of Indebtedness on the date of its incurrence, or and later reclassify and redivide or reclassify all or a portion of such item of IndebtednessIndebtedness among any one or more of such clauses and/or Section 4.08(a), in any manner that complies with this Section 4.094.08. Indebtedness under the Credit Agreement Facilities outstanding on the date on which Notes are first issued and authenticated under of this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest or Preferred Stock or dividends on Disqualified Stock dividends or distributionsStock, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities shares of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.094.08; provided provided, in each such case, that the amount thereof shall be of any such accrual, accretion or payment is included in Fixed Charges of the Company as accrued (to the extent required by the definition of such term) of the Company as accrued. For purposes of determining compliance with any U.S. dollar denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be utilized, calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred. Notwithstanding any other provision of this covenant, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this covenant shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. In determining the amount of Indebtedness outstanding, the outstanding amount of any particular Indebtedness of any Person shall be counted only once and any obligation of such person or any other Person under any guarantee, Lien, letter of credit or similar instrument supporting such Indebtedness shall be disregarded so long as it is permitted to be incurred by the Person or Persons incurring such obligation. The amount of any Indebtedness outstanding as of any date will be:
(a1) the accreted value of the Indebtedness, in the case cause of any Indebtedness issued with original issue discount;
(b2) with respect to contingent obligations, the principal amount maximum liability upon the occurrences of the Indebtedness, in contingency giving rise to the case of any other Indebtedness; andobligation;
(c3) with respect to Hedging Obligations, the net amount payable, if any, by the specified Persons if such Hedging Obligations terminated at that time due to default by such Person;
(4) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1A) the Fair Market Value of such assets at the date of determination; and;
(2B) the amount of such Indebtedness of the other Person;
(5) the maximum amount the Company and its Restricted Subsidiaries would become obligated to pay upon the maturity of, or pursuant to any mandatory redemption provisions of, such Disqualified Stock, in the case of any Disqualified Stock;
(6) the amount of the liability in respect thereof determined in accordance with GAAP, in the case of Indebtedness issued at a price that is less than the principal amount thereof; and
(7) the principal amount of the Indebtedness, in the case of any other PersonIndebtedness.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred equity; provided, however, that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Subsidiary Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stockpreferred equity, if the Fixed Charge Coverage Ratio for the Company’s 's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock preferred equity is issued, as the case may be, would have been at least 2.25 2.0 to 1.01, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock preferred equity had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.09(a) above will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “"Permitted Debt”"):
(1) the incurrence by the Issuers Company and the Guarantors, its Restricted Subsidiaries of additional 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 the Company and its Restricted Subsidiaries thereunderthereunder and Hedging Obligations being deemed to have a principal amount equal to the net obligations of the Company and its Restricted Subsidiaries thereunder from time to time) not to exceed the greater of:
(A) from the date of (i) this Indenture through August 31, 2004, $700.0 million 80.0 million, from September 1, 2004 through May 31, 2005, $60.0 million, from June 1, 2005 through February 28, 2006, $40.0 million, and (ii) from and after March 1, 2006, $175.0 million plus 35.030.0 million, in each case less 75% of the Company’s Adjusted Consolidated aggregate amount of all Net Tangible Assets determined on Proceeds of Asset Sales applied by the Company or any of its Restricted Subsidiaries since the date of this Indenture to repay any term Indebtedness under a Credit Facility or to repay any revolving credit Indebtedness under a Credit Facility pursuant to Section 4.10 hereof; or
(B) $30.0 million; provided, however, that for purposes of calculating the amounts available under this clause (1), such incurrenceamounts shall be reduced by the amount of any Indebtedness of any Receivables Subsidiary outstanding at any time;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers and the Guarantors then guaranteeing the Notes of Indebtedness represented by the Notes and the related Guarantees to be issued on or after the date of this Indenture and the incurrence by the Issuers and the Guarantors then guaranteeing the Notes of Indebtedness represented by the Exchange Notes and the related Note Guarantees;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 10.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceat any time outstanding;
(5) Indebtedness of a Subsidiary incurred and outstanding on or prior to the date on which such Subsidiary was acquired by the Company (other than Indebtedness incurred in contemplation of, or in connection with, the transaction or series of related transactions pursuant to which such Subsidiary became a Subsidiary of or was otherwise acquired by the Company); provided, that such Indebtedness is non-recourse to the Company or any of its Subsidiaries other than the Subsidiary acquired; provided, further, that for any such Indebtedness outstanding at any time under this clause (5) in excess of $10.0 million on the date that such Subsidiary is acquired by the Company, the Company would have been able to incur $1.00 of additional Indebtedness pursuant to Section 4.09(a) above after giving effect to the incurrence of such Indebtedness pursuant to this clause (5);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under the Section 4.09(a) above or clauses (2), (3), (4), (5), (14) or (156) of this Section 4.09(b);
(67) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Subsidiary Guarantor is the obligor on such Indebtedness and the payee is not the Company or a GuarantorSubsidiary Guarantor or a Receivables Subsidiary, such Indebtedness must be unsecured and expressly subordinated in right of payment to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Subsidiary Guarantee, in the case of a Subsidiary Guarantor; and
(B) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (67);
(7) 8) the issuance by any of the Company’s 's Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stockshares of preferred equity; provided, however, thatthat any:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock 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 Stock 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 Stock preferred equity by such Restricted Subsidiary that was not permitted by this clause (7)8);
(8) 9) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging ObligationsObligations in the ordinary course of business;
(910) the Guarantee guarantee by the Company or any of its Restricted Subsidiaries the Subsidiary Guarantors then guaranteeing the Notes of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided provided, that if the Indebtedness being guaranteed is subordinated in right of payment to or pari passu with the Notes, then the Guarantee must shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed; provided, further, that neither the Company nor any such Subsidiary Guarantor may guarantee any Indebtedness pursuant to this clause (10) incurred under clause (5) of this Section 4.09(b) unless the Company would have been able to incur $1.00 of additional Indebtedness pursuant to Section 4.09(a) above after giving effect to the incurrence of such Indebtedness pursuant to such clause (5) of this Section 4.09(b);
(1011) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers' compensation claims, self-insurance obligations or bidobligations, plugging bankers' acceptances, performance and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business;
(1112) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(1213) the incurrence by the Company or any of its Restricted Foreign Subsidiaries of in-kind obligations relating Indebtedness in an aggregate principal amount at any time outstanding pursuant to net oil or natural gas balancing positions arising in the ordinary course of business;
this clause (13) ), including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any obligation arising from agreements Indebtedness incurred pursuant to this clause (13), not to exceed $5.0 million (or the equivalent thereof, measured at the time of the Company or any Restricted Subsidiary of the Company providing for indemnification, adjustment of purchase price, earn outs, or similar obligationseach incurrence, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company or any Restricted Subsidiaryapplicable foreign currency);
(14) any Permitted Acquisition Indebtedness; and
(15) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (1514), not to exceed $10.0 million; provided, that such Indebtedness may not be secured;
(15) Indebtedness of the greater Company and its Restricted Subsidiaries in connection with the performance, surety, statutory, appeal or similar bonds in the ordinary course of business;
(i16) $75.0 million Indebtedness of the Company and its Restricted Subsidiaries in connection with agreements providing for indemnification, purchase price adjustments and similar obligations in connection with the sale or disposition of any of their business, properties or assets to any Person that is not an Affiliate; and
(ii17) 5.0% the incurrence by a Receivables Subsidiary of Indebtedness in a Qualified Receivables Transaction that is without credit-related recourse to the Company or to any other Subsidiary of the Company or their assets (other than such Receivables Subsidiary and its assets and, as to the Company or any Subsidiary of the Company’s Adjusted Consolidated Net Tangible Assets determined as , other than pursuant to representations, warranties, covenants and indemnities customary for such transactions) and is not guaranteed by any such Person. The Company will not incur any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the date Company unless such Indebtedness is also contractually subordinated in right of such incurrence payment to the Notes on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or issuanceby virtue of being secured on a first or junior Lien basis. 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 (1517) above, or is entitled to be incurred pursuant to Section 4.09(a)) above, the Company Company, in its sole discretion, will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under the Credit Agreement Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsinterest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock preferred equity as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities shares of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided provided, in each such case, that the amount thereof shall be is included in Fixed Charges of the Company as accrued accrued. Notwithstanding any other provision of this Section 4.09 hereof, except in the case of Hedging Obligations, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to the extent required by the definition this Section 4.09 shall not be deemed to be exceeded solely as a result of such termfluctuations in exchange rates or currency values. The amount of any Indebtedness outstanding as of any date will be:
(a1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b2) the principal amount of the Indebtedness, in the case of any other Indebtedness; andIndebtedness not issued with original issue discount;
(c3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser ofof the:
(1A) the Fair Market Value of such assets at the date of determination; and
(2B) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Samples: Indenture (Jordan Industries Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company Issuer will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and Issuer will not permit any of its Restricted Subsidiaries to issue any shares of Preferred Stock; provided, however, that the Issuers Issuer or any Subsidiary Guarantor may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors (which may incur Indebtedness (including Acquired Debtbe guaranteed by any Subsidiary Guarantor) or issue Preferred Stock, if the Fixed Charge Coverage Debt to Adjusted Cash EBITDA Ratio for the CompanyIssuer’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred would be less than or such Disqualified Stock or such Preferred Stock is issued, as the case may be, would have been at least 2.25 equal to 1.05.50 to 1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or and the Disqualified Stock or the Preferred Stock application of proceeds therefrom had been issued, as the case may be, occurred at the beginning of such four-quarter period.
(b) The limitations set forth in Section 4.09(a4.03(a) will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1i) the incurrence by the Issuers Issuer and the Guarantors, any Restricted Subsidiaries of revolving credit or term loan 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 the Company Issuer and its Restricted Subsidiaries thereunder) not to exceed (A) the greater of (ix) $700.0 50.0 million and (iiy) $175.0 million plus 35.035% of Adjusted Cash EBITDA for the CompanyIssuer’s Adjusted Consolidated Net Tangible Assets determined on most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such Indebtedness is incurred less (B) the stated amount of such incurrenceall letters of credit, bankers’ acceptances, similar instruments or performance bonds outstanding pursuant to clause (xix) below;
(2ii) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers and the Guarantors of Indebtedness represented by the Notes to be (other than Additional Notes) and any Guarantees thereof issued on the date of this Indenture and the related Note GuaranteesIssue Date;
(4iii) Indebtedness existing on the incurrence by the Company or any of its Restricted Subsidiaries of Issue Date (other than Indebtedness represented by Capital described in clauses (i) and (ii) above);
(iv) Indebtedness (including Capitalized Lease Obligations, mortgage financings or purchase money obligations, in each case, ) incurred for or issued by the purpose of financing Issuer or any Restricted Subsidiary to finance all or any part of the purchase price or cost of designpurchase, construction, installation lease or improvement of propertyproperty (real or personal), plant or equipment that is used or useful in the business of the Company or any of its Restricted Subsidiaries, in a Permitted Business up to an aggregate principal amount outstandingthat, including when aggregated with the principal amount of all Permitted Refinancing other Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness then outstanding and incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (2), (3), (4), (5), (14) or (15) of this Section 4.09(b);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and
(B) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations;
(9) the Guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business;
(13) any obligation arising from agreements of the Company or any Restricted Subsidiary of the Company 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 Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company or any Restricted Subsidiary;
(14) any Permitted Acquisition Indebtedness; and
(15) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15), not to exceed the greater of (i) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance. For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (15) above, or is entitled to be incurred pursuant to Section 4.09(a), the Company will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributions, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other Person.clause
Appears in 1 contract
Samples: Indenture (GeoEye, Inc.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) incur any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stock; provided, however, that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors any Guarantor may incur Indebtedness (including Acquired Debt) or issue Preferred Stock, if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock is issued, as the case may be, would have been at least 2.25 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuers Company and the GuarantorsRestricted 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 the Company and its Restricted Subsidiaries thereunder) not to exceed the greater greatest of (i) $700.0 million and 325.0 million, (ii) $175.0 million plus 35.0the Borrowing Base in effect under the Credit Agreement at such time, and (iii) 32.5% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers Company and the Guarantors of Indebtedness represented by the Notes to be issued on the date of this Indenture and the related Note Guarantees;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Finance Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 30.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the CompanyCompany or any Preferred Stock of a Restricted Subsidiary, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (2), (3), (4), (5), (14), (15) or (1516) of this Section 4.09(b);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and
(B) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations;
(9) the Guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business or consistent with industry practice or past practice and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of businessbusiness or consistent with industry practice or past practice;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil oil, natural gas liquid or natural gas balancing positions arising in the ordinary course of business;
(13) any obligation arising from agreements of the Company or any Restricted Subsidiary of the Company 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 Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company or any Restricted Subsidiary;
(14) any Permitted Acquisition Indebtedness; and
(15) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or Indebtedness, the issuance by the Company of any Disqualified Stock or the issuance by any Restricted Subsidiary of Preferred Stock in an aggregate principal amount (or accreted value, as applicable) or liquidation preference at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock or Preferred Stock issued pursuant to this clause (15), not to exceed exceed, at any one time outstanding, the greater of (ia) $75.0 50.0 million and (iib) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance. For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness Indebtedness, Disqualified Stock or Preferred Stock meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (15) above, or is entitled to be incurred or issued pursuant to Section 4.09(a), the Company will be permitted to divide, classify and reclassify such item of Indebtedness Indebtedness, Disqualified Stock or Preferred Stock on the date of its incurrenceincurrence or issuance, or later redivide or reclassify all or a portion of such item of Indebtedness, Disqualified Stock or Preferred Stock, in any manner that complies with this Section 4.09. Indebtedness under the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of “Permitted Debt. .” The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributions, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Samples: Indenture (Permian Resources Corp)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company Xxxxxxx will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) Incur any Indebtedness (including Acquired Debt), and the Company Issuer and Xxxxxxx will not issue any preferred stock or Disqualified Stock Stock, respectively, and Xxxxxxx will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Xxxxxxx may incur Incur Indebtedness (including Acquired Debt) or issue preferred stock or Disqualified Stock, and the Issuer and the Subsidiary Guarantors may incur Incur Indebtedness (including Acquired Debt) or issue Preferred preferred stock or Disqualified Stock, if the Fixed Charge Coverage Ratio for the Company’s Xxxxxxx’x most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred Incurred or such Disqualified Stock or such Preferred Stock preferred stock is issued, as the case may be, issued would have been at least 2.25 2.5 to 1.01, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred Incurred or the preferred stock or Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Paragraph (a) of this Section 4.09(a) 4.09 will not prohibit the incurrence Incurrence of any Indebtedness by the Issuer or any of the following items Guarantors under or in respect of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuers and the Guarantors, 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 and letters of guarantee being deemed to have a principal amount equal to the maximum potential liability of the Company Xxxxxxx and its Restricted Subsidiaries thereunder) not to exceed the greater of:
(A) Cdn$300 million, less the aggregate amount of all Net Proceeds of Asset Sales that have been applied by Xxxxxxx or any of its Restricted Subsidiaries since the Issue Date to permanently repay any term Indebtedness under a Credit Facility pursuant to Section 4.10 hereof and less the aggregate amount of all commitment reductions with respect to any revolving credit borrowings under a Credit Facility that have been made by Xxxxxxx or any of its Restricted Subsidiaries since the Issue Date as a result of the application of Net Proceeds of Asset Sales pursuant to Section 4.10 hereof; and
(iB) $700.0 million and (ii) $175.0 Cdn$150 million plus 35.030% of the Company’s Adjusted Consolidated Net Tangible Assets determined on as of the last day of the fiscal quarter for which internal financial statements are available immediately preceding the date of on which such incurrenceIndebtedness is Incurred;
(2) the incurrence by the Company and its Restricted Subsidiaries Existing Indebtedness (other than Indebtedness described under clause (1), (3) or (6) of the Existing Indebtednessthis Section 4.09(b));
(3) the incurrence by the Issuers Notes and the Guarantors of Indebtedness represented by the Notes related Guarantees to be issued on the date of this Indenture and the related Note GuaranteesIssue Date;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred Incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation construction or improvement of property, plant or equipment used in the business of the Company Issuer or any of its Restricted Subsidiariessuch Guarantor, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred Incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred Incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 US$25.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceat any time outstanding;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease refinance or discharge any replace Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred Incurred under Section 4.09(a) or clauses (2), (3), (4), (5), (14) or (1513) of this Section 4.09(b);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company Xxxxxxx and any of its Restricted Subsidiaries, including the intercompany Indebtedness referred to in the last sentence of the definition of “Existing Indebtedness”; provided, however, that:
(A) if the Company Issuer or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a GuarantorIndebtedness, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the CompanyIssuer, or the Note Guarantee, in the case of a Guarantor; and
(B) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company Xxxxxxx or a Restricted Subsidiary of the Company Xxxxxxx and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company Xxxxxxx or a Restricted Subsidiary of the CompanyXxxxxxx, will xxxx be deemed, in each case, to constitute an incurrence Incurrence of such Indebtedness by the Company Xxxxxxx or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) Hedging Obligations, provided that such Hedging Obligations were Incurred in the issuance by any ordinary course of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is business and not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7)for speculative purposes;
(8) the incurrence guarantee by the Company Issuer or any of its Restricted Subsidiaries of Hedging Obligations;
(9) the Guarantee by the Company or any of its Restricted Subsidiaries Guarantors of Indebtedness of Xxxxxxx or the Company Issuer or a another Restricted Subsidiary of the Company to the extent Xxxxxxx that the guaranteed Indebtedness was permitted to be incurred Incurred by another provision of this Section 4.09; provided that if ;
(9) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness being guaranteed is subordinated to or pari passu in the form of additional Indebtedness with the Notessame terms, then and the Guarantee must be subordinated or pari passu, as applicable, to payment of dividends on Disqualified Stock in the form of additional shares of the same extent 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 Fixed Charges of Xxxxxxx as the Indebtedness guaranteedaccrued;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations or bidand Obligations under Oil and Gas Hedging Contracts, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary that such Contracts were entered into in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of businessnot for speculative purposes;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions production imbalances arising in the ordinary course of business;
(1312) any obligation arising from agreements standby letters of the Company credit, guarantees, performance or any Restricted Subsidiary of the Company providing for indemnification, adjustment of purchase price, earn outs, surety bond or similar other reimbursement obligations, in each case, incurred or assumed issued in the ordinary course of business and not in connection with the disposition borrowing of money or acquisition the obtaining of any businessan advance or credit (other than advances or credit for goods and services in the ordinary course of business and on terms and conditions that are customary in the Oil and Gas Business, assets and other than the extension of credit represented by such letter of credit, guarantee or Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company performance or any Restricted Subsidiarysurety bond itself);
(1413) any Permitted Acquisition Indebtedness; and
(15) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred Incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred or Disqualified Stock issued Incurred pursuant to this clause (1513), not to exceed US$30.0 million;
(14) Indebtedness of Compton or the greater Issuer to the extent that the net proceeds thereof are promptly (A) used to purchase Notes tendered in a Change of Control Offer or (iB) $75.0 million deposited to defease or to satisfy and discharge the Notes; and
(ii15) 5.0% Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the Company’s Adjusted Consolidated Net Tangible Assets determined ordinary course of business; provided, however, that such Indebtedness is extinguished within five Business Days after receipt of notice of its Incurrence by the Issuer or Guarantor, as of the date of such incurrence or issuanceapplicable. 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 (15) above, or is entitled to be incurred Incurred pursuant to Section 4.09(a), Xxxxxxx or the Company applicable Restricted Subsidiary will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, in whole or later redivide or reclassify all or a portion of such item of Indebtedness, in part in any manner that complies with the applicable part of this Section 4.09, including by allocation to more than one other type of Indebtedness. In addition, any Indebtedness originally classified as Incurred pursuant to clauses (1) through (15) above may later be reclassified by the Issuer such that it will be deemed as having been Incurred pursuant to another of such clauses to the extent that such reclassified Indebtedness could be Incurred pursuant to such new clause at the time of such reclassification. Notwithstanding the foregoing, Indebtedness under the Credit Agreement Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture Issue Date will initially be deemed to have been incurred Incurred on such date in reliance on the exception provided by clause (1) of the definition this Section 4.09(b). Notwithstanding any other provision of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsthis Section 4.09, the accretion or amortization maximum amount of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due that may be Incurred pursuant to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock this Section 4.09 will not be deemed to be an incurrence of exceeded with respect to any outstanding Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued due solely to the extent required by the definition result of such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, fluctuations in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; andcurrency exchange rates.
(c) Neither Xxxxxxx nor the Issuer will Incur any additional Indebtedness (including Permitted Debt) that is contractually subordinated in respect right of payment to any other Indebtedness of another Person secured by a Lien Xxxxxxx or the Issuer, respectively, unless such additional Indebtedness is also contractually subordinated in right of payment to the Parent Guarantee or the Notes, as applicable, on substantially identical terms. Neither Xxxxxxx nor the assets Issuer will permit any Subsidiary Guarantor to Incur any Indebtedness that is subordinated in right of payment to any other Indebtedness of such Subsidiary Guarantor unless it is subordinated in right of payment to such Subsidiary Guarantor’s Subsidiary Guarantee on substantially identical terms. For purposes of the specified Personforegoing, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the no Indebtedness of the Issuer or any Guarantor will be deemed to be contractually subordinated in right of payment to any other PersonIndebtedness of the Issuer or such Guarantor solely by reason of any Liens or guarantees arising or created in respect thereof or by virtue of the fact that the holders of any secured Indebtedness have entered into intercreditor agreements giving one or more of such holders priority over the other holders in the collateral held by them.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stock), if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock is issued, as the case may be, would have been at least 2.25 2.00 to 1.01.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuers Company and the Guarantors, any Guarantors of Indebtedness and letters of credit under Senior 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 (a) the greater of (i) $700.0 235.0 million and (ii) $175.0 million plus 35.0% an amount equal to 1.0 times Consolidated Cash Flow of the Company’s Adjusted Consolidated Company for the most recently ended four full fiscal quarters of the Company for which internal financial statements are available less (b) the aggregate amount of all Net Tangible Assets determined on Proceeds of Asset Sales applied by the Company or any of its Restricted Subsidiaries since the date of this Indenture to repay any term Indebtedness under such incurrenceSenior Credit Facilities or to repay any revolving credit Indebtedness under such Senior Credit Facilities and effect a corresponding commitment reduction thereunder pursuant to Section 4.10 hereof;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and the related Note Guarantees;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (42), not to exceed the greater of (i) $45.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance;
(53) Indebtedness of the incurrence by Company to any Restricted Subsidiary of the Company or of any Restricted Subsidiary of the Company to the Company or any other Restricted Subsidiary of its Restricted Subsidiaries of Permitted Refinancing the Company to the extent that such Indebtedness in exchange for, or the net proceeds of which are used corresponds to renew, refund, refinance, replace, defease or discharge any Indebtedness Investment permitted by clause (other than intercompany Indebtedness5) of the Company definition of “Permitted Investments”; provided that such Indebtedness shall not have been transferred or pledged to any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (2), (3), (4), (5), (14) or (15) of this Section 4.09(b)third party;
(64) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(Aa) 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 unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and
(Bb) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (64);
(75) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stockshares of preferred stock; provided, however, that:
(Aa) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(Bb) any sale or other transfer of any such Preferred Stock preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock preferred stock by such Restricted Subsidiary that was not permitted by this clause (75);
(6) Indebtedness of any Person that shall have become a Restricted Subsidiary of the Company after the date of this Indenture; provided that such Indebtedness (i) shall have existed at the time such Person becomes a Restricted Subsidiary of the Company and shall not have been created in contemplation of or in connection with such Person becoming a Restricted Subsidiary of the Company (ii) does not constitute Indebtedness for borrowed money unless (x) such Indebtedness constitutes purchase money obligations, (y) such Indebtedness constitutes Excluded Debt or (z) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.09(a) after giving pro forma effect to the incurrence of such Indebtedness and (iii) is not directly or indirectly recourse to the Company or any of its Restricted Subsidiaries or any of their respective assets, other than to the Person that becomes a Restricted Subsidiary of the Company, and any Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (6);
(7) Guarantees incurred in the ordinary course of business by the Company or any of its Restricted Subsidiaries in respect of (i) obligations of any Broker-Dealer Subsidiaries and any other Excluded Regulated Subsidiaries, (ii) the Excluded Debt of KCG Asia or (iii) other obligations of any Restricted Subsidiary of the Company that is not a Broker-Dealer Subsidiary, a Guarantor, or other Excluded Regulated Subsidiary; provided that the aggregate amount of all Guarantees permitted by this clause (7)(iii) shall not exceed the greater of (x) $30.0 million and (y) 0.5% of Consolidated Total Assets;
(8) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness and, other than with respect to any Indebtedness under the 2015 Convertible Notes, any Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (8);
(9) Indebtedness constituting purchase money obligations (including Capital Lease Obligations) incurred to finance the acquisition, construction or improvement of any fixed or capital assets, and any Indebtedness assumed or incurred in connection with the acquisition of any such assets or secured by a Lien on any such assets prior to the acquisition thereof, and Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (9); provided that (a) the aggregate principal amount of all Indebtedness permitted by this clause (9) shall not exceed the greater of (x) $60,000,000 and (y) 0.9% of Consolidated Total Assets, in each case at any time outstanding and (b) such Indebtedness is initially incurred prior to or within 365 days after such acquisition or the completion of such construction;
(10) Excluded Debt;
(11) Guarantees of the Company and its Restricted Subsidiaries in respect of Indebtedness or other liabilities of the Company and its Restricted Subsidiaries so long as the incurrence or existence of such Indebtedness or other liabilities is permitted under this Indenture; provided that the Company or any of the Guarantors may not incur such Guarantees in respect of Indebtedness or other liabilities of a party that is not the Company or a Guarantor; provided further that any Guarantees in respect of subordinated Indebtedness shall also be subordinated to the Notes or any Note Guarantee on terms at least as favorable to the Holders of the Notes as those applicable to the subordinated indebtedness that is guaranteed;
(12) the incurrence by Foreign Restricted Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (x) $50,000,000 and (y) 0.8% of Consolidated Total Assets (in each case, or the equivalent thereof, measured at the time of each incurrence, in the applicable foreign currency);
(13) cash management obligations and Indebtedness in respect of netting services, overdraft protections and similar arrangements in each case in connection with cash management and deposit accounts in the ordinary course of business;
(14) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging ObligationsObligations for bona fide hedging purposes and not for speculative purposes;
(915) Indebtedness representing deferred compensation or other similar arrangements to employees of the Guarantee Company or any of its Restricted Subsidiaries incurred in the ordinary course of business;
(16) Indebtedness incurred by the Company or any of its Restricted Subsidiaries of Indebtedness of the Company in an acquisition, any other Investment or a Restricted Subsidiary of the Company any disposition, in each case, expressly permitted under this Indenture, in each case to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision constituting indemnification obligations or obligations in respect of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to purchase price (including earn-outs) or pari passu with the Notes, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteedother similar adjustments;
(1017) the incurrence Indebtedness incurred by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company instruments issued or a Restricted Subsidiary created in the ordinary course of business and any Guarantees business, including in respect of workers compensation claims, health, disability or letters of credit functioning as other employee benefits or supporting any property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(18) Indebtedness consisting of the foregoing bonds or obligations financing of insurance premiums so long as the aggregate amount of such Indebtedness is not in excess of the amount of the unpaid cost of, and workers’ compensation claims shall be incurred only to defer the cost of, such insurance for the year in which such Indebtedness is incurred and such Indebtedness is outstanding only during such year and is incurred in the ordinary course of business;
(1119) the incurrence obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Company or any of its Restricted Subsidiaries Subsidiaries, or obligations in respect of Indebtedness arising from the honoring by a letters of credit, bank or other financial institution of a check, draft guarantees or similar instrument inadvertently drawn against insufficient fundsinstruments related thereto, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in each case in the ordinary course of businessbusiness and consistent with past practice;
(13) any obligation arising from agreements of the Company or any Restricted Subsidiary of the Company 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 Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company or any Restricted Subsidiary;
(14) any Permitted Acquisition Indebtedness; and
(1520) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (1520), at the time of incurrence thereof, not to exceed $75,000,000;
(21) Indebtedness in the greater ordinary course of business in respect of letters of credit, guarantees, counter-indemnities and short term facilities incurred by the Company or any of its Restricted Subsidiaries engaged in Exchange and Clearing Operations in connection with the ordinary clearing, depository and settlement procedures (iincluding, without limitation, any letter of credit or guarantees provided to any central securities depositories or external custodians) $75.0 million relating thereto; and
(22) 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 (except in the case of daylight overdrafts) inadvertently drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is covered within five business days. The Company will not incur, and will not permit any Guarantor to incur, any Indebtedness (iiincluding Permitted Debt) 5.0% that is contractually subordinated in right of payment to any other Indebtedness of the Company’s Adjusted Consolidated Net Tangible Assets determined as Company 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 will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the date Company solely by virtue of such incurrence being unsecured or issuanceby virtue of being secured on a junior Lien or priority basis. 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 (1522) above, or is entitled to be incurred pursuant to Section 4.09(a)) hereof, the Company will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionspremium, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities shares of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided provided, in each such case, that the amount thereof shall be of any such accrual, accretion or payment is included in Fixed Charges of the Company as accrued accrued. Notwithstanding any other provision of this Section 4.09, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. Notwithstanding the foregoing, so long as it is not a Guarantor, neither GETCO Investments LLC nor GETCO Strategic Investments, LLC shall incur any Indebtedness (other than Indebtedness of the type described in clauses (4) (so long as such Indebtedness is owed to the extent required by the definition of such termCompany or a Guarantor), (13), (16) or (22) above). The amount of any Indebtedness outstanding as of any date will be:
(a1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1A) the Fair Market Value of such assets at the date of determination; and
(2B) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Samples: Indenture (KCG Holdings, Inc.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will Trust shall not, and will shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), and the Company will Trust shall not issue any Disqualified Stock and will shall not permit any of its Restricted Subsidiaries to issue any shares of Preferred Stock; provided, however, that the Issuers Trust may incur Indebtedness (including Acquired Debt) or and issue Disqualified Stock, and the Trust and the Guarantors may incur Indebtedness (including and issue Preferred Stock and any other Restricted Subsidiary may incur Acquired Debt) or issue Preferred Stock, if the Fixed Charge Coverage Ratio for the Company’s Trust's most recently ended four full fiscal quarters for which internal financial statements are publicly available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock is issued, as the case may be, issued would have been at least 2.25 2.0 to 1.01, determined on a pro forma basis Pro Forma Basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Preferred Stock or the Preferred Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.09(a) will . The first paragraph of this covenant shall not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “"Permitted Debt”"):
(1) the incurrence by the Issuers and the Guarantors, Trust and/or one or more Restricted Subsidiaries of additional 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 the Company Trust and its the Restricted Subsidiaries Subsidiaries, without duplication, thereunder) not to exceed $625.0 million less (x) the greater aggregate principal amount of Receivables Debt outstanding under clause (i2) $700.0 million below and (iiy) the aggregate amount of all Net Proceeds of Asset Sales applied by the Trust or any of its Restricted Subsidiaries to repay any Indebtedness under a Credit Facility or Receivables Debt under Receivables Facilities and effect a corresponding commitment reduction thereunder pursuant to Section 4.11 hereof; provided, that Restricted Subsidiaries that are not Guarantors shall not directly or indirectly incur Indebtedness and letters of credit in an aggregate principal amount outstanding under this clause (1) in excess of $175.0 50.0 million; provided, further, that the aggregate principal amount of Indebtedness, letters of credit and Receivables Debt under Receivables Facilities which may be incurred under this clause (1) and clause (2) below shall not be reduced below $100.0 million plus 35.0% in the aggregate at any one time outstanding by reason of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date subclause (y) above and subclause (y) of such incurrenceclause (2) below;
(2) the incurrence by Receivables Subsidiaries of Receivables Debt under Receivables Facilities in an aggregate principal amount at any time outstanding pursuant to this clause (2) not to exceed $625 million less (x) the Company aggregate principal amount of Indebtedness and letters of credit (determined as described in clause (1) above) outstanding under clause (1) above and (y) the aggregate amount of all Net Proceeds of Asset Sales applied to reduce commitments with respect to Receivables Debt or Indebtedness under a Credit Facility pursuant to the covenant described in Section 4.11 hereof; provided, that the aggregate principal amount of Indebtedness, letters of credit and Receivable Debt under Receivables Facilities which may be incurred pursuant to this clause (2) and clause (1) above shall not be reduced below $100.0 million in the aggregate at any one time outstanding by reason of subclause (y) above and subclause (y) of clause (1) above;
(3) the incurrence by the Trust and its Restricted Subsidiaries of the Existing Indebtedness;
(34) the incurrence by the Issuers Trust and the Guarantors of Indebtedness represented by the Notes to be issued on the date of this Indenture Issue Date and the related Note Subsidiary Guarantees and the New Notes (as defined in the Registration Rights Agreement) to be issued pursuant to the Registration Rights Agreement and the related Subsidiary Guarantees;
(45) the incurrence by the Company Trust or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation construction or improvement of property, plant or equipment used in the business of the Company Trust or any of its Restricted Subsidiariessuch Subsidiary, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred pursuant to this clause (45), not to exceed the greater of (i) $45.0 50.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceat any time outstanding;
(5a) the incurrence by the Company Trust or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease refinance or discharge any replace Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) the first paragraph of this covenant or clauses (2), (3), (4), (5), (14) 6), or (1514) of this Section 4.09(b);
paragraph and (6b) the incurrence by the Company Trust or any of its Restricted Subsidiaries of Permitted Preferred Stock in exchange for, or the net proceeds of which are used to refund, refinance or replace Preferred Stock (other than intercompany Preferred Stock) that was permitted by this Indenture to be incurred under the first paragraph of this covenant;
(7) the incurrence by the Trust or any of its Restricted Subsidiaries of intercompany Indebtedness or Preferred Stock between or among the Company Trust and any of its Restricted Subsidiaries; provided, however, that:
(Aa) if the Company Trust or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a GuarantorIndebtedness, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the CompanyTrust, or the Note Subsidiary Guarantee, in the case of a Guarantor; and
(B) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness or Preferred Stock being held by a Person other than the Company Trust or a Restricted Subsidiary of the Company thereof and (ii) any sale or other transfer of any such Indebtedness or Preferred Stock to a Person that is not either the Company Trust or a Restricted Subsidiary of the Company, will thereof; shall be deemed, in each case, to constitute an incurrence of such Indebtedness or Preferred Stock by the Company Trust or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company Trust or any of its Restricted Subsidiaries of Hedging ObligationsObligations that are incurred solely for the purpose of (a) fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be outstanding or (b) hedging currency or commodity risks of the Trust and its Restricted Subsidiaries incurred by the Trust or such Restricted Subsidiaries in the ordinary course of their business;
(9) the Guarantee guarantee by the Company Trust or any of its Restricted Subsidiaries the Guarantors of Indebtedness of the Company Trust or a Restricted Subsidiary of the Company to the extent Guarantor that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteedcovenant;
(10) 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 shall not be deemed to be an incurrence by of Indebtedness or an issuance of Disqualified Stock for purposes of this covenant; provided, in each such case, that the Company amount thereof is included in Fixed Charges of the Trust as accrued;
(11) Indebtedness of the Trust or any Restricted Subsidiary represented by performance bonds and letters of its credit for the account of the Trust or such Restricted Subsidiaries of Indebtedness Subsidiary, as the case may be, in respect of order to provide security for workers' compensation claims and payment obligations in connection with self-insurance obligations or bidinsurance, plugging and abandonmentin each case, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary that are incurred in the ordinary course of business in accordance with customary industry practice in amounts, and any Guarantees or letters of credit functioning as or supporting any of for the foregoing bonds or obligations and workers’ compensation claims purposes, customary in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business DaysTrust's industry;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business;
(13) any obligation arising from agreements Indebtedness of the Company Trust or any Restricted Subsidiary of the Company arising from agreements providing for indemnification, adjustment of purchase price, earn outs, price or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Capital Stock Subsidiary, other than guarantees of a Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Restricted Subsidiary for the purpose of financing such acquisition; provided that the maximum aggregate liability in respect of all such Indebtedness shall at no time exceed the gross proceeds actually received or to be received by the Trust and the Restricted Subsidiary in a transaction permitted by this Indentureconnection with such dispositions;
(13) Indebtedness of the Trust or any Restricted Subsidiary solely in respect of bankers acceptances, and appeal bonds (to the extent that any such incurrence does not result in the incurrence of any obligation to repay any obligation relating to borrowed money of others), all in the ordinary course of business in accordance with customary industry practices, in amounts and for the purposes customary in the Trust's industry; provided that the aggregate principal amount outstanding of such obligation is not reflected as a liability on the face of the balance sheet of the Company Indebtedness (including any Indebtedness issued to refinance, refund or any Restricted Subsidiaryreplace such Indebtedness) shall at no time exceed $5.0 million;
(14) the incurrence by any Permitted Acquisition Indebtedness; andRestricted Subsidiary that is not a Guarantor of Indebtedness in accordance with Section 4.10 hereof;
(15) the guarantee by any Restricted Subsidiary that is not a Guarantor of Indebtedness of a Restricted Subsidiary that is not a Guarantor that was permitted to be incurred under this Indenture; and
(16) the incurrence by the Company Trust or any of its Restricted Subsidiaries the Guarantors of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (1516), not to exceed the greater $35.0 million. The Trust shall not, and shall not permit any of its Restricted Subsidiaries to, incur any Indebtedness (iincluding Permitted Debt) $75.0 million and (ii) 5.0% that is contractually subordinated in right of payment to any other Indebtedness of the Company’s Adjusted Consolidated Net Tangible Assets determined as Trust or such Restricted Subsidiaries 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 date Trust or its Restricted Subsidiaries shall be deemed to be contractually subordinated in right of such incurrence payment to any other Indebtedness of the Trust or issuanceits Restricted Subsidiaries solely by virtue of being unsecured. For purposes of determining compliance with this Section 4.094.09 hereof, 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 (1516) above, or is entitled to be incurred pursuant to Section 4.09(a)the first paragraph of this covenant, the Company will Trust shall be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, incurrence in any manner that complies with this Section 4.09covenant. Indebtedness under the Credit Agreement Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially shall be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributions, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will shall not, and will shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to otherwise (collectively, “incur”) ), with respect to any Indebtedness (including Acquired Debt), and the Company will shall not issue any Disqualified Stock and will shall not permit any of its Restricted Subsidiaries to issue any Preferred StockDisqualified Stock or preferred stock; provided, however, that the Issuers Company or any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, Stock and the Guarantors any Restricted Subsidiary may incur Indebtedness issue preferred stock if (including Acquired Debtx) or issue Preferred Stock, if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock preferred stock is issued, as the case may be, issued would have been at least 2.25 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock preferred stock had been issued, as the case may be, at the beginning of such four-quarter periodperiod or (y) if the Total Leverage Ratio on the date on which such additional Indebtedness is incurred or such Disqualified Stock or preferred stock is issued would have been no higher than 6.5 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), giving effect to the incurrence of the additional Indebtedness, Disqualified Stock or preferred stock.
(b) Subsection (a) of this Section 4.09(a) will 4.9 shall not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1i) the incurrence by the Issuers Company and the Guarantors, its Restricted 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 the Company and its Restricted Subsidiaries thereunderi) not to exceed the greater of (i) $700.0 million and (ii) $175.0 million plus 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence2,500.0 million;
(2ii) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness, including the Existing Secured Notes;
(3iii) the incurrence by the Issuers Company and the Note Guarantors of Indebtedness represented by the Initial Notes to be issued on (including the date of this Indenture Note Guarantees and the related any future Note Guarantees);
(4iv) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, in an aggregate amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (iv), not to exceed the greater of (x) $275.0 million and (y) 1.0% of Consolidated Total Assets at any time outstanding;
(v) mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation construction or improvement of property, plant or equipment used in the business of the Company or any Restricted Subsidiary of its Restricted Subsidiariesthe Company, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred pursuant to this clause (4v), not to exceed the greater of (ix) $45.0 675.0 million and (iiy) 3.02.5% of the Company’s Adjusted Consolidated Net Tangible Total Assets determined as of the date of such incurrence or issuanceat any time outstanding;
(5vi) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, refinance or replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a4.9(a) hereof or clauses (2ii), (3iii), (4xii), (5), (14xiv) or (15xxi) of this Section 4.09(b4.9(b) or this clause (vi) or, solely to the extent of the excess (if any) of the amount of Indebtedness incurred and outstanding under clause (xx) of this Section 4.9(b) prior to the applicable refinancing over the maximum aggregate amount permitted to be incurred and outstanding under clause (xx) of this Section 4.9(b) at the time of such refinancing, clause (xx) of this Section 4.9(b);
(6vii) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any a Note Guarantor is the obligor on such Indebtedness and the payee obligee is not the Company or a another Note Guarantor, such Indebtedness must be unsecured and expressly subordinated (without regard to security interest) to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and
(B) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will Company shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was is not permitted by this clause (6vii);
(7viii) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that:
(Ai) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging ObligationsObligations that are incurred and not for speculative purposes and (ii) the incurrence by a Securitization Special Purpose Entity of Indebtedness in a Qualified Securitization Transaction that is without recourse to the Company or to any other Restricted Subsidiary of the Company or their assets (other than Standard Securitization Undertakings);
(9ix) the Guarantee by the Company or any Restricted Subsidiary of its Restricted Subsidiaries the Company of Indebtedness of the Company or a any Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of under this Section 4.094.9 (other than the Note Guarantees); provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the NotesNotes or any Note Guarantee, then the Guarantee must shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteedguaranteed (without regard to security interest);
(10x) 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 4.9; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued;
(xi) obligations in respect of performance and surety bonds and completion guarantees or similar obligations provided by the Company or any Restricted Subsidiary of the Company in each case in the normal course of business (whether or not consistent with past practice);
(xii) the incurrence by the Company or any of its Restricted Subsidiaries of Acquired Debt; provided, however, that on the date of acquisition and after giving effect thereto on a pro forma basis, (i) the Fixed Charge Coverage Ratio of the Company (A) would be at least 2.0 to 1.0 or (B) would be equal to or greater than such Fixed Charge Coverage Ratio immediately prior to such acquisition or (ii) the Total Leverage Ratio of the Company (A) would be no higher than 6.5 to 1.0 or (B) would be equal to or lower than such Total Leverage Ratio immediately prior to such acquisition;
(xiii) the incurrence by any Foreign Subsidiary or other Non-Guarantor Subsidiary of Indebtedness in respect an aggregate principal amount at any time outstanding, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (xiii), not to exceed the greater of self-insurance obligations (x) $675.0 million or bid(y) 2.5% of Consolidated Total Assets;
(xiv) Indebtedness of the Company or any Restricted Subsidiary incurred in connection with or in contemplation of, plugging and abandonmentor to provide all or any portion of the funds or credit support utilized to consummate, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided the acquisition by the Company or a any Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds Company of property used or obligations useful in a Permitted Business (whether through the direct purchase of assets or the purchase of Capital Stock of, or merger or consolidation with, any Person owning such assets); provided, however, on the date of such incurrence and workers’ compensation claims in after giving effect thereto on a pro forma basis, the ordinary course Fixed Charge Coverage Ratio of businessthe Company (A) would be at least 2.0 to 1.0 or (B) would be equal to or greater than such Fixed Charge Coverage Ratio immediately prior to such incurrence;
(11xv) the incurrence Indebtedness incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including letters of credit in respect of workers’ compensation claims, death, disability or other employee benefits or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement-type obligations regarding workers’ compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(xvi) 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 provided that such Indebtedness is covered extinguished within five Business DaysDays of notice of its incurrence;
(12xvii) the incurrence by Indebtedness of the Company or any of its Restricted Subsidiaries supported by a letter of incredit issued pursuant to the Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;
(xviii) Indebtedness of the Company or any of its Restricted Subsidiaries consisting of (i) the financing of insurance premiums or (ii) take-kind or-pay or similar obligations relating to net oil or natural gas balancing positions arising contained in supply arrangements, in each case, incurred in the ordinary course of business;
(13) any obligation arising from agreements of the Company or any Restricted Subsidiary of the Company 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 Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company or any Restricted Subsidiary;
(14) any Permitted Acquisition Indebtedness; and
(15xix) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15xix), not to exceed the greater of (ix) $75.0 1,000.0 million and (iiy) 5.03.75% of Consolidated Total Assets;
(xx) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness secured by a Lien under Credit Facilities in an aggregate principal amount such that, on a pro forma basis (including a pro forma application of the proceeds therefrom), the Secured Leverage Ratio would not exceed 3.50 to 1.00;
(xxi) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness of the Company and/or any Restricted Subsidiary in an aggregate outstanding principal amount not to exceed 100% of the Company’s Adjusted Consolidated Net Tangible Assets amount of any capital contributions or other proceeds received by the Company or any Restricted Subsidiary (a) from the issuance or sale of its Equity Interests (other than Disqualified Stock) or (b) in the form of any cash contribution, plus the fair market value, as determined as by the Company in good faith, of Cash Equivalents, marketable securities or other property received by the Company or any Restricted Subsidiary from the issuance and sale of its Equity Interests (other than Disqualified Stock) or a contribution to the capital of the date Company or any Restricted Subsidiary (including through consolidation, amalgamation or merger), in each case after the Issue Date, and in each case other than (x) any proceeds received from the sale of Equity Interests to, or contributions from, the Company or any of its Restricted Subsidiaries, (y) to the extent the relevant proceeds have otherwise been applied to make Restricted Payments hereunder and (z) any Excluded Contribution; and
(xxii) the incurrence of Indebtedness of any joint venture or Indebtedness of the Company or any Restricted Subsidiary incurred on behalf of any joint venture or any guarantees by the Company or any Restricted Subsidiary of Indebtedness of any joint venture in an aggregate outstanding principal amount for all such incurrence Indebtedness not to exceed at any time the greater of $350.0 million and 1.25% of Consolidated Total Assets.
(c) The Company shall not, and shall not permit any Note Guarantor to, incur any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Company or issuance. the Note Guarantors unless such Indebtedness is also contractually subordinated in right of payment to the Notes on substantially identical terms; provided, however, that no Indebtedness of the Company or the Note Guarantors shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company or any Note Guarantor solely by virtue of being unsecured or having a junior lien priority.
(d) For purposes of determining compliance with this Section 4.094.9, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1i) through (15xxii) aboveof Section 4.9(b) hereof, or is entitled to be incurred pursuant to subsection (a) of this Section 4.09(a)4.9, the Company will shall be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify from time to time all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.094.9. Indebtedness permitted by this Section 4.9 need not be permitted solely by reference to one clause permitting such Indebtedness but may be permitted in part by one such clause and in part by one or more other clauses of this Section 4.9 permitting such Indebtedness. Indebtedness under the Credit Agreement Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture Issue Date will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1xx) of the definition Section 4.9(b) hereof.
(e) In addition, for purposes of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsdetermining compliance with this Section 4.9, the accretion Company or amortization the applicable Restricted Subsidiary may, pursuant to an Officers’ Certificate delivered to the Trustee, elect to treat all or any portion of original issue discount, the payment of interest on commitment under any Indebtedness not secured by a Lien (including with respect to any revolving loan commitment) as being incurred at the time of such commitment, in the form which case any subsequent incurrence of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock will under such commitment shall not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to the extent required by the definition of at such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other Personsubsequent time.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock other than to the Company or another Restricted Subsidiary; provided, however, that the Issuers Company or any Guarantor may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, Stock and the Guarantors any of its Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue Preferred Stockpreferred stock, if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock preferred stock is issued, as the case may be, issued would have been at least 2.25 2.0 to 1.0, 1 determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the such additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock preferred stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) . The first paragraph of this Section 4.09(a) 4.12 will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence Indebtedness evidenced by the Issuers Existing Notes in aggregate principal amount of up to $101.6 million and any related Guarantees;
(2) Indebtedness under the Guarantors, of Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount not exceeding $50.0 million at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed the greater of (i) $700.0 million and (ii) $175.0 million plus 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtednessany related Guarantees;
(3) the incurrence by the Issuers and the Guarantors of Indebtedness represented by the Notes to be issued on the date of this Indenture and the related Note GuaranteesGuarantees issued on the Issue Date;
(4) Indebtedness solely represented by premium financing or similar deferred payment obligations incurred with respect to insurance policies purchased in the ordinary course of business and consistent with past practice;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or financings, purchase money obligations or other Indebtedness or preferred stock, or synthetic lease obligations, in each case, 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 propertyproperty (real or personal and including acquisitions of Capital Stock), plant or equipment used in the business a Permitted Business of the Company or such Restricted Subsidiary (in each case, whether through the direct purchase of such assets or the Equity Interests of any of its Restricted SubsidiariesPerson owning such assets), or repairs, additions or improvements to such assets, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred pursuant to this clause (45), not to exceed the greater of (i) $45.0 5.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceat any time outstanding;
(56) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to extend, renew, refund, refinance, replace, defease or discharge any discharge, Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under the first paragraph of this Section 4.09(a) 4.12 or clauses (2), (3), (4), (5), 6) and (14) or (15) of this Section 4.09(b)paragraph;
(67) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(Aa) 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 unsecured (i) permitted as a Permitted Investment described in clause (1)(b) of the definition thereof and (ii) expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and
(Bb) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either any of the Company, a Guarantor or, in the case where the payor on such intercompany Indebtedness is not the Company or a Guarantor, any Restricted Subsidiary of the Company, Company will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (67);
(7) 8) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stockshares of Disqualified Stock or preferred stock; provided, however, that:that if the issuer of such shares of Disqualified Stock or preferred stock is a Restricted Subsidiary of the Company that is not a Guarantor and the purchaser of such shares is the Company or a Guarantor, such Investment must be permitted as a Permitted Investment described in clause (1)(b) of the definition thereof and
(Aa) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Disqualified Stock or preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(Bb) any sale or other transfer of any such Preferred Disqualified Stock or preferred stock to a Person that is not either any of the Company Company, a Guarantor or, in the case where the issuer of such Disqualified Stock or preferred stock is not a Guarantor, any Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Disqualified Stock or preferred stock by such Restricted Subsidiary that was not permitted by this clause (7)8);
(8) 9) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging ObligationsObligations in the ordinary course of business;
(910) the Guarantee by the Company or any Restricted Subsidiary of its Restricted Subsidiaries the Company of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent Guarantor that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.094.12; provided that if the Indebtedness being guaranteed is subordinated in right of payment to the Notes or pari passu with the Notesa Note Guarantee, then the Guarantee must shall be subordinated or pari passu, as applicable, in right of payment to the same extent as the Indebtedness guaranteed;
(1011) the Guarantee by any Restricted Subsidiary of the Company that is not a Guarantor of Indebtedness of the Company or any other Restricted Subsidiary that was permitted to be incurred by another provision of this Section 4.12;
(12) the incurrence by the Company or any of its the Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations or bid, plugging letters of credit and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary bankers acceptances issued in the ordinary course and not supporting Indebtedness, including in respect of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims claims, payment obligations in connection with health or other types of social security benefits, unemployment or other insurance or self-insurance obligations, performance and surety, appeal, environmental assurance and similar bonds or indemnification, adjustment of purchase price or similar obligations incurred in connection with the ordinary course disposition of businessany business or assets;
(1113) the incurrence by the Company or any of its the Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds; provided, so long as however, that such Indebtedness is covered extinguished within five Business Daysthree business days of incurrence;
(1214) the incurrence Indebtedness, Disqualified Stock or preferred equity of any Person that is acquired by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business;
(13) any obligation arising from agreements of the Company merged into or any Restricted Subsidiary of the Company providing for indemnification, adjustment of purchase price, earn outsconsolidated with, or similar obligationstransfers substantially all of its assets to, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Capital Stock of a Restricted Subsidiary in a transaction permitted by accordance with the terms of this Indenture; provided provided, however, that all such obligation Indebtedness, Disqualified Stock or preferred equity does not exceed $5.0 million in the aggregate at any time outstanding and is not reflected as incurred or issued in contemplation of such acquisition or merger or to provide all or a liability on the face portion of the balance sheet of the Company funds or any Restricted Subsidiary;
(14) any Permitted Acquisition Indebtednesscredit support required to consummate such acquisition or merger; and
(15) the incurrence by the Company or any of its the Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any shares of Disqualified Stock or preferred stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15), outstanding not to exceed the greater $5.0 million. The Company will not incur, and will not permit any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of (i) $75.0 million and (ii) 5.0% payment to any other Indebtedness of the Company’s Adjusted Consolidated Net Tangible Assets determined as Company or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the date of such incurrence or issuanceNotes and the applicable Note Guarantee on substantially identical terms. For purposes of determining compliance with this Section 4.094.12, 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 (15) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.09(a)4.12, the Company will be permitted to divide, classify and reclassify such item of Indebtedness Indebtedness, Disqualified Stock or preferred equity or any portion thereof 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 or as having been incurred pursuant to the first paragraph of this Section 4.12, 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 the first paragraph of this Section 4.12 and may later redivide or 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 the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt4.12. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsdividends, the accretion of accreted value or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock preferred equity as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Disqualified Stock or Disqualified Stock preferred stock in the form of additional securities shares of the same class of Preferred Disqualified Stock or Disqualified Stock preferred stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Disqualified Stock or Disqualified Stock preferred stock for purposes of this Section 4.094.12; provided provided, in each such case (other than preferred stock that is not Disqualified Stock), that the amount thereof shall be of any such accrual, accretion or amortization or payment (without duplication) is included in Fixed Charges of the Company as accrued accrued, accreted or amortized or paid. Notwithstanding any other provision of this Section 4.12, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to the extent required by the definition this Section 4.12 shall not be deemed to be exceeded solely as a result of such termfluctuations in exchange rates or currency values. The amount of any Indebtedness outstanding as of any date will be:
(a1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1A) the Fair Market Value of such assets asset at the date of determination; , and
(2B) the amount of the such Indebtedness of the other Person. Notwithstanding anything to the contrary under this Section 4.12, the Company shall repay in full the Indebtedness described in clause (1) of the second paragraph of this Section 4.12 no later than the 31st day following the Issue Date with the funds held in the Escrow Account.
Appears in 1 contract
Samples: Indenture (Sterling Chemicals Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will OI Group shall not, and will shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), and the Company will OI Group shall not issue any Disqualified Stock and will OI Group shall not permit any of its Restricted Subsidiaries to issue any Preferred StockDisqualified Stock or preferred stock; providedPROVIDED, howeverHOWEVER, that the Issuers OI Group and any of its Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or and may issue Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stockpreferred stock, if the Fixed Charge Coverage Ratio for the Company’s OI Group'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 Stock is issued, as the case may be, would have been at least 2.25 2.00 to 1.01.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) . The first paragraph of this Section 4.09(a) will 4.13 shall not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”"PERMITTED DEBT"):
(1) the incurrence by the Issuers and the Guarantors, OI Group or its Restricted Subsidiaries of Indebtedness and letters of credit under Credit Facilities (and the incurrence of Guarantees thereof) in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed the greater $4.5 billion (of (i) which not more than $700.0 million and (ii) $175.0 million plus 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date 1.41 billion of such incurrenceIndebtedness shall be incurred by Restricted Subsidiaries that are not Guarantors);
(2) the incurrence by the Company OI Group and its any Restricted Subsidiaries Subsidiary of OI Group of the Existing Indebtedness;
(3) the incurrence by OI Group, the Issuers Company and the Guarantors of Indebtedness represented by the Notes and the related Guarantees to be issued on the date of this Indenture and the related Note GuaranteesExchange Notes to be issued pursuant to the Registration Rights Agreement;
(4) the incurrence by the Company OI Group or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceAssets;
(5) the incurrence by OI Group or any of its Restricted Subsidiaries of Indebtedness incurred to finance all or any part of the Company purchase price or cost of construction or improvement of property, plant or equipment used in the business of OI Group or such Restricted Subsidiary, in an aggregate principal amount at any time outstanding, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (5), not to exceed 5.0% of Tangible Assets, as measured after giving effect to such transaction;
(6) provided that so long as no Default shall have occurred or be continuing or would be caused thereby, the incurrence by OI Group or any of its Restricted Subsidiaries of Indebtedness, the proceeds of which are or shall be used to refund, refinance or replace the $300.0 million aggregate principal amount of 7.85% Senior Notes due 2004, the $350.0 million aggregate principal amount of 7.15% Senior Notes due 2005, the $300.0 million aggregate principal amount of 8.10% Senior Notes due 2007, the $250.0 million aggregate principal amount of 7.35% Senior Notes due 2008 and the $250.0 million aggregate principal amount of 7.50% Senior Debentures due 2010, in each case of OI Inc.
(7) incurrence by OI Group or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are or shall be used to renew, refund, refinance, replace, defease refinance or discharge any replace Indebtedness (other than intercompany Intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under the first paragraph of this Section 4.09(a) 4.13 or clauses (2), (3), (4), (5), (146) or (157) of this Section 4.09(b)paragraph;
(6) 8) the incurrence by the Company OI Group or any of its Restricted Subsidiaries of intercompany Intercompany Indebtedness between or among the Company OI Group and any of its Restricted SubsidiariesSubsidiaries and with respect to OI Group only, between OI Group and OI Inc.; provided, however, that:
(Aa) if OI Group, the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a GuarantorIndebtedness, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note GuaranteeGuarantees of the Notes, in the case of OI Group or a Guarantor;
(b) any incurrence by OI Group of Intercompany Indebtedness to OI Inc. after the Issue Date shall be in exchange for cash loans or advances from OI Inc. in the ordinary course of business consistent with past practices; and
(Bc) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company OI Group or a Restricted Subsidiary of the Company thereof and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company OI Group or a Restricted Subsidiary of the Companythereof, will shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company OI Group or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6)8);
(79) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company OI Group or any of its Restricted Subsidiaries of Hedging Obligations;
(910) provided that so long as no Default shall have occurred or be continuing or would be caused thereby, the incurrence by any Foreign Subsidiary of OI Group of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed $300.0 million, in addition to the $1.41 billion of Indebtedness that may be incurred under clause (1) of this paragraph;
(11) (i) the Guarantee by the Company or any of its Restricted Subsidiaries the Guarantors of Indebtedness of the Company OI Group or a any Restricted Subsidiary of OI Group and (ii) the Company to the extent Guarantee by any Foreign Subsidiary of Indebtedness of OI Group or any Restricted Subsidiary of OI Group, in each case, that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days4.13;
(12) the incurrence by accrual of interest, the Company accretion or amortization of original issue discount, the payment of interest on any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising Indebtedness in the ordinary course form of businessadditional 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 shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.13 or an issuance of Disqualified Stock; provided, in each such case, that the amount thereof is included in Fixed Charges of OI Group as accrued;
(13) any obligation arising from agreements of the Company or any Restricted Subsidiary of the Company 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 Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company or any Restricted Subsidiary;
(14) any Permitted Acquisition Indebtedness; and
(15) the incurrence by the Company OI Group or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (1513), not to exceed $300.0 million;
(14) Indebtedness arising from agreements of OI Group or a Restricted Subsidiary of OI Group providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the greater disposition of any business, assets or a Subsidiary, other than Guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; PROVIDED, HOWEVER, that (i) $75.0 million such Indebtedness is not reflected on the balance sheet of OI Group or any such Restricted Subsidiary of OI Group (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet shall not be deemed to be reflected on such balance sheet for purposes of this clause (i)) and (ii) 5.0% the maximum assumable liability in respect of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of all such incurrence or issuance. For purposes of determining compliance with this Section 4.09, in the event Indebtedness that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (15) above, or is entitled permitted to be incurred pursuant to Section 4.09(a), the Company will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (114) of shall at no time exceed the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributions, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:
gross proceeds including noncash proceeds (a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets noncash proceeds being measured at the date of determination; andtime received and without giving effect to any subsequent changes in value) actually received by OI Group and its Restricted Subsidiaries in connection with such disposition;
(215) the amount incurrence by OI Group or any of its Restricted Subsidiaries of Indebtedness incurred or deemed incurred or cash consideration received from the Indebtedness sale of the other Person.accounts receivable by OI Group or any of its Restricted Subsidiaries or a special purpose vehicle established by any of them to purchase and sell such receivables;
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of Preferred Stock; provided, however, that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Domestic Restricted Subsidiaries and any other Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stock, if the Fixed Charge Coverage Ratio for the Company’s most recently ended four eight full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Preferred Stock or Disqualified Stock or such Preferred Stock is issued, as the case may be, issued would have been at least 2.25 2.0 to 1.01, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Preferred Stock or the Preferred Disqualified Stock had been issued, as the case may be, at the beginning of such foureight-quarter period.
(b) Notwithstanding the foregoing, clause (a) of this Section 4.09(a) 4.09 will not prohibit the incurrence or issuance of any of the following items of Indebtedness or issuances of Disqualified Preferred Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1i) the incurrence by the Issuers and the Guarantors, Company or any Guarantor of Indebtedness (and letters any replacements, renewals, refinancings, extensions or amendments of credit under Credit Facilities any thereof) in an aggregate principal amount at any one time outstanding as of the date of any such incurrence under this clause (1i) (with letters of credit being deemed not to have a principal exceed an amount equal to the maximum potential liability greater of (x) $585.0 million, less the aggregate amount of all Net Proceeds of Asset Sales (other than a sale of all or a substantial portion of the assets used in or related to the Turkey Operations) applied by the Company or any of its Subsidiaries to repay Indebtedness incurred under this clause (i) pursuant to Section 4.12 and (y) 75% of the fair market value of property, plant, equipment and intangibles (excluding goodwill) of the Company and its consolidated Restricted Subsidiaries;
(ii) the incurrence by the Company or any Restricted Subsidiary of Indebtedness pursuant to a revolving credit facility under the Existing U.S. Credit Facilities (and any replacements, renewals, refinancings, extensions or amendments of any thereof) in an aggregate principal amount outstanding at any one time as of the date of any such incurrence under this clause (ii) not to exceed the Domestic Borrowing Base;
(iii) the incurrence of Indebtedness by the Foreign Restricted Subsidiaries thereunderpursuant to the Existing Foreign Credit Facility (and any replacements, renewals, refinancings, extensions or amendments thereof) in an aggregate principal amount outstanding at any one time as of the date of any such incurrence under this clause (iii) not to exceed the greater of (ix) $700.0 50.0 million and (iiy) $175.0 million plus 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrenceForeign Borrowing Base;
(2iv) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers and the Guarantors of Indebtedness represented by the Notes to be issued on the date of this Indenture and the related Note (including, in each case, any Subsidiary Guarantees);
(4v) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, obligations incurred in each case, incurred for the purpose ordinary course of financing all or business in an amount outstanding at any part one time as of the date of any such incurrence not to exceed 75% of the purchase price or cost fair market value of designthe asset purchased, construction, installation acquired or improvement of property, plant or equipment used in constructed;
(vi) the business of incurrence by the Company or any of its Restricted SubsidiariesSubsidiaries of Capital Lease Obligations incurred in the ordinary course of business in an amount outstanding at any one time as of the date of any such incurrence not to exceed 5% of the Company’s Consolidated Tangible Net Worth;
(vii) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations pursuant to which the Company or the Restricted Subsidiary has hedged against its actual exposure to fluctuations in interest rates, currency values or commodity prices;
(viii) the incurrence by the Company or any Restricted Subsidiary of up to $25.0 million aggregate principal amount of Indebtedness to the Camp County Industrial Development Corporation pursuant to that certain Loan Agreement (the “Camp County Loan Agreement”), dated as of June 15, 1999, between the Company and the Camp County Industrial Development Corporation, including the incurrence by the Company or any Restricted Subsidiary to Xxxxxx Trust and Savings Bank pursuant to the Reimbursement Agreement dated June 15, 1999 between the Company and Xxxxxx Trust and Savings Bank, or under any irrevocable letter of credit, surety bond, insurance policy or other similar instrument issued by any Person to support the Company’s or any Restricted Subsidiary’s Obligations pursuant to the Camp County Loan Agreement or in connection with the related bonds issued by the Camp County Industrial Development Corporation (and reimbursement and similar agreements in respect thereof) and any Permitted Refinancing Indebtedness relating thereto; provided, that such $25.0 million and any corresponding credit enhancement or reimbursement obligation with respect thereto shall be reduced by any prepayments or scheduled payments under the Camp County Loan Agreement;
(ix) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount outstanding(or accreted value, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge as applicable) at any Indebtedness incurred pursuant to time outstanding under this clause (4), ix) not to exceed $150.0 million;
(x) the greater incurrence by the Company or any Restricted Subsidiary of (i) up to $45.0 82.5 million aggregate principal amount of Indebtedness to the issuer of industrial development bonds and (ii) 3.0% similar Indebtedness resulting from the Acquisition, including the incurrence by the Company or any Restricted Subsidiary of Indebtedness to the issuer of any irrevocable letter of credit, surety bond, insurance policy or other similar instrument issued by any Person to support the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date or any Restricted Subsidiary’s, Obligations pursuant to or in connection with such related industrial revenue bonds (and reimbursement and similar agreements in respect thereof); provided, that such $82.5 million and any corresponding credit enhancement or reimbursement obligation with respect thereto shall be reduced by any prepayments or scheduled payments in respect of such incurrence industrial revenue bonds or issuanceIndebtedness;
(5xi) 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, replace, defease refinance or discharge any replace Indebtedness (other than intercompany Indebtedness) of under the Company Senior Notes and the Senior Notes Indenture or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) or clauses paragraph (2), (3), (4), (5), (14) or (15a) of this Section 4.09(b4.09 or clauses (i), (ii), (iii), (v), (vi), (viii), (x) or (xiv) of this paragraph (b);
(6xii) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness and Intercompany Bonds between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) except in the case of Intercompany Bonds, if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a GuarantorIndebtedness, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the NotesNote, in the case of the Company, or the Note Subsidiary Guarantee, in the case of a Guarantor; and
(B) (i1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company thereof and (ii2) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will thereof shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6xii);
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations;
(9xiii) the Guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this covenant and, in the case of a Domestic Restricted Subsidiary, the provisions of Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed4.18;
(10xiv) Indebtedness of the Company to the extent the net proceeds thereof are promptly (a) used to purchase Notes tendered in a Change of Control Offer made as a result of a Change of Control in accordance with this Indenture or (b) deposited to defease the Notes in accordance with Section 8.04 hereof;
(xv) 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 by of Indebtedness or an issuance of Disqualified Stock for purposes of this covenant; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company or any as accrued; and
(xvi) the issuance of its Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by Preferred Stock to the Company or a Wholly Owned Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business;Subsidiary.
(11c) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business;
(13) any obligation arising from agreements of the Company or any Restricted Subsidiary of the Company 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 Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company or any Restricted Subsidiary;
(14) any Permitted Acquisition Indebtedness; and
(15) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15), not to exceed the greater of (i) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance. 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 (1i) through (15xvi) above, or is entitled to be incurred pursuant to paragraph (a) of this Section 4.09(a)4.09, the Company will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. covenant; provided, that (x) Indebtedness outstanding under the Existing U.S. Credit Agreement outstanding Facilities on the date on which Notes are first issued and authenticated under of this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by in clauses (i) and (ii), as applicable, of paragraph (b) of this Section 4.09 and (y) Indebtedness outstanding under Existing Foreign Credit Facility on the date of this Indenture will be deemed to have been incurred on such date in reliance on the exception provided in clause (1iii) of the definition paragraph (b) of Permitted Debt. this Section 4.09.
(d) The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsinterest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities shares of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided provided, in each such case, that the amount thereof shall be is included in Fixed Charges of the Company as accrued to the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:accrued.
(ae) With respect to Indebtedness denominated in a currency other than United States dollars, the accreted value Company or any of the Indebtedness, its Restricted Subsidiaries shall not have been deemed to incur Indebtedness solely as a result of fluctuations in the case exchange rates of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other Personcurrencies.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stockpreferred stock, if the Fixed Charge Coverage Ratio for the Company’s 's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock preferred stock is issued, as the case may be, issued would have been at least 2.25 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the preferred stock or Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “"Permitted Debt”"):
(1) the incurrence by the Issuers Company and any Guarantor of additional Indebtedness pursuant to any Revolving Credit Facility; provided, however, that immediately after giving effect to any such incurrence the Guarantors, of Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding of all Indebtedness incurred under this clause (1) and then outstanding does not exceed the greater of (with letters A) $125.0 million and (B) the sum of credit being deemed to have a principal (i) 80% of the face amount equal to the maximum potential liability of all accounts receivable owned by the Company and its Restricted Subsidiaries thereunder) as of the end of the most recent fiscal quarter preceding such date that were not to exceed the greater of (i) $700.0 million and more than 90 days past due plus (ii) $175.0 million plus 35.050% of the Company’s Adjusted Consolidated Net Tangible Assets determined on book value of all inventory owned by the Company and its Restricted Subsidiaries as of the end of the most recent fiscal quarter preceding such date (provided that such amount shall be reduced to the extent of such incurrenceany reduction or elimination of any commitment under any Credit Facility resulting from or relating to the formation of any Receivables Subsidiary or the consummation of any Qualified Receivables Transaction);
(2) the incurrence by the Company and any Guarantor of additional Indebtedness pursuant to any Term Loan Facility; provided, however, that after giving effect to any such incurrence the aggregate principal amount of such Indebtedness incurred under this clause (2) and then outstanding does not exceed $250.0 million less the aggregate amount of all Net Proceeds of Asset Sales applied by the Company or any of its Restricted Subsidiaries since the date of this Indenture to repay any Indebtedness under a Credit Facility pursuant to Section 4.10.
(3) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(34) the incurrence by the Issuers Company and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and the Exchange Notes and the related Note GuaranteesGuarantees to be issued pursuant to the Registration Rights Agreement;
(45) the incurrence by the Company or any of its Restricted Subsidiaries Subsidiary of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation improvement or improvement lease of property, plant or equipment used in the business of the Company or any of its such Restricted SubsidiariesSubsidiary, or incurred within 180 days after such purchase, lease or improvement, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred pursuant to this clause (45), not to exceed the greater of (i) $45.0 25.0 million and or (ii) 3.05.0% of the Company’s Adjusted 's Consolidated Net Tangible Assets determined as at the time of the date of such any incurrence or issuancethereof;
(56) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease refinance or discharge any replace Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clauses (2), (3), (4), (5), (6), (11), (14), (15) or (1518) of this Section 4.09(b);
(67) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a GuarantorIndebtedness, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and
(B) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, ; will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging ObligationsObligations that are incurred for the purpose of fixing or hedging (i) any currency exchange risk, (ii) any commodity price risk or (iii) any interest rate risk with respect to any floating rate Indebtedness that is permitted by the terms of this Indenture to be outstanding;
(9) the Guarantee guarantee by the Company or any of its Restricted Subsidiaries the Guarantors of Indebtedness or other Obligations of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(10) 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 by 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 Fixed Charges of the Company or any of its Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of businessaccrued;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from constituting reimbursement obligations with respect to letters of credit issued in the honoring by a bank ordinary course of business, including, without limitation, letters of credit in respect of workers' compensation claims or self-insurance, or other financial institution of a check, draft Indebtedness with respect to reimbursement type obligations regarding workers' compensation claims or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Daysself insurance;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil in respect of performance and surety bonds and completion guarantees provided by the Company or natural gas balancing positions arising such Restricted Subsidiaries in the ordinary course of business;
(13) the incurrence by the Company or any obligation Restricted Subsidiary of Indebtedness arising from agreements of the Company or any such Restricted Subsidiary of the Company providing for indemnification, adjustment of purchase price, earn outs, price or similar obligations, in each case, incurred or assumed in connection with the acquisition of disposition or acquisition of any business, assets or Capital Stock of a Restricted Subsidiary in a transaction permitted Subsidiary, other than guarantees of Indebtedness incurred by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company any Person acquiring all or any Restricted Subsidiaryportion of such business, assets or a Subsidiary for the purpose of financing such acquisition;
(14) the issuance of preferred stock by any Permitted Acquisition IndebtednessRestricted Subsidiary issued to the Company or another Restricted Subsidiary; andprovided that any subsequent issuance or transfer of any Equity Securities or any other event that results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an issuance of such shares of preferred stock;
(15) the incurrence of Indebtedness or Disqualified Stock 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 that such Indebtedness or Disqualified Stock is not incurred in contemplation of such acquisition or merger; provided further that such Indebtedness or Disqualified Stock shall not exceed $25.0 million at any time outstanding;
(16) any guarantee of the Indebtedness of any Investee Store by clause (9) of the definition of "Permitted Investment;"
(17) the incurrence by a Receivables Subsidiary of Indebtedness in a Qualified Receivables Transaction that is without recourse to the Company or to any other Subsidiary of the Company or their assets (other than such Receivables Subsidiary and its assets and, as to the Company or any Subsidiary of the Company, other than pursuant to representations, warranties, covenants and indemnities customary for such transactions) and is not guaranteed by any such Person (excluding guarantees of Obligations (other than principal of, and interest on, Indebtedness) pursuant to representations, warranties, covenants and indemnities entered into in the ordinary course of business in connection with a Qualified Receivables Transaction); and
(18) the incurrence by the Company or any Restricted Subsidiary of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (1518), not to exceed the greater of (i) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance35.0 million. For purposes of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (1518) above, or is entitled to be incurred pursuant to Section 4.09(a)) hereof, the Company will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under the Revolving Credit Agreement Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributions, Indebtedness under Term Loan Facilities outstanding on the accretion or amortization of original issue discount, the payment of interest date on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, which Notes are first issued and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock authenticated under this Indenture will not be deemed to be an incurrence have been incurred on such date in reliance on the exception provided by clause (2) of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other PersonPermitted Debt.
Appears in 1 contract
Samples: Indenture (Jondex Corp)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company and any of the Guarantors may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stockpreferred stock, if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock preferred stock is issued, as the case may be, issued would have been at least 2.25 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), ) as if the additional Indebtedness had been incurred incurred, or the Disqualified Stock or the Preferred Stock preferred stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuers Company and the Guarantorsits Restricted Subsidiaries of Indebtedness, of Indebtedness and letters of credit and bankers’ acceptances under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) as of any date of incurrence of any such Indebtedness (with letters of credit and bankers’ acceptances being deemed to have a principal an amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed the greater of:
(a) the greater of $600.0 million or the Borrowing Base, less (ia) $700.0 million the aggregate amount of all Net Proceeds of Asset Sales applied by the Company or any of its Restricted Subsidiaries to repay Indebtedness and permanently reduce commitments under Credit Facilities pursuant to Section 4.10 and (iib) $175.0 million plus 35.0% the aggregate amount of the Company’s Adjusted Consolidated Net Tangible Assets determined on Indebtedness incurred pursuant to Section 4.09(b)(15) outstanding as of the date of such incurrenceany incurrence pursuant to this clause (1); or
(b) $350.0 million;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers Company and the Guarantors of Indebtedness represented by the Notes and Subsidiary Guarantees to be issued on the date of this Indenture Issue Date and any Notes or Subsidiary Guarantees issued in exchange thereof pursuant to the related Note GuaranteesRegistration Rights Agreement;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation construction or improvement of property, plant or equipment used in the business of the Company or any of its such Restricted SubsidiariesSubsidiary, in an aggregate principal amount at any time outstanding, as of the date of incurrence of any Indebtedness pursuant to this clause (4), including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 35.0 million and (ii) 3.01.25% of the Company’s Adjusted Consolidated Net Tangible Total Assets (determined as of the date of such incurrence or issuanceincurrence);
(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 or replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (2), (3) or (4) above, this clause (5), clauses (4), (513), (14) or (1516) of this below or pursuant to Section 4.09(b4.09(a);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among owed to the Company and or any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a GuarantorIndebtedness, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note GuaranteeSubsidiary Guarantee of such Guarantor, in the case of a Guarantor; and
(B) (i1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company thereof and (ii2) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will thereof shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness under Hedging ObligationsObligations that are not entered into for the purpose of speculation; provided that in the case of Hedging Obligations relating to interest rates, (a) such Hedging Obligations relate to payment obligations on Indebtedness otherwise permitted to be incurred by this Section 4.09 and (b) the notional principal amount of such Hedging Obligations at the time incurred does not exceed the principal amount of the Indebtedness to which such Hedging Obligations relate;
(9) 8) the Guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09 and could have been incurred (in compliance with this Section 4.09; provided that if ) by the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteedPerson so Guaranteeing such Indebtedness;
(109) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising funds in the ordinary course of business;
(13) any obligation arising from agreements of the Company or any Restricted Subsidiary of the Company providing for indemnification; provided, adjustment of purchase pricehowever, earn outs, or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; provided that such obligation Indebtedness is not reflected as a liability on the face extinguished within five Business Days of the balance sheet of the Company or any Restricted Subsidiaryincurrence;
(14) any Permitted Acquisition Indebtedness; and
(15) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15), not to exceed the greater of (i) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance. For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (15) above, or is entitled to be incurred pursuant to Section 4.09(a), the Company will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributions, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Samples: Indenture (Post Holdings, Inc.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will shall not, and will shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), ) and the Company will shall not issue any Disqualified Stock and will shall not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company and DFG may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock), and the Guarantors may incur guarantee such Indebtedness (including Acquired Debt) or of DFG, and the Company and DFG may issue Preferred shares of Disqualified Stock, if (i) 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 such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock is issuedissued (in either case, as the case may be, “Incurrence Date”) would have been at least 2.25 1.5 to 1.01 and (ii) the ratio (the “Debt Ratio”) of (A) the aggregate principal amount of consolidated Indebtedness of the Company and its Subsidiaries outstanding as of the date of the Company’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the Incurrence Date to (B) the Consolidated Cash Flow of the Company for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the Incurrence Date would have been less than 5.0 to 1; provided, determined however, that for the purposes of calculating the aggregate principal amount of consolidated Indebtedness of the Company and its Subsidiaries as of any date (i) the aggregate principal amount of the outstanding Notes as of such date shall be deemed to be the principal amount thereof as of such date and (ii) the aggregate principal amount of the Indebtedness outstanding under any revolving credit facility as of such date shall be deemed to be the daily average amounts outstanding thereunder during the three months ending on such date. Each of the foregoing ratios shall be calculated on a pro forma basis giving effect to (including a pro forma i)(A) the incurrence of the Indebtedness or issuance of the Disqualified Stock giving rise to such calculation, (B) any other incurrence of Indebtedness (other than revolving credit borrowings) or issuance of Disqualified Stock subsequent to the commencement of the four-quarter reference period and (C) in each such case, the application of the net proceeds therefrom), therefrom as if the additional Indebtedness such incurrence, issuance and application had been incurred or the Disqualified Stock or the Preferred Stock had been issued, as the case may be, occurred at the beginning of the four-quarter reference period and (ii) any acquisitions that have been made by the Company or any of its Subsidiaries, including through mergers or consolidations and including any related financing transactions, during such four-quarter reference period or subsequent thereto and prior to the Calculation Date as if they occurred on the first day of such four-quarter reference period. In addition, the Consolidated Cash Flow for any such four-quarter reference period shall be calculated (i) to include the Consolidated Cash Flow of the acquired entities (adjusted to include any expense or cost reductions for which pro forma treatment would be permitted under Article 11 of Regulation S-X promulgated under the Securities Act as of the date of this Agreement), (ii) without giving effect to clause (iii) of the proviso set forth in the definition of Consolidated Net Income and (iii) to exclude the Consolidated Cash Flow attributable to discontinued operations, as determined in accordance with GAAP, and to operations or businesses disposed of prior to the Calculation Date. In calculating the Fixed Charges as of any Calculation Date, the Fixed Charges attributable to discontinued operations, as determined in accordance with GAAP, and to operations or businesses disposed of prior to the Calculation Date shall be excluded, but only to the extent that the obligations giving rise to such Fixed Charges will not be obligations of the referent Person or any of its Subsidiaries following the Calculation Date.
(b) Section 4.09(a) will The foregoing provisions shall not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable apply to (collectively, “Permitted Debt”):
(1i) the incurrence by DFG (and Guarantees thereof by the Issuers Company and the Guarantors, ) of Indebtedness for working capital purposes and letters of credit under pursuant to the Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) Agreement (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) in an aggregate principal amount not to exceed as of any date of incurrence the greater lesser of (i1) $700.0 million 55,000,000, minus the amount of any permanent reduction in the amount of borrowings permitted thereunder in accordance with the terms thereof, and (2) the amount of the Borrowing Base, (ii) $175.0 million plus 35.0% the incurrence by DFG (and Guarantees thereof by the Company and the Guarantors) of the Company’s Adjusted Consolidated Net Tangible Assets determined Indebtedness represented by (1) DFG Senior Notes issued on the date Closing Date in the aggregate principal amount not to exceed $220,000,000 and (2) DFG Senior Notes issued after the Closing Date pursuant to the DFG Senior Notes Indenture so long as the Net Proceeds of such incurrence;
issuances are used, substantially contemporaneously with such issuances, solely to redeem the Notes and the Company Senior Notes in compliance with the voluntary redemption provisions of this Agreement and the Company Senior Note Exchange Agreement, (2iii) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
, (3iv) the incurrence by the Issuers Company and its Subsidiaries of the Guarantors of Indebtedness represented by the Notes to be issued on the date of this Indenture and the related Note Guarantees;
Company Senior Notes, (4v) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation construction or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiariessuch Subsidiary, in an aggregate principal amount outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of $5,000,000 at any time outstanding, (i) $45.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance;
(5vi) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refundextend, refinance, renew, replace, defease or discharge any refund, Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture Agreement to be incurred under Section 4.09(a) or clauses (2)incurred, (3), (4), (5), (14) or (15) of this Section 4.09(b);
(6vii) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Wholly Owned Subsidiaries; provided, however, that:
that (A) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a GuarantorIndebtedness, such Indebtedness must be unsecured and is expressly subordinated subordinate to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and
Notes and (B) (iB)(1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Wholly Owned Subsidiary of the Company and (ii2) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Wholly Owned Subsidiary of the Company, will shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations;
(9) the Guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(10viii) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred for the purpose of fixing or hedging (A) interest rate risk with respect to any floating rate Indebtedness in respect of self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided that is permitted by the Company terms of this Agreement to be outstanding, or a Restricted Subsidiary (B) currency exchange risk in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or connection with existing financial obligations and workers’ compensation claims in the ordinary course not for purposes of business;
speculation, (11ix) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such (in addition to Indebtedness is covered within five Business Days;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business;
(13) any obligation arising from agreements of the Company or any Restricted Subsidiary of the Company 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 Capital Stock of a Restricted Subsidiary in a transaction permitted by any other clause of this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company or any Restricted Subsidiary;
(14paragraph) any Permitted Acquisition Indebtedness; and
(15) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15), outstanding not to exceed $10,000,000, (x) the greater incurrence by the Company or any of its Subsidiaries of Earn-out Obligations in an aggregate amount not to exceed $5,000,000 at any time outstanding and (xi) the Incurrence by a Receivables Subsidiary of Indebtedness in connection with a Qualified Receivables Transaction that is without recourse (other than pursuant to representations, warranties, covenants and indemnities entered into in the ordinary course of business in connection with a Qualified Receivables Transaction) to DFG or any of its Subsidiaries or any of their respective assets and that is not Guaranteed by DFG or any of its Subsidiaries.
(c) Notwithstanding any provision contained in this Section 8.4 to the contrary, after the Closing Date, neither the Company shall, nor shall it permit any of its Subsidiaries to, incur any Indebtedness to LGP (other than (i) $75.0 million as a Purchaser and (ii) 5.0% solely as a counterparty to any Hedging Obligation) unless such Indebtedness constitutes Subordinated Indebtedness.
(d) The Company shall not incur any Indebtedness which by its terms is both (i) subordinate in right of payment to any Senior Indebtedness and (ii) senior in right of payment to the Notes (it being understood that Indebtedness shall not be deemed subordinate in right of payment to other Indebtedness solely by reason of such other Indebtedness having the benefit of a security interest in property of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance. ).
(e) For purposes of determining compliance with this Section 4.098.4, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt Indebtedness described in clauses (1i) through (15ix) above, or is entitled to be incurred pursuant to of paragraph (b) of this Section 4.09(a)8.4, the Company will be permitted to divideshall, in its sole discretion, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. 8.4 and will only be required to include the amount and type of such Indebtedness under the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed in one of such clauses or pursuant to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributions, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principlesSection 8.4(a), and may re-classify any such item of Indebtedness from time to time among such clauses or the payment first paragraph of dividends or distributions on Preferred Stock or Disqualified Stock in this Section 8.4, so long as such item meets the form applicable criteria for such category. Accrual of additional interest, accretion of accreted value and issuance of securities of the same class of Preferred Stock or Disqualified Stock will paid-in-kind shall not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other Person8.4.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will shall not, and will shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company will shall not issue any Disqualified Stock and will shall not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, Stock and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stock), if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock preferred stock is issued, as the case may be, would have been at least 2.25 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock preferred stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a4.08(a) will hereof shall not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stockpreferred stock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuers Company and the Guarantors, Guarantors of additional 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 the Company and its Restricted Subsidiaries thereunder) not to exceed the greater of (ia) $700.0 million 50.0 million, less the aggregate amount of all permanent commitment reductions with respect to any revolving credit borrowings under one or more Credit Facilities that have been made by the Company or any of its Restricted Subsidiaries since the date of this Indenture and (iib) $175.0 million plus 35.019.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on Assets; provided, however, that in no event shall the date aggregate principal amount of Indebtedness under such incurrenceCredit Facilities that is not revolving credit borrowings exceed $35.0 million;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers Company and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and any PIK Notes and any increases in the principal amount of outstanding Global Notes, in each case as a result of the issuance of PIK Interest and the related Note GuaranteesGuarantees (but not any Additional Notes for the avoidance of doubt);
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of of, or to lease property, plant plant, equipment or equipment other assets (including Capital Stock) used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), ) at any time outstanding not to exceed the greater of (i) $45.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance5.0 million;
(5) Indebtedness (including Acquired Debt) of (x) the Company or any Guarantor incurred or issued to finance an acquisition of all or substantially all of the assets of another Person (whether through merger, consolidation, the direct purchase of such assets or the acquisition of Capital Stock of the person owning such assets) or (y) Persons that are acquired by the Company or a Guarantor; provided that after giving effect to the incurrence of such Indebtedness, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (5), and such acquisition, merger or consolidation (in each case with such pro forma adjustments as are contemplated by the definition of “Fixed Charge Coverage Ratio”), the Company would have been able to incur $1.00 of additional Indebtedness pursuant to the first paragraph of this Section after giving effect to the incurrence of such Indebtedness pursuant to this clause (5);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of Indebtedness between or among the Company or and/or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case Subsidiaries) that was permitted by this Indenture to be incurred under Section 4.09(a4.08(a) hereof or clauses (2), (3), (4), (5), (146), (15) or (1516) of this Section 4.09(b4.08(b);
(67) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and and/or any of its Restricted Subsidiaries; provided, however, that:
(A) 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 unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note GuaranteeGuarantee of such Guarantor, in the case of a Guarantor; and
(B) any (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and Company, or (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will Company shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (67);
(7) 8) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stockshares of preferred stock; provided, however, thatthat any:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; andor
(B) any sale or other transfer of any such Preferred Stock preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will shall be deemed, in each case, to constitute an issuance of such Preferred Stock preferred stock by such Restricted Subsidiary that was not permitted by this clause (7)8);
(8) 9) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging ObligationsObligations in the ordinary course of business and not for speculative purposes;
(910) the Guarantee by the Company or any of its Restricted Subsidiaries the Guarantors of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.094.08; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Note Guarantee must shall be subordinated or pari passu, as applicable, to other Indebtedness of the Guarantor to the same extent as the Indebtedness guaranteed;
(1011) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, insurance contracts, self-insurance obligations or bidobligations, plugging bankers’ acceptances, performance and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion other similar guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims not constituting Indebtedness in the ordinary course of business;
(1112) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence Days following receipt by the Company or any such Restricted Subsidiary of its Restricted Subsidiaries of in-kind obligations relating to net oil notice or natural gas balancing positions arising in the ordinary course of businesssuch event;
(13) any obligation arising from agreements of the Company or any Restricted Subsidiary of the Company 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 Capital Stock of a Restricted Subsidiary (including, without limitation, assets acquired by a Restricted Subsidiary of the Company and any Person that, as a result of such transaction, becomes a Restricted Subsidiary of the Company) in a transaction permitted by this Indenture; , provided that the maximum liability in respect of all such obligation is not reflected as Indebtedness incurred in connection with a liability on disposition shall at no time exceed the face gross proceeds including noncash proceeds (the Fair Market Value of such noncash proceeds being measured at the balance sheet of time received and without giving effect to any subsequent changes in value) actually received by the Company or any and its Restricted SubsidiarySubsidiaries in connection with such disposition;
(14) Indebtedness of the Company or a Restricted Subsidiary to the extent that the net proceeds thereof are promptly deposited to effect Legal Defeasance or Covenant Defeasance of the Notes or to effect satisfaction and discharge of this Indenture;
(15) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate amount at any time outstanding pursuant to this clause (15), including all Permitted Acquisition IndebtednessRefinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (15), not to exceed $8.0 million (or the equivalent thereof, measured at the time of each incurrence, in applicable foreign currency); and
(1516) the incurrence by the Company or any of its Restricted Subsidiaries the Guarantors of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (1516), not to exceed the greater $10.0 million. The Company shall not incur, and shall not permit any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of (i) $75.0 million and (ii) 5.0% payment to any other Indebtedness of the Company’s Adjusted Consolidated Net Tangible Assets determined as Company 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 date Company solely by virtue of such incurrence being unsecured or issuanceby virtue of being secured on a junior Lien basis. For purposes of determining compliance with this Section 4.094.08, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (1516) aboveappearing above in this Section 4.08(b), or is entitled to be incurred pursuant to Section 4.09(a4.08(a), the Company will shall be permitted to divide, classify and reclassify divide such item of Indebtedness on the date of its incurrence, or and later reclassify and redivide or reclassify all or a portion of such item of IndebtednessIndebtedness among any one or more of such clauses and/or Section 4.08(a), in any manner that complies with this Section 4.094.08. Indebtedness under the Credit Agreement Facilities outstanding on the date on which Notes are first issued and authenticated under of this Indenture will shall initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest or Preferred Stock or dividends on Disqualified Stock dividends or distributionsStock, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities shares of the same class of Preferred Stock or Disqualified Stock will shall not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.094.08; provided provided, in each such case, that the amount thereof shall be of any such accrual, accretion or payment is included in Fixed Charges of the Company as accrued (to the extent required by the definition of such term) of the Company as accrued. For purposes of determining compliance with any U.S. dollar denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be utilized, calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred. Notwithstanding any other provision of this Section, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. In determining the amount of Indebtedness outstanding, the outstanding amount of any particular Indebtedness of any Person shall be counted only once and any obligation of such person or any other Person under any guarantee, Lien, letter of credit or similar instrument supporting such Indebtedness shall be disregarded so long as it is permitted to be incurred by the Person or Persons incurring such obligation. The amount of any Indebtedness outstanding as of any date will shall be:
(a1) the accreted value of the Indebtedness, in the case cause of any Indebtedness issued with original issue discount;
(b2) with respect to contingent obligations, the principal amount maximum liability upon the occurrences of the Indebtedness, in contingency giving rise to the case of any other Indebtedness; andobligation;
(c3) with respect to Hedging Obligations, the net amount payable, if any, by the specified Persons if such Hedging Obligations terminated at that time due to default by such Person;
(4) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1A) the Fair Market Value of such assets at the date of determination; and;
(2B) the amount of such Indebtedness of the other Person;
(5) the maximum amount the Company and its Restricted Subsidiaries would become obligated to pay upon the maturity of, or pursuant to any mandatory redemption provisions of, such Disqualified Stock, in the case of any Disqualified Stock;
(6) the amount of the liability in respect thereof determined in accordance with GAAP, in the case of Indebtedness issued at a price that is less than the principal amount thereof; and
(7) the principal amount of the Indebtedness, in the case of any other PersonIndebtedness.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stock; provided, however, that the Issuers may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue Preferred Stock, if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock is issued, as the case may be, would have been at least 2.25 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuers and the GuarantorsRestricted 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 the Company and its Restricted Subsidiaries thereunder) not to exceed the greater greatest of (i) $700.0 million and 2.0 billion, (ii) $175.0 million plus the Borrowing Base in effect under the Credit Agreement at such time, and (iii) 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers and the Guarantors of Indebtedness represented by the Notes to be issued on the date of this Indenture and the related Note Guarantees;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Finance Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 250.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (2), (3), (4), (5), (14) or (15) of this Section 4.09(b);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and
(B) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations;
(9) the Guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business;
(13) any obligation arising from agreements of the Company or any Restricted Subsidiary of the Company 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 Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company or any Restricted Subsidiary;
(14) any Permitted Acquisition Indebtedness; and
(15) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15), not to exceed the greater of (i) $75.0 450.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance. For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (15) above, or is entitled to be incurred pursuant to Section 4.09(a), the Company will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributions, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Samples: Indenture (Parsley Energy, Inc.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock Stock, and the Company will not permit any of its Restricted Subsidiaries to issue any Preferred StockDisqualified Stock or preferred stock; provided, however, that the Issuers Company may incur Indebtedness (including Acquired Debt) or and issue shares of Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stock, if the Fixed Charge Coverage Ratio for the Company’s 's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred incurred, or such Disqualified Stock or such Preferred Stock is issued, as the case may be, would have been at least 2.25 2 to 1.0, determined 1 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 Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) . The first paragraph of this Section 4.09(a) 4.09 will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “"Permitted Debt”"):
(1) the incurrence by the Issuers and the Guarantors, Company of Indebtedness and letters of credit under Credit Facilities (and the incurrence by the Guarantors of guarantees thereof) in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed $390 million, plus the greater excess, if any, of (ix) $700.0 10.9 million and over (iiy) $175.0 million plus 35.0% the amounts drawn on the revolving credit facility, that form part of the Company’s Adjusted Consolidated Net Tangible Assets determined Credit Agreement, on the date Closing Date, less the aggregate amount of such incurrenceall Net Proceeds of Asset Sales applied by the Company or any Restricted Subsidiary to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.10 hereof;
(2) the incurrence by the Company and its Restricted Subsidiaries any Guarantor of the Existing Indebtedness;
(3) the incurrence by the Issuers Company and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture hereof and the Exchange Notes and the related Note GuaranteesGuarantees 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 or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation construction or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiariessuch Guarantor, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 15.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceat any time outstanding;
(5) the incurrence by the Company or any of its Restricted Subsidiaries the Guarantors of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease refinance or discharge any replace Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under the first paragraph of this Section 4.09(a) 4.09 or clauses clause (2), (3), (4), (5), (14), (15) or (1516) of this Section 4.09(b)paragraph;
(6) (A) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(Aa) if the Company or any Guarantor is the obligor on such Indebtedness and the payee (other than where such Indebtedness is not held by the Company or a Guarantor), such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and
(B) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company thereof and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Companythereof, will shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations;
(9) the Guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business;
(13) any obligation arising from agreements of the Company or any Restricted Subsidiary of the Company 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 Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company or any Restricted Subsidiary;
(14) any Permitted Acquisition Indebtedness; and
(15) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15), not to exceed the greater of (i) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance. For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (15) above, or is entitled to be incurred pursuant to Section 4.09(a), the Company will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributions, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Samples: Indenture (American Seafoods Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company or any Guarantor may incur Indebtedness (including Acquired Debt) or ), the Company may issue Disqualified Stock, Stock and the Guarantors any Guarantor may incur Indebtedness (including Acquired Debt) or issue Preferred Stockpreferred stock, if the Fixed Charge Coverage Ratio for the Company’s 's most recently ended four full fiscal quarters for which internal consolidated financial statements are publicly available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock preferred stock is issued, as the case may be, issued would have been at least 2.25 2.0 to 1.01, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the preferred stock or Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “"Permitted Debt”"):
(1) the incurrence by the Issuers and the Guarantors, Company or any Guarantor of Indebtedness and letters of credit under Credit Facilities Facilities, in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries the Guarantors thereunder) not to exceed the greater $325.0 million less
(A) the aggregate amount of (i) $700.0 million and (ii) $175.0 million plus 35.0% all Net Proceeds of Asset Sales applied by the Company’s Adjusted Consolidated Net Tangible Assets determined on Company or any of its Restricted Subsidiaries since the date of such incurrencethis Indenture to repay term Indebtedness under a Credit Facility or to repay revolving credit Indebtedness and effect a corresponding commitment reduction thereunder, in each case, pursuant to Section 4.10 hereof and less
(B) the amount of Indebtedness incurred and outstanding in connection with a Qualified Receivables Transaction pursuant to clause (13) of this paragraph;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers and the Guarantors Company of Indebtedness represented by the Notes to be issued on the date of this Indenture and the Exchange Notes to be issued pursuant to the Exchange and Registration Rights Agreement and the incurrence by any Guarantor of Indebtedness represented by any Note Guarantee related Note Guaranteesto the Notes or the Exchange Notes;
(4) the incurrence by the Company or any of its Restricted Subsidiaries Guarantor of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligationsobligations (including borrowings under a Credit Facility) or Acquired Debt, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation development, maintenance, upgrade or improvement of property, plant plant, equipment or equipment assets (in each case whether through the direct purchase of assets or through the purchase of Capital Stock of the Person owning such assets) used in the business of the Company or any of its such Restricted SubsidiariesSubsidiary, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) exceed, at any time outstanding, $45.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance15 million;
(5) the incurrence by the Company or any of its Restricted Subsidiaries Guarantor of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease refinance or discharge any replace Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (2), (3), (4), (5), (14) or (15) of this Section 4.09(b);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted SubsidiariesSubsidiaries (other than a Receivables Subsidiary); provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a GuarantorIndebtedness, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and
(B) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, ; will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any shares of the Company’s preferred stock of a Restricted Subsidiaries Subsidiary issued to the Company or to another Restricted Subsidiary; provided that any of its Restricted Subsidiaries subsequent transfer of any Preferred Stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that or any other event which results in any such Preferred Stock being held by a Person other than the Company or Restricted Subsidiary ceasing to be a Restricted Subsidiary of the Company; and
(B) or any sale or other subsequent transfer of any such Preferred Stock shares of preferred stock (except to a Person that is not either the Company or a any another Restricted Subsidiary of the Company, will Subsidiary) shall be deemed, in each case, to constitute be an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7)preferred stock;
(8) the incurrence by the Company or any of its Restricted Subsidiaries Guarantor of Hedging ObligationsObligations in the ordinary course of business or as may be required in connection with any Senior Debt and not for speculative purposes;
(9) the Guarantee guarantee by the Company or any of its Restricted Subsidiaries Guarantor of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent Guarantor that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(10) Indebtedness of the incurrence Company or any of its Restricted Subsidiaries in respect of workers' compensation claims, self-insurance obligations, indemnities, performance bonds, bankers' acceptances, letters of credit and surety, appeal or similar bonds provided by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and and, in any Guarantees or letters of credit functioning as or supporting such case, any of the foregoing bonds or reimbursement obligations and workers’ compensation claims in the ordinary course of businessconnection therewith;
(11) the incurrence by Indebtedness of the Company or any of its Restricted Subsidiaries of Indebtedness arising from Subsidiary to the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long extent the net proceeds thereof are promptly deposited to defease all outstanding Notes in full as such Indebtedness is covered within five Business Dayspursuant to Section 8.02 hereof;
(12) the incurrence by the Company contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or any of its Restricted Subsidiaries of in-kind obligations relating to net oil collection or natural gas balancing positions arising overdraft protection in the ordinary course of business;
(13) the incurrence by a Receivables Subsidiary of Indebtedness in a Qualified Receivables Transaction; provided that such Indebtedness is non-recourse to the Company or any obligation of its Restricted Subsidiaries (except to the extent of customary representations, warranties, covenants and indemnities entered into in connection with a Qualified Receivables Transaction);
(14) obligations of the Company and its Restricted Subsidiaries arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case incurred or assumed in connection with the disposition of any business, assets or a Subsidiary of the Company in accordance with the terms of this Indenture, other than Guarantees by the Company or any Restricted Subsidiary of the Company providing for indemnification, adjustment of purchase price, earn outs, Indebtedness incurred by any Person acquiring all or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition any portion of any such business, assets or Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company or for the purpose of financing such acquisition; provided, however, that the maximum aggregate liability in respect of all such obligations shall not exceed the gross proceeds, including the fair market value as determined in good faith by a majority of the Board of Directors of the Company of non-cash proceeds (the fair market value of such non-cash proceeds being measured at the time it is received and without giving effect to any subsequent changes in value), actually received by the Company and its Restricted Subsidiary;
(14) any Permitted Acquisition IndebtednessSubsidiaries in connection with such disposition; and
(15) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or Indebtedness, the issuance by the Company of any Disqualified Stock or the issuance by a Restricted Subsidiary of preferred stock in an aggregate principal amount (or accreted value, as applicable) liquidation preference at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinancerefinance or replace any Indebtedness, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued or preferred stock incurred pursuant to this clause (15), not to exceed the greater of (i) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance. For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (15) above, or is entitled to be incurred pursuant to Section 4.09(a), the Company will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributions, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other Person30.0 million.
Appears in 1 contract
Samples: Indenture (National Waterworks Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will shall not, and will shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to otherwise (collectively, “incur”) ), with respect to any Indebtedness (including Acquired Debt), and the Company will shall not issue any Disqualified Stock and will shall not permit any of its Restricted Subsidiaries to issue any Preferred StockDisqualified Stock or preferred stock; provided, however, that the Issuers Company or any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, Stock and the Guarantors any Restricted Subsidiary may incur Indebtedness issue preferred stock if (including Acquired Debtx) or issue Preferred Stock, if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock preferred stock is issued, as the case may be, issued would have been at least 2.25 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock preferred stock had been issued, as the case may be, at the beginning of such four-quarter periodperiod or (y) the Total Leverage Ratio on the date on which such additional Indebtedness is incurred or such Disqualified Stock or preferred stock is issued would have been no higher than 6.5 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), giving effect to the incurrence of the additional Indebtedness, Disqualified Stock or preferred stock.
(b) Subsection (a) of this Section 4.09(a) will 4.9 shall not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1i) the incurrence by the Issuers Company and the Guarantors, its Restricted 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 the Company and its Restricted Subsidiaries thereunderi) not to exceed (a) $1,250.0 million plus (b) the greater of (ix) $700.0 1,500.0 million and (iiy) $175.0 million plus 35.039.0% of LTM Consolidated Cash Flow (measured at the Company’s Adjusted Consolidated Net Tangible Assets determined on the date time of such incurrence);
(2ii) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness, including the Existing Notes;
(3iii) the incurrence by the Issuers Company and the Note Guarantors of Indebtedness represented by the Initial Notes to be issued on (including the date of this Indenture Note Guarantees and the related any future Note Guarantees);
(4iv) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, in an aggregate amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (iv), not to exceed the greater of (x) $275.0 million and (y) 1.0% of Consolidated Total Assets at any time outstanding;
(v) mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation construction or improvement of property, plant or equipment used in the business of the Company or any Restricted Subsidiary of its Restricted Subsidiariesthe Company, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred pursuant to this clause (4v), not to exceed the greater of (ix) $45.0 675.0 million and (iiy) 3.02.5% of the Company’s Adjusted Consolidated Net Tangible Total Assets determined as of the date of such incurrence or issuanceat any time outstanding;
(5vi) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, refinance or replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a4.9(a) hereof or clauses (2ii), (3iii), (4xii), (5), (14xiv) or (15xxi) of this Section 4.09(b4.9(b) or this clause (vi) or, solely to the extent of the excess (if any) of the amount of Indebtedness incurred and outstanding under clause (xx) of this Section 4.9(b) prior to the applicable refinancing over the maximum aggregate amount permitted to be incurred and outstanding under clause (xx) of this Section 4.9(b) at the time of such refinancing, clause (xx) of this Section 4.9(b);
(6vii) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any a Note Guarantor is the obligor on such Indebtedness and the payee obligee is not the Company or a another Note Guarantor, such Indebtedness must be unsecured and expressly subordinated (without regard to security interest) to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and
(B) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will Company shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was is not permitted by this clause (6vii);
(7viii) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that:
(Ai) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging ObligationsObligations that are incurred and not for speculative purposes and (ii) the incurrence by a Securitization Special Purpose Entity of Indebtedness in a Qualified Securitization Transaction that is without recourse to the Company or to any other Restricted Subsidiary of the Company or their assets (other than Standard Securitization Undertakings);
(9ix) the Guarantee by the Company or any Restricted Subsidiary of its Restricted Subsidiaries the Company of Indebtedness of the Company or a any Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of under this Section 4.094.9 (other than the Note Guarantees); provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the NotesNotes or any Note Guarantee, then the Guarantee must shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteedguaranteed (without regard to security interest);
(10x) 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 4.9; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued;
(xi) obligations in respect of performance and surety bonds and completion guarantees or similar obligations provided by the Company or any Restricted Subsidiary of the Company in each case in the normal course of business (whether or not consistent with past practice);
(xii) the incurrence by the Company or any of its Restricted Subsidiaries of Acquired Debt; provided, however, that on the date of acquisition and after giving effect thereto on a pro forma basis, (i) the Fixed Charge Coverage Ratio of the Company (A) would be at least 2.0 to 1.0 or (B) would be equal to or greater than such Fixed Charge Coverage Ratio immediately prior to such acquisition or (ii) the Total Leverage Ratio of the Company (A) would be no higher than 6.5 to 1.0 or (B) would be equal to or lower than such Total Leverage Ratio immediately prior to such acquisition;
(xiii) the incurrence by any Foreign Subsidiary or other Non-Guarantor Subsidiary of Indebtedness in respect an aggregate principal amount at any time outstanding, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (xiii), not to exceed the greater of self-insurance obligations (x) $675.0 million or bid(y) 2.5% of Consolidated Total Assets;
(xiv) Indebtedness of the Company or any Restricted Subsidiary incurred in connection with or in contemplation of, plugging and abandonmentor to provide all or any portion of the funds or credit support utilized to consummate, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided the acquisition by the Company or a any Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds Company of property used or obligations useful in a Permitted Business (whether through the direct purchase of assets or the purchase of Capital Stock of, or merger or consolidation with, any Person owning such assets); provided, however, on the date of such incurrence and workers’ compensation claims in after giving effect thereto on a pro forma basis, (i) the ordinary course Fixed Charge Coverage Ratio of businessthe Company (A) would be at least 2.0 to 1.0 or (B) would be equal to or greater than such Fixed Charge Coverage Ratio immediately prior to such incurrence or (ii) the Total Leverage Ratio of the Company (A) would be no higher than 6.5 to 1.0 or (B) would be equal to or lower than such Total Leverage Ratio immediately prior to such incurrence;
(11xv) the incurrence Indebtedness incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including letters of credit in respect of workers’ compensation claims, death, disability or other employee benefits or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement-type obligations regarding workers’ compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(xvi) 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 provided that such Indebtedness is covered extinguished within five Business DaysDays of notice of its incurrence;
(12xvii) the incurrence by Indebtedness of the Company or any of its Restricted Subsidiaries supported by a letter of incredit issued pursuant to the Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;
(xviii) Indebtedness of the Company or any of its Restricted Subsidiaries consisting of (i) the financing of insurance premiums or (ii) take-kind or-pay or similar obligations relating to net oil or natural gas balancing positions arising contained in supply arrangements, in each case, incurred in the ordinary course of business;
(13) any obligation arising from agreements of the Company or any Restricted Subsidiary of the Company 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 Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company or any Restricted Subsidiary;
(14) any Permitted Acquisition Indebtedness; and
(15xix) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15xix), not to exceed the greater of (ix) $75.0 1,000.0 million and (iiy) 5.03.75% of Consolidated Total Assets;
(xx) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness secured by a Lien under Credit Facilities in an aggregate principal amount such that, on a pro forma basis (including a pro forma application of the proceeds therefrom), the Secured Leverage Ratio would not exceed 3.50 to 1.00;
(xxi) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness of the Company and/or any Restricted Subsidiary in an aggregate outstanding principal amount not to exceed 100% of the Company’s Adjusted Consolidated Net Tangible Assets amount of any capital contributions or other proceeds received by the Company or any Restricted Subsidiary (a) from the issuance or sale of its Equity Interests (other than Disqualified Stock) or (b) in the form of any cash contribution, plus the fair market value, as determined as by the Company in good faith, of Cash Equivalents, marketable securities or other property received by the Company or any Restricted Subsidiary from the issuance and sale of its Equity Interests (other than Disqualified Stock) or a contribution to the capital of the date Company or any Restricted Subsidiary (including through consolidation, amalgamation or merger), in each case after the Issue Date, and in each case other than (x) any proceeds received from the sale of Equity Interests to, or contributions from, the Company or any of its Restricted Subsidiaries, (y) to the extent the relevant proceeds have otherwise been applied to make Restricted Payments hereunder and (z) any Excluded Contribution; and
(xxii) the incurrence of Indebtedness of any joint venture or Indebtedness of the Company or any Restricted Subsidiary incurred on behalf of any joint venture or any guarantees by the Company or any Restricted Subsidiary of Indebtedness of any joint venture in an aggregate outstanding principal amount for all such incurrence Indebtedness not to exceed at any time the greater of $350.0 million and 1.25% of Consolidated Total Assets.
(c) The Company shall not, and shall not permit any Note Guarantor to, incur any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Company or issuance. the Note Guarantors unless such Indebtedness is also contractually subordinated in right of payment to the Notes on substantially identical terms; provided, however, that no Indebtedness of the Company or the Note Guarantors shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company or any Note Guarantor solely by virtue of being unsecured or having a junior lien priority.
(d) For purposes of determining compliance with this Section 4.094.9, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1i) through (15xxii) aboveof Section 4.9(b) hereof, or is entitled to be incurred pursuant to subsection (a) of this Section 4.09(a)4.9, the Company will shall be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify from time to time all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.094.9. Indebtedness permitted by this Section 4.9 need not be permitted solely by reference to one clause permitting such Indebtedness but may be permitted in part by one such clause and in part by one or more other clauses of this Section 4.9 permitting such Indebtedness. Indebtedness under the Credit Agreement Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture Issue Date will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1xx) of the definition Section 4.9(b) hereof.
(e) In addition, for purposes of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsdetermining compliance with this Section 4.9, the accretion Company or amortization the applicable Restricted Subsidiary may, pursuant to an Officers’ Certificate delivered to the Trustee, elect to treat all or any portion of original issue discount, the payment of interest on commitment under any Indebtedness not secured by a Lien (including with respect to any revolving loan commitment) as being incurred at the time of such commitment, in the form which case any subsequent incurrence of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock will under such commitment shall not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to the extent required by the definition of at such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other Personsubsequent time.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will Foamex shall not, and will shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), Foamex and the Company will Guarantors shall not issue any Disqualified Stock Stock, and will Foamex shall not permit any of its Restricted Subsidiaries which are not Guarantors to issue any Preferred shares of Disqualified Stock; provided, however, that the Issuers Foamex and its Restricted Subsidiaries may incur Indebtedness (including Acquired DebtDebt and Indebtedness under the Credit Agreement) or issue Disqualified Stock, and Stock or in the case of Restricted Subsidiaries which are not Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stock, shares of preferred stock if the Fixed Charge Coverage Ratio for the Company’s Foamex'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 Stock preferred stock is issued, as the case may be, issued would have been at least 2.25 to 1.01, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock preferred stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “"Permitted Debt”"):
(1) the incurrence by the Issuers and the Guarantors, Foamex or any of its Restricted 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 reimbursement liability of the Company Foamex and its Restricted Subsidiaries thereunderwith respect thereto) not exceeding an amount equal to exceed $285.0 million, less the greater aggregate amount of (i) $700.0 million and (ii) $175.0 million plus 35.0% all Net Proceeds of the Company’s Adjusted Consolidated Net Tangible Assets determined on Asset Sales that have been applied since the date of this Indenture to repay such incurrenceIndebtedness under any such Credit Facilities and resulting in a permanent reduction of the related commitments pursuant to Section 4.10 hereof;
(2) the incurrence by the Company Foamex and its Restricted Subsidiaries of the Existing Indebtedness, including the incurrence of any current or future Guarantees by any Restricted Subsidiary of Foamex of the Senior Subordinated Notes;
(3) the incurrence by the Issuers and the Guarantors of Indebtedness represented by the Notes and the related Guarantees to be issued on the date of this Indenture and the Exchange Notes and the related Note GuaranteesGuarantees to be issued pursuant to any Registration Rights Agreement;
(4) the incurrence by the Company Foamex or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, case incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation construction or improvement of property, plant or equipment used in the business of the Company Foamex or any of its such Restricted SubsidiariesSubsidiary, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 30.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceat any time outstanding;
(5) the incurrence by the Company Foamex or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease refinance or discharge any replace Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (2), (3), (4), (5), (149) or (15) of this Section 4.09(b);
(6) the incurrence by the Company Foamex or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company Foamex and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company Foamex or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Guarantor, such Indebtedness must be unsecured and is expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the CompanyFoamex, or the Note Subsidiary Guarantee, in the case of a the Guarantor; and
(B) both (i1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company Foamex or a Restricted Subsidiary of the Company and (ii2) any sale or other transfer of any such Indebtedness to a Person that is not either the Company Foamex or a Restricted Subsidiary of the Company, will Foamex shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company Foamex or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company Foamex or any of its Restricted Subsidiaries of Hedging ObligationsObligations entered into either (a) for the purpose of fixing or hedging of interest rate or currency exchange risk or (b) in the ordinary course of business;
(9) 8) the Guarantee or co-issuance by the Company Foamex or any of its Restricted Subsidiaries of Indebtedness of the Company Foamex or a Restricted Subsidiary of the Company to the extent Foamex that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that ;
(9) Acquired Debt of a Restricted Subsidiary in existence at the time of the acquisition of such Subsidiary, if the Indebtedness being guaranteed such Acquired Debt was not incurred in contemplation of such acquisition and such Acquired Debt is subordinated Non-Recourse Debt (except with respect to or pari passu with the Notes, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteedsuch acquired Subsidiary and its Restricted Subsidiaries);
(10) the incurrence Indebtedness arising from agreements of Foamex or a Restricted Subsidiary for indemnification, adjustment of purchase price, or similar obligations, in each case incurred in connection with a disposition of any business assets, or Restricted Subsidiaries, other than guarantees of Indebtedness incurred by the Company any Person acquiring all or any portion of such acquisition;
(11) Indebtedness of a Foreign Subsidiary and its Restricted Subsidiaries (which is Non-Recourse Debt, except with respect to such entities) not to exceed an aggregate amount of $100.0 million;
(12) Any financing related to Receivables Transactions permitted pursuant to this Indenture;
(13) Indebtedness of Foamex or any of its Restricted Subsidiaries represented by letters of Indebtedness credit in respect of order to provide security for workers' compensation claims, payment obligations in connection with self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims requirements in the ordinary course of business;
(1114) the incurrence Obligations in respect of performance bonds and completion guarantees provided by the Company or Foamex of any Restricted Subsidiary of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising Foamex in the ordinary course of business;
(13) any obligation arising from agreements of the Company or any Restricted Subsidiary of the Company 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 Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company or any Restricted Subsidiary;
(14) any Permitted Acquisition Indebtedness; and
(15) the incurrence by the Company Foamex or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of including, without limitation, pursuant to any Disqualified Stock Credit Facilities, in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15), not to exceed the greater of (i) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance55.0 million. For purposes of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (15) above, above or is entitled to be incurred pursuant to Section 4.09(a), the Company will be permitted to divideIssuers shall, in their sole discretion, classify and (or later reclassify in whole or in part) such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributions, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock will accreted value shall not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Samples: Indenture (Foamex Capital Corp)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), ) and the Company will shall not issue any Disqualified Stock and will shall not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company may incur Indebtedness (including Acquired Debt) or and issue shares of Disqualified Stock, Stock and the Guarantors any Restricted Subsidiary may incur Indebtedness Acquired Debt if (including Acquired Debti) or issue Preferred Stock, if the Company's Fixed Charge Coverage Ratio for the Company’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 or such Preferred Stock is issued, as the case may be, issued would have been at least 2.25 2.75 to 1.01, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom)basis, as if the additional Indebtedness had been incurred incurred, or the Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
period and (bii) the Company is in compliance with Section 4.09(a) will 4.4 hereof. The provisions of the first paragraph of this covenant shall not prohibit apply to the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “"Permitted Debt”):") so long as no Default has occurred and is continuing or would be caused thereby:
(1i) the incurrence by the Issuers and the Guarantors, Company or its Restricted Subsidiaries of Indebtedness under the Senior Credit Facility 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 the Company and its Restricted Subsidiaries thereunder) not ); provided that the sum of the aggregate principal amount of all Indebtedness of the Company and its Restricted Subsidiaries outstanding under the Senior Credit Facility after giving effect to exceed the greater of such incurrence, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any other Indebtedness incurred pursuant to this clause (i) does not exceed an amount equal to $700.0 125.0 million and less, without duplication, (iiX) $175.0 million plus 35.0% the aggregate amount of all repayments, optional or mandatory, of the Company’s Adjusted Consolidated Net Tangible Assets determined on principal of any Indebtedness under the date term loan portion of such incurrence;
(2) the incurrence Senior Credit Facility that have been made by the Company and its Restricted Subsidiaries since the Issue Date, (Y) the aggregate amount of PIK Securities issued and outstanding pursuant to this Indenture to a maximum amount equal to the Minimum Cash Flow Participation Amount, and (Z) the aggregate amount of Asset Sale proceeds applied by the Company and its Restricted Subsidiaries to permanently reduce the availability of revolving credit Indebtedness under the Senior Credit Facility pursuant to Section 4.12; it being understood that the total committed facilities with respect to any refinancing of the Existing IndebtednessSenior Credit Facility may exceed the actual aggregate principal amount of Indebtedness outstanding at the time of such refinancing so long as the total of such commitments does not exceed the limitations set forth in this clause (i);
(3ii) the incurrence by the Issuers and the Guarantors Company of Indebtedness represented by the Notes Securities and the PIK Securities issued pursuant to be issued on the date of this Indenture and the related Note incurrence by the Subsidiary Guarantors of the Guarantees;
(4iii) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, case incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation construction or improvement of property, plant or equipment used in the business of the Company or any of its such Restricted SubsidiariesSubsidiary, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge any replace Indebtedness incurred pursuant to this clause (4iii), not to exceed the greater of (i) $45.0 5.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceat any time outstanding;
(5iv) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (2), (3), (4), (5), (14) or (15) of this Section 4.09(b);
(6v) the incurrence by the Company of Indebtedness owing to and held by any Restricted Subsidiary or any Indebtedness of its a Restricted Subsidiaries of intercompany Indebtedness between or among Subsidiary which is a Subsidiary Guarantor owing to and held by the Company and any of its or another Restricted SubsidiariesSubsidiary which is a Subsidiary Guarantor; provided, however, that:
that (Aa) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a GuarantorIndebtedness, such Indebtedness must be unsecured and is expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the NotesSecurities and this Indenture, in the case (b) if a Restricted Subsidiary of the CompanyCompany is the obligor on such Indebtedness, or such Indebtedness is expressly subordinated to the Note Guarantee, prior payment in the case full in cash of a Guarantor; andsuch Restricted Subsidiary's Guarantee and (c)
(B) (i1) any subsequent event or issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (ii2) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will Guarantor shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6v);
(7vi) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging ObligationsObligations that are incurred in the normal course of business and consistent with past business practices for the purpose of fixing or hedging currency, commodity or interest rate risk (including with respect to any floating rate Indebtedness that is permitted by the terms of this Indenture to be outstanding in connection with the conduct of their respective businesses and not for speculative purposes);
(9vii) the Guarantee guarantee by the Company or any of its Restricted Subsidiaries the Subsidiary Guarantors of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed4.3;
(10viii) the incurrence by Trim Trends Canada of Indebtedness under the CIBC Facility, provided that the aggregate principal amount of all Indebtedness of Trim Trends Canada outstanding under the CIBC Facility, after giving effect to such incurrence, including all permitted Refinancing Indebtedness incurred to refund, refinance or replace any other Indebtedness incurred pursuant to this clause (viii), does not exceed an amount equal to $2.0 million; and
(ix) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business;
(13) any obligation arising from agreements of the Company or any Restricted Subsidiary of the Company 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 Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company or any Restricted Subsidiary;
(14) any Permitted Acquisition Indebtedness; and
(15) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any other Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15ix), not to exceed the greater of (i) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance2.5 million. For purposes of determining compliance with this Section 4.094.3, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1i) through (15ix) above, above as of the date of incurrence thereof or is entitled to be incurred pursuant to Section 4.09(a)the first paragraph of this covenant as of the date of incurrence thereof, the Company will be permitted to divideshall, in its sole discretion, classify and reclassify such item of Indebtedness on as of the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, incurrence thereof in any manner that complies with this Section 4.09. covenant and such item of Indebtedness under the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially shall be deemed to have treated as having been incurred on pursuant to only one of such date in reliance on clauses or pursuant to the exception provided by clause (1) first paragraph hereof. Accrual of the definition of Permitted Debt. The interest, accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsdividends, the accretion or amortization of original issue discount, accreted value and the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other Personcovenant.
Appears in 1 contract
Samples: Indenture (Harvard Industries Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company Seven Seas will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company will The foregoing provisions shall not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stock; provided, however, that the Issuers may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stock, if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock is issued, as the case may be, would have been at least 2.25 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.apply to:
(b) Section 4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1i) the incurrence by the Issuers Seven Seas and the Guarantors, if any, of Indebtedness and letters of credit under the 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) Facility not to exceed exceeding the greater of (ia) $700.0 25.0 million and (iib) $175.0 million plus 35.0% the Borrowing Base, less any amounts derived from Asset Sales and applied to the required permanent reduction of such Indebtedness (and a permanent reduction of the Company’s Adjusted Consolidated Net Tangible Assets determined on related commitment to lend or in the date amount available to be refinanced in the case of such incurrencea revolving credit facility) under the Credit Facility as contemplated by Section 4.10;
(2ii) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3iii) the incurrence by the Issuers Seven Seas and the Guarantors any Guarantor of Indebtedness represented by the Notes to be issued on the date of this Indenture and the related Note GuaranteesNotes;
(4iv) the incurrence by the Company Seven Seas or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings financings, Purchase Money Obligations or purchase money obligationssimilar financing transactions relating to its properties, in each case, incurred for assets and rights acquired after the purpose date of financing all or any part issue of the purchase price or cost of designNotes, construction, installation or improvement of property, plant or equipment used in provided that the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount outstandingof such Indebtedness under this clause does not exceed 100% of the cost of such properties, including all Permitted Refinancing Indebtedness incurred to renewassets and rights and provided, refundfurther, refinance, replace, defease or discharge any that the aggregate amount of Indebtedness incurred pursuant to this clause (4), iv) does not to at any time exceed the greater of (i) $45.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance10.0 million;
(5v) the incurrence by the Company Seven Seas or any of its Restricted Subsidiaries Subsidiary of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refundextend, refinance, renew, replace, defease or discharge any refund, Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case such entity that was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (2), (3), (4), (5), (14) or (15) of this Section 4.09(b)incurred;
(6vi) the incurrence by of Indebtedness of Seven Seas to a Restricted Subsidiary; provided that any such Indebtedness is made pursuant to an intercompany note and is subordinated in right of payment to the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company Notes; and any of its Restricted Subsidiaries; provided, howeverfurther, that:that any subsequent
(Avii) the incurrence of Indebtedness of a Restricted Subsidiary to Seven Seas or another Restricted Subsidiary; provided that (a) any such Indebtedness is made pursuant to an intercompany note and (b) if the Company or any a Guarantor is the obligor on incurs such Indebtedness and the payee to a Restricted Subsidiary that is not the Company or a Guarantor, such Indebtedness must be unsecured and expressly is subordinated in right of payment to the prior payment in full in cash Subsidiary Guarantee of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a such Guarantor; and
(B) (i) and provided, further, that any subsequent issuance or transfer of Equity Interests that any Capital Stock of any Restricted Subsidiary to whom such Indebtedness is owed or any other event which results in any such Indebtedness being held by a Person other than the Company or Restricted Subsidiary ceasing to be a Restricted Subsidiary of the Company and (ii) or any sale or other subsequent transfer of any such Indebtedness (except to a Person that is not either the Company Seven Seas or a another Restricted Subsidiary of the Company, will Subsidiary) shall be deemed, in each case, to constitute be an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6)Indebtedness;
(7viii) the issuance by any incurrence, assumption or creation of the Company’s Restricted Subsidiaries to the Company or to any Hedging Obligations of its Restricted Subsidiaries of any Preferred Stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company Seven Seas or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such Preferred Stock pursuant to a Person that is not either the Company or a Restricted Subsidiary of the Companyinterest rate protection obligations, will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations;
(9) the Guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary of the Company but only to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision stated aggregate notional amounts of this Section 4.09; provided that if such obligations do not exceed 105% of the aggregate principal amount of the Indebtedness being guaranteed is subordinated to covered by such interest rate protection obligations; the incurrence, assumption or pari passu with creation of Hedging Obligations under currency exchange contracts entered into for the Notespurpose of limiting risks that arise in the ordinary course of business of Seven Seas and its Subsidiaries; and the incurrence, then assumption or creation of Hedging Obligations that Seven Seas or a Restricted Subsidiary enters into for the Guarantee must be subordinated purpose of protecting its production against fluctuations in oil or pari passu, as applicable, to the same extent as the Indebtedness guaranteednatural gas prices;
(10ix) the incurrence by the Company or any of Seven Seas and its Restricted Subsidiaries of Indebtedness in respect connection with one or more standby letters of self-insurance obligations credit, or bid, plugging and abandonment, appeal, reimbursement, performance, performance or surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business;
(13) any obligation arising from agreements of the Company or any Restricted Subsidiary of the Company providing for indemnification, adjustment of purchase price, earn outs, or similar reimbursement obligations, in each case, incurred or assumed issued in the conduct of the Oil and Gas Business and not in connection with the disposition borrowing of money or acquisition the obtaining of advances or credit, not to exceed in the aggregate at any time outstanding 5.0% of consolidated total assets of Seven Seas;
(x) issuance of any business, assets or Capital Stock of Guarantee by a Restricted Subsidiary in a transaction of Seven Seas of senior Indebtedness of Seven Seas that was permitted by to be incurred under this Indenture; provided that prior to or concurrently with the issuance of such obligation is not reflected as a liability on the face of the balance sheet of the Company or any Guarantee such Restricted SubsidiarySubsidiary complies with Section 4.17 hereof;
(14xi) any Permitted Acquisition Indebtedness; and
(15) the incurrence by the Company Indebtedness of Seven Seas or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock Guarantor incurred to finance Permitted Infrastructure Investments, in an aggregate principal amount (or accreted value, as applicable) that does not at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15), not to exceed the greater of (i) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance. For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (15) above, or is entitled to be incurred pursuant to Section 4.09(a), the Company will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributions, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount10.0 million;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Samples: Indenture (Seven Seas Petroleum Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”"INCUR") any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; providedPROVIDED, howeverHOWEVER, that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Company's Restricted Subsidiaries that are Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stockpreferred stock, if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock is issuedif, as the case may be, would have been at least 2.25 to 1.0, determined on a after giving pro forma basis effect thereto (including a pro forma application of the net proceeds therefrom), as if the Company's Debt to Cash Flow Ratio immediately preceding the incurrence of such additional Indebtedness had been incurred or the issuance of such Disqualified Stock or the Preferred Stock had been issuedpreferred stock, as the case may be, at the beginning of such four-quarter periodwould have been no greater than 7.0 to 1.
(b) The provisions of Section 4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”"PERMITTED DEBT"):
(1) the incurrence by the Issuers Company and the Guarantors, any of its Restricted Subsidiaries of additional 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 52 principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) ), including all Permitted Refinancing Indebtedness incurred to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (1), not to exceed the greater of (ia) 1.5 times the Company's Consolidated Cash Flow for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred and (b) $700.0 million and (ii) $175.0 million plus 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence45.0 million;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers Company and the Guarantors of Indebtedness represented by the Notes and the related Guarantees to be issued on the date of this Indenture Indenture, and the Exchange Notes and the related Note GuaranteesGuarantees to be issued pursuant to the Registration Rights Agreement;
(4) the incurrence by the Company or any of its Restricted Subsidiaries the Guarantors of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 10.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance;at any time outstanding
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clauses (2), (3), (4), (5), (14) or (1512) of this Section 4.09(b);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; providedPROVIDED, howeverHOWEVER, that:
that (A) 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 unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and
(B) (ia) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (iib) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the Company’s 's Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stockshares of preferred stock; providedPROVIDED, howeverHOWEVER, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such Preferred Stock preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging ObligationsObligations in the ordinary course of business;
(9) the Guarantee guarantee by the Company or any of its Restricted Subsidiaries the Guarantors of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided PROVIDED that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee must guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers' compensation claims, self-insurance obligations or bidobligations, plugging bankers' acceptances, performance and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;; and
(12) Acquired Debt incurred at the incurrence by time a Sprint PCS Affiliate is merged with or into or becomes a subsidiary of or transfers all or substantially all of its assets to the Company or a Guarantor on or prior to December 31, 2005, but only to the extent that immediately after giving effect to the incurrence of such Indebtedness (a) the Company's Debt to Cash Flow Ratio would have been no greater than 7.75 to 1.0; and (b) the Company's Debt to Cash Flow Ratio immediately following such incurrence would decrease as compared to the Company's Debt to Cash Flow Ratio immediately prior to such incurrence. The Company will not incur, and will not permit any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of its Restricted Subsidiaries of in-kind obligations relating payment to net oil or natural gas balancing positions arising in the ordinary course of business;
(13) any obligation arising from agreements other Indebtedness of the Company or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee on substantially identical terms; PROVIDED, HOWEVER, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any Restricted Subsidiary other Indebtedness of the Company providing for indemnification, adjustment solely by virtue of purchase price, earn outs, being unsecured or similar obligations, in each case, incurred by virtue of being secured on a first or assumed in connection with the disposition or acquisition of any business, assets or Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company or any Restricted Subsidiary;
(14) any Permitted Acquisition Indebtedness; and
(15) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15), not to exceed the greater of (i) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuancejunior Lien basis. 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 (1512) above, or is entitled to be incurred pursuant to Section 4.09(a)) hereof, the Company will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsinterest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities shares of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided PROVIDED, in each such case, that the amount thereof shall be of any such accrual, accretion or payment is included in Fixed Charges Consolidated Interest Expense of the Company as accrued to accrued. Notwithstanding any other provision of this Section 4.09, the extent required by the definition of such term. The maximum amount of Indebtedness that the Company or any Indebtedness outstanding Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of any date will be:
(a) the accreted value of the Indebtedness, fluctuations in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other Personexchange rates or currency values.
Appears in 1 contract
Samples: Indenture (Ipcs Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries that is not a Guarantor to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company and any of its Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue Preferred Stockpreferred stock, if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock preferred stock is issued, as the case may be, issued would have been at least 2.25 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), ) as if the additional Indebtedness had been incurred incurred, or the Disqualified Stock or the Preferred Stock preferred stock 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), Disqualified Stock or preferred stock that may be incurred or issued, as applicable, by Restricted Subsidiaries that are not Guarantors, pursuant to this Section 4.09(a), shall not exceed $500.0 million at any one time outstanding.
(b) Section 4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuers Company and the Guarantors, its Restricted 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 an amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed $2.80 billion, less the greater sum of (i) $700.0 million the aggregate amount of all Net Proceeds of Asset Sales applied by the Company or any of its Restricted Subsidiaries to repay Indebtedness under Credit Facilities pursuant to Section 4.10 and (ii) the amount of Indebtedness in excess of $175.0 500.0 million plus 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrenceincurred pursuant to clause (10) below;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers Company and the Guarantors of Indebtedness represented by the Notes to be issued on (excluding any Additional Notes), the date Subsidiary Guarantees of this Indenture all Notes, the 2026 Notes, the Subsidiary Guarantees of all 2026 Notes, the 2029 Notes, Subsidiary Guarantees of all 2029 Notes, the 2031 Notes and the related Note GuaranteesSubsidiary Guarantees of all 2031 Notes;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Finance Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation construction or improvement of property, plant or equipment assets used in the business of the Company or any such Restricted Subsidiary, or in respect of its Restricted Subsidiariesa Sale and Leaseback Transaction, in an aggregate principal amount outstandingamount, including and all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 400.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceat any time outstanding;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, refinance or replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) or clauses clause (2), (3), (4), (5), (14) or (153) of above or this clause (5) or pursuant to Section 4.09(b4.09(a);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among owed to the Company and or any of its Restricted Subsidiaries; provided, however, that:
(Aa) if the Company or any Guarantor is the obligor on such Indebtedness, and such Indebtedness and the payee is held by a Restricted Subsidiary that is not the Company or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note GuaranteeSubsidiary Guarantee of such Guarantor, in the case of a Guarantor; and
(Bb) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company thereof and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will thereof shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any Indebtedness under Hedging Obligations entered into for bona fide hedging purposes of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary and not for the purpose of speculation; provided that in the case of Hedging Obligations relating to interest rates, (a) such Hedging Obligations relate to payment obligations on Indebtedness otherwise permitted to be incurred by this covenant and (b) the notional principal amount of such Hedging Obligations at the time incurred does not exceed the principal amount of the Company; and
(B) any sale or other transfer of any Indebtedness to which such Preferred Stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7)Hedging Obligations relate;
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations;
(9) the Guarantee guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09covenant and could have been incurred (in compliance with this covenant) by the Person so guaranteeing such Indebtedness;
(9) the incurrence by any of the Company’s Foreign Subsidiaries of Indebtedness in an aggregate principal amount, including all Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (9), not to exceed (x) $200.0 million at any time outstanding plus (y) $200.0 million at any time outstanding; provided that if the any Indebtedness being guaranteed is subordinated under this subclause (y) shall be supported by a letter of credit incurred under one or more Credit Facilities pursuant to or pari passu with the Notes, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteedclause (1) of this Section 4.09(b);
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or pursuant to a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of businessReceivables Financing;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient fundsfunds in the ordinary course of business; provided, so long as however, that such Indebtedness is covered extinguished within five Business DaysDays of incurrence;
(12) the incurrence by Indebtedness of the Company or any of its Restricted Subsidiaries in respect of insecurity for workers’ compensation claims, payment obligations in connection with self-kind obligations relating to net oil insurance, performance bonds, surety bonds or natural gas balancing positions arising similar requirements in the ordinary course of business;
(13) any obligation arising from agreements of the Company or any Restricted Subsidiary of the Company providing for indemnification, adjustment of purchase price, earn outs, earn-out or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition or acquisition of any business or assets of the Company or any Restricted Subsidiary or Equity Interests of a Restricted Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Capital Stock Equity Interests for the purpose of a Restricted Subsidiary financing or in a transaction permitted by this Indenturecontemplation of any such acquisition; provided that (a) any amount of such obligation is not reflected as a liability obligations included on the face of the balance sheet of the Company or any Restricted Subsidiary;
Subsidiary shall not be permitted under this clause (1413) any Permitted Acquisition Indebtednessand (b) in the case of a disposition, the maximum aggregate liability in respect of all such obligations outstanding under this clause (13) shall at no time exceed the gross proceeds actually received by the Company and the Restricted Subsidiaries in connection with such disposition; and
(1514) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (1514), not to exceed the greater of $750.0 million.
(ic) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance. 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 (1514) above, or is entitled to be incurred pursuant to Section 4.09(a)the first paragraph of this covenant, the Company will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, incurrence (or later redivide reclassify such Indebtedness in whole or reclassify all or a portion of such item of Indebtedness, in part) in any manner that complies with this Section 4.09covenant. Indebtedness under In addition, the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsinterest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities shares of the same class of Preferred Stock or Disqualified Stock will not be deemed to be treated as an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09Indebtedness; provided provided, in each such case, that the amount thereof shall be is included in Fixed Charges of the Company as accrued accrued. Notwithstanding the foregoing, any Indebtedness outstanding pursuant to the Credit Agreement on the date of this Indenture will be deemed to have been incurred pursuant to clause (1) of the definition of “Permitted Debt.”
(d) Notwithstanding the foregoing, the maximum amount of Indebtedness that may be incurred pursuant to this covenant shall not be deemed to be exceeded with respect to any outstanding Indebtedness due solely to the result of fluctuations in the exchange rates of currencies.
(e) For purposes of determining compliance with any U.S. dollar denominated restriction on the incurrence of Indebtedness where the Indebtedness incurred is denominated in a different currency, the amount of such Indebtedness will be the U.S. Dollar Equivalent determined on the date of the incurrence of such Indebtedness; provided, however, that if any such Indebtedness denominated in a different currency is subject to a Currency Protection 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 Protection Agreement. The principal amount of any Permitted 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 required by the definition of that (1) such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the IndebtednessU.S. Dollar Equivalent was determined based on a Currency Protection Agreement, in which case the case of any Permitted Refinancing Indebtedness issued will be determined in accordance with original issue discount;
the preceding sentence, and (b2) the principal amount of the Indebtedness, in Permitted Refinancing Indebtedness exceeds the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the principal amount of the Indebtedness being refinanced, in which case the U.S. Dollar Equivalent of such excess, as appropriate, will be determined on the date such Permitted Refinancing Debt is incurred.
(f) Notwithstanding the provisions of clauses (a) through (e) of this Section 4.09, the Company will not, and will not permit any Restricted Subsidiary to, directly or indirectly, incur any Indebtedness that is or purports to be by its terms (or by the terms of any agreement governing such Indebtedness) subordinated in right of payment to any other Indebtedness of the Company or of such Restricted Subsidiary, 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 subordinated in the right of payment to the Notes or the Subsidiary Guarantee of such Restricted Subsidiary, to the same extent and in the same manner as such Indebtedness is subordinated in right of payment to such other PersonIndebtedness of the Company or such Restricted Subsidiary, as the case may be. For purposes of this Section 4.09(f), no Indebtedness will be deemed to be subordinated in right of payment to any other Indebtedness of the Company or any Restricted Subsidiary solely by virtue of being unsecured or secured by a junior priority Lien or by virtue of the fact that the holders of such Indebtedness have entered into intercreditor agreements or other arrangements giving one or more of such holders priority over the other holders in the collateral held by them, including intercreditor agreements that contain customary provisions requiring turnover by holders of junior prior liens of proceeds of collateral in the event that the security interests in favor of the holders of the senior priority in such intended collateral are not perfected or invalidated and similar customary provisions protecting the holders of senior priority liens.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stockpreferred stock, if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock preferred stock is issued, as the case may be, would have been at least 2.25 2.0 to 1.01, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock preferred stock had been issued, as the case may be, at the beginning of such four-quarter period.;
(b) The provisions of Section 4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuers Company and the Guarantors, any Guarantor of Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with l)(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 less the greater aggregate amount of (i) $700.0 million and (ii) $175.0 million plus 35.0% all repayments, optional or mandatory, of the Company’s Adjusted Consolidated Net Tangible Assets determined on principal of any term Indebtedness under a Credit Facility (other than repayments that are concurrently refunded or refinanced or repayment of Indebtedness of AMI at the date of such incurrenceissuance of the Initial Notes) that have been made by the Company or any of its Restricted Subsidiaries since the date of this Indenture and less the aggregate amount of all commitment reductions with respect to any revolving credit borrowings under a Credit Facility that have been made by the Company or any of its Restricted Subsidiaries since the date of this Indenture;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers Company and the Guarantors of Indebtedness represented by the Initial Notes and the related Note Guarantees to be issued on the date of this Indenture and the Exchange Notes and the related Note GuaranteesGuarantees 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 or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 10.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceat any time outstanding;
(5) Indebtedness of a Subsidiary incurred and outstanding on or prior to the date on which such Subsidiary was acquired by the Company (other than Indebtedness incurred in contemplation of, or in connection with, the transaction or series of related transactions pursuant to which such Subsidiary became a Subsidiary of or was otherwise acquired by the Company); provided, however, that for any such Indebtedness outstanding at any time under this clause (5), on the date that such Subsidiary is acquired by the Company, the Company would have been able to incur $1.00 of additional Indebtedness pursuant to clause (a) above after giving effect to the incurrence of such Indebtedness pursuant to this clause (5).
(6) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(aclause (a) above or clauses (2), (3), (4), (5), (146) or (1513) of this Section 4.09(b);
(67) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Wholly-Owned Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and
(B) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Wholly-Owned Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Wholly-Owned Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (67);
(7) 8) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Wholly-Owned Restricted Subsidiaries of any Preferred Stockshares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock preferred stock being held by a Person other than the Company or a Wholly-Owned Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such Preferred Stock preferred stock to a Person that is not either the Company or a Wholly-Owned Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock preferred stock by such Restricted Subsidiary that was not permitted by this clause (7)8);
(8) 9) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging ObligationsObligations in the ordinary course of business;
(910) the Guarantee guarantee by the Company or any of its Restricted Subsidiaries the Guarantors of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee must shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(1011) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations or bidobligations, plugging performance and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business;
(1112) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;; and
(1213) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business;
(13) any obligation arising from agreements of the Company or any Restricted Subsidiary of the Company 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 Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company or any Restricted Subsidiary;
(14) any Permitted Acquisition Indebtedness; and
(15) the incurrence by the Company or any of its Restricted Subsidiaries Guarantors of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15), not to exceed the greater of (i) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance35.0 million. For purposes of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1Sections 4.09(b)(l) through (1513) above, or is entitled to be incurred pursuant to Section 4.09(a)) hereof, the Company will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under the Credit Agreement Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsinterest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities shares of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided provided, in each such case, that the amount thereof shall be of any such accrual, accretion or payment is included in Fixed Charges of the Company as accrued accrued. Notwithstanding any other provision of this Section 4.09, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to the extent required by the definition this Section 4.09 shall not be deemed to be exceeded solely as a result of such termfluctuations in exchange rates or currency values. The amount of any Indebtedness outstanding as of any date will be:
(a1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with the original issue discount;
(b2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1A) the Fair Market Value of such assets at the date of determination; and
(2B) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”"INCUR") any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock Stock, and the Company will not permit any of its Restricted Subsidiaries to issue any Preferred StockDisqualified Stock or preferred stock; provided, however, that the Issuers Company and any Guarantor may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock), and the Guarantors Company may incur Indebtedness (including Acquired Debt) or issue Preferred Disqualified Stock, if the Fixed Charge Coverage Ratio for the Company’s 's most recently ended four full fiscal quarters for which internal financial statements are available have been filed with the SEC in compliance with Section 4.03 immediately preceding the date on which such additional Indebtedness is incurred incurred, or such Disqualified Stock or such Preferred Stock is issued, as the case may be, would have been at least 2.25 to 1.01, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred incurred, or the such Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) . Notwithstanding the foregoing, so long as no Default shall have occurred and be continuing or would be caused thereby, the first paragraph of this Section 4.09(a) 4.09 will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”"PERMITTED DEBT"):
(1) the incurrence by the Issuers and the Guarantors, Company or any Guarantor of Indebtedness and letters of credit under the Credit Facilities Agreement in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed the greater amount of (i) $700.0 million all borrowings and (ii) $175.0 million plus 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined commitments thereunder on the date Closing Date, plus $10.0 million, less the aggregate amount of all Net Proceeds of Asset Sales applied by the Company or any of its Restricted Subsidiaries to repay such incurrenceIndebtedness and to effect a corresponding commitment reduction thereunder pursuant to Section 4.10 hereof;
(2) the incurrence by the Company and its any Restricted Subsidiaries Subsidiary of the Existing IndebtednessIndebtedness (including, without limitation, deferred purchase price obligations (whether or not contingent) under acquisition agreements in effect on the date of this Indenture);
(3) the incurrence by the Issuers Company and the Guarantors of Indebtedness represented by the Notes and the related Subsidiary Guarantees to be issued on the date of this Indenture hereof and the Exchange Notes and the related Note GuaranteesSubsidiary Guarantees to be issued pursuant to the Registration Rights Agreement;
(4) the incurrence by the Company or any of its Restricted Subsidiaries Subsidiary of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, case incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation construction or improvement of property, plant or equipment used in the business of the Company or any of its such Restricted SubsidiariesSubsidiary, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 10.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceat any time outstanding;
(5) the incurrence by the Company or any of its the Restricted Subsidiaries Subsidiary of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease refinance or discharge any replace Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under the first paragraph of this Section 4.09(a) 4.09 or clauses (2), (3), (4), (5), or (14) or (15) of this Section 4.09(b)paragraph;
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(Aa) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a GuarantorIndebtedness, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Subsidiary Guarantee, in the case of a Guarantor; and
(B) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company thereof and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Wholly Owned Restricted Subsidiary of the Companythereof, will shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging ObligationsObligations under or with respect to (a) Interest Rate Agreements not for the purpose of speculation and (b) Currency Agreements entered into in the ordinary course of business and not for the purpose of speculation;
(9) 8) the Guarantee guarantee by the Company or any of its Restricted Subsidiaries the Guarantors of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that if ;
(9) the accrual of interest, the accretion or amortization of original issue discount and the payment of interest on any Indebtedness being guaranteed is subordinated to or pari passu in the form of additional Indebtedness with the Notessame terms, then and the Guarantee must be subordinated or pari passu, as applicable, to payment of reasonable dividends on Disqualified Stock in the form of additional shares of the same extent class of Disqualified Stock, will not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.09; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as the Indebtedness guaranteedaccrued;
(10) the incurrence of Indebtedness of the Company or any Restricted Subsidiary in respect of performance bonds and surety or appeal bonds entered into by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a such Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business;
(11) the incurrence by of Indebtedness of the Company or any of its Restricted Subsidiaries of Indebtedness Subsidiary arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient fundsfunds in the ordinary course of business, so long as provided that such Indebtedness is covered satisfied within five Business Days3 business days of incurrence;
(12) the incurrence by of Indebtedness of the Company or any Restricted Subsidiary represented by letters of its credit for the account of the Company or such Restricted Subsidiaries of inSubsidiary, as the case may be, in order to provide security for workers' compensation claims, payment obligations in connection with self-kind obligations relating to net oil insurance programs or natural gas balancing positions arising similar requirements in the ordinary course of business;
(13) any obligation arising from agreements endorsements in the ordinary course of the Company business of negotiable instruments for deposit or any Restricted Subsidiary of the Company 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 Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company or any Restricted Subsidiarycollection;
(14) any Permitted Acquisition Indebtedness; and
(15) the incurrence by the Company or any of its Restricted Subsidiaries Subsidiary of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15), not to exceed the greater of (i) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance10.0 million. For purposes of determining compliance with this Section 4.09, in the event that an item of any proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (1513) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.09(a)4.09, the Company will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrenceincurrence and, or later redivide or from time to time, reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Notwithstanding the foregoing, Indebtedness under the Credit Agreement Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially hereunder shall be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributions, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Samples: Indenture (Aaipharma Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company Issuers will not, and will not permit any of its Express’ Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company Issuers will not issue any Disqualified Stock and will not permit any of its Express’ Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors any Restricted Subsidiary of Express may incur Indebtedness (including Acquired Debt) or issue Preferred Stockpreferred stock, if the Fixed Charge Coverage Ratio for the Company’s Express’ 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 Stock preferred stock is issued, as the case may be, would have been at least 2.25 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock preferred stock had been issued, as the case may be, at the beginning of such four-quarter period; provided, further, that Restricted Subsidiaries of Express that are not Guarantors may not incur Indebtedness or issue any shares of preferred stock if, after giving pro forma effect to such incurrence or issuance (including a pro forma application of the net proceeds therefrom), more than an aggregate of $25.0 million of Indebtedness or preferred stock of Restricted Subsidiaries of Express that are not Guarantors would be outstanding pursuant to this Section 4.09(a) and Sections 4.09(b)(13) and (20) hereof at such time.
(b) The provisions of Section 4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1) (a) the incurrence by the Issuers and the Guarantors, any Restricted Subsidiary of Express of Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (11)(a) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company Issuers and its Express’ Restricted Subsidiaries thereunder) not to exceed $125.0 million and (b) the incurrence by the Issuers and any Restricted Subsidiary of Express of revolving credit Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time 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 Issuers and Express’ Restricted Subsidiaries thereunder) not to exceed the greater of (ix) $700.0 200.0 million and or (iiy) $175.0 million plus 35.0% the amount of the Company’s Adjusted Consolidated Net Tangible Assets determined on Borrowing Base as of the date of such incurrence;
(2) the incurrence by the Company Issuers and its Express’ Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and the any Exchange Notes and related Note GuaranteesGuarantees issued pursuant to the Registration Rights Agreement;
(4) the incurrence by the Company Issuers or any of its Express’ Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company Issuers or any of its Express’ Restricted Subsidiaries, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (ia) $45.0 25.0 million and (iib) 3.0% of Total Assets at the Company’s Adjusted Consolidated Net Tangible Assets determined as time of the date of such incurrence or issuanceincurrence, at any time outstanding;
(5) the incurrence by the Company Issuers or any of its Express’ Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clauses (2), (3), (4), (5), (14) or (1517) of this Section 4.09(b);
(6) the incurrence by the Company Issuers or any of its Express’ Restricted Subsidiaries of intercompany Indebtedness between or among the Company Issuers and any of its Express’ Restricted Subsidiaries; provided, however, that:
(A) if the Company Issuers or any Subsidiary Guarantor is the obligor on such Indebtedness and the payee is not the Company Issuers or a Subsidiary Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the CompanyIssuers, or the Note Guarantee, in the case of a Subsidiary Guarantor; and
(B) (i1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company Issuers or a Restricted Subsidiary of the Company Express and (ii2) any sale or other transfer of any such Indebtedness to a Person that is not either the Company Issuers or a Restricted Subsidiary of the CompanyExpress, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company Issuers or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the Company’s Express’ Restricted Subsidiaries to the Company Issuers or to any of its Express’ Restricted Subsidiaries of any Preferred Stockshares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock preferred stock being held by a Person other than the Company Issuers or a Restricted Subsidiary of the CompanyExpress; and
(B) any sale or other transfer of any such Preferred Stock preferred stock to a Person that is not either the Company Issuers or a Restricted Subsidiary of the CompanyExpress, will be deemed, in each case, to constitute an issuance of such Preferred Stock preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company Issuers or any of its Express’ Restricted Subsidiaries of Hedging ObligationsObligations in the ordinary course of business or incurred to hedge interest rate risk on floating rate Indebtedness incurred in accordance with the terms of this Indenture;
(9) the Guarantee guarantee by the Company Issuers or any Restricted Subsidiary of its Restricted Subsidiaries Express of Indebtedness of the Company Issuers or a Restricted Subsidiary of Express and the Company guarantee by any Foreign Subsidiary of Express of Indebtedness of another Foreign Subsidiary of Express, in each case, to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company Issuers or any of its Express’ Restricted Subsidiaries of Indebtedness in respect of letters of credit, bank guarantees, workers’ compensation claims, self-insurance obligations or bidobligations, plugging and abandonmentbankers’ acceptances, guarantees, performance, surety, statutory, appeal, reimbursementcompletion, performanceexport or import, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing indemnities, customs, revenue bonds or obligations and workers’ compensation claims similar instruments in the ordinary course of business, including guarantees or obligations with respect thereto (in each case other than for an obligation for money borrowed); provided, however that upon the drawing of such letters of credit, such obligations are reimbursed within 30 days following such drawing;
(11) the incurrence by the Company Issuers or any of its Express’ 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 Days10 business days;
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Indebtedness of Foreign Subsidiaries incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (12), not to exceed the Company greater of (a) $10.0 million (or the equivalent thereof, measured at the time of each incurrence, in the applicable foreign currency) or (b) 1.5% of Total Assets of all Foreign Subsidiaries at the time of such incurrence, at any one time outstanding;
(13) Indebtedness of a Subsidiary outstanding on the date such Subsidiary was acquired by Express or a Restricted Subsidiary of Express (other than Indebtedness incurred in contemplation of, or in connection with, the transaction or series of related transactions pursuant to which such Subsidiary became a Subsidiary of or was otherwise acquired by Express or a Restricted Subsidiary of Express); provided that, on the date that such Subsidiary is acquired by Express or a Restricted Subsidiary of Express and after giving effect to the incurrence of such Indebtedness and the acquisition of such Subsidiary pursuant to this clause (13), either (a) Express would have been able to incur $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.09(a) hereof or (b) Express’ Fixed Charge Coverage Ratio would be greater than immediately prior to such acquisition;
(14) the incurrence by the Issuers or Express’ Restricted Subsidiaries of Indebtedness arising from agreements providing for indemnification, adjustment of purchase price or similar obligations, incurred in connection with the disposition of any business, assets or Restricted Subsidiary of Express (other than Guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Restricted Subsidiary for the purpose of financing such acquisition), so long as the principal amount of such Indebtedness does not exceed the gross proceeds actually received by the Issuers or any Restricted Subsidiary of Express in connection with such transactions;
(15) the incurrence by the Issuers or any of its Express’ Restricted Subsidiaries of in-kind obligations relating to net oil Indebtedness arising in connection with endorsement of instruments for collection or natural gas balancing positions arising deposit in the ordinary course of business;
(13) any obligation arising from agreements of the Company or any Restricted Subsidiary of the Company 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 Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company or any Restricted Subsidiary;
(14) any Permitted Acquisition Indebtedness; and
(1516) the incurrence by the Company Issuers or any of its Express’ Restricted Subsidiaries of Indebtedness consisting of obligations to pay insurance premiums in an amount not to exceed the annual premiums in respect of such insurance premiums at any one time outstanding;
(17) Contribution Indebtedness;
(18) Indebtedness of the Issuers or any of Express’ Restricted Subsidiaries, the proceeds of which are applied to defease or discharge the Notes pursuant to Articles 8 or 11 hereof;
(19) take-or-pay obligations contained in supply arrangements entered into by Express or a Restricted Subsidiary of Express in the ordinary course of business; and
(20) the incurrence by the Issuers or any of Express’ Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock of the Issuers or any of Express’ Restricted Subsidiaries or preferred stock of the Issuers or any of Express’ Restricted Subsidiaries in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (1520), not to exceed the greater of (ia) $75.0 50.0 million and (iib) 5.06.0% of Total Assets at the Company’s Adjusted Consolidated Net Tangible Assets determined as time of incurrence, at any one time outstanding. The Issuers 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 the date Issuers or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of such incurrence payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Issuers solely by virtue of being unsecured or issuanceby virtue of being secured on a junior priority basis. For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (1520) above, or is entitled to be incurred pursuant to Section 4.09(a)) hereof, the Company Issuers will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. ; provided that Indebtedness under the Credit Agreement Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionspreferred stock dividends, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock preferred stock as Indebtedness due to a change in accounting principles, principles and the payment of dividends or distributions on Preferred Stock preferred stock or Disqualified Stock in the form of additional securities shares of the same class of Preferred Stock preferred stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock preferred stock or Disqualified Stock for purposes of this Section 4.09; provided provided, in each such case, that the amount thereof shall be included in Fixed Charges of Express as accrued. For purposes of determining compliance with any U.S. dollar-denominated restriction on the Company incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be utilized, calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred. Notwithstanding any other provision of this Section 4.09, the maximum amount of Indebtedness that the Issuers or any Restricted Subsidiary of Express may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as accrued to the extent required by the definition a result of such termfluctuations in exchange rates or currency values. The amount of any Indebtedness outstanding as of any date will be:
(a1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1A) the Fair Market Value of such assets at the date of determination; and
(2B) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Samples: Indenture (Express Parent LLC)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company Parent will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company Parent will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Parent may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, Stock and the Guarantors Parent’s Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue Preferred Stockpreferred stock, if the Fixed Charge Coverage Ratio of Parent and its Restricted Subsidiaries for the CompanyParent’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 Stock preferred stock is issued, as the case may be, would have been at least 2.25 to 1.02.00:1.00, in each case, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock preferred stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a6.03(a) will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1i) the incurrence by the Issuers and the Guarantors, Parent or any of its Restricted Subsidiaries of Indebtedness and letters of credit under Credit Facilities (including the Credit Agreement Facilities) in an aggregate principal amount at any one time outstanding under this clause (1Section 6.03(b)(i) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company Parent and its Restricted Subsidiaries thereunder) not to exceed the greater sum of (iA) $700.0 million and €2.15 billion plus (iiB) $175.0 million the Incremental Facilities Amount plus 35.0% (C) the aggregate principal amount of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrenceany Designated Existing Subsidiary Indebtedness;
(2ii) the incurrence by the Company Parent and its Restricted Subsidiaries of the Existing IndebtednessIndebtedness listed on Schedule 1.01(a);
(3iii) the incurrence by Parent and its Restricted Subsidiaries of additional Existing Indebtedness (other than the Issuers and the Guarantors of Indebtedness represented by the Notes Credit Agreement Facilities) in an aggregate principal amount not to be issued on the date of this Indenture and the related Note Guarantees;exceed €300.0 million.
(4iv) the incurrence by the Company Parent or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or financings, purchase money obligationsobligations or Attributable Debt, in each case, incurred for the purpose of financing or refinancing all or any part of the purchase price or cost of design, construction, lease, installation or improvement of propertyproperty (real or personal), plant or equipment used or useful in the business of the Company Parent or any of its Restricted Subsidiaries, Subsidiaries in an aggregate principal amount outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed at any time outstanding the greater of (i) $45.0 €350.0 million and (ii) 3.01.5% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceTotal Assets;
(5v) the incurrence by the Company Parent or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture Agreement to be incurred under Section 4.09(a6.03(a) or clauses (2ii), (3iii), (4v), (5xiii), (14xvii) or (15xix) of this Section 4.09(b6.03(b);
(6vi) the incurrence by the Company Parent or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company Parent and any of its such Restricted Subsidiaries; provided, however, that:
provided that (A) 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 unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and
(B) (i) any subsequent issuance or transfer of Equity Interests Capital Stock that results in any such Indebtedness being held by a Person other than the Company Parent or a Restricted Subsidiary of the Company Parent and (iiB) any sale or other transfer of any such Indebtedness to a Person that is not either the Company Parent or a Restricted Subsidiary of the Company, will be deemedParent will, in each case, be deemed to constitute an incurrence of such Indebtedness by the Company Parent or such Restricted Subsidiary, as the case may be, that was not permitted by this clause Section 6.03(b)(vi); provided, further, that all such Indebtedness in excess of €10.0 million for any such Restricted Subsidiary shall be (6)x) in the case of any such Indebtedness owed to Parent, to the extent permitted by applicable laws and regulations, subordinated to the Obligations pursuant to the terms of a Subordinated Intercompany Note, and (y) evidenced by a Subordinated Intercompany Note, which note (and any assets or property securing the Indebtedness evidenced thereby, whether or not such assets or property would otherwise constitute Excluded Property) shall be pledged to the Collateral Agent and subject to the Liens in favor of the Collateral Agent pursuant to the Security Documents;
(7vii) the issuance by any Restricted Subsidiary of the Company’s Restricted Subsidiaries Parent to the Company Parent or to any of its Restricted Subsidiaries of any Preferred Stockshares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests Capital Stock that results in any such Preferred Stock preferred stock being held by a Person other than the Company Parent or a any of its Restricted Subsidiary of the CompanySubsidiaries; and
(B) any sale or other transfer of any such Preferred Stock preferred stock to a Person that is not either the Company Parent or a any of its Restricted Subsidiary of the CompanySubsidiaries, will be deemed, in each case, to constitute an issuance of such Preferred Stock preferred stock by such Restricted Subsidiary that was not permitted by this clause (7Section 6.03(b)(vii);
(8) viii) the incurrence by the Company Parent or any of its Restricted Subsidiaries of Hedging ObligationsObligations in the ordinary course of business and not for speculative purposes (as determined in good faith by Parent);
(9ix) the Guarantee by the Company Parent or any of its Restricted Subsidiaries of Indebtedness of the Company Parent or a any of its Restricted Subsidiary of the Company Subsidiaries to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteedcovenant;
(10x) the incurrence by the Company Parent or any of its Restricted Subsidiaries of Indebtedness (including letters of credit) in respect of workers’ compensation claims, pension obligations, environmental remediation or other environmental obligations, self-insurance obligations or similar obligations, bankers’ acceptances, customs, VAT and other tax guarantees (including tax guarantees resulting from any fiscal unity between Loan Parties formed, incorporated or organized in the Netherlands), bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing appeal bonds or guarantees (including in connection with contractual obligations and workers’ compensation claims to customers), in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions each case arising in the ordinary course of business;
(13xi) a Guarantee by any obligation arising from agreements Restricted Subsidiaries formed, incorporated or organized in the Netherlands of Indebtedness granted pursuant to a declaration of joint and several liability used for the purpose of Section 2:403 of the Company or Dutch Civil Code (and any Restricted Subsidiary of the Company 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 Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; provided that residual liability under such obligation is not reflected as a liability on the face of the balance sheet of the Company or any Restricted Subsidiary;
(14) any Permitted Acquisition Indebtedness; and
(15) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued declaration arising pursuant to this clause (15), not to exceed the greater of (i) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance. For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (15) above, or is entitled to be incurred pursuant to Section 4.09(a), the Company will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1section 2:404(2) of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributions, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discountDutch Civil Code);
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will shall not, and will shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), and the Company will shall not issue any Disqualified Stock and will shall not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and any of the Company's Restricted Subsidiaries that are Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred StockIndebtedness, if the Fixed Charge Coverage Ratio for the Company’s 's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock is issued, as the case may be, issued would have been at least 2.25 2.00 to 1.01, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the such additional Indebtedness had been incurred or the preferred stock or Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a) will hereof shall not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “"Permitted Debt”"):
(1) (a) subsequent to the Spin-off occurring by February 27, 2004 or immediately prior to in contemplation thereof, the incurrence by the Issuers and the Guarantors, Company or any Guarantor of additional Indebtedness and letters of credit under one or more Credit Facilities and Guarantees thereof by the Guarantors, and (b) if the Spin-off does not occur by February 27, 2004 and the Company is merged with and into GHVI, the incurrence by GHVI or any Guarantor of additional Indebtedness and letters of credit under GHVI's Existing Credit Agreement and Guarantees thereof by the Guarantors, provided that, in an the case of (a) above, the aggregate principal amount at any one time outstanding under of all Indebtedness of the Company and the Guarantors incurred pursuant to 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 the Guarantors thereunder) does not exceed an amount equal to exceed $275.0 million, and, in the greater case of (ib) above, the aggregate principal amount of Indebtedness of GHVI and the Guarantors incurred pursuant to this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of GHVI and the Guarantor thereunder) does not exceed an amount equal to $700.0 million and (ii) $175.0 million plus 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence515.0 million;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers Company and the Guarantors of Indebtedness represented by the Notes to be issued on the date of this Indenture (and the related Note GuaranteesExchange Notes to be issued pursuant to the Registration Rights Agreement) and the incurrence by the Guarantors of the Subsidiary Guarantees of those Notes;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, case incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation construction or improvement of property, plant or equipment used in the business of the Company or any of its such Restricted SubsidiariesSubsidiary, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 million and (ii) 3.03.5% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of at the date time of such incurrence or issuanceincurrence;
(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, replace, defease refinance or discharge any replace Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clauses (2), (3), (4), (5), (1412) or (1513) of this Section 4.09(b);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted SubsidiariesSubsidiaries that are Guarantors; provided, however, that:
(Aa) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a GuarantorIndebtedness, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case ;
(b) if a Restricted Subsidiary of the CompanyCompany is the obligor on such Indebtedness, or such Indebtedness is expressly subordinated to the Note prior payment in full in cash of such Restricted Subsidiary's Subsidiary Guarantee, in the case of a Guarantor; and
(B) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and that is a Guarantor and
(ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will Company that is a Guarantor shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging ObligationsObligations that are incurred in the normal course of business and consistent with past business practices for the purpose of fixing or hedging interest rate risk (including with respect to any floating rate Indebtedness that is permitted by the terms of this Indenture to be outstanding in connection with the conduct of their respective businesses and not for speculative purposes);
(9) 8) the Guarantee guarantee by the Company or any of its Restricted Subsidiaries the Guarantors of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09;
(9) the incurrence by the Company's Unrestricted Subsidiaries of Non-recourse Debt; provided provided, however, that if any such Indebtedness ceases to be Non-recourse Debt of an Unrestricted Subsidiary, such event shall be deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteedCompany that was not permitted by this clause (9);
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect arising from guarantees of self-insurance obligations Indebtedness of the Company or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by any Restricted Subsidiary or the agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the ordinary course disposition of business any business, assets or Capital Stock of a Restricted Subsidiary; provided that the maximum aggregate liability in respect of all such Indebtedness shall at no time exceed the gross proceeds actually received by the Company and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims its Restricted Subsidiaries in the ordinary course of businessconnection with such disposition;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating Indebtedness to net oil or natural gas balancing positions arising the extent the proceeds thereof are deposited to defease the Notes as described in the ordinary course of businessArticle 8 hereof;
(13) any obligation arising from agreements of if the Spin-off does not occur by February 27, 2004 and the Company is merged with and into GHVI, any then outstanding indebtedness of GHVI or any Restricted Subsidiary of the Company 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 Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company or any Restricted SubsidiaryGHVI;
(14) any Permitted Acquisition Indebtedness; and
(15) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness represented by worker's compensation claims and other statutory or regulatory obligations, self-insurance obligations, letters of credit, performance bonds, warranty or contractual service obligations or appeal bonds, in each case to the issuance extent incurred in the ordinary course of business of the Company or such Restricted Subsidiary;
(15) the incurrence by the Company or any of any Disqualified Stock the Guarantors of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15), not to exceed the greater $35.0 million (no more than $10 million of which will be incurred by Foreign Subsidiaries); and
(i16) $75.0 million Guarantees and other Indebtedness that constitutes a Permitted Investment or a payment permitted under Section 4.07 hereof.
(iic) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance. 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 (1516) above, above as of the date of incurrence thereof or is entitled to be incurred pursuant to Section 4.09(a)) hereof as of the date of incurrence thereof, the Company will be permitted to divideshall, in its sole discretion, classify and reclassify (or later classify in whole or in part, in its sole discretion) such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.094.09 and such Indebtedness will be treated as having been incurred pursuant to such clauses or the first paragraph hereof, as the case may be, designated by the Company. Indebtedness under the Credit Agreement Facilities outstanding on the closing date on which Notes are first issued and authenticated under this Indenture of the Spin-off will initially be deemed to have been incurred on such date in reliance on of the exception provided by clause (1) of the definition of Permitted Debt. The accrual Accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsdividends, the accretion of accreted value or amortization of original issue discount, liquidation preference and the payment of interest on any Indebtedness not secured by a Lien or dividends in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Samples: Indenture (Genesis Healthcare Corp)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, to create, incur, issue, assume, Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stock; provided, however, that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stock, if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available applicable Reference Period immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock is issued, as the case may be, would have been at least 2.25 2.00 to 1.01.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter periodReference Period.
(b) The provisions of Section 4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuers Company and the Guarantors, any Restricted Subsidiary of Indebtedness and letters of credit under Credit Debt Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its the Restricted Subsidiaries thereunder) not to exceed the greater of (ia) $700.0 550.0 million and (iib) the sum of $175.0 250.0 million plus 35.0and 30.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on as of the date of such incurrenceincurrence and after giving effect to the use of proceeds thereof;
(2) the incurrence by the Company and its Restricted Subsidiaries of (a) the Existing Indebtedness and (b) any Permitted Acquisition Indebtedness;
(3) the incurrence by the Issuers and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and the related Note GuaranteesIssue Date;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Finance Lease Obligations, mortgage financings or purchase money obligationsobligations or other Indebtedness, in each case, incurred for the purpose of financing all or any part of the purchase price price, other acquisition cost or cost of design, construction, installation installation, development, repair or improvement of property, plant or equipment used in the business of the Company or any of its Restricted SubsidiariesSubsidiaries (together with improvements, additions, accessions and contractual rights relating primarily thereto), in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease defease, discharge or discharge otherwise retire for value, in whole or in part, any Indebtedness incurred pursuant to this clause (4), not to exceed at any time outstanding the greater of (ia) $45.0 50.0 million and (iib) 3.05.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceand after giving effect to the use of proceeds thereof;
(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, replace, defease defease, discharge or discharge otherwise retire for value, in whole or in part, any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture hereby to be incurred under Section 4.09(a) or clauses (2), (3), (4), (5), (148), (13), (15) or (1516) of this Section 4.09(b);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(Aa) if the Company Issuers or any Guarantor is the obligor on such Indebtedness and the payee is not the Company an Issuer or a Guarantor, if such Indebtedness must be is not unsecured and expressly subordinated in right of payment to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the CompanyIssuers, or the Note Guarantee, in the case of a Guarantor, then the incurrence of such Indebtedness; and
(Bb) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the CompanyCompany in each case of clause (a) or clause (b), will be deemed, in each case, deemed to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that:
(Aa) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(Bb) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, will be deemed to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations, not for speculative purposes;
(9) the Guarantee by the Company Issuers or any of its Restricted Subsidiaries the Guarantors of Indebtedness of the Company Issuers or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09covenant; provided that if the Indebtedness being guaranteed is subordinated to the Notes or pari passu with the Notesa Note Guarantee, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteedguaranteed (or, at the Company’s election, to a greater extent);
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations and other social security or similar legislation, old age pension or public liability obligations, statutory obligations, government contracts, trade contracts, regulatory obligations, leases, utility contracts and similar obligations, bid, plugging and abandonment, appeal, reimbursement, performance, tender, surety and similar bonds and completion guarantees provided by by, or for the account of, the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees Guarantees, contingent reimbursement obligations, bank guarantees or letters of credit functioning as or as, supporting any or issued to assure payment or performance of the foregoing bonds or obligations and workers’ compensation compensation, health, disability or other benefits, unemployment or other insurance claims in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business;
(13) any obligation arising from agreements of the Company or any Restricted Subsidiary of the Company providing for indemnification, contribution, adjustment of purchase price, earn earn-outs, holdbacks, deferred compensation or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Capital Stock of a Restricted Subsidiary in a transaction permitted hereby;
(14) the incurrence by this Indenture; provided that such obligation is not reflected as a liability on the face Company or any of its Restricted Subsidiaries of Indebtedness in respect of the balance sheet financing of insurance premiums with the providers of such insurance or their Affiliates in the ordinary course of business;
(15) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness representing deferred compensation to employees of the Company or any Restricted Subsidiary;
Subsidiary of the Company incurred in the ordinary course of business (14) including those incurred in connection with any Permitted Acquisition Indebtednessacquisition); and
(1516) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (1516), not to exceed the greater of (ia) $75.0 50.0 million and (iib) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceissuance and after giving effect to the use of proceeds thereof. The Issuers will not incur, and the Issuers 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 Issuers 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 (or, at the Company’s election, to a greater extent); provided, however, that no Indebtedness will be considered contractually subordinated in right of payment to any other Indebtedness solely by virtue of being unsecured, secured with different collateral or to a greater or lesser extent or priority or by virtue of structural subordination, maturity date or being guaranteed by less than all guarantors of such other Indebtedness. For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1Section 4.09(b)(1) through (1516) above, or is entitled to be incurred pursuant to Section 4.09(a), the Company will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09covenant. Indebtedness under the Credit Agreement Debt Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture hereunder will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted DebtDebt and may not later be reclassified. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsdividends, the accretion of principal, accreted value or liquidation preference, the amortization of original issue discount or debt discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same termsIndebtedness, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock, the obligation to pay a premium in respect of Indebtedness or Preferred Stock or Disqualified Stock arising in connection with the issuance of a notice of redemption or the making of a mandatory change of control offer or asset sale offer for such Indebtedness or Preferred Stock or Disqualified Stock, increases in the amount of Indebtedness outstanding solely as a result of fluctuations in exchange rates or currency values, unrealized losses or charges in respect of Hedging Obligations, and the reclassification of Preferred Stock as Indebtedness due to a change in accounting principles, in each case will not be deemed not to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09covenant; provided that the amount thereof shall be is included in Fixed Charges of the Company as accrued to the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stockpreferred stock, if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock preferred stock is issued, as the case may be, issued would have been at least (i) 2.25 to 1.01 in the case of any incurrence or issuance on or before December 31, 2004; and (ii) 2.5 to 1 in the case of any incurrence or issuance after December 31, 2004, 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 Stock preferred stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuers Company and the Guarantors, any of its Restricted Subsidiaries of additional Indebtedness and letters of credit under Credit Facilities and/or the incurrence by a Receivables Subsidiary of Indebtedness pursuant to a Qualified Receivables Transaction in an aggregate principal amount at any one time outstanding under this clause (1) (with 1)(with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed the greater of (i) $700.0 175.0 million and (ii) $175.0 million plus 35.0% the amount of the Company’s Adjusted Consolidated Borrowing Base, in each case less the aggregate amount of all Net Tangible Assets determined on the date Proceeds of such incurrence;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers and the Guarantors of Indebtedness represented by the Notes to be issued on the date of this Indenture and the related Note Guarantees;
(4) the incurrence Asset Sales applied by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of since the date of such incurrence or issuance;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred repay any term Indebtedness under Section 4.09(a) or clauses (2), (3), (4), (5), (14) or (15) of this Section 4.09(b);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and
(B) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company Credit Facility or to repay any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations;
(9) the Guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of revolving credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business;
(13) any obligation arising from agreements of the Company or any Restricted Subsidiary of the Company 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 Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company or any Restricted Subsidiary;
(14) any Permitted Acquisition Indebtedness; and
(15) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15), not to exceed the greater of (i) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance. For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (15) above, or is entitled to be incurred pursuant to Section 4.09(a), the Company will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under the a Credit Agreement outstanding on the date on which Notes are first issued Facility and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributions, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by effect a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other Person.corresponding commitment reduction thereunder pursuant to
Appears in 1 contract
Samples: Indenture (Broder Bros Co)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company Issuer will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company Issuer will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stock; provided, however, that the Issuers Issuer may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue Preferred Stock, if the Fixed Charge Coverage Ratio for the CompanyIssuer’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock is issued, as the case may be, would have been at least 2.25 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuers and the Guarantors, Issuer or any Restricted Subsidiary (whether as borrower or guarantor) of Indebtedness and letters of credit under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company Issuer and its Restricted Subsidiaries thereunder) not to exceed the greater of (i) $700.0 725.0 million and (ii) the sum of (x) $175.0 400.0 million plus and (y) 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence;
(2) the incurrence by the Company Issuer and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers Issuer and the Guarantors of Indebtedness represented by (a) the Notes to be issued on the date of this Indenture Indenture, (b) the Exchange Notes issued pursuant to any Registration Rights Agreement; and the related (c) any Note Guarantees;.
(4) the incurrence by the Company Issuer or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligationsobligations or other Indebtedness, in each case, incurred for the purpose of financing all or any part of the purchase price or other acquisition cost or cost of design, construction, installation installation, development, repair or improvement of property, plant or equipment used in the business of the Company Issuer or any of its Restricted SubsidiariesSubsidiaries (together with improvements, in an aggregate principal amount outstandingadditions, including all accessions and contractual rights relating primarily thereto), and any Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (2), (3), (4), (5), (14) or (15) of this Section 4.09(b);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and
(B) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations;
(9) the Guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business;
(13) any obligation arising from agreements of the Company or any Restricted Subsidiary of the Company 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 Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company or any Restricted Subsidiary;
(14) any Permitted Acquisition Indebtedness; and
(15) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15), not to exceed the greater of (i) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance. For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (15) above, or is entitled to be incurred pursuant to Section 4.09(a), the Company will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributions, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other Person.clause
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee permit, suffer to exist or otherwise be or become directly or indirectly liableliable with respect to, contingently or otherwise, with respect to otherwise (collectively, “incur”) ), any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stockpreferred stock; provided, however, that the Issuers Company and any Guarantor may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stock, if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock is issued, as the case may be, would have been at least 2.25 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness or issuances Indebtedness:
(a) Expansion Debt if, at the time of Disqualified Stock or Preferred Stockincurrence of such Expansion Debt, as applicable (collectively, “Permitted Debt”):the following conditions shall have been satisfied:
(1) the incurrence by the Issuers each Debt Service Reserve Account and the Guarantors, 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 Additional Debt Service Reserve Account is funded to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed the greater of (i) $700.0 million and (ii) $175.0 million plus 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrencethen required funding level;
(2) the incurrence by final maturity date of such Expansion Debt shall not be earlier than the Company and its Restricted Subsidiaries latest Guaranteed Substantial Completion Date set forth in the EPC Contract for that part of the Existing IndebtednessProject associated with the applicable Train or Trains (the “Project Phase”);
(3) in the event any Train, Facility LNG Sale and Purchase Agreement or EPC Contract related to the Train or Trains being financed with the proceeds of such Expansion Debt (such Train, Facility LNG Sale and Purchase Agreement and EPC Contract, the “Applicable Expansion Debt Assets”) are not part of the Collateral, the Company shall, and shall cause each Restricted Subsidiary with an interest in Applicable Expansion Debt Assets to (in each case, prior to the incurrence of such Expansion Debt), execute and deliver to the Common Security Trustee, such additional agreements and supplements to the Security Documents as are necessary or advisable in order to subject such Applicable Expansion Debt Assets to the Lien of the Common Security Trustee thereunder (including financing statements and other documents reasonably requested by the Issuers Common Security Trustee in order to perfect and protect the Guarantors of Indebtedness represented by the Notes to be issued on the date of this Indenture and the related Note GuaranteesCommon Security Trustee’s Lien in such Applicable Expansion Debt Assets);
(4) the incurrence by Company shall have delivered to the Company or any Trustee a certificate of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business an Authorized Officer of the Company certifying that:
(A) all necessary approvals and permits to be issued by FERC and DOE/FE with respect to the applicable Train or Trains and with respect to the applicable stage of construction for such Train or Trains have been issued;
(B) the Company has used reasonable commercial efforts to obtain insurance with respect to the applicable Train or Trains that would satisfy the requirements of Section 4.18.
(C) no Default or Event of Default has occurred and is continuing;
(D) in connection with Expansion Debt Related to Train Three and Train Four, the Train Three and Train Four EPC Contract and the Train Three and Train Four LNG Sales Agreements are in effect and not in material payment default or a breach that has resulted in a material non-payment by the counterparty to such Facility LNG Sale and Purchase Agreement; and any modification to the Train Three and Train Four LNG Sales Agreements since the Notes Issue Date would not reasonably be expected to result in a Material Adverse Effect;
(E) in connection with Expansion Debt Related to Train Five and/or Train Six, the associated EPC Contract is in effect and not in material default; and the Train Five LNG Sales Agreement and any Facility LNG Sale and Purchase Agreement relating to Train Six, as applicable, are in effect and not in material payment default or a breach that has resulted in a material non-payment by the counterparty to such Facility LNG Sale and Purchase Agreement;
(F) the amount of its Restricted Subsidiaries, in an aggregate principal amount outstanding, including all Permitted Refinancing Senior Debt (excluding Working Capital Debt and excluding Indebtedness or Guarantees incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause under clauses (4f), not (g), (h), (i), (j), (k), (l), (m), (o), (p) and (q) of this Section 4.08) outstanding after giving effect to exceed the greater incurrence of the Expansion Debt, is capable of being amortized to a zero balance by the termination date of the last to terminate of the Applicable Facility LNG Sale and Purchase Agreements such that the Projected Debt Service Coverage Ratio after the last Guaranteed Substantial Completion Date with respect to any Trains then in construction or with respect to which the Expansion Debt is being incurred through the terms of such Applicable Facility LNG Sale and Purchase Agreements would be at least 1.5 to 1.0; provided that the Projected Debt Service Coverage Ratio shall be calculated (i) $45.0 million solely with respect to Contracted Cash Flow; and (ii) 3.0% using an interest rate equal to the weighted average interest rate of all such Senior Debt outstanding after giving effect to the incurrence of the Expansion Debt;
(G) the Independent Engineer has delivered a certificate to the Company certifying that the Expansion Debt to be incurred, together with any equity contribution amount required by such Expansion Debt and all Contracted Cash Flows, shall be sufficient to fund the entirety of the Project Costs of the Project Phase through the Guaranteed Substantial Completion Date thereof, plus reasonable contingencies;
(H) the Independent Engineer has prepared a report, addressed and delivered to the Company’s Adjusted Consolidated Net Tangible Assets determined , addressing the technical and economic feasibility of the Project Phase, the reasonableness of the capital cost, budget and construction schedule of the Project Phase, the reasonableness and the consistency of the funding schedule for the Project Phase, describing the construction status of, and the expected impact of the Project Phase on any phase of the Project relating to Trains with a lower Train Number than the Project Phase, the reasonableness of the EPC Contract and the Facility LNG Sale and Purchase Agreements relating to the Project Phase, and confirming that sufficient funds are available to reach Substantial Completion with respect to EPC Contracts relating to Trains with a lower Train Number than the Project Phase (the “IE Phase Report”); and the IE Phase Report does not disclose facts or conclusions that constitute or would reasonably be expected to result in a Material Adverse Effect; and
(I) at any time when there is no Secured Bank Debt outstanding, the Company shall have received letters from any two Acceptable Rating Agencies (or if only one Acceptable Rating Agency is then rating the Notes, the Company shall have received a letter from that Acceptable Rating Agency) to the effect that the Acceptable Rating Agency has considered the contemplated incurrence, and that, if the contemplated incurrence is consummated, such Acceptable Rating Agency would reaffirm the then current rating of the Notes as of the date of such incurrence incurrence; provided that with respect to Expansion Debt relating to Train Five or issuance;Train Six incurred at any time that there is Secured Bank Debt outstanding, the amount of Expansion Debt that may be incurred shall be limited such that the ratio of
(5i) the incurrence present value of (x) the projected cash flows to be received by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange forpursuant to Applicable Facility LNG Sale and Purchase Agreements related to Train One, or Train Two, Train Three, and Train Four, minus (y) the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case projected expenses that was permitted by this Indenture could reasonably be expected to be incurred under Section 4.09(aby the Company throughout the term of the Applicable Facility LNG Sale and Purchase Agreements related to Train One, Train Two, Train Three, and Train Four; to
(ii) the sum of the outstanding principal amount of Senior Debt (excluding Working Capital Debt and excluding Indebtedness or Guarantees incurred pursuant to clauses (2f), (3g), (4h), (5i), (14j), (k), (l), (m), (o), (p) or and (15q) of this Section 4.09(b);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and
(B) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations;
(9) the Guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business;
(13) any obligation arising from agreements of the Company or any Restricted Subsidiary of the Company 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 Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company or any Restricted Subsidiary;
(14) any Permitted Acquisition Indebtedness; and
(15) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15), not to exceed the greater of (i) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance. For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (15) above, or is entitled to be incurred pursuant to Section 4.09(a), the Company will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributions, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other Person4.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. 60
(a) The Company will shall not, and will shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company may incur unsecured Indebtedness (including Acquired Debt) or issue Disqualified Stock, Stock and the Guarantors Company’s Restricted Subsidiaries may incur unsecured Indebtedness (including Acquired Debt) or issue Preferred Stockpreferred stock, if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional unsecured Indebtedness is incurred or such Disqualified Stock or such Preferred Stock preferred stock is issued, as the case may be, would have been at least 2.25 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), ) as if the additional unsecured Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock preferred stock had been issued, as the case may be, at the beginning of such the four-quarter periodperiod used to calculate the Fixed Charge Coverage Ratio.
(b) The provisions of Section 4.09(a4.7(a) will hereof shall not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
): (1) the incurrence by the Issuers Company and the Guarantors, Guarantors of Indebtedness the Notes and letters of credit under Credit Facilities note guarantees in an the aggregate principal amount at to be issued on the Closing Date and any one time outstanding under Permitted Refinancing Indebtedness that is incurred to renew, refund, refinance, replace, defease, extend or discharge any Indebtedness incurred pursuant to this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed the greater of (i) $700.0 million and (ii) $175.0 million plus 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence;
); (2) the incurrence by the Company and or any of its Restricted Subsidiaries of the Existing Indebtedness;
Indebtedness and any Permitted Refinancing Indebtedness that is incurred pursuant to or in lieu of a commitment in existence as of the Closing Date; (3) the incurrence by the Issuers Company or any of its Restricted Subsidiaries of: (A) First Lien Debt so long as (i) no Event of Default shall have occurred and be continuing or would result from giving effect to such First Lien Debt, (ii) the Guarantors Weighted Average Life to Maturity of Indebtedness represented by any First Lien Debt shall be no shorter than the Weighted Average Life to Maturity of the Notes and (iii) (x) at the time of such incurrence and after giving pro forma effect thereto, the First Lien Leverage Ratio would be no greater than 1.50:1.00 or (y) if, after giving pro forma effect to such incurrence of First Lien Debt, the First Lien Leverage Ratio would be issued on greater than 1.50:1.00, then the date aggregate initial outstanding amount of this Indenture such new First Lien Debt that would cause the First Lien Leverage Ratio to exceed 1.50:1.00 shall not exceed $300.0 million; and (B) Junior Lien Debt that is expressly contractually subordinated in right of payment and lien priority to the related Note Guarantees;
prior payment in full in cash of all the Senior Secured Obligations, so long as, at the time of such incurrence and after giving pro forma effect thereto, the Secured Leverage Ratio would be no greater than 2.00:1.00; (4) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by (including Capital Lease Obligations, mortgage financings or financings, purchase money obligations, in each case, obligations and government bond financings) incurred for to finance (or to reimburse the purpose 61 Company or any of financing its Restricted Subsidiaries for) all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment any Aircraft Asset used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount outstanding, including all Permitted Refinancing Subsidiaries or leased to third parties which Indebtedness is incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause within one (4), not to exceed the greater of (i1) $45.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of year from the date of such incurrence purchase or issuance;
installation or improvement; provided that no junior Liens shall be permitted on any such Aircraft Asset; (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, replace, extend, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a4.7(a) or any of clauses (2), 1) through (3), (4), (5), (14) or (1523) of this Section 4.09(b4.7(b);
; (6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and and/or any of its Restricted Subsidiaries; provided, however, that:
(A) 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 unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and
(B) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stockshares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations;
Obligations in the ordinary course of business and not for speculative purposes; (9) the Guarantee (including by way of co-obligation or assumption) by the Company or any Restricted Subsidiary of its Restricted Subsidiaries the Company of Indebtedness of the Company or a Restricted Subsidiary of the Company (including in connection with or in contemplation of a spin-off of the original obligor of the guaranteed or assumed Indebtedness) to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.094.7; provided that if the Indebtedness being guaranteed is subordinated to Junior Lien Debt, Senior Unsecured Pari Passu Debt or pari passu with the NotesSubordinated Debt, then the Guarantee must be subordinated Junior Lien Debt, Senior Unsecured Pari Passu Debt or pari passuSubordinated Debt, as applicable, to the same extent as the Indebtedness guaranteed;
guaranteed or assumed; (10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness or reimbursement obligations in respect of workers’ compensation claims, self-insurance obligations (including reinsurance), bankers’ acceptances, performance bonds and surety bonds in the ordinary course of business (including without limitation in respect of customs obligations, landing fees, taxes, airport charges, overfly rights and any other obligations to airport and governmental authorities); (11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations any overdrafts and related liabilities arising from treasury, depository and cash management services or bidin connection with any automated clearing house transfers of funds; (12) Indebtedness (a) constituting credit support or financing from aircraft or engine manufacturers or their affiliates or (b) incurred to finance or refinance Aircraft Assets (including, plugging and abandonmentwithout limitation, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business;
(11) the incurrence by to reimburse the Company or any of its Restricted Subsidiaries for the acquisition cost of Indebtedness arising from any of the honoring by a bank or other financial institution of a checkforegoing, draft to finance any pre-delivery, 62 progress or similar instrument inadvertently drawn against insufficient fundspayment or pursuant to a sale and lease-back) (whether in advance of or at any time following any acquisition of items being financed, so long as and whether such indebtedness is unsecured in whole or in part or is secured by such items or by other items or by any combination); provided that the principal amount of such Indebtedness is covered within five Business Days;
incurred in reliance on subsection (b) of this clause (12), at the time of incurrence of such Indebtedness, may exceed the aggregate incurred and anticipated costs to finance acquisition of the item or items being financed by such Indebtedness (calculated at the time of incurrence of such Indebtedness and determined in good faith by an officer of the Company or Restricted Subsidiary, as applicable (including reasonable estimates of anticipated costs) and calculated to include, without limitation, purchase price, fees, expenses, repayment of any pre-delivery financing and related interest expense (whether or not capitalized) and premium (if any), delivery and late charges and other costs associated with such acquisition (as so calculated, for purposes of this proviso, the “financing costs”)) but, if such principal amount exceeds such financing costs, it may not exceed the aggregate Fair Market Value of the item or items securing such Indebtedness (which Fair Market Value may, at the time of an advance commitment, be determined to be the Fair Market Value at the time of such commitment or (at the option of the issuer or such Indebtedness) the Fair Market Value projected for the time of incurrence of such Indebtedness) or (c) constituting letters of credit in lieu of security deposits and maintenance reserves in connection with any Indebtedness in operating lease associated with an Aircraft Asset; provided, further, that no junior Liens shall be permitted on any such Aircraft Asset; (13) Indebtedness issued to current or former directors, consultants, managers, officers and employees and their spouses or estates (a) to purchase or redeem Capital Stock of the Company issued to such director, consultant, manager, officer or employee in an aggregate principal amount not to exceed $2.5 million in any twelve-month period or (b) pursuant to any deferred compensation plan approved by the Board of Directors of the Company; (14) reimbursement obligations in respect of standby or documentary letters of credit or banker’s acceptances; (15) surety and appeal bonds that do not secure judgments that constitute an Event of Default; (16) Indebtedness of the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil Credit Card, travel charge or natural gas balancing positions arising clearing house processors in connection with Credit Card processing, travel charge or clearing house services incurred in the ordinary course of business;
, whether in the form of hold-backs or otherwise; (1317) any obligation arising from agreements the incurrence by a Receivables Subsidiary of Indebtedness in a Qualified Receivables Transaction that is without recourse to the Company or to any other Restricted Subsidiary of the Company providing for indemnificationor their assets (other than such Receivables Subsidiary and its assets and, 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 Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of to the Company or any other Restricted Subsidiary;
(14) any Permitted Acquisition Indebtedness; and
(15) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15), not to exceed the greater of (i) $75.0 million and (ii) 5.0% Subsidiary of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of , other than Standard Securitization Undertakings) and is not guaranteed by any such incurrence or issuance. For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (15) above, or is entitled to be incurred pursuant to Section 4.09(a), the Company will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributions, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09Person; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other Person.63
Appears in 1 contract
Samples: Indenture (Allegiant Travel CO)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt); the Company will not, and will not permit any of its Restricted Subsidiaries to, issue any Disqualified Stock; and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stockother preferred securities; provided, however, that the Issuers Company and any of its Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue Disqualified StockStock and any Restricted Subsidiary may issue other preferred securities, and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stockif, 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 such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock is other preferred securities are issued, as the case may be, Fixed Charge Coverage Ratio would have been at least 2.25 2.00 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock other preferred securities had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):) or the issuance of any preferred securities described in clause (10) below:
(1) the incurrence by the Issuers and the Guarantors, Company or any of its Restricted Subsidiaries of Indebtedness and letters of credit under one or more Credit Facilities in an Facilities, provided that, after giving effect to any such incurrence, the aggregate principal amount at any one time outstanding of all Indebtedness incurred under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) and then outstanding does not to exceed the greater of (ia) $700.0 900.0 million and or (iib) $175.0 625.0 million plus 35.025.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on as of the date of such incurrence;
(2) the incurrence by the Company and or its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers Company and the Guarantors of Indebtedness represented by (a) the Initial Notes and the related Note Guarantees to be issued on the date of this Indenture and (b) the Exchange Notes and the related Note GuaranteesGuarantees issued pursuant to a Registration Rights Agreement;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation construction or improvement of property, plant or equipment used in the business of the Company or any of its such Restricted Subsidiaries, in an aggregate principal amount outstandingSubsidiary, including all Permitted Refinancing Indebtedness incurred to renew, refundextend, refinance, renew, replace, defease or discharge refund any Indebtedness incurred pursuant to this clause (4), provided that after giving effect to any such incurrence, the principal amount of all Indebtedness incurred pursuant to this clause (4) and then outstanding does not to exceed the greater of (ia) $45.0 25.0 million and (iib) 3.02.5% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceincurrence;
(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 renewto, refundextend, refinance, renew, replace, defease or discharge refund Indebtedness of the Company or any Indebtedness Restricted Subsidiary (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company), in each case case, that was permitted by this Indenture to be incurred under the first paragraph of this Section 4.09(a) 4.09 or clauses clause (2), (3), (4), (5), (14) or (1512) of this Section 4.09(b) or this clause (5);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(Aa) if the Company or any Guarantor is the obligor on such Indebtedness and the payee a Guarantor is not the Company or a Guarantorobligee, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, or if a Guarantor is the obligor on such Indebtedness and neither the Company nor another Guarantor is the obligee, such Indebtedness must be expressly subordinated to the prior payment in the case full in cash of the Company, or all Obligations with respect to the Note Guarantee, in the case Guarantee of a such Guarantor; and
(Bb) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either neither the Company or nor a Restricted Subsidiary of the Company, Company will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the incurrence by the Company or any of its Restricted Subsidiaries of obligations under Hedging Contracts in the ordinary course of business and not for speculative purposes;
(8) the Guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness of the Company or any of its Restricted Subsidiaries that was permitted to be incurred by another provision of this Section 4.09; provided that in the event such Indebtedness being Guaranteed is subordinated in right of payment to the Notes or the Note Guarantees, then the Guarantee shall be subordinated in right of payment to the Notes or the Note Guarantees, as the case may be;
(9) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of bid, performance, surety and similar bonds issued for the account of the Company and any of its Restricted Subsidiaries in the ordinary course of business, including Guarantees and obligations of the Company or any of its Restricted Subsidiaries with respect to letters of credit supporting such obligations (in each case other than an obligation for money borrowed);
(10) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stockpreferred securities; provided, however, that:
(Aa) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock preferred securities being held by a Person other than the Company or a Restricted Subsidiary of the Company; , and
(Bb) any sale or other transfer of any such Preferred Stock preferred securities to a Person that is not either the Company or a Restricted Subsidiary of the Company, will Company shall be deemed, in each case, to constitute an issuance (as of the date of such Preferred Stock issuance, sale or transfer) of such preferred securities by such Restricted Subsidiary that was not permitted by this clause (710);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations;
(9) the Guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of liability in respect of the Indebtedness arising from of any Unrestricted Subsidiary of the honoring by Company or any Joint Venture but only to the extent that such liability is the result of the Company’s or any such Restricted Subsidiary’s being a bank general partner of such Unrestricted Subsidiary or other financial institution Joint Venture and not as guarantor of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Daysand provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (11) and then outstanding does not exceed $10.0 million;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business;
(13) any obligation arising from agreements of the Company or any Restricted Subsidiary of the Company 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 Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company or any Restricted Subsidiary;
(14) any Permitted Acquisition Indebtedness; and
(1513) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or Indebtedness, provided that, after giving effect to any such incurrence, the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including of all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to under this clause (15), 13) and then outstanding does not to exceed the greater of (ia) $75.0 50.0 million and (iib) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceincurrence. For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness (including Acquired Debt) meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (1513) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.09(a)4.09, the Company will be permitted to divide, classify and (or later classify or reclassify in whole or in part in its sole discretion) such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Any Indebtedness under the Credit Agreement outstanding Facilities on the date on which Notes are first issued and authenticated under of this Indenture will initially shall be deemed to have been considered incurred on such date in reliance on under the exception provided by clause (1) first paragraph of the definition of Permitted Debtthis Section 4.09 and may not be reclassified. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsinterest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities shares of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided , provided, in each such case, that the amount thereof shall be is included in Fixed Charges of the Company as accrued to the extent required by the definition accrued. For purposes of such term. The amount of any Indebtedness outstanding as of any date will be:
this Indenture, (a) the accreted value unsecured Indebtedness of any Person will not be deemed to be subordinated in right of payment to secured Indebtedness of that Person merely because it is unsecured and (b) Indebtedness of the Company will not be deemed to be subordinated in right of payment to Indebtedness of a Restricted Subsidiary merely because it is structurally subordinated thereto. Further, the accounting reclassification of any obligation of the Company or any of its Restricted Subsidiaries as Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09. For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the term Indebtedness, or first committed, in the case of any other revolving credit Indebtedness; and
(c) provided that if such Indebtedness is incurred to refinance other Indebtedness denominated in respect of Indebtedness of another Person secured by a Lien on foreign currency, and such refinancing would cause the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other Person.applicable U.S.
Appears in 1 contract
Samples: Indenture (Exterran Partners, L.P.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, to create, incur, issue, assume, Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stock; provided, however, that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stock, if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock is issued, as the case may be, would have been at least 2.25 2.00 to 1.01.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuers Company and the Guarantors, any Guarantor 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 the Company and its Restricted Subsidiaries Guarantors thereunder) not to exceed the greater greatest of (ia) $700.0 million and 1,250.0 million, (iib) $175.0 million plus 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on as of the date of such incurrence and (c) the Borrowing Base in effect under the Credit Agreement at the time of incurrence;
(2) the incurrence by the Company and its Restricted Subsidiaries of (a) the Existing Indebtedness and (b) any Permitted Acquisition Indebtedness;
(3) the incurrence by the Issuers Company and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and the related Note Guaranteeshereof;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligationsobligations or other Indebtedness, in each case, incurred for the purpose of financing all or any part of the purchase price price, other acquisition cost or cost of design, construction, installation installation, development, repair or improvement of property, plant or equipment used in the business of the Company or any of its Restricted SubsidiariesSubsidiaries (together with improvements, additions, accessions and contractual rights relating primarily thereto), in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease defease, discharge or discharge otherwise retire for value, in whole or in part, any Indebtedness incurred pursuant to this clause (4), not to exceed at any time outstanding the greater of (ia) $45.0 100.0 million and (iib) 3.04.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceincurrence;
(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, replace, defease defease, discharge or discharge otherwise retire for value, in whole or in part, any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture hereby to be incurred under Section 4.09(a) or clauses (2), (3), (4), (5), (148), (13), (15) or (1516) of this Section 4.09(b);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(Ai) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Guarantor, if such Indebtedness must be is not unsecured and expressly subordinated in right of payment to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor, then the incurrence of such Indebtedness; and
(Bii) (iA) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (iiB) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, in each case of clause (i) or clause (ii), will be deemed, in each case, deemed to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that:
(Aa) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(Bb) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, will be deemed to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations;
(9) the Guarantee by the Company or any of its Restricted Subsidiaries the Guarantors of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09covenant; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteedguaranteed (or, at the Company’s election, to a greater extent);
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of self-self- insurance obligations and other social security or similar legislation, old age pension or public liability obligations, statutory obligations, government contracts, trade contracts, regulatory obligations, leases, utility contracts and similar obligations, bid, plugging and abandonment, appeal, reimbursement, performance, tender, surety and similar bonds and completion guarantees provided by by, or for the account of, the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees Guarantees, contingent reimbursement obligations, bank guarantees or letters of credit functioning as or as, supporting any or issued to assure payment or performance of the foregoing bonds or obligations and workers’ compensation compensation, health, disability or other benefits, unemployment or other insurance claims in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business;
(13) any obligation arising from agreements of the Company or any Restricted Subsidiary of the Company providing for indemnification, contribution, adjustment of purchase price, earn earn-outs, holdbacks, deferred compensation or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Capital Stock of a Restricted Subsidiary in a transaction permitted hereby;
(14) the incurrence by this Indenture; provided that such obligation is not reflected as a liability on the face Company or any of its Restricted Subsidiaries of Indebtedness in respect of the balance sheet financing of insurance premiums with the providers of such insurance or their Affiliates in the ordinary course of business;
(15) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness representing deferred compensation to employees of the Company or any Restricted SubsidiarySubsidiary of the Company incurred in the ordinary course of business (including those incurred in connection with any acquisition);
(14) any Permitted Acquisition Indebtedness; and
(1516) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (1516), not to exceed the greater of (i) $75.0 150.0 million and (ii) 5.06.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance;
(17) the incurrence by the Company or any of its Restricted Subsidiaries of obligations relating to net Hydrocarbon balancing positions arising in the ordinary course of business; and
(18) the incurrence by the Company or any of its Restricted Subsidiaries of liability in respect of Indebtedness of any Unrestricted Subsidiary or any Joint Venture but only if such liability is the result of (a) the Company’s or any such Restricted Subsidiary’s being a general partner or member of, or owner of an Equity Interest in, such Unrestricted Subsidiary or Joint Venture and not as guarantor of such Indebtedness if, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (18)(a) and then outstanding does not exceed the greater of (i) $50.0 million and (ii) 1.0% of Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence, or (b)(i) Customary Recourse Exceptions and (ii) the pledge of (or a Guarantee limited in recourse solely to) Equity Interests in such Unrestricted Subsidiary or Joint Venture held by the Company or such Restricted Subsidiary to secure Non-Recourse Debt. The Company 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 Company 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 (or, at the Company’s election, to a greater extent); provided, however, that no Indebtedness will be considered contractually subordinated in right of payment to any other Indebtedness solely by virtue of being unsecured, secured with different collateral or to a greater or lesser extent or priority or by virtue of structural subordination, maturity date or being guaranteed by less than all guarantors of such other Indebtedness. For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1Section 4.09(b)(1) through (1518) above, or is entitled to be incurred pursuant to Section 4.09(a), the Company will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or and later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09covenant. Indebtedness under the Credit Agreement Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture hereunder will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsdividends, the accretion of principal, accreted value or liquidation preference, the amortization of original issue discount or debt discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same termsIndebtedness, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock, the obligation to pay a premium in respect of Indebtedness or Preferred Stock or Disqualified Stock arising in connection with the issuance of a notice of redemption or the making of a mandatory change of control offer or asset sale offer for such Indebtedness or Preferred Stock or Disqualified Stock, increases in the amount of Indebtedness outstanding solely as a result of fluctuations in exchange rates or currency values, unrealized losses or charges in respect of Hedging Obligations, and the reclassification of Preferred Stock as Indebtedness due to a change in accounting principles, in each case will not be deemed not to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09covenant; provided that the amount thereof shall be is included in Fixed Charges of the Company as accrued to the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Samples: Indenture (Viper Energy Partners LP)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) with respect to any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stockpreferred stock, if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock preferred stock is issued, as the case may be, would have been at least 2.25 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock preferred stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuers Company and the Guarantors, any of its Restricted 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) (with letters including amounts incurred and outstanding pursuant to clause (B) of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunderthis clause (1)) not to exceed the greater of (ix) $700.0 million 1,400 million, and (iiy) $175.0 million plus 35.0% of any additional amount, if after giving pro forma effect to the Company’s Adjusted Consolidated Net Tangible Assets determined on the date incurrence of such incurrenceadditional amount and the application of proceeds therefrom, the Consolidated Secured Leverage Ratio would be no greater than 4.25 to 1.00 (provided, that solely for the purpose of determining compliance with this clause (1)(A)(y) of this covenant, any Indebtedness that is incurred and outstanding or proposed to be incurred, in each case pursuant to this clause (1)(A)(y) will be deemed to be Total Secured Debt for purposes of calculating the Consolidated Secured Leverage Ratio) and (B) any Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (1);
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers Company and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and the related Note GuaranteesIndenture;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, case incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted SubsidiariesSubsidiaries (whether through the direct purchase of assets or the Equity Interests of any Person owning such assets), in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 million and 4.0% of Total Assets or (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance$150.0 million at any time outstanding;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (2), (3), (4), (5), (1416) or (1517) of this Section 4.09(b);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(Aa) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and
(B) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stockshares of preferred stock; provided, however, that:
(Aa) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(Bb) any sale or other transfer of any such Preferred Stock preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging ObligationsObligations in the ordinary course of business;
(9) the Note Guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Note Guarantee must shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations or bid, plugging and abandonment, appeal, reimbursementbankers’ acceptances, performance, bid and surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Daysfunds in the ordinary course of business;
(12) the incurrence of Indebtedness arising from agreements of the Company or any of its Restricted Subsidiaries providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred in connection with the disposition of any business, assets or a Restricted Subsidiary, other than the Note Guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Restricted Subsidiary for the purpose of financing such acquisition; provided, however, that the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the Fair Market Value of such non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and Restricted Subsidiaries in connection with such disposition;
(13) the incurrence of Indebtedness owed to any Person in connection with worker’s compensation, self-insurance, health, disability or other employee benefits or property, casualty or liability insurance provided by such Person to the Company or any of its Restricted Subsidiaries, pursuant to reimbursement or indemnification obligations to such Person, in each case incurred in the ordinary course of business and consistent with past practices;
(14) pledges, deposits or payments made or given in the ordinary course of business in connection with or to secure statutory, regulatory or similar obligations, including obligations under health, safety or environmental obligations, or arising from guarantees to suppliers, lessors, licenses, contractors, franchisees or customers of obligations, other than Indebtedness, made in the ordinary course of business;
(15) the incurrence of Indebtedness by the Company or any of its Restricted Subsidiaries issued to directors, officers or employees of in-kind obligations relating the Company or any of its Restricted Subsidiaries in connection with the redemption or purchase of Capital Stock that, by its terms, is subordinated to net oil the Notes, is not secured by any assets of the Company or natural gas balancing positions arising any of its Restricted Subsidiaries and does not require cash payments prior to the Stated Maturity of the Notes, in the ordinary course of businessan aggregate principal amount at any time outstanding not to exceed $5.0 million;
(1316) any obligation arising from agreements the incurrence of (x) Indebtedness by the Company or any Restricted Subsidiary to finance an acquisition (including, without limitation, by way of the Company providing for indemnification, adjustment a merger) 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 Capital Stock of any Person engaged in, or assets used or useful in, a Restricted Subsidiary in a transaction permitted by this IndenturePermitted Business or (y) Acquired Debt; provided that 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 such obligation Indebtedness is not reflected as incurred would have been at least 1.75 to 1.0, determined on a liability on the face pro forma basis (including a pro forma application of the balance sheet net proceeds therefrom), as if the Indebtedness had been incurred at the beginning of the Company or any Restricted Subsidiary;
(14) any Permitted Acquisition Indebtednesssuch four-quarter period; and
(1517) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (1517), not to exceed the greater of (i) $75.0 million and 4.0% of Total Assets or (ii) 5.0% $150.0 million. The Company 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 Company’s Adjusted Consolidated Net Tangible Assets determined as Company 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 will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the date Company solely by virtue of such incurrence being unsecured or issuanceby virtue of being secured on a first or junior priority basis. 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 (1517) above, or is entitled to be incurred pursuant to Section 4.09(a)) hereof, the Company will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Notwithstanding the foregoing, Indebtedness under the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of “Permitted Debt” only and may not be reclassified. Indebtedness under Credit Facilities (other than the Notes and Indebtedness under the Credit Agreement) outstanding on the date on which the Notes are first issued and authenticated under this Indenture will initially be deemed to be incurred pursuant to clause (2) of the definition of “Permitted Debt.” The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsinterest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities shares of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; . Notwithstanding any other provision of this Section 4.09, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. In connection with the incurrence or issuance, as applicable, of (x) revolving loan Indebtedness under this covenant or (y) any commitment (including for revolving loan Indebtedness) or other transaction relating to the incurrence or issuance of Indebtedness, Disqualified Stock or preferred stock under this covenant and the granting of any Lien to secure such Indebtedness, in each case in reliance on a basket requiring calculation of the Consolidated Secured Leverage Ratio, the Company or applicable Restricted Subsidiary may designate such incurrence or issuance and the granting of any Lien therefor as having occurred on the date of first incurrence of such revolving loan Indebtedness or commitment or intention to consummate such transaction (such date, the “Deemed Date”), and any related subsequent actual incurrence or issuance and granting of such Lien therefor will be deemed to have been incurred or issued and granted on such Deemed Date for purposes of calculating the Consolidated Secured Leverage Ratio (and all such calculations of the Consolidated Secured Leverage Ratio on and after the Deemed Date until the termination of such commitment, including as a result of funding a non-revolving commitment, or until such transaction is consummated or abandoned or such election is rescinded shall be made on a pro forma basis giving effect to the deemed incurrence or issuance, the granting of any Lien therefor and related transactions in connection therewith). Any such election may be rescinded at any time, provided that the amount thereof shall be included in Fixed Charges such rescission does not cause a Default as a result of the Company as accrued provisions of this paragraph ceasing to the extent required by the definition of such termbe applicable. The amount of any Indebtedness outstanding as of any date will be:
(a1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1A) the Fair Market Value of such assets at the date of determination; and
(2B) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Samples: Indenture (B&G Foods, Inc.)
