Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, incur, with respect to any Indebtedness (including Acquired Debt), and shall not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Issuer and its Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) and the Issuer’s Restricted Subsidiaries may issue shares of preferred stock, if, after giving effect thereto and the application of the proceeds therefrom, either (i) the Fixed Charge Coverage Ratio for the Issuer’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been at least 2.0 to 1.0, or (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as of the end of the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been less than or equal to 1.75 to 1.0. (b) Section 4.10(a) shall not prohibit the incurrence of any Indebtedness that meets the following criteria or the issuance of any preferred stock that meets the following criteria, as applicable (collectively, “Permitted Debt”): (1) the incurrence by the Issuer or any Restricted Subsidiary of Indebtedness pursuant to Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, in an aggregate principal amount at any one time outstanding not to exceed the greater of $1,500 million and 22.5% of Consolidated Tangible Assets at the time of incurrence; (2) the Existing Indebtedness; (3) the incurrence by the Issuer of Indebtedness represented by the Initial Notes issued on the Issue Date and replacement Notes in respect thereof, if any (and the incurrence by any Subsidiary Guarantor of any related Note Guarantee); (4) the incurrence or issuance by the Issuer or any Restricted Subsidiary of the Issuer of Indebtedness (including Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction), Disqualified Stock or preferred stock, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development or improvement of plant, equipment or other property used or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvement, in an aggregate principal amount at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence; (5) the incurrence by the Issuer or any Restricted Subsidiary of Permitted Refinancing Indebtedness in exchange for, or incurred to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause (5) or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4) or (11) of this Section 4.10(b); (6) the incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposes; (7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence; (8) 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 (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days; (9) the incurrence of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary; (10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business; (11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true: (a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a); (b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or (c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition; (12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less; (13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence; (14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer; (15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations; (16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business; (17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein; (18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon; (19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4); (20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence; (21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiaries; provided, however, that: (a) if the Issuer or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and 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 Issuer, or the Note Guarantee, in the case of a Subsidiary Guarantor; and (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, which new incurrence is not permitted by this clause (21); (22) the issuance by any Restricted Subsidiary to the Issuer or to any other Restricted Subsidiary of shares of preferred stock; provided, however, that: (a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and (b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22); (23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be subordinated in right of payment to the Notes or the Note Guarantee, as the case may be, and (b) Non-Guarantors of Indebtedness incurred by other Non-Guarantors in accordance with the provisions of this Indenture; and
Appears in 4 contracts
Samples: Indenture (Howard Hughes Corp), Indenture (Howard Hughes Corp), Indenture (Howard Hughes Corp)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries Subsidiary to, Incur, directly or indirectly, incur, with respect to any Indebtedness (including Acquired Debt)Indebtedness, and shall the Company will not issue any Disqualified Stock and will not permit any of its the Restricted Subsidiaries to issue any shares of preferred stockPreferred Stock; provided, however, that the Issuer Company will be entitled to Incur Indebtedness or issue Disqualified Stock and its any Restricted Subsidiaries may incur Subsidiary will be entitled to Incur Indebtedness (including Acquired Debt) and the Issuer’s Restricted Subsidiaries may or issue shares of preferred stock, Preferred Stock if, on the date of such Incurrence or issuance and after giving effect thereto and the application of the proceeds therefromon a pro forma basis, either (i) the Fixed Charge Coverage Ratio for the Issuer’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been be at least 2.0 to 1.0, or (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as of the end of the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been less than or equal to 1.75 to 1.0.
(b) Notwithstanding Section 4.10(a) shall not prohibit 4.09(a), the incurrence Company and the Restricted Subsidiaries will be entitled to Incur any or all of any Indebtedness that meets the following criteria or the issuance of any preferred stock that meets the following criteria, as applicable Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or any Restricted Subsidiary of Indebtedness Incurred pursuant to the Credit Facilities or Project LoansAgreement; provided, including however, that, immediately after giving effect to any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by Incurrence, the Issuer or any Restricted Subsidiary, in an aggregate principal amount at any one time of all Indebtedness Incurred under this clause (1) and then outstanding does not exceed $3.4 billion; provided, that the Company or the Restricted Subsidiaries can Incur additional Secured Indebtedness under this clause (1) if, after giving pro forma effect to exceed such Incurrence, the Consolidated Senior Secured Debt Ratio would be no greater of $1,500 million and 22.5% of Consolidated Tangible Assets at the time of incurrencethan 3.5 to 1.0;
(2) Indebtedness owed to and held by the Existing IndebtednessCompany or a Restricted Subsidiary; provided, however, that (i) any subsequent issuance or transfer of any Capital Stock that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary and (ii) any subsequent transfer of such Indebtedness (other than to the Company or a Restricted Subsidiary) shall be deemed, in each case, to constitute the Incurrence of such Indebtedness by the obligor thereon that was not permitted by this clause (2);
(3) the incurrence by the Issuer of Indebtedness represented by the Initial Notes issued on the Issue Date and replacement Notes in respect thereof, if (including any (and the incurrence by Note Guarantee but excluding any Subsidiary Guarantor of any related Note GuaranteeAdditional Notes);
(4) Indebtedness that is outstanding on the incurrence Issue Date (other than Indebtedness described in clause (1), (2) or issuance (3) of this Section 4.09(b));
(5) Indebtedness of a Restricted Subsidiary Incurred and outstanding on or prior to the date on which such Subsidiary was acquired by the Issuer or any Restricted Subsidiary of the Issuer of Company (other than Indebtedness (including Capital Lease Obligations and Indebtedness incurred Incurred in connection with a sale/leaseback transaction)with, Disqualified Stock or preferred stock, in each case, incurred or issued for the purpose of financing to provide all or any part portion of the purchase price funds or cost credit support utilized to consummate, the transaction or series of designrelated transactions pursuant to which such Subsidiary became a Subsidiary or was acquired by the Company); provided, constructionhowever, lease, installation, development or improvement of plant, equipment or other property used or useful in a Permitted Business which occurs within 365 days that on the date of such purchaseacquisition and after giving effect thereto on a pro forma basis, design, construction, lease, installation, development either (i) the Company would be entitled to Incur at least $1.00 of additional Indebtedness pursuant to the first paragraph of this covenant or improvement, in an aggregate principal amount (ii) the Fixed Charge Coverage Ratio (A) would be at any time outstanding, together with any least 1.75 to 1.0 and (B) would be greater than such Fixed Charge Coverage Ratio immediately prior to such acquisition;
(6) Permitted Refinancing Indebtedness in respect thereof, not of Indebtedness Incurred pursuant to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5) the incurrence by the Issuer or any Restricted Subsidiary of Permitted Refinancing Indebtedness in exchange for, or incurred to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause (54.09(a) or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3Sections 4.09(b)(3), (4), (5), (22) or this clause (11) of this Section 4.10(b6);
(67) the incurrence Hedging Obligations directly related to Indebtedness permitted to be Incurred by the Issuer or any of its Company and the Restricted Subsidiaries pursuant to this Indenture or entered into in the ordinary course of Hedging Obligations business and not for speculative purposes;
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness 8) obligations in respect of workers’ worker’s compensation claims, self-and self insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, and performance, bid, stay, customs, appeal, replevin and surety bonds and performance and completion and compliance guarantees provided by the Company or other similar obligations incurred any Restricted Subsidiary in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) the incurrence by the Issuer or any of its Restricted Subsidiaries of 9) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft draft, credit card, purchase card or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer business or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection other cash management services in the ordinary course of business; provided that (i) such Indebtedness (other than credit or purchase cards) is extinguished within ten business days of notification to the Company of its incurrence and (ii) such Indebtedness in respect of credit or purchase cards is extinguished within 60 days from its Incurrence;
(1110) Acquired Debt Indebtedness consisting of any Guarantee by (i) the Company or a Guarantor of Indebtedness or preferred stock other Obligations of the Issuer Company or its Restricted Subsidiaries incurred to provide all or a portion any of the funds utilized to acquire Persons that are acquired Restricted Subsidiaries, (ii) a Foreign Subsidiary of Indebtedness or other Obligations of another Foreign Subsidiary or (iii) a Non-Guarantor Subsidiary of Indebtedness or other Obligations of another Non-Guarantor Subsidiary, in each case so long as the Incurrence of such guaranteed Indebtedness or other obligations by the Issuer Company or any such Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with is permitted under the terms of this Indenture; provided that immediately after giving effect provided, that, if the Indebtedness being guaranteed is subordinated to such acquisitionor pari passu with the Notes, any of then the following is true:
(a) Guarantee must be subordinated or pari passu, as applicable, to the Issuer would be permitted to incur at least $1.00 of additional same extent as the Indebtedness pursuant to Section 4.10(a)guaranteed;
(b11) (i) Capital Lease Obligations and (ii) Attributable Debt, and Permitted Refinancing Indebtedness in respect thereof, in an aggregate principal amount on the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect date of Incurrence that, when taken together with the principal amount of all other Indebtedness then outstanding and Incurred pursuant to such acquisition would be this clause (11), does not exceed the greater than of $175.0 million or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition2.5% of Total Assets;
(12) Indebtedness of Non-Guarantor Subsidiaries and Foreign Subsidiaries in an aggregate principal amount on the Issuer date of Incurrence that, when taken together with the principal amount of all other Indebtedness then outstanding and Incurred pursuant to this clause (12), does not exceed the greater of $350.0 million or a Restricted Subsidiary 5.0% of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or lessTotal Assets;
(13) Indebtedness Incurred after the incurrence or issuance by the Issuer or a Restricted Subsidiary Issue Date in respect of the Issuer of Purchase Money Indebtedness and Permitted Refinancing Indebtedness in respect thereof, in an aggregate principal amount on the date of Incurrence that, when taken together with the principal amount of all other Indebtedness then outstanding and Incurred pursuant to this clause (or accreted value13), as applicable) at any time outstanding, does not to exceed the greater of $150.0 250.0 million and or 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrenceTotal Assets;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer Company or any Restricted Subsidiary of the Issuer Restricted Subsidiaries consisting of (ai) the financing of insurance premiums with the providers of such insurance or their affiliates or (bii) take-or-pay obligations contained in supply arrangementsagreements, in each case case, in the ordinary course of business;
(1715) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist Company or any of the Restricted Subsidiaries supported by a letter of credit issued pursuant to the terms of Credit Agreement in a joint venture agreement as a result principal amount not in excess of the failure stated amount of such letter of credit;
(16) Indebtedness in an aggregate amount not to exceed the foreign currency equivalent of the Issuer greater of $150.0 million or any Restricted Subsidiary 2.5% of the Issuer to make a required capital contribution thereinTotal Assets in respect of letters of credit denominated in currencies other than U.S. dollars;
(17) Foreign Jurisdiction Deposits;
(18) Indebtedness consisting of guarantees of indebtedness or other obligations of the Issuer or any Restricted Subsidiary joint ventures permitted under clause (19)(a) of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course definition of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon“Permitted Investments;”
(19) Indebtedness consisting Incurred in connection with judgments, decrees, attachments or awards that do not constitute an Event of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Default under Section 4.08(b)(46.01(6);
(20) Guarantees issued from time Indebtedness in the form of (i) guarantees of loans and advances to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures)officers, directors, consultants and employees, in an aggregate amount not to exceed $20.0 million at any one time outstanding the greater of $100.0 million outstanding, and 2.5% of Consolidated Tangible Assets (ii) reimbursements owed to officers, directors, consultants and employees of the Issuer at Company, any of its Subsidiaries or the time of incurrenceCompany’s direct or indirect parent companies;
(21) Indebtedness consisting of obligations to make payments to current or former officers, directors and employees of the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer and Company, any of its Restricted Subsidiaries or the Company’s direct or indirect parent companies, their respective estates, spouses or former spouses with respect to the cancellation, purchase or redemption of Equity Interests of the Company, any of its Subsidiaries, or any of the Company’s direct or indirect parent companies to the extent permitted under Section 4.07(b)(5);
(22) Indebtedness of the Company or a Guarantor incurred in connection with or in contemplation of, or to provide all or any portion of the funds or credit support utilized to consummate, the acquisition by the Company or such Guarantor of property used or useful in a Permitted Business (including a Product) (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, that:on the date of such Incurrence and after giving effect thereto on a pro forma basis, the Fixed Charge Coverage Ratio (A) would be at least 1.75 to 1.0 and (B) would be greater than such Fixed Charge Coverage Ratio immediately prior to such Incurrence;
(a23) if Non-Recourse Debt; provided, however, that the Issuer aggregate principal amount of any such Indebtedness, when taken together with all other Indebtedness Incurred pursuant to this clause (23) and then outstanding, does not exceed the greater of $175.0 million or 2.5% of Total Assets;
(24) Indebtedness consisting of obligations under any Subsidiary Guarantor is Permitted Convertible Indebtedness Call Transaction;
(25) Indebtedness of the obligor Company or of any of the Restricted Subsidiaries in an aggregate principal amount on such the date of Incurrence that, when taken together with all other Indebtedness of the Company and the obligee is Restricted Subsidiaries then outstanding and Incurred pursuant to this clause (25), does not exceed the Issuer greater of $400.0 million or a Subsidiary Guarantor, such Indebtedness must be unsecured and subordinated in right 5.0% 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 Issuer, or the Note Guarantee, in the case of a Subsidiary GuarantorTotal Assets; and
(i26) Indebtedness Incurred in a Qualified Receivables Transaction that is not recourse to the Company or any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer Restricted Subsidiary (except for Standard Securitization Undertakings or a Restricted Subsidiary and (ii) any sale whose principal assets are the receivables, leases or other transfer assets that are the subject of a Qualified Receivables Transaction).
(c) For purposes of determining compliance with this Section 4.09:
(1) all Indebtedness outstanding under the Credit Agreement on the Issue Date will be treated as Incurred under clause (1) of the immediately preceding paragraph;
(2) in the event that an item of Indebtedness (or any such portion thereof) meets the criteria of more than one of the types of Indebtedness to a Person that is not either described in Section 4.09, the Issuer or a Restricted Subsidiary shall be deemedCompany, in each caseits sole discretion, will classify such item of Indebtedness (or any portion thereof) at the time of Incurrence and will only be required to constitute a new incurrence include the amount and type of such Indebtedness by in one of the Issuer clauses of Section 4.09(b) (provided that any Indebtedness originally classified as Incurred pursuant to any of clauses (2) through (26) of Section 4.09(b) may later be reclassified as having been Incurred pursuant to Section 4.09(a) or any other of clauses (2) through (26) of Section 4.09(b) to the extent that such Restricted Subsidiaryreclassified Indebtedness could be Incurred pursuant to Section 4.09(a) or one of clauses (2) through (26) of Section 4.09(b), as the case may be, which new incurrence is not permitted by this clause (21if it were Incurred at the time of such reclassification);
(223) the issuance by any Restricted Subsidiary Company will be entitled to divide and classify an item of Indebtedness in more than one of the Issuer or to any other Restricted Subsidiary types of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results Indebtedness described in any such preferred stock being held by a Person other than the Issuer or a Restricted SubsidiarySection 4.09; and
(b4) with respect to Indebtedness permitted under Section 4.09(b)(4) in respect of Sale Leaseback Transactions that are not Capital Lease Obligations on the Issue Date, any sale reclassification of such Sale Leaseback Transactions as Capital Lease Obligations shall not be deemed an Incurrence of Indebtedness for purposes of this covenant.
(d) For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed, in the case of revolving credit debt; provided, that, if such Indebtedness is incurred to Refinance other transfer 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 Permitted Refinancing Indebtedness does not exceed the principal amount of such Indebtedness being Refinanced.
(e) 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 preferred stock to a Person respective Indebtedness is denominated that is not either in effect on the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance date of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);Refinancing.
(23f) Guarantees The Company will not, and will not permit any Guarantor to, directly or indirectly incur any Indebtedness (other than Guarantees of Designated SPE including Permitted Debt) by (a) the Issuer that is subordinated or junior in right of payment to any Subsidiary Guarantor of Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary of the Issuer in accordance with Company or such Guarantor, as the provisions of this Indenture; provided that in the event case may be, unless such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be expressly subordinated in right of payment to the Notes or the applicable Note GuaranteeGuarantee to the extent and in the same manner as such Indebtedness is subordinated to other Indebtedness of the Company or such Guarantor, as the case may be, ; provided that (i) unsecured Indebtedness shall not be treated as subordinated or junior to any other Indebtedness merely because it is unsecured and (bii) Non-Guarantors Indebtedness shall not be treated as subordinated or junior in right of payment to other Indebtedness incurred by other Non-Guarantors in accordance merely because such Indebtedness has a junior priority with the provisions of this Indenture; andrespect to any collateral.
Appears in 4 contracts
Samples: Indenture (Endo International PLC), Indenture (Endo International PLC), Indenture (Endo International PLC)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and shall 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 Issuer and its Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the Issuer’s Restricted Subsidiaries may incur Indebtedness or issue shares of preferred stock, if, after giving effect thereto and the application of the proceeds therefrom, either (i) if the Fixed Charge Coverage Ratio for the IssuerCompany’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding in accordance with Section 4.21 would have been at least 2.0 to 1, determined on a pro forma basis (including a pro forma application of the date on which such net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related thereto), as if the additional Indebtedness is had been incurred (and such transaction had occurred) or such the preferred stock is or Disqualified Stock had been issued, as the case may be, would have been at least 2.0 to 1.0, or (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as beginning of the end of the Issuer’s most recently ended fiscal such four-quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been less than or equal to 1.75 to 1.0period.
(b) Section 4.10(a4.11(a) shall will not prohibit the incurrence of any Indebtedness that meets of the following criteria or the issuance items of any preferred stock that meets the following criteria, as applicable Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer Company or any Restricted Subsidiary of Indebtedness pursuant to and letters of credit under one or more Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, 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 Subsidiaries thereunder) not to exceed the greater of $1,500 million and 22.5(i) 30.0% of Consolidated Net Tangible Assets at the time of incurrenceor (ii) $600.0 million;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuer Company and the Subsidiary Guarantors of Indebtedness represented by the Initial Notes issued on the Issue Date and replacement Notes in respect thereof, if any (and the incurrence by any Subsidiary Guarantor of any related Note Guarantee)Guarantees to be issued pursuant to this Supplemental Indenture;
(4) the incurrence or issuance by the Issuer Company or any of its Restricted Subsidiary of the Issuer Subsidiaries of Indebtedness (including represented by Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction)Obligations, Disqualified Stock mortgage financings or preferred stockpurchase money obligations, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development installation or improvement of plantproperty, plant or equipment or other property used or useful usable in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvementBusiness, in an aggregate principal amount at any time outstandingamount, together with any including all Permitted Refinancing Indebtedness in respect thereofincurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of $25.0 million and (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 million at the any time of incurrenceoutstanding;
(5) the incurrence by the Issuer Company or any of its Restricted Subsidiary Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or incurred the net proceeds of which are used to extend, renew, refund, refinance, replacerenew, defease or discharge any replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.10(a), this clause (54.11(a) or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4), (5), (16) or (1117) of this Section 4.10(b4.11(b);
(6) the incurrence by the Issuer 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 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 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 shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the 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 in the ordinary course of business and not for speculative purposes;
(79) the guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary of the Company that was permitted to be incurred by another provision of this Section 4.11; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, ; self-insurance or similar obligations, ; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred credit in respect thereof) in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) 11) the incurrence by the Issuer 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 in the ordinary course of businessfunds, so long as such Indebtedness is extinguished covered within five Business Days;
(912) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Issuer Company or a such Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations price or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests subsidiary, other than guarantees of the Issuer 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted SubsidiarySubsidiary in connection with such disposition;
(1014) the incurrence by the Company or a Restricted Subsidiary of Indebtedness resulting from endorsements consisting of negotiable instruments for collection take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(1115) Acquired Debt the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16) the incurrence by the Company or Indebtedness or preferred stock any of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, refund, refinance, renew, defease or replace any Indebtedness incurred pursuant to this clause (16), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of $150.0 million and 3.0(i) 5.0% of Consolidated Net Tangible Assets of the Issuer at the time of incurrence;
and (14ii) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services$100.0 million; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;and
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Issuer or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and 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 Issuer, or the Note Guarantee, in the case of a Subsidiary Guarantor; and
(i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new incurrence of such Indebtedness by the Issuer or such Restricted Subsidiaryissuance, as the case may be, which new incurrence is not permitted by this clause (21);
(22) the issuance by any Restricted Subsidiary to the Issuer or to any other Restricted Subsidiary of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of Indebtedness permitted to be incurred by the Issuer Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the Issuer case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the provisions date of this Indenture; provided such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the event Company or such Subsidiary Guarantor unless such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be 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 other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) For purposes of determining compliance with this Section 4.11, in the Note Guaranteeevent that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (17) of Section 4.11(b), as or is entitled to be incurred pursuant to Section 4.11(a), the case may beCompany will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11. Indebtedness under Credit Facilities outstanding on the date on which 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, 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 (b) Non-Guarantors 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 incurred by other Non-Guarantors in accordance with the provisions or an issuance of Disqualified Stock for purposes of this IndentureSection 4.11; andprovided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued. Notwithstanding any other provision of this Section 4.11, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.
Appears in 4 contracts
Samples: Fourth Supplemental Indenture (Westlake Chemical Corp), Fifth Supplemental Indenture (Westlake Chemical Corp), Third Supplemental Indenture (Westlake Chemical Corp)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer OI Group shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and OI Group shall not issue any Disqualified Stock and OI Group shall not permit any of its Restricted Subsidiaries to issue any shares of Disqualified Stock or preferred stock; provided, however, that the Issuer OI Group and any of its Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) and the Issuer’s Restricted Subsidiaries may issue shares of preferred stock, if, after giving effect thereto and the application of the proceeds therefrom, either (i) if the Fixed Charge Coverage Ratio for the IssuerOI 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 preferred stock is issued, as the case may be, would have been at least 2.0 2.00 to 1.01.00, or determined on a pro forma basis (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as including a pro forma application of the end of net proceeds therefrom), as if the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is had been incurred or at the beginning of such preferred stock is issued, as the case may be, would have been less than or equal to 1.75 to 1.0.
(b) four-quarter period. The first paragraph of this Section 4.10(a) 4.13 shall not prohibit the incurrence of any Indebtedness that meets of the following criteria or the issuance items of any preferred stock that meets the following criteria, as applicable Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer OI Group or any its Restricted Subsidiary Subsidiaries of Indebtedness pursuant to under Credit Facilities or Project Loans, including any Guarantee (and the incurrence of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, 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 Company and its Restricted Subsidiaries thereunder) not to exceed the greater $4.5 billion (of which not more than $1,500 million and 22.5% 1.41 billion of Consolidated Tangible Assets at the time of incurrencesuch Indebtedness shall be incurred by Restricted Subsidiaries that are not Guarantors);
(2) the incurrence by OI Group and any Restricted Subsidiary of OI Group of the Existing Indebtedness;
(3) the incurrence by OI Group, the Issuer Company and the Guarantors of Indebtedness represented by the Initial Notes and the related Guarantees to be issued on the Issue Date and replacement Notes in respect thereof, if any (the Exchange Securities and the incurrence by any Subsidiary Guarantor of any related Note Guarantee)Guarantees to be issued pursuant to the Registration Rights Agreement;
(4) the incurrence or issuance by the Issuer OI Group or any of its Restricted Subsidiary of the Issuer Subsidiaries of Indebtedness (including represented by Capital Lease Obligations and Obligations, in an aggregate principal amount at any time outstanding, including all Permitted Refinancing Indebtedness incurred in connection with a sale/leaseback transactionto refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), Disqualified Stock not to exceed 3.0% of Tangible Assets;
(5) the incurrence by OI Group or preferred stock, in each case, any of its Restricted Subsidiaries of Indebtedness incurred or issued for the purpose of financing to finance all or any part of the purchase price or cost of design, construction, lease, installation, development construction or improvement of plantproperty, plant or equipment used in the business of OI Group or other property used or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvementRestricted Subsidiary, in an aggregate principal amount at any time outstanding, together with any including all Permitted Refinancing Indebtedness in respect thereofincurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (5), not to exceed the greater of $25.0 million and 1.05.0% of Consolidated Tangible Assets at the time of incurrenceAssets, as measured after giving effect to such transaction;
(56) 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 $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) the incurrence by the Issuer OI Group or any of its Restricted Subsidiary Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or incurred the net proceeds of which are or shall be used to extend, renew, refund, refinance, replace, defease refinance or discharge any replace Indebtedness (other than intercompany Intercompany Indebtedness) that was permitted by this Indenture to be incurred under the first paragraph of this Section 4.10(a), this clause (5) 4.13 or clause clauses (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (46) or (117) of this Section 4.10(b)paragraph;
(6) 8) the incurrence by the Issuer OI Group or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposes;
(7) the incurrence by the Issuer Intercompany Indebtedness between or among OI Group and any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoingOI Group only, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) 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 (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection between OI Group and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer and any of its Restricted SubsidiariesOI Inc.; provided, however, that:
(a) if OI Group, the Issuer Company or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary GuarantorIndebtedness, 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 IssuerCompany, or the Note GuaranteeGuarantees of the Notes, in the case of OI Group or a Subsidiary 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
(i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer OI Group or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer OI Group or a Restricted Subsidiary thereof, shall be deemed, in each case, to constitute a new an incurrence of such Indebtedness by the Issuer OI Group or such Restricted Subsidiary, as the case may be, which new incurrence is that was not permitted by this clause (21)8);
(229) the issuance incurrence by OI Group or any of its Restricted Subsidiaries of Hedging Obligations;
(10) 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 the Guarantors of Indebtedness of OI Group or any Restricted Subsidiary to of OI Group and (ii) the Issuer Guarantee by any Foreign Subsidiary of Indebtedness of OI Group or to any other Restricted Subsidiary of OI Group, in each case, that was permitted to be incurred by another provision of this Section 4.13;
(12) 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 preferred stockthe 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) the incurrence by OI Group or any of 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 refund, refinance or replace any Indebtedness incurred pursuant to this clause (13), 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 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:that (i) 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;
(a15) the incurrence by OI Group or any subsequent issuance of its Restricted Subsidiaries of Indebtedness incurred or transfer deemed incurred or cash consideration received from the sale of Equity Interests that results in accounts receivable by OI Group or any such preferred stock being held by a Person other than the Issuer 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 SubsidiarySubsidiaries 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
(b18) the incurrence by OI Group or any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a its Restricted Subsidiary shall be deemedSubsidiaries of Acquired Debt, in each casean aggregate principal amount at any time outstanding, including all Permitted Refinancing Indebtedness incurred to constitute a new issuance of such preferred stock by such Restricted Subsidiaryrefund, which new issuance is not permitted by refinance or replace any Indebtedness incurred pursuant to this clause (2218);
, not to exceed 5.0% of Tangible Assets, as measured after giving effect to the transaction for which the Acquired Debt was incurred. The Company shall not incur any Indebtedness (23) Guarantees (other than Guarantees of Designated SPE including Permitted Debt) by (a) after the Issuer or Issue Date that is contractually subordinated in right of payment to any Subsidiary Guarantor of other Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions of this Indenture; provided that in the event Company unless such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be 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 Note GuaranteeGuarantors, as the case may be, and unless such Indebtedness is also contractually subordinated in right of payment to the obligations under the Notes or Guarantees 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 4.13, in the event that any proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (b1) Non-Guarantors through (18) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.13, the Company shall be permitted to classify such item of Indebtedness on the date of its incurrence in any manner that complies with this Section 4.13, or later reclassify all or a portion of such item of Indebtedness. Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture shall be deemed to have been incurred on such date in reliance on the exception provided by other Non-Guarantors in accordance with clauses (1) or (2) of the provisions definition of this Indenture; andPermitted Debt above.
Appears in 4 contracts
Samples: Indenture (Owens Illinois Inc /De/), Indenture (Owens Illinois Group Inc), Fourth Supplemental Indenture (Owens Illinois Group Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Any New Parent will not, the Company will not and shall not neither of them will permit any of its their 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 shall any such New Parent or the Company will not issue any Disqualified Stock and neither of them will permit any of its their Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that such New Parent or the Issuer and its Restricted Subsidiaries Company, whichever entity is then the ultimate parent company, may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Issuer’s Restricted Subsidiaries Guarantors may incur Indebtedness (including Acquired Debt) or issue shares of preferred stock, if, after giving effect thereto and the application of the proceeds therefrom, either (i) if the Fixed Charge Coverage Ratio for such New Parent’s or the Issuer’s Company’s, as the case may be, 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 2.0 2.5 to 1.01 until December 31, or 2009 and 3.0 to 1 thereafter, in each case, determined on a pro forma basis (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as including a pro forma application of the end of net proceeds therefrom), as if the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is had been incurred or such the Disqualified Stock or the preferred stock is had been issued, as the case may be, would have been less than or equal to 1.75 to 1.0at the beginning of such four-quarter period.
(b) The provisions of Section 4.10(a4.14(a) shall hereof will not prohibit the incurrence of any Indebtedness that meets of the following criteria or the issuance items of any preferred stock that meets the following criteria, as applicable Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by such New Parent, the Issuer or Company and any Restricted Subsidiary Guarantor of additional Indebtedness pursuant to and letters of credit under any Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, Facility (A) 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 stated amount thereof of the Company and its Restricted Subsidiaries thereunder) not to exceed $20.0 million, less the greater aggregate amount of $1,500 million all Net Proceeds of Asset Sales applied by any such New Parent, the Company or any of their Restricted Subsidiaries since the Issue Date to repay any term Indebtedness under a Credit Facility or to repay any revolving credit Indebtedness under a Credit Facility and 22.5% of Consolidated Tangible Assets at the time of incurrencein each case, effect a corresponding commitment reduction thereunder pursuant to Section 4.11 hereof;
(2) (A) the incurrence by any such New Parent, the Company and their Restricted Subsidiaries of Existing IndebtednessIndebtedness and (B) encumbrances or restrictions existing under agreements existing on the Issue Date as in effect on that date;
(3) the incurrence by any such New Parent, the Issuer Company and the Guarantors of Indebtedness represented by the Initial Notes and the related Note Guarantees to be issued on the Issue Date and replacement the Exchange Notes in respect thereof, if any (and the incurrence by any Subsidiary Guarantor of any related Note Guarantee)Guarantees to be issued pursuant to the Registration Rights Agreement;
(4) the incurrence or issuance by any such New Parent, the Issuer Company or any of their Restricted Subsidiary of the Issuer Subsidiaries of Indebtedness (including represented by Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction)Obligations, Disqualified Stock mortgage financings or preferred stockpurchase money obligations, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development installation or improvement of plantproperty, plant or equipment used in the business of any such New Parent, the Company or other property used or useful in a Permitted Business which occurs within 365 days any of such purchasetheir Restricted Subsidiaries, design, construction, lease, installation, development or improvementas the case may be, in an aggregate principal amount amount, 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 $10.0 million at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5) the incurrence by any such New Parent, the Issuer Company or any of their Restricted Subsidiary Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or incurred the net proceeds of which are used to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause (54.14(a) hereof or clause clauses (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4), (5) or (1112) of this Section 4.10(b4.14(b);
(6) the incurrence by any such New Parent, the Issuer Company or any of its their Restricted Subsidiaries of Hedging intercompany Indebtedness between or among such New Parent, the Company and any of their Restricted Subsidiaries; provided, however, that:
(A) if such New Parent, the Company or any Guarantor is the obligor on such Indebtedness and the payee is not such New Parent, the Company or a Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes and the Note Guarantees; and
(B) any (i) subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than such New Parent, the Company or any of their Restricted Subsidiaries, or (ii) sale or other transfer of any such Indebtedness to a Person that is not for speculative purposesany of such New Parent, the Company or any of their Restricted Subsidiaries, will be deemed, in each case, to constitute an incurrence of such Indebtedness by such New Parent, the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any such New Parent’s or the Company’s Restricted Subsidiaries to such New Parent, the Company or to any of their Restricted Subsidiaries of shares of preferred stock; provided, however, that any (A) subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than such New Parent, the Company or such Restricted Subsidiary, or (B) sale or other transfer of any such preferred stock to a Person that is not any of such New Parent, the Company or such Restricted Subsidiary, 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 any such New Parent, the Issuer Company or any of its their Restricted Subsidiaries of Hedging Obligations in the ordinary course of business;
(9) the guarantee by any such New Parent, the Company or any of the Guarantors of Indebtedness of such New Parent, the Company or any of their Restricted Subsidiaries, as the case may be, that was permitted to be incurred by another provision of this Section 4.14; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(10) the incurrence by any such New Parent, the Company or any of their Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of creditbids, performance bonds, completion bonds, bid bonds, and surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred bonds in the ordinary course of business; provided, howeverincluding Note Guarantees or obligations of such New Parent, that upon the drawing of Company or such Restricted Subsidiary, as the case may be, with respect to letters of credit supporting such bid, performance or surety obligations (in each case other than for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrencean obligation for money borrowed);
(8) 11) the incurrence by any such New Parent, the Issuer Company 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 (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of businessfunds, so long as such Indebtedness is extinguished covered within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;and
(12) Indebtedness the incurrence by any such New Parent, the Company or any of the Issuer or a Restricted Subsidiary Guarantors of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (12), not to exceed $5.0 million at any one time outstanding after giving pro forma effect to such incurrence and the greater of $150.0 million and 3.0% of Consolidated Tangible Assets application of the Issuer at proceeds therefrom. Any New Parent and the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations Issuers will not incur, and will not permit any Guarantor to suppliersincur, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE including Permitted Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Issuer or any Subsidiary Guarantor that is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and contractually subordinated in right of payment to any other Indebtedness of such New Parent, the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Issuer, Issuers or the Note Guarantee, in the case of a Subsidiary Guarantor; and
(i) any subsequent issuance or transfer of Equity Interests that results in any such Guarantor unless such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, which new incurrence is not permitted by this clause (21);
(22) the issuance by any Restricted Subsidiary to the Issuer or to any other Restricted Subsidiary of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be 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 Issuers solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. For purposes of determining compliance with this Section 4.14, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt set forth in clauses (1) through (12) of Section 4.14(b), or is entitled to be incurred pursuant to Section 4.14(a), any such New Parent or the Note GuaranteeCompany, as the case may be, and (b) Non-Guarantors will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.14, and such item of Indebtedness will be treated as having been incurred pursuant to such category. Indebtedness under Credit Facilities outstanding on the Issue Date and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by other Non-Guarantors clause (1) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, if applicable, the payment of interest on any Indebtedness in accordance the form of additional Indebtedness with the provisions same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, 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 IndentureSection 4.14; provided, in each such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges of such New Parent or the Company, as the case may be, as accrued. Notwithstanding any other provision of this Section 4.14, the maximum amount of Indebtedness that any such New Parent, 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. The amount of any Indebtedness outstanding as of any date will be:
(1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(A) the Fair Market Value of such assets at the date of determination; and
(B) the amount of the Indebtedness of the other Person.
Appears in 3 contracts
Samples: Indenture (Forbes Energy Services Ltd.), Indenture (Forbes Energy Services Ltd.), Indenture (Forbes Energy Services LLC)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”; with “incurrence” having a correlative meaning) any Indebtedness (including Acquired Debt), and shall 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 Issuer Company may incur Indebtedness (including Acquired Debt) and issue Disqualified Stock, and its Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) and the Issuer’s Restricted Subsidiaries may issue shares of preferred stock, if, after giving effect thereto and the application of the proceeds therefrom, either (i) if the Fixed Charge Coverage Ratio for the IssuerCompany’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 2.0 to 1.0, or determined on a pro forma basis (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as including a pro forma application of the end of net proceeds therefrom), as if the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is had been incurred or such the Disqualified Stock or the preferred stock is had been issued, as the case may be, would have been less than or equal to 1.75 to 1.0at the beginning of such four-quarter period.
(b) The provisions of Section 4.10(a4.09(a) shall hereof will not prohibit the incurrence of any Indebtedness that meets of the following criteria items of Indebtedness or the issuance issuances of any Disqualified Stock or preferred stock that meets the following criteriastock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer Company or any of its Restricted Subsidiary Subsidiaries of additional Indebtedness pursuant to and letters of credit under Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, 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 (a) $1,500 2.45 billion and (b) $700.0 million and 22.5plus 35.0% of Consolidated Tangible the Total Assets at of the time Company determined on the date of such incurrence;
(2) the incurrence by the Company or its Restricted Subsidiaries of Existing Indebtedness;
(3) the incurrence by the Issuer Issuers and the Guarantors of Indebtedness represented by (a) the Initial Notes and the related Note Guarantees to be issued on the Issue Date and replacement (b) the Exchange Notes in respect thereof, if any (and the incurrence by any Subsidiary Guarantor of any related Note Guarantee)Guarantees to be issued pursuant to the Registration Rights Agreement;
(4) the incurrence or issuance by the Issuer Company or any of its Restricted Subsidiary of the Issuer Subsidiaries of Indebtedness (including represented by Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction)Obligations, Disqualified Stock mortgage financings or preferred stockpurchase money obligations, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development installation or improvement of plantproperty, plant or equipment used in the business of the Company or other property used or useful in a Permitted Business which occurs within 365 days any of such purchase, design, construction, lease, installation, development or improvementits Restricted Subsidiaries, in an aggregate principal amount at any time outstandingamount, together with any including all Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5) the incurrence by the Issuer or any Restricted Subsidiary of Permitted Refinancing Indebtedness in exchange for, or incurred to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4) at any time; provided that, immediately after giving effect to any such incurrence, the principal amount of all Indebtedness incurred pursuant to this clause (4) and then outstanding does not exceed the greater of (a) $75.0 million and (b) 3.25% of the Total Assets of the Company;
(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, discharge or otherwise retire for value, any Indebtedness (other than intercompany Indebtedness) or Disqualified Stock of the Company, or Indebtedness (other than intercompany Indebtedness) or preferred stock of any Restricted Subsidiary, in each case that was permitted by this Indenture to be incurred under Section 4.10(a), this clause (54.09(a) hereof or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4), (13), (14) or (1115) of this Section 4.10(b4.09(b) or this clause (5);
(6) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposes;
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) 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 (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer Company and any of its Restricted Subsidiaries; provided, however, that:
(aA) if the Issuer Company or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee payee is not the Issuer Company or a Subsidiary Guarantor, 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 IssuerCompany, 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 Issuer Company or a Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either neither the Issuer or Company nor a Restricted Subsidiary shall Subsidiary, will be deemed, in each case, to constitute a new an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, which new incurrence is that was not permitted by this clause (216);
(227) the issuance by any of the Company’s Restricted Subsidiary Subsidiaries to the Issuer Company or to any other of its Restricted Subsidiary Subsidiaries of 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 Issuer Company or a Restricted Subsidiary; and
(bB) any sale or other transfer of any such preferred stock to a Person that is not either neither the Issuer or Company nor a Restricted Subsidiary shall Subsidiary, will be deemed, in each case, to constitute a new an issuance of such preferred stock by such Restricted Subsidiary, which new issuance is Subsidiary that was not permitted by this clause (227);
(23) Guarantees 8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations in the ordinary course of business and not for speculative purposes;
(other than Guarantees of Designated SPE Debt) by (a9) the Issuer Guarantee by the Company or any Subsidiary Guarantor of its Restricted Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that if the Issuer 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 Restricted Subsidiary of Indebtedness consisting of the Issuer financing of insurance premiums in accordance customary amounts consistent with the provisions operations and business of this Indenturethe Company and its Restricted Subsidiaries;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness constituting reimbursement obligations with respect to letters of credit; provided that, upon the drawing of such letters of credit, such obligations are reimbursed within 30 days following such drawing;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of liability in respect of the Indebtedness of any Unrestricted Subsidiary or any Joint Venture but only to the extent that such liability is the result of the 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; provided that, immediately after giving effect to any such incurrence, the principal amount of all Indebtedness incurred pursuant to this clause (12) and then outstanding does not exceed $25.0 million;
(13) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Acquisition Indebtedness;
(14) the incurrence by any Foreign Subsidiary of Indebtedness that, in the event aggregate together with all other Indebtedness of all Foreign Subsidiaries (including all Permitted Refinancing Indebtedness incurred to extend, renew, refund, refinance, replace, defease, discharge or otherwise retire for value any Indebtedness incurred pursuant to this clause (14)), does not exceed $50.0 million; and
(15) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness and the issuance by the Company of any Disqualified Stock, provided that, immediately after giving effect to any such incurrence or issuance, the amount of all such Indebtedness and Disqualified Stock incurred or issued pursuant to this clause (15) and then outstanding (including all Indebtedness and Disqualified Stock incurred or issued to Refinance any Indebtedness or Disqualified Stock incurred or issued pursuant to this clause (15)) does not exceed the greater of (a) $75.0 million and (b) 3.25% of the Total Assets of the Company determined on the date of such incurrence.
(c) The Company will not incur, and will not permit any Guarantor to incur, any Indebtedness (including Permitted Debt) that is being Guaranteed contractually subordinated in right of payment to any other Indebtedness of the Company or such Guarantor unless such Indebtedness is Subordinated Indebtedness, then the related Guarantee shall be also contractually subordinated in right of payment to the Notes or the applicable Note GuaranteeGuarantee 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 any Guarantor solely by virtue of being unsecured or by virtue of being secured on a junior priority basis.
(d) 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) of Section 4.09(b) hereof, or is entitled to be incurred pursuant to Section 4.09(a) hereof, the Company will be permitted in its sole discretion to divide, redivide, classify or reclassify such item of Indebtedness on the date of its incurrence, and later divide, redivide, classify or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest or preferred stock dividends, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of any obligation of the Company or any Restricted Subsidiary as Indebtedness due to a change in accounting principles, and the payment of dividends on preferred stock or Disqualified Stock in the form of additional 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 that, in each such case, the amount thereof is included in Fixed Charges of the Company as accrued to the extent required by the definition of such term.
(e) For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be utilized, calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term Indebtedness, or first committed, in the case of revolving credit Indebtedness; provided that if such Indebtedness is incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the case may beprincipal 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, and (b) Non-Guarantors 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. The principal amount of any Permitted Refinancing Indebtedness incurred by to refinance other Non-Guarantors Indebtedness, if incurred in accordance with a different currency from the provisions 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 this Indenture; andsuch refinancing.
Appears in 3 contracts
Samples: Indenture (NGL Energy Partners LP), Indenture (NGL Energy Partners LP), Indenture (NGL Energy Partners LP)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its the 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), none of the Company or any of the Restricted Subsidiaries will issue any Disqualified Stock, and shall the Company will not, and the Company will not permit any of its the Restricted Subsidiaries to to, issue any shares of preferred stock; provided, however, that the Issuer and its Company or any Restricted Subsidiaries Subsidiary may incur Indebtedness (including Acquired Debt) and the Issuer’s Restricted Subsidiaries may or issue Disqualified Stock or other shares of preferred stock, if, after giving effect thereto if the Consolidated Interest Coverage Ratio of the Company and the application of the proceeds therefrom, either (i) the Fixed Charge Coverage Ratio Restricted Subsidiaries on a consolidated basis for the Issuer’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or other shares of preferred stock is issued, as the case may be, would have been at least 2.0 to 1.0, or in each case determined on a pro forma basis (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as including a pro forma application of the end of Net Proceeds therefrom), as if the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is had been incurred or such the Disqualified Stock or other shares of preferred stock is had been issued, as the case may be, would have been less than or equal to 1.75 to 1.0on the first day of such four-quarter period.
(b) The provisions of Section 4.10(a4.08(a) shall (“Incurrence of Indebtedness and Issuance of Preferred Stock”) hereof will not prohibit the incurrence of any Indebtedness that meets of the following criteria or the issuance items of any preferred stock that meets the following criteria, as applicable Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or any Restricted Subsidiary Company and the Guarantors of Indebtedness pursuant and letters of credit under a Credit Facility (with letters of credit being deemed to Credit Facilities or Project Loans, including any Guarantee have a principal amount equal to the maximum potential liability of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, Company and the Guarantors thereunder) in an a maximum aggregate principal amount at any one time outstanding under this clause (1) not to exceed (i) $175.0 million plus (ii) an amount not to exceed $125.0 million less the greater of $1,500 million and 22.5% of Consolidated Tangible Assets at Indebtedness represented by the time of incurrenceNotes then outstanding;
(2) the Existing Indebtednessincurrence by the Company and any Guarantor of Indebtedness (including any subsequent accretion) represented by the Secured Convertible Notes to be issued on the Issue Date (or that may be issued pursuant to awards granted from time to time under the Management Incentive Plan in a maximum principal amount not in excess of the maximum principal amount issuable pursuant to the Management Incentive Plan as in effect on the Issue Date and in compliance with the terms of the Secured Convertible Indenture) and any guarantees thereof;
(3) the incurrence by the Issuer Company and any Guarantor of Indebtedness represented by the Initial Notes and the related Note Guarantees to be issued on the Issue Date and replacement Notes in respect thereof, if any (and the incurrence by any Subsidiary Guarantor of any related Note Guarantee)Date;
(4) the incurrence or issuance by the Issuer Company or any Restricted Subsidiary of Existing Indebtedness (other than Indebtedness described in clauses (1), (2) and (3) of this Section 4.08(b));
(5) the Issuer incurrence by the Company or the Restricted Subsidiaries of Indebtedness (including represented by Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction)Obligations, Disqualified Stock mortgage financings or preferred stockpurchase money obligations, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development installation or improvement of plantproperty, plant or equipment used in the business of the Company or other property used or useful such Restricted Subsidiary, provided that the Company would be able to incur at least $1.00 of additional Indebtedness pursuant to the ratio set forth in a Permitted Business which occurs within 365 days Section 4.08(a) after giving effect to the incurrence of any such purchase, design, construction, lease, installation, development or improvement, in an aggregate principal amount at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not pursuant to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrencethis clause (5);
(56) Indebtedness of the Company and the Restricted Subsidiaries incurred and outstanding on or prior to the date on which a new Subsidiary was acquired by the Company or such Restricted Subsidiary (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 or such Restricted Subsidiary); provided, however, that (a) on the date that such Subsidiary is acquired by, or is merged into the Company or such Restricted Subsidiary, the Company would have been able to incur at least $1.00 of additional Indebtedness pursuant to the ratio set forth in clause (a) of this Section 4.08 after giving effect to the incurrence of such Indebtedness pursuant to this clause (6); and (b) the new Subsidiary becomes a Restricted Subsidiary and a Guarantor;
(7) the incurrence by the Issuer Company or any Restricted Subsidiary of Permitted Refinancing Indebtedness in exchange for, or incurred the Net Proceeds of which are used to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a4.08(a) or clauses (1), this clause (5) or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4), (6) or this clause (117) of this Section 4.10(b4.08(b), provided that, with respect to any such debt incurred pursuant to Section 4.08(a) or clauses (1) or (2) of this Section 4.08(b), an authorized representative on behalf of the holders or lenders of such Indebtedness, as applicable, shall execute a joinder, supplement or amendment to the Intercreditor Agreements pursuant which the holders or lenders of such Indebtedness, as applicable, and any agent, trustee or person or institution holding a similar title therefor shall become bound by, and subject to the terms of, the Intercreditor Agreements;
(68) the incurrence by the Company or any Restricted Subsidiary of intercompany Indebtedness between or among the Company and the Restricted Subsidiaries; provided, however, that:
(1) if the payee is not the Company or a Restricted Subsidiary, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes and the Note Guarantees; and
(2) any (A) 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, or (B) sale or other transfer of any such Indebtedness to a Person that is not the Company or a Restricted 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 (8);
(9) the incurrence by the Issuer Company or any of its Restricted Subsidiaries Subsidiary of Hedging Obligations not for speculative purposesin the ordinary course of business;
(710) the guarantee by the Company or any Restricted Subsidiary of Indebtedness of the Company or any Restricted Subsidiary that was permitted to be incurred by another provision of this Section 4.08; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(11) the incurrence by the Issuer Company or any of its Restricted Subsidiaries Subsidiary of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, and performance bonds, completion bonds, bid bonds, and surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred bonds in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) 12) the incurrence by the Issuer Company 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 (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of businessfunds, so long as such Indebtedness is extinguished covered within five Business Days;
(913) the incurrence by the Company or any Restricted Subsidiary of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations price or similar obligations, or guarantees or letters of credit, surety bonds or performance bonds securing any obligations of the Company or any Restricted Subsidiary pursuant to such agreements, in each case, any case incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests Restricted Subsidiary (other than guarantees of the Issuer Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Restricted SubsidiarySubsidiary for the purpose of financing such acquisition), so long as the amount does not exceed the gross proceeds actually received by the Company or any Restricted Subsidiary in connection with such disposition;
(1014) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer Company or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of 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 pursuant to this clause (14), not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;75.0 million; and
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer Company or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed with respect to exist pursuant equipment mobilization expenditures that are committed to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred be reimbursed by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), Person party to a Drilling Contract in an aggregate amount not to exceed (a) $50.0 million in respect of each Deepwater Vessel and (b) $25.0 million in respect of each Jackup Rig at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets outstanding. None of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer Company or any of the Restricted Subsidiary of intercompany Subsidiaries will incur any Indebtedness between or among the Issuer and any of its Restricted Subsidiaries; provided, however, that:
(aincluding Permitted Debt) if the Issuer or any Subsidiary Guarantor that is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and contractually 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 any other Indebtedness of the Issuer, or the Note Guarantee, in the case of a Subsidiary Guarantor; and
(i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, which new incurrence is not permitted by this clause (21);
(22) the issuance by any Restricted Subsidiary to the Issuer or to any other Restricted Subsidiary of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions of this Indenture; provided that in the event unless such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be 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 solely by virtue of being unsecured or the Note Guarantee, as the case may be, and (b) Non-Guarantors by virtue of Indebtedness incurred by other Non-Guarantors in accordance with the provisions of this Indenture; andbeing secured on a junior Lien basis.
Appears in 2 contracts
Samples: Indenture (Vantage Drilling International), Indenture (Vantage International Management Pte Ltd.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guaranty or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt)) or issue Disqualified Stock, and that the Company shall not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Issuer and its Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) and the Issuer’s Restricted Subsidiaries may issue shares of preferred stock, if, after giving effect thereto and the application of the proceeds therefrom, either (i) the Fixed Charge Coverage Ratio stock except for the Issuer’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been at least 2.0 issued to 1.0, or (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as of the end of the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been less than or equal to 1.75 to 1.0.
(b) Section 4.10(a) shall not prohibit the incurrence of any Indebtedness that meets the following criteria or the issuance of any preferred stock that meets the following criteria, as applicable (collectively, “Permitted Debt”):
(1) the incurrence and held by the Issuer Company or any Restricted Subsidiary of Indebtedness pursuant to Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, in an aggregate principal amount at any one time outstanding not to exceed the greater of $1,500 million and 22.5% of Consolidated Tangible Assets at the time of incurrence;
(2) the Existing Indebtedness;
(3) the incurrence by the Issuer of Indebtedness represented by the Initial Notes issued on the Issue Date and replacement Notes in respect thereof, if any (and the incurrence by any Subsidiary Guarantor of any related Note Guarantee);
(4) the incurrence or issuance by the Issuer or any Wholly-Owned Restricted Subsidiary of the Issuer of Indebtedness (including Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction)Company, Disqualified Stock or preferred stock, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development or improvement of plant, equipment or other property used or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvement, in an aggregate principal amount at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5) the incurrence by the Issuer or any Restricted Subsidiary of Permitted Refinancing Indebtedness in exchange for, or incurred to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) PROVIDED that was permitted by this Indenture to be incurred under Section 4.10(a), this clause (5) or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4) or (11) of this Section 4.10(b);
(6) the incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposes;
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) 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 (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Issuer or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and 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 Issuer, or the Note Guarantee, in the case of a Subsidiary Guarantor; and
(i) any subsequent issuance or transfer of Equity Interests Capital Stock that results in such Wholly-Owned Restricted Subsidiary ceasing to be a Wholly-Owned Restricted Subsidiary of the Company or any subsequent transfer of such Indebtedness being held by a Person preferred stock (other than to the Issuer Company or a any of its Wholly-Owned Restricted Subsidiary and (iiSubsidiaries) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, which new incurrence is not permitted by this clause (21);
(22) the issuance by any Restricted Subsidiary to the Issuer or to any other Restricted Subsidiary of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiarythe issuer thereof; PROVIDED, which new issuance is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) HOWEVER, that the Issuer Company or any Subsidiary Guarantor may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and any Subsidiary Guarantor may issue preferred stock if, on the date of Indebtedness permitted such incurrence or issuance and after giving effect thereto, the Consolidated Leverage Ratio does not exceed 2.0 to be incurred by the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be subordinated in right of payment to the Notes or the Note Guarantee, as the case may be, and (b) Non-Guarantors of Indebtedness incurred by other Non-Guarantors in accordance with the provisions of this Indenture; and1.
Appears in 2 contracts
Samples: Second Supplemental Indenture (Arcadia Financial LTD), First Supplemental Indenture (Olympic Financial LTD)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly 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 Borrower shall not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; providedDisqualified Stock, however, that the Issuer and its Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) and the Issuer’s Restricted Subsidiaries may issue shares of preferred stock, if, after giving effect thereto and the application of the proceeds therefrom, either except:
(i) the Fixed Charge Coverage Ratio for the Issuer’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred under one or such preferred stock is issued, as the case may be, would have been at least 2.0 to 1.0, or (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as of the end of the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been less than or equal to 1.75 to 1.0.
(b) Section 4.10(a) shall not prohibit the incurrence of any Indebtedness that meets the following criteria or the issuance of any preferred stock that meets the following criteria, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or any Restricted Subsidiary of Indebtedness pursuant to more Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, in an aggregate principal amount (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Borrower and its Restricted Subsidiaries thereunder), together with Indebtedness of its Restricted Subsidiaries under any Credit Facilities permitted by Section 4.09 of the Indenture, at any one time outstanding not to exceed an amount equal to $517,000,000, less the greater amount of $1,500 million and 22.5% all Net Proceeds (as defined in the Indenture) of Consolidated Tangible Assets at all Asset Sales (as defined in the time Indenture) applied to repay Indebtedness under Credit Facilities pursuant to Section 4.10 of incurrencethe Indenture subsequent to the date of the Indenture;
(2ii) the Existing IndebtednessSurviving Debt;
(3iii) the incurrence intercompany Indebtedness incurred by the Issuer Borrower as a result of loans or advances from any of its Restricted Subsidiaries; provided, however, that (A) such Indebtedness represented must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Advances on terms approved by the Initial Notes issued on the Issue Date Administrative Agent and replacement Notes (B) (x) any subsequent issuance or transfer of Equity Interests, other than directors qualifying shares, that results in respect thereof, if any such Indebtedness being held by a Person other than a Restricted Subsidiary and (and the incurrence by y) any Subsidiary Guarantor sale or other transfer of any related Note Guarantee);
(4) such Indebtedness to a Person that is not the incurrence Borrower or issuance by the Issuer or any a Restricted Subsidiary of the Issuer of Indebtedness (including Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction)Subsidiary, Disqualified Stock or preferred stockshall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Borrower that was not permitted by this clause (iii);
(iv) Hedging Obligations that are incurred or issued for the purpose of financing all fixing or hedging interest rate risk with respect to any part of the purchase price or cost of design, construction, lease, installation, development or improvement of plant, equipment or other property used or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvement, in an aggregate principal amount at any time floating rate Indebtedness that is permitted by this Agreement to be outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5v) the incurrence guarantee by the Issuer or any Borrower of Indebtedness of a Restricted Subsidiary of Permitted Refinancing Indebtedness in exchange for, or incurred to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause (5) or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4) or (11) of this Section 4.10(b)Indenture;
(6vi) loans and advances to the incurrence Borrower from members of the Board of Directors, officers or shareholders of the Borrower; provided, however, that such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Advances and all terms of such Indebtedness shall have been approved by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposesAdministrative Agent;
(7vii) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness obligations in respect of performance, bid, appeal, surety and similar bonds and completion of performance guarantees provided by the Borrower in the ordinary course of business;
(viii) Indebtedness of the Borrower owed to, including obligations in respect of letters of credit for the benefit of, any Person in connection with workers’ compensation claimscompensation, self-insurance obligationshealth, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees disability or other similar employee benefits or property, casualty or liability insurance provided by such Person to the Borrower, pursuant to reimbursement or indemnification obligations to such Person, in each case incurred in the ordinary course of business; provided, however, that upon the drawing request of letters of credit such Person for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoingindemnification, such obligations are reimbursed within 30 days following such drawing incurrence or incurrence;drawing; and
(8) the incurrence by the Issuer ix) additional Indebtedness 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 in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements Disqualified Stock of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, Borrower (in each case, incurred or assumed in connection with the disposition or acquisition of addition to any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired Disqualified Stock permitted by the Issuer or any Restricted Subsidiary of the Issuer clauses (including by way of merger, amalgamation or consolidationi) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
through (a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness ix))above in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, outstanding not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services1,000,000; provided that such obligations are incurred the Borrower shall not incur any Indebtedness (including any Indebtedness permitted under clauses (i) through (ix) above) that is contractually subordinated in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence right of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or payment to any Hedging Obligations;
(16) other Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Issuer or any Subsidiary Guarantor is the obligor on Borrower unless such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and also contractually 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 Issuer, or the Note Guarantee, in the case of a Subsidiary Guarantor; and
(i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, which new incurrence is not permitted by this clause (21);
(22) the issuance by any Restricted Subsidiary to the Issuer or to any other Restricted Subsidiary of shares of preferred stockAdvances on substantially identical terms; provided, however, that:
(a) any subsequent issuance or transfer that no Indebtedness of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary Borrower shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of Indebtedness permitted deemed to be incurred by the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be contractually subordinated in right of payment to any other Indebtedness of the Notes or the Note Guarantee, as the case may be, and (b) Non-Guarantors Borrower solely by virtue of Indebtedness incurred by other Non-Guarantors in accordance with the provisions of this Indenture; andbeing unsecured.
Appears in 2 contracts
Samples: Credit Agreement (Madison River Communications Corp), Credit Agreement (Madison River Communications Corp.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt), ; neither the Company nor any Guarantor shall issue any Disqualified Stock; and the Company shall not permit any of its Restricted Subsidiaries that are not Guarantors to issue any shares of preferred stock; provided, however, that the Issuer and its Restricted Subsidiaries Company or any Guarantor may incur Indebtedness (including Acquired Debt) and the Issuer’s Restricted Subsidiaries may or issue shares of preferred stock, if, after giving effect thereto and the application of the proceeds therefrom, either (i) Disqualified Stock if the Fixed Charge Coverage Ratio for the Issuer’s Company's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock Disqualified Stock is issued, as the case may be, issued would have been at least 2.0 to 1.0, or determined on a pro forma basis (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as including a pro forma application of the end of net proceeds therefrom), as if the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred had been incurred, or such preferred stock is the Disqualified Stock had been issued, as the case may be, would have been less than or equal at the beginning of such four-quarter period. The provisions of the first paragraph of this covenant will not apply to 1.75 to 1.0.
(b) Section 4.10(a) shall not prohibit the incurrence of any Indebtedness that meets of the following criteria or the issuance items of any preferred stock that meets the following criteria, as applicable Indebtedness (collectively, “"Permitted Debt”"):
(1) the incurrence by the Issuer or any Restricted Subsidiary of Indebtedness pursuant to Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, in an aggregate principal amount at any one time outstanding not to exceed the greater of $1,500 million and 22.5% of Consolidated Tangible Assets at the time of incurrence;
(2) the Existing Indebtedness;
(3) the incurrence by the Issuer of Indebtedness represented by the Initial Notes issued on the Issue Date and replacement Notes in respect thereof, if any (and the incurrence by any Subsidiary Guarantor of any related Note Guarantee);
(4) the incurrence or issuance by the Issuer or any Restricted Subsidiary of the Issuer of Indebtedness (including Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction), Disqualified Stock or preferred stock, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development or improvement of plant, equipment or other property used or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvement, in an aggregate principal amount at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5) the incurrence by the Issuer or any Restricted Subsidiary of Permitted Refinancing Indebtedness in exchange for, or incurred to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause (5) or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4) or (11) of this Section 4.10(b);
(6) the incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposes;
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) 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 (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Issuer or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and 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 Issuer, or the Note Guarantee, in the case of a Subsidiary Guarantor; and
(i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, which new incurrence is not permitted by this clause (21);
(22) the issuance by any Restricted Subsidiary to the Issuer or to any other Restricted Subsidiary of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be subordinated in right of payment to the Notes or the Note Guarantee, as the case may be, and (b) Non-Guarantors of Indebtedness incurred by other Non-Guarantors in accordance with the provisions of this Indenture; and
Appears in 2 contracts
Samples: Indenture (Diamond Brands Operating Corp), Indenture (Diamond Brands Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer Company shall not, and shall not cause or 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 shall the Company will not and will not permit any Restricted Subsidiary to issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Issuer Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and its the Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) and the Issuer’s Restricted Subsidiaries may or issue shares of preferred stock, if, after giving effect thereto and the application of the proceeds therefrom, either (i) if the Fixed Charge Coverage Ratio for the IssuerCompany’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 2.0 to 1.0, or determined on a pro forma basis (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as including a pro forma application of the end of net proceeds therefrom), as if the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is had been incurred or such the Disqualified Stock or the preferred stock is had been issued, as the case may be, would have been less than or equal to 1.75 to 1.0.
(b) Section 4.10(a) shall not prohibit at the incurrence of any Indebtedness that meets the following criteria or the issuance of any preferred stock that meets the following criteria, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or any Restricted Subsidiary of Indebtedness pursuant to Credit Facilities or Project Loans, including any Guarantee beginning of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, in an aggregate principal amount at any one time outstanding not to exceed the greater of $1,500 million and 22.5% of Consolidated Tangible Assets at the time of incurrence;
(2) the Existing Indebtedness;
(3) the incurrence by the Issuer of Indebtedness represented by the Initial Notes issued on the Issue Date and replacement Notes in respect thereof, if any (and the incurrence by any Subsidiary Guarantor of any related Note Guarantee);
(4) the incurrence or issuance by the Issuer or any Restricted Subsidiary of the Issuer of Indebtedness (including Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction), Disqualified Stock or preferred stock, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development or improvement of plant, equipment or other property used or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvement, in an aggregate principal amount at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5) the incurrence by the Issuer or any Restricted Subsidiary of Permitted Refinancing Indebtedness in exchange for, or incurred to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause (5) or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4) or (11) of this Section 4.10(b);
(6) the incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposes;
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, selffour-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) 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 (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Issuer or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and 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 Issuer, or the Note Guarantee, in the case of a Subsidiary Guarantor; and
(i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, which new incurrence is not permitted by this clause (21);
(22) the issuance by any Restricted Subsidiary to the Issuer or to any other Restricted Subsidiary of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be subordinated in right of payment to the Notes or the Note Guarantee, as the case may be, and (b) Non-Guarantors of Indebtedness incurred by other Non-Guarantors in accordance with the provisions of this Indenture; andquarter period.
Appears in 2 contracts
Samples: Term Loan Agreement (Carnival PLC), Term Loan Agreement (Carnival PLC)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt)Indebtedness) and that the Company shall not issue any Disqualified Stock, and shall not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that (x) the Issuer Company and its Restricted Subsidiaries the Guarantors may incur Indebtedness (including Acquired DebtIndebtedness) and (y) the Issuer’s Restricted Subsidiaries Company may issue shares of preferred stockDisqualified Stock, if, after giving effect thereto and the application of the proceeds therefrom, either (i) in each case if the Fixed Charge Coverage Ratio for the Issuer’s Company's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock Disqualified Stock is issued, as the case may be, issued would have been at least 2.0 to 1.0, or determined on a pro forma basis (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as including a pro forma application of the end of net proceeds therefrom), as if the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred had been incurred, or such preferred stock is the Disqualified Stock had been issued, as the case may be, would have been less than or equal to 1.75 to 1.0.at the beginning of such four-quarter period. The foregoing provisions will not apply to:
(b) Section 4.10(a) shall not prohibit the incurrence of any Indebtedness that meets the following criteria or the issuance of any preferred stock that meets the following criteria, as applicable (collectively, “Permitted Debt”):
(1i) the incurrence by the Issuer or any Restricted Subsidiary Company of Indebtedness pursuant to under the New Senior Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt (and guarantees thereof by the Issuer or any Restricted Subsidiary, in an aggregate principal amount at any one time outstanding not to exceed the greater of $1,500 million and 22.5% of Consolidated Tangible Assets at the time of incurrence;
(2Guarantors) the Existing Indebtedness;
(3) the incurrence by the Issuer of Indebtedness represented by the Initial Notes issued on the Issue Date and replacement Notes in respect thereof, if any (and the incurrence by any Subsidiary Guarantor of any related Note Guarantee);
(4) the incurrence or issuance by the Issuer or any Restricted Subsidiary of the Issuer of Indebtedness (including Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction), Disqualified Stock or preferred stock, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development or improvement of plant, equipment or other property used or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvement, in an aggregate principal amount at any time outstanding, together outstanding (with any Permitted Refinancing Indebtedness in respect thereof, letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Subsidiaries thereunder) not to exceed the greater of (x) $25.0 600.0 million and 1.0(y) the sum of 80% of Consolidated Tangible Assets at the time of incurrence;
(5) the incurrence by the Issuer or any Restricted Subsidiary of Permitted Refinancing Indebtedness in exchange for, or incurred to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause (5) or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4) or (11) of this Section 4.10(b);
(6) the incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposes;
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion Eligible Receivables and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) 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 (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 million and 3.065% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliersEligible Inventory, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Issuer or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and subordinated in right of payment to the prior payment in full in cash of all Obligations then due with respect to the Notesless, in the case of the Issuer, or the Note Guarantee, in the case each of a Subsidiary Guarantor; and
(i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, which new incurrence is not permitted by this clause (21);
(22x) the issuance by any Restricted Subsidiary to the Issuer or to any other Restricted Subsidiary of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this and clause (22y);
(23) Guarantees (other than Guarantees , the aggregate amount of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be subordinated in right of payment to the Notes or the Note Guarantee, as the case may be, and (b) Non-Guarantors of Indebtedness incurred by other Non-Guarantors in accordance with the provisions of this Indenture; andall Net
Appears in 2 contracts
Samples: Indenture (Pillowtex Corp), Indenture (Tennessee Woolen Mills Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer Company
(i) shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guaranty or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt), and
(ii) shall not issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Issuer Company and its Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) and the Issuer’s Restricted Subsidiaries may or issue shares of preferred stock, if, after giving effect thereto and the application of the proceeds therefrom, either (i) Disqualified Stock if the Fixed Charge Coverage Ratio for the Issuer’s Company's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock Disqualified Stock is issued would have been at least 2.0 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock had been issued, as the case may be, would have been at least 2.0 to 1.0, or (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as beginning of the end of the Issuer’s most recently ended fiscal such four-quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been less than or equal to 1.75 to 1.0period.
(b) The provisions of Section 4.10(a4.09(a) hereof shall not prohibit the incurrence apply to any of any Indebtedness that meets the following criteria or the issuance of any preferred stock that meets the following criteria, as applicable (collectively, “"Permitted Debt”"):
(1i) the incurrence by the Issuer Company or any Restricted Subsidiary of its Subsidiaries of revolving credit Indebtedness and letter of credit obligations pursuant to the Revolving Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, Agreement in an aggregate principal amount not to exceed at the time of incurrence thereof the greater of (x) $275.0 million or (y) 70% of inventory plus 85% of accounts receivable (each as determined in accordance with GAAP, but excluding accounts receivable that are past due by more than 60 days, other than by reason of any Bankruptcy Law) at any one time outstanding not to exceed outstanding, provided that such $275.0 million specified in clause (i)(x) above shall be permanently reduced by the greater aggregate amount of $1,500 million Indebtedness of all Receivables Subsidiaries of the Company and 22.5% of Consolidated Tangible Assets at the time of incurrenceits Subsidiaries;
(2ii) the incurrence by the Company and its Subsidiaries of the Existing Indebtedness;
(3iii) the incurrence by the Issuer Company of Indebtedness represented by the Initial Notes issued on Debentures and by Finlay Jewelry of Indebtedness represented by the Issue Date and replacement Notes in respect thereof, if any Senior Notes;
(and iv) the incurrence by any Subsidiary Guarantor Finlay Jewelry of any related Note Guarantee)Indebtedness or other obligations in an aggregate principal amount of up to the greater of (x) $37.0 million and (y) 90% of the fair market value of the fine gold content of specified Consignment Inventory eligible to be consigned under (a) the Gold Consignment Agreement or (b) a substantially similar gold consignment agreement that Finlay Jewelry may enter into subsequent to the date of this Indenture which provides for the transfer of title to the gold content of Consignment Inventory from the relevant vendor to a gold consignor; provided that such $37.0 million specified in clause (x) above shall be permanently reduced by the aggregate amount of all Net Proceeds of Asset Sales applied to repay such Indebtedness pursuant to Section 4.10(b)(i) hereof;
(4v) the incurrence or issuance by the Issuer Company or any Restricted Subsidiary of the Issuer its Subsidiaries of Indebtedness (including represented by Capital Lease Obligations and in aggregate principal amount not to exceed $4.0 million at any time outstanding;
(vi) the incurrence by the Company or any of its Subsidiaries of Indebtedness incurred in connection with a sale/leaseback transaction), Disqualified Stock represented by mortgage financings or preferred stockpurchase money obligations, in each case, case incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development construction or improvement of plantproperty, plant or equipment used in the business of the Company or other property used or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvementSubsidiary, in an aggregate principal amount not to exceed $4.0 million at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5vii) the incurrence by the Issuer Company or any Restricted Subsidiary of its Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or incurred to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause (5) or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4) or (11) of this Section 4.10(b);
(6viii) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Hedging intercompany Indebtedness between or among the Company and any of its Wholly Owned Subsidiaries; provided, however, that (x) if the Company is the obligor on such Indebtedness, such Indebtedness is expressly subordinate (in accordance with the terms of this Indenture) to the payment in full of all Obligations with respect to the Debentures and (y)
(A) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Wholly Owned Subsidiary of the Company and (B) any sale or other transfer of any such Indebtedness to a Person that is not for speculative purposeseither the Company or a Wholly Owned Subsidiary of the Company shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Subsidiary, as the case may be;
(7ix) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred for the purpose of fixing or hedging interest rate risk with respect to any floating rate Indebtedness that is permitted by the terms of this Indenture to be outstanding;
(x) the incurrence by the Company or any of its Subsidiaries of Hedging Obligations that are incurred for the purpose of fixing or hedging commodity price risk, entered into in the ordinary course of business and not for speculative purposes, to protect against fluctuations in the prices of raw materials used in the Company's or such Subsidiary's business in amounts reasonably related to such business;
(xi) the incurrence by the Company or any of its Subsidiaries of Hedging Obligations that are incurred for the purpose of fixing or hedging foreign exchange rate risk, entered into in the ordinary course of business and not for speculative purposes and in amounts reasonably related to the businesses of the Company and its Subsidiaries;
(xii) the incurrence by the Company or any of its Subsidiaries of Acquired Debt of a Person incurred prior to the date upon which such Person was (or such Person's assets were) acquired by the Company or any of its Subsidiaries (excluding Indebtedness incurred by such Person in connection with, or in contemplation of, such acquisition) in an aggregate principal amount not to exceed $10.0 million at any one time outstanding;
(xiii) the incurrence by the Company or any of its Subsidiaries of Indebtedness in respect of workers’ worker's compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bondsperformance, surety bonds, appeal bonds, performance, and similar bonds and completion and compliance guarantees provided by the Company or other similar obligations incurred any of its Subsidiaries in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) xiv) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness arising from any agreement entered into by the Company or any of its Subsidiaries providing for indemnification, purchase price adjustment or similar obligations, in each case incurred or assumed in connection with any asset sale;
(xv) the incurrence of Indebtedness by the Company or any of its Subsidiaries in connection with a Guarantee of any Indebtedness of the Company or any of its Subsidiaries that was permitted to be incurred by another provision of this Section 4.09;
(xvi) the incurrence by the Company or any of its Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business; provided, so long as however, that such Indebtedness is extinguished within five Business Days;Days of incurrence; and
(9xvii) the incurrence by the Company or any of its Subsidiaries of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, (in each case, incurred or assumed in connection with the disposition or acquisition of addition to Indebtedness permitted by any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms other clause of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(aSection 4.09(b) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, outstanding not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;40.0 million.
(14c) the incurrence For purposes of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection determining compliance with the borrowing provisions of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures4.09(b), in the event that an amount not to exceed at any time outstanding item of Indebtedness meets the greater criteria of $100.0 million and 2.5% of Consolidated Tangible Assets more than one of the Issuer at categories of Permitted Debt described in Sections 4.09(b)(i) through (xvii) above or is entitled to be incurred pursuant to Section 4.09(a) hereof, the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Issuer or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and subordinated in right of payment to the prior payment in full in cash of all Obligations then due with respect to the NotesCompany shall, in the case its sole discretion, classify such item of the Issuer, or the Note Guarantee, in the case of a Subsidiary Guarantor; and
(i) any subsequent issuance or transfer of Equity Interests that results Indebtedness in any manner that complies with the provisions of this Section 4.09 and such item of Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness will be treated as having been incurred pursuant to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new incurrence only one of such Indebtedness by the Issuer clauses or such Restricted Subsidiary, as the case may be, which new incurrence is not permitted by this clause (21);
(22pursuant to Section 4.09(a) the issuance by any Restricted Subsidiary to the Issuer or to any other Restricted Subsidiary of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of hereof. Indebtedness permitted to be incurred by the Issuer pursuant to Sections 4.09(b)(i) through (xvii) above may be incurred pursuant to one agreement or any Restricted Subsidiary of the Issuer in accordance several agreements with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be subordinated in right of payment to the Notes one lender or the Note Guarantee, as the case may be, and (b) Non-Guarantors of Indebtedness incurred by other Non-Guarantors in accordance with the provisions of this Indenture; andseveral lenders.
Appears in 2 contracts
Samples: Indenture (Finlay Enterprises Inc /De), Indenture (Finlay Enterprises Inc /De)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer Company shall not, not and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company shall not issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Issuer and its Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Issuer’s Restricted Subsidiaries Guarantors may incur Indebtedness (including Acquired Debt) or issue shares of preferred stock, ifif the Leverage Ratio, as of the Calculation Date, would have been no greater than (i) 4.25 to 1 in the case of any incurrence or issuance on or before December 31, 2013, (ii) 4.00 to 1 in the case of any incurrence or issuance on or after giving effect thereto January 1, 2014 and on or before December 31, 2014, and (iii) 3.50 to 1 in the case of any incurrence or issuance on or after January 1, 2015, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), either (i) as if the Fixed Charge Coverage Ratio for the Issuer’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is had been incurred or such the Disqualified Stock or the preferred stock is had been issued, as the case may be, would have been at least 2.0 to 1.0, or (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as of the end of the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been less than or equal to 1.75 to 1.0Calculation Date.
(b) The provisions of Section 4.10(a4.09(a) hereof shall not prohibit prohibit, so long as no Default or Event of Default has occurred and is continuing, the incurrence of any Indebtedness that meets of the following criteria or the issuance items of any preferred stock that meets the following criteria, as applicable Indebtedness (collectively, “Permitted Debt”):
(1i) the incurrence by the Issuer or any Company and its Restricted Subsidiary Subsidiaries of Indebtedness pursuant to Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, in an aggregate principal amount at any one time outstanding not to exceed the greater of $1,500 million and 22.5% of Consolidated Tangible Assets at the time of incurrence;
(2) the Existing Indebtedness;
(3ii) the incurrence by the Issuer Company and the Guarantors of Indebtedness represented by the Initial Notes and the related Note Guarantees to be issued on in accordance with the Issue Date terms and replacement Notes in respect thereof, if any conditions of the Plan;
(and iii) the incurrence by any Subsidiary Guarantor of any related Note Guarantee);
(4) the incurrence or issuance by the Issuer Company or any of its Restricted Subsidiary of the Issuer Subsidiaries of Indebtedness (including represented by Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction)Obligations, Disqualified Stock financings or preferred stockpurchase money obligations, in each case, incurred or issued for the purpose of financing all or any part of the purchase price (whether in an asset acquisition or acquisition of Equity Interests) or cost of design, construction, lease, installation, development installation or improvement of plantproperty, plant or equipment or other property used or useful in a the Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development the Company or improvementany of its Restricted Subsidiaries, in an aggregate principal amount amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (iii), not to exceed U.S.$15,000,000 at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5iv) the incurrence by the Issuer Company or any of its Restricted Subsidiary Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or incurred the net proceeds of which are used to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), the first paragraph of this clause covenant or clauses (5) or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Datei), (3), (4ii) or (11iii) of this Section 4.10(b4.09(b);
(6v) the incurrence by the Issuer Company or any of its Wholly-Owned 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, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and
(B) (1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Wholly-Owned Restricted Subsidiary of the Company and (2) 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, not permitted by this clause (v); and
(C) such Indebtedness is otherwise incurred in accordance with Section 4.23 hereof.
(vi) the issuance by any of the Company’s Wholly-Owned Restricted Subsidiaries to the Company or to any of its Wholly-Owned Restricted Subsidiaries that is a Guarantor of shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Wholly-Owned Restricted Subsidiary of the Company that is a Guarantor;
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Wholly-Owned Restricted Subsidiary of the Company that is a Guarantor, and
(C) 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 (vi);
(vii) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations for the purpose of managing the Company’s (or any Restricted Subsidiary’s) exposure to fluctuations in interest rates with respect to Indebtedness permitted to be Incurred by the Company pursuant to this Indenture or protecting the Company (or its Restricted Subsidiaries) against currency fluctuations in the ordinary course of business and not for speculative purposes;
(7viii) the guarantee by the Company or any of the Guarantors of Indebtedness of the Company or a Restricted Subsidiary of the Company that was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(ix) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business in respect of workers’ compensation claims, claims or self-insurance obligationsinsurance, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such reimbursement type obligations are reimbursed within 30 days following such drawing or incurrenceregarding workers’ compensation claims;
(8) x) the incurrence by the Issuer Company or any Restricted Subsidiary of its Indebtedness consisting of performance and other similar bonds and reimbursement obligations Incurred by the Company or any Restricted Subsidiaries Subsidiary securing the performance of contractual, franchise, concession or license obligations of the Company or a Restricted Subsidiary;
(xi) Attributable Debt with Respect to a Sale and Leaseback Transaction to the extent such Sale and Leaseback Transaction complies with the provisions under Section 4.20;
(xii) 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 in the ordinary course of businessbusiness provided, so long as however, that such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16xiii) Indebtedness of the Issuer Company, to the extent the net proceeds thereof in their entirety are (i) used solely to purchase Notes tendered in a Change of Control Offer or any Restricted Subsidiary of (ii) concurrently deposited to defease the Issuer Notes as described under Article XII hereof;
(xiv) Indebtedness consisting of (ai) the financing of insurance premiums or (bii) take-or-take or pay obligations contained in supply arrangementsagreements, in each case in the ordinary course of business;; and
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21xv) the incurrence by the Issuer Company or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiaries; providedSubsidiaries of additional Indebtedness in an aggregate principal amount at any time outstanding, howeverincluding all Permitted Refinancing Indebtedness incurred to renew, that:
refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (axv), but excluding the indebtedness permitted by clauses (i) if the Issuer or through (xiv), not to exceed U.S.$20,000,000. The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and contractually 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 any other Indebtedness of the Issuer, Company or the Note Guarantee, in the case of a Subsidiary Guarantor; and
(i) any subsequent issuance or transfer of Equity Interests that results in any such Guarantor unless such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, which new incurrence is not permitted by this clause (21);
(22) the issuance by any Restricted Subsidiary to the Issuer or to any other Restricted Subsidiary of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms. 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 (i) through (xv) above or is entitled to be incurred pursuant to Section 4.09(a) hereof, the Note GuaranteeCompany shall be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, the reclassification of accounts payable as Indebtedness and the payment of dividends on Disqualified Stock or preferred stock of Restricted Subsidiaries in the form of additional shares of the same class of Disqualified Stock or preferred stock of Restricted Subsidiaries will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock or preferred stock of Restricted Subsidiaries for purposes of this Section 4.09; 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. 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. 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. 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 determined as the average daily observed currency exchange rates reported by the Federal Reserve Bank of New York for the trailing 30 calendar day period, including the date of incurrence, in the case may beof term Indebtedness, and (b) Non-Guarantors or first committed, in the case of revolving credit Indebtedness. The principal amount of any Indebtedness incurred by to refinance other Non-Guarantors Indebtedness, if incurred in accordance with a different currency from the provisions Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such refinancing indebtedness is denominated calculated based on the relevant currency exchange rates as calculated in the first sentence of this Indenture; andparagraph.
Appears in 2 contracts
Samples: Indenture (Maxcom Telecommunications Inc), Indenture (Maxcom Telecommunications Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer OI Group shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, (collectively, “incur”) with respect to any Indebtedness (including Acquired Debt), and OI Group shall not issue any Disqualified Stock and OI Group shall not permit any of its Restricted Subsidiaries to issue any shares of Disqualified Stock or preferred stock; provided, however, that the Issuer OI Group and any of its Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) and the Issuer’s Restricted Subsidiaries may issue shares of preferred stock, if, after giving effect thereto and the application of the proceeds therefrom, either (i) if the Fixed Charge Coverage Ratio for the IssuerOI 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 preferred stock is issued, as the case may be, would have been at least 2.0 2.00 to 1.01.00, or determined on a pro forma basis (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as including a pro forma application of the end of net proceeds therefrom), as if the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is had been incurred or at the beginning of such preferred stock is issued, as the case may be, would have been less than or equal to 1.75 to 1.0.
(b) four-quarter period. The first paragraph of this Section 4.10(a) 4.13 shall not prohibit the incurrence of any Indebtedness that meets of the following criteria or the issuance items of any preferred stock that meets the following criteria, as applicable Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer OI Group or any its Restricted Subsidiary Subsidiaries of Indebtedness pursuant to under Credit Facilities or Project Loans, including any Guarantee (and the incurrence of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, 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 Company and its Restricted Subsidiaries thereunder) not to exceed the greater $4.5 billion (of which not more than $1,500 million and 22.5% 1.75 billion of Consolidated Tangible Assets at the time of incurrencesuch Indebtedness shall be incurred by Restricted Subsidiaries that are not Guarantors);
(2) the incurrence by OI Group and any Restricted Subsidiary of OI Group of the Existing Indebtedness;
(3) the incurrence by OI Group, the Issuer Company and the Guarantors of Indebtedness represented by the Initial Notes and the related Guarantees to be issued on the Issue Date and replacement Notes in respect thereof, if any (the Exchange Securities and the incurrence by any Subsidiary Guarantor of any related Note Guarantee)Guarantees to be issued pursuant to the Registration Rights Agreement;
(4) the incurrence or issuance by the Issuer OI Group or any of its Restricted Subsidiary of the Issuer Subsidiaries of Indebtedness (including represented by Capital Lease Obligations and Obligations, in an aggregate principal amount at any time outstanding, including all Permitted Refinancing Indebtedness incurred in connection with a sale/leaseback transactionto refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), Disqualified Stock not to exceed 3.0% of Tangible Assets;
(5) the incurrence by OI Group or preferred stock, in each case, any of its Restricted Subsidiaries of Indebtedness incurred or issued for the purpose of financing to finance all or any part of the purchase price or cost of design, construction, lease, installation, development construction or improvement of plantproperty, plant or equipment used in the business of OI Group or other property used or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvementRestricted Subsidiary, in an aggregate principal amount at any time outstanding, together with any including all Permitted Refinancing Indebtedness in respect thereofincurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (5), not to exceed the greater of $25.0 million and 1.05.0% of Consolidated Tangible Assets at the time of incurrenceAssets, as measured after giving effect to such transaction;
(56) 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 the Issuer OI Group or any of its Restricted Subsidiary Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or incurred the net proceeds of which are or shall be used to extend, renew, refund, refinance, replace, defease refinance or discharge any replace Indebtedness (other than intercompany Intercompany Indebtedness) that was permitted by this Indenture to be incurred under the first paragraph of this Section 4.10(a), this clause (5) 4.13 or clause clauses (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (46) or (117) of this Section 4.10(b)paragraph;
(6) 8) the incurrence by the Issuer OI Group or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposes;
(7) the incurrence by the Issuer Intercompany Indebtedness between or among OI Group and any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoingOI Group only, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) 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 (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection between OI Group and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer and any of its Restricted SubsidiariesOI Inc.; provided, however, that:
(a) if OI Group, the Issuer Company or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary GuarantorIndebtedness, 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 IssuerCompany, or the Note GuaranteeGuarantees of the Notes, in the case of OI Group or a Subsidiary 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
(i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer OI Group or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer OI Group or a Restricted Subsidiary thereof, shall be deemed, in each case, to constitute a new an incurrence of such Indebtedness by the Issuer OI Group or such Restricted Subsidiary, as the case may be, which new incurrence is that was not permitted by this clause (21)8);
(229) the issuance incurrence by OI Group or any of its Restricted Subsidiaries of Hedging Obligations;
(10) 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 $1.75 billion of Indebtedness that may be incurred under clause (1) of this paragraph;
(11) (i) the Guarantee by the Company or any of the Guarantors of Indebtedness of OI Group or any Restricted Subsidiary to of OI Group and (ii) the Issuer Guarantee by any Foreign Subsidiary of Indebtedness of OI Group or to any other Restricted Subsidiary of OI Group, in each case, that was permitted to be incurred by another provision of this Section 4.13;
(12) 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 preferred stockthe 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) the incurrence by OI Group or any of 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 refund, refinance or replace any Indebtedness incurred pursuant to this clause (13), 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 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:that (i) 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;
(a15) the incurrence by OI Group or any subsequent issuance of its Restricted Subsidiaries of Indebtedness incurred or transfer deemed incurred or cash consideration received from the sale of Equity Interests that results in accounts receivable by OI Group or any such preferred stock being held by a Person other than the Issuer 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 SubsidiarySubsidiaries 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
(b18) the incurrence by OI Group or any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a its Restricted Subsidiary shall be deemedSubsidiaries of Acquired Debt, in each casean aggregate principal amount at any time outstanding, including all Permitted Refinancing Indebtedness incurred to constitute a new issuance of such preferred stock by such Restricted Subsidiaryrefund, which new issuance is not permitted by refinance or replace any Indebtedness incurred pursuant to this clause (2218);
, not to exceed 5.0% of Tangible Assets, as measured after giving effect to the transaction for which the Acquired Debt was incurred. The Company shall not incur any Indebtedness (23) Guarantees (other than Guarantees of Designated SPE including Permitted Debt) by (a) after the Issuer or Issue Date that is contractually subordinated in right of payment to any Subsidiary Guarantor of other Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions of this Indenture; provided that in the event Company unless such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be 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 Issue Date that is contractually subordinated in right of payment to any other Indebtedness of OI Group or the Note GuaranteeGuarantors, as the case may be, and unless such Indebtedness is also contractually subordinated in right of payment to the obligations under the Notes or Guarantees 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 4.13, in the event that any proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (b1) Non-Guarantors through (18) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.13, the Company shall be permitted to classify such item of Indebtedness on the date of its incurrence in any manner that complies with this Section 4.13, or later reclassify all or a portion of such item of Indebtedness. Indebtedness under Credit Facilities outstanding on the Issue Date shall be deemed to have been incurred on such date in reliance on the exception provided by other Non-Guarantors in accordance with clauses (1) or (2) of the provisions definition of this Indenture; andPermitted Debt above.
Appears in 2 contracts
Samples: Indenture (Owens Illinois Group Inc), Indenture (Owens-Illinois Healthcare Packaging Inc.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer Company
(i) shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guaranty or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt), and
(ii) shall not issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Issuer Company and its Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) and the Issuer’s Restricted Subsidiaries may or issue shares of preferred stock, if, after giving effect thereto and the application of the proceeds therefrom, either (i) Disqualified Stock if the Fixed Charge Coverage Ratio for the Issuer’s Company's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock Disqualified Stock is issued would have been at least 2.0 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock had been issued, as the case may be, would have been at least 2.0 to 1.0, or (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as beginning of the end of the Issuer’s most recently ended fiscal such four-quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been less than or equal to 1.75 to 1.0period.
(b) The provisions of Section 4.10(a4.09(a) hereof shall not prohibit the incurrence apply to any of any Indebtedness that meets the following criteria or the issuance of any preferred stock that meets the following criteria, as applicable (collectively, “"Permitted Debt”"):
(1i) the incurrence by the Issuer Company or any Restricted Subsidiary of its Subsidiaries of revolving credit Indebtedness and letter of credit obligations pursuant to the Revolving Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, Agreement in an aggregate principal amount not to exceed at the time of incurrence thereof the greater of (x) $275.0 million or (y) 70% of inventory plus 85% of accounts receivable (each as determined in accordance with GAAP, but excluding accounts receivable that are past due by more than 60 days, other than by reason of any Bankruptcy Law) at any one time outstanding not to exceed outstanding, provided that such $275.0 million specified in clause (i)(x) above shall be permanently reduced by the greater aggregate amount of $1,500 million Indebtedness of all Receivables Subsidiaries of the Company and 22.5% of Consolidated Tangible Assets at the time of incurrenceits Subsidiaries;
(2ii) the incurrence by the Company and its Subsidiaries of the Existing Indebtedness;
(3iii) the incurrence by the Issuer Company of Indebtedness represented by the Initial Notes issued on the Issue Date and replacement Notes in respect thereof, if any Notes;
(and iv) the incurrence by any Subsidiary Guarantor Finlay Jewelry of any related Note Guarantee)Indebtedness or other obligations in an aggregate principal amount of up to the greater of (x) $37.0 million and (y) 90% of the fair market value of the fine gold content of specified Consignment Inventory eligible to be consigned under (a) the Gold Consignment Agreement or (b) a substantially similar gold consignment agreement that Finlay Jewelry may enter into subsequent to the date of this Indenture which provides for the transfer of title to the gold content of Consignment Inventory from the relevant vendor to a gold consignor; provided that such $37.0 million specified in clause (x) above shall be permanently reduced by the aggregate amount of all Net Proceeds of Asset Sales applied to repay such Indebtedness pursuant to Section 4.10(b)(i) hereof;
(4v) the incurrence or issuance by the Issuer Company or any Restricted Subsidiary of the Issuer its Subsidiaries of Indebtedness (including represented by Capital Lease Obligations and in aggregate principal amount not to exceed $4.0 million at any time outstanding;
(vi) the incurrence by the Company or any of its Subsidiaries of Indebtedness incurred in connection with a sale/leaseback transaction), Disqualified Stock represented by mortgage financings or preferred stockpurchase money obligations, in each case, case incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development construction or improvement of plantproperty, plant or equipment used in the business of the Company or other property used or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvementSubsidiary, in an aggregate principal amount not to exceed $4.0 million at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5vii) the incurrence by the Issuer Company or any Restricted Subsidiary of its Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or incurred to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause (5) or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4) or (11) of this Section 4.10(b);
(6viii) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations intercompany Indebtedness between or among Finlay Enterprises, the Company and any of its Wholly Owned Subsidiaries; provided, however, that (x) if the Company
(A) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Finlay Enterprises, the Company or a Wholly Owned Subsidiary of the Company and (B) any sale or other transfer of any such Indebtedness to a Person that is not for speculative purposesFinlay Enterprises, the Company or a Wholly Owned Subsidiary of the Company shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Subsidiary, as the case may be;
(7ix) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred for the purpose of fixing or hedging interest rate risk with respect to any floating rate Indebtedness that is permitted by the terms of this Indenture to be outstanding;
(x) the incurrence by the Company or any of its Subsidiaries of Hedging Obligations that are incurred for the purpose of fixing or hedging commodity price risk, entered into in the ordinary course of business and not for speculative purposes, to protect against fluctuations in the prices of raw materials used in the Company's or such Subsidiary's business in amounts reasonably related to such business;
(xi) the incurrence by the Company or any of its Subsidiaries of Hedging Obligations that are incurred for the purpose of fixing or hedging foreign exchange rate risk, entered into in the ordinary course of business and not for speculative purposes and in amounts reasonably related to the businesses of the Company and its Subsidiaries;
(xii) the incurrence by the Company or any of its Subsidiaries of Acquired Debt of a Person incurred prior to the date upon which such Person was (or such Person's assets were) acquired by the Company or any of its Subsidiaries (excluding Indebtedness incurred by such Person in connection with, or in contemplation of, such acquisition) in an aggregate principal amount not to exceed $10.0 million at any one time outstanding;
(xiii) the incurrence by the Company or any of its Subsidiaries of Indebtedness in respect of workers’ worker's compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bondsperformance, surety bonds, appeal bonds, performance, and similar bonds and completion and compliance guarantees provided by the Company or other similar obligations incurred any of its Subsidiaries in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) xiv) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness arising from any agreement entered into by the Company or any of its Subsidiaries providing for indemnification, purchase price adjustment or similar obligations, in each case incurred or assumed in connection with any asset sale;
(xv) the incurrence of Indebtedness by the Company or any of its Subsidiaries in connection with a Guarantee of any Indebtedness of the Company or any of its Subsidiaries that was permitted to be incurred by another provision of this Section 4.09;
(xvi) the incurrence by the Company or any of its Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business; provided, so long as however, that such Indebtedness is extinguished within five Business Days;Days of incurrence; and
(9xvii) the incurrence by the Company or any of its Subsidiaries of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, (in each case, incurred or assumed in connection with the disposition or acquisition of addition to Indebtedness permitted by any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms other clause of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(aSection 4.09(b) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, outstanding not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;40.0 million.
(14c) the incurrence For purposes of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection determining compliance with the borrowing provisions of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures4.09(b), in the event that an amount not to exceed at any time outstanding item of Indebtedness meets the greater criteria of $100.0 million and 2.5% of Consolidated Tangible Assets more than one of the Issuer at categories of Permitted Debt described in Sections 4.09(b)(i) through (xvii) above or is entitled to be incurred pursuant to Section 4.09(a) hereof, the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Issuer or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and subordinated in right of payment to the prior payment in full in cash of all Obligations then due with respect to the NotesCompany shall, in the case its sole discretion, classify such item of the Issuer, or the Note Guarantee, in the case of a Subsidiary Guarantor; and
(i) any subsequent issuance or transfer of Equity Interests that results Indebtedness in any manner that complies with the provisions of this Section 4.09 and such item of Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness will be treated as having been incurred pursuant to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new incurrence only one of such Indebtedness by the Issuer clauses or such Restricted Subsidiary, as the case may be, which new incurrence is not permitted by this clause (21);
(22pursuant to Section 4.09(a) the issuance by any Restricted Subsidiary to the Issuer or to any other Restricted Subsidiary of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of hereof. Indebtedness permitted to be incurred by the Issuer pursuant to Sections 4.09(b)(i) through (xvii) above may be incurred pursuant to one agreement or any Restricted Subsidiary of the Issuer in accordance several agreements with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be subordinated in right of payment to the Notes one lender or the Note Guarantee, as the case may be, and (b) Non-Guarantors of Indebtedness incurred by other Non-Guarantors in accordance with the provisions of this Indenture; andseveral lenders.
Appears in 2 contracts
Samples: Indenture (Finlay Fine Jewelry Corp), Indenture (Finlay Enterprises Inc /De)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, create, incur, issue, assume, Guarantee or otherwise become directly or indirectlyindirectly liable, incurcontingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and shall the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stockPreferred Stock; provided, however, that the Issuer and its Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Issuer’s Restricted Subsidiaries Guarantors may incur Indebtedness (including Acquired Debt) or issue shares of preferred stockPreferred Stock, if, after giving effect thereto and the application of the proceeds therefrom, either (i) if the Fixed Charge Coverage Ratio for the IssuerCompany’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 preferred stock Disqualified Stock or such Preferred Stock is issued, as the case may be, would have been at least 2.0 to 1.0, or determined on a pro forma basis (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as including a pro forma application of the end of net proceeds therefrom), as if the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is had been incurred or such preferred stock is the Disqualified Stock or the Preferred Stock had been issued, as the case may be, would have been less than or equal to 1.75 to 1.0.
(b) Section 4.10(a) shall not prohibit at the incurrence of any Indebtedness that meets the following criteria or the issuance of any preferred stock that meets the following criteria, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or any Restricted Subsidiary of Indebtedness pursuant to Credit Facilities or Project Loans, including any Guarantee beginning of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, in an aggregate principal amount at any one time outstanding not to exceed the greater of $1,500 million and 22.5% of Consolidated Tangible Assets at the time of incurrence;
(2) the Existing Indebtedness;
(3) the incurrence by the Issuer of Indebtedness represented by the Initial Notes issued on the Issue Date and replacement Notes in respect thereof, if any (and the incurrence by any Subsidiary Guarantor of any related Note Guarantee);
(4) the incurrence or issuance by the Issuer or any Restricted Subsidiary of the Issuer of Indebtedness (including Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction), Disqualified Stock or preferred stock, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development or improvement of plant, equipment or other property used or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvement, in an aggregate principal amount at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5) the incurrence by the Issuer or any Restricted Subsidiary of Permitted Refinancing Indebtedness in exchange for, or incurred to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause (5) or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4) or (11) of this Section 4.10(b);
(6) the incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposes;
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, selffour-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) 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 (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Issuer or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and 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 Issuer, or the Note Guarantee, in the case of a Subsidiary Guarantor; and
(i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, which new incurrence is not permitted by this clause (21);
(22) the issuance by any Restricted Subsidiary to the Issuer or to any other Restricted Subsidiary of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be subordinated in right of payment to the Notes or the Note Guarantee, as the case may be, and (b) Non-Guarantors of Indebtedness incurred by other Non-Guarantors in accordance with the provisions of this Indenture; andquarter period.
Appears in 2 contracts
Samples: Indenture (Callon Petroleum Co), Indenture (Callon Petroleum Co)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer Company shall not, and 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 with respect to (or, collectively, “incur”) any Indebtedness (including Acquired Debt), ) and the Company shall not permit any of its Restricted Subsidiaries Subsidiary to issue any shares of preferred stock; provided, however, that the Issuer and its Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) and may permit a Restricted Subsidiary to incur Indebtedness or issue preferred stock if at the Issuer’s Restricted Subsidiaries may issue shares time of preferred stock, if, such incurrence or issuance and after giving effect thereto and the (including a pro forma application of the net proceeds therefrom), either (i) the Fixed Charge Coverage Leverage Ratio for the Issuer’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been at least 2.0 be less than 7.0 to 1.0, or (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as of the end of the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been less than or equal to 1.75 to 1.0.
(b) Section 4.10(a) . The foregoing limitations shall not prohibit the incurrence of any Indebtedness that meets the following criteria or the issuance of any preferred stock that meets the following criteria, as applicable (collectively, “Permitted Debt”):apply to:
(1) the incurrence by the Issuer Company or any Restricted Subsidiary of Indebtedness pursuant to and letters of credit under Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, 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 the Restricted Subsidiaries thereunder) not to exceed the greater of $1,500 million and 22.5% of Consolidated Tangible Assets at the time of incurrence3,260.0 million;
(2) the Existing Indebtednessissuance of the Note Guarantees on the date hereof;
(3) the incurrence by the Issuer of Indebtedness represented by the Initial Notes issued on the Issue Date and replacement Notes in respect thereof, if any (Company and the incurrence by any Subsidiary Guarantor Restricted Subsidiaries of any related Note Guarantee)the Existing Indebtedness;
(4) the incurrence or issuance by the Issuer or any Restricted Subsidiary of the Issuer of Indebtedness (including Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction), Disqualified Stock or preferred stock, in each case, incurred or issued for Notes on the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development or improvement of plant, equipment or other property used or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvement, in an aggregate principal amount at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrencedate hereof;
(5) the incurrence by the Issuer or any Company and the Restricted Subsidiary Subsidiaries of Permitted Capital Lease Obligations, mortgage financings and/or additional Indebtedness constituting purchase money obligations, including all Refinancing Indebtedness in exchange forincurred with respect thereto, or incurred up to extend, renew, refund, refinance, replace, defease or discharge an aggregate at any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause (5) or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds one time outstanding of the Initial Notes issued on the Issue Date), greater of (3), i) $250.0 million and (4ii) or (11) 5.0% of this Section 4.10(b)Consolidated Total Assets as of any date of incurrence;
(6) the incurrence by or issuance of Indebtedness or preferred stock between (i) the Issuer or any of its Company and the Restricted Subsidiaries of Hedging Obligations not for speculative purposesand (ii) the Restricted Subsidiaries;
(7) the incurrence by the Issuer or any of its Company and the Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred Hedging Obligations in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) the incurrence by the Issuer Company and the Restricted Subsidiaries in respect of performance bonds, bankers’ acceptances, workers’ compensation claims, surety, bid, appeal or similar bonds, completion guarantees, payment obligations in connection with self-insurance or similar obligations, and bank overdrafts (and letters of credit in respect thereof) in the ordinary course of business;
(9) the incurrence by the Company and the Restricted Subsidiaries of Indebtedness consisting of “earn-out” obligations, Guarantees, indemnities or obligations in respect of purchase price adjustments in connection with the acquisition or disposition of assets, including, without limitation, shares of Capital Stock;
(10) the incurrence by the Company 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 (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of businessfunds, so long as such Indebtedness is extinguished covered within five (5) Business Days;
(911) the incurrence Guarantee by the Company or any Subsidiary Guarantor of Indebtedness arising from agreements of the Issuer Company or a Restricted Subsidiary and the Guarantee by any non-Guarantor Subsidiary of the Issuer providing for indemnification, adjustment Indebtedness of purchase price, holdback, contingency payment obligations or similar obligationsanother non-Guarantor Subsidiary, in each case, to the extent that the Guaranteed Indebtedness was permitted to be incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms another provision of this IndentureSection 4.10; provided that immediately after giving effect to such acquisition, any of if the following Indebtedness being Guaranteed is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal contractually subordinated to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) Notes or the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would Note Guarantees, as applicable, then the Guarantee must be less than or equal subordinated to the Issuer’s actual same extent as the Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisitionGuaranteed;
(12) the incurrence by the Company and the Restricted Subsidiaries of Refinancing Indebtedness issued in exchange for, or the proceeds of which are used to repay, redeem, defease, extend, refinance, renew, replace or refund, Indebtedness (other than intercompany Indebtedness) referred to in clauses (2) through (5) above, this clause (12) or clause (13) below or that was otherwise permitted to be incurred pursuant to the Issuer or a Restricted Subsidiary test set forth in the first paragraph of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accountsthis Section 4.10; provided that such Indebtedness remains outstanding for ten Business Days or less;and
(13) the incurrence or issuance by the Issuer Company or a any Restricted Subsidiary of the Issuer 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 pursuant to this clause (13), not to exceed $50.0 million. Notwithstanding the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer foregoing, Restricted Subsidiaries that are non-Guarantor Subsidiaries will not be permitted to incur Indebtedness or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist issue preferred stock pursuant to the terms first paragraph of a joint venture agreement as a result of this Section 4.10 or clause (13) above if, after giving effect to such incurrence or issuance, the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting aggregate principal amount of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or such Restricted Subsidiaries of the Issuer of Indebtedness that are non-Guarantor Subsidiaries (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of excluding intercompany Indebtedness between or among the Issuer Company and any of its the Restricted Subsidiaries; provided) outstanding pursuant to such first paragraph or such clause, howevertogether with the aggregate liquidation preference of preferred stock issued by such Restricted Subsidiaries that are non-Guarantor Subsidiaries (excluding intercompany preferred stock issued between or among the Company and the Restricted Subsidiaries) outstanding pursuant to such provisions, that:
would exceed the greater of (ax) if $1.25 billion and (y) 1.25x Adjusted EBITDA as of any date of incurrence. The Company will not incur, and the Issuer or Company will not permit any Subsidiary Guarantor to incur, any Indebtedness that is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and contractually 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 any other Indebtedness of the Issuer, Company or the Note Guarantee, in the case of a such Subsidiary Guarantor; and
(i) any subsequent issuance or transfer of Equity Interests that results in any Guarantor unless such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, which new incurrence is not permitted by this clause (21);
(22) the issuance by any Restricted Subsidiary to the Issuer or to any other Restricted Subsidiary of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be 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 Company or a Subsidiary 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 4.10, for the Note Guaranteeavoidance of doubt, 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 (13) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.10, the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.10. Indebtedness under the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will at all times be deemed to have been incurred on such date in reliance on the exception provided by clause (1) above. The accrual of interest or preferred stock dividends, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on preferred stock or Disqualified Stock in the form of additional 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 4.10; provided, in each such case, that the amount thereof is included in the 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, the U.S. Dollar-equivalent principal amount of Indebtedness denominated in a currency other than U.S. Dollars will be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred; provided that if such Indebtedness is incurred to extend, replace, refund, refinance, renew or defease, or that is exchanged for, other Indebtedness denominated in a currency other than U.S. Dollars, and such extension, replacement, refunding, refinancing, renewal, defeasance or exchange 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 extension, replacement, refunding, refinancing, renewal, defeasance or exchange, such U.S. Dollar-denominated restriction shall be deemed not to have been exceeded so long as the case may beprincipal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being extended, and (b) Non-Guarantors replaced, refunded, refinanced, renewed, defeased or exchanged. Notwithstanding any other provision of this Section 4.10, the maximum amount of Indebtedness incurred by that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.10 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:
(1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(2) the principal amount of the Indebtedness, in the case of any other Non-Guarantors in accordance with the provisions of this IndentureIndebtedness; and
(3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(i) the Fair Market Value of such assets at the date of determination; and
(ii) the amount of the Indebtedness of the other Person.
Appears in 2 contracts
Samples: Senior Indenture (Iron Mountain Inc), Senior Indenture (Iron Mountain Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur;” with “incurrence” having a correlative meaning) any Indebtedness (including Acquired Debt), and shall 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 Issuer Company may incur Indebtedness (including Acquired Debt) and its issue Disqualified Stock, and the Company’s Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) and the Issuer’s Restricted Subsidiaries may issue shares of preferred stock, if, after giving effect thereto and the application of the proceeds therefrom, either (i) if the Fixed Charge Coverage Ratio for the IssuerCompany’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 preferred stock is issued, as the case may be, would have been at least 2.0 to 1.01, or determined on a pro forma basis (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as including a pro forma application of the end of net proceeds therefrom), as if the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is had been incurred or such the Disqualified Stock or preferred stock is had been issued, as the case may be, would have been less than or equal to 1.75 to 1.0at the beginning of such four-quarter period.
(b) Notwithstanding the foregoing, the provisions of Section 4.10(a5.7(a) shall hereof will not prohibit the incurrence of any Indebtedness that meets of the following criteria or (the issuance items of any preferred stock that meets the following criteria, Indebtedness described below in this paragraph (b) being referred to collectively as applicable (collectively, “Permitted Debt”):
(1i) the incurrence by the Issuer or Company and any Restricted Subsidiary of additional Indebtedness pursuant to and letters of credit under Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, in an aggregate principal amount at any one time outstanding under this clause (i) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed the greater of (1) $1,500 275.0 million and 22.5or (2) 25% of Consolidated Tangible Assets at Assets; provided, that the time maximum amount permitted to be outstanding under this clause (i) shall not be deemed to limit additional Indebtedness under the Credit Facilities to the extent the incurrence of incurrencesuch additional Indebtedness is permitted pursuant to any of the other provisions of this Section 5.7;
(2ii) the incurrence of Existing Indebtedness;
(3iii) the incurrence by the Issuer Company of Indebtedness represented by the Initial Notes and the related Subsidiary Guarantees to be issued on the Issue Date and replacement Notes in respect thereof, if any Date;
(and iv) the incurrence by any Subsidiary Guarantor of any related Note Guarantee);
(4) the incurrence or issuance by the Issuer Company or any Restricted Subsidiary of the Issuer Company of Indebtedness (including represented by Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction)Obligations, Disqualified Stock mortgage financings or preferred stockpurchase money obligations, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development improvement, deployment, refurbishment, modification or improvement lease of plantproperty, plant or equipment or other property furniture, fixtures and equipment, in each case used in the business of the Company or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvementRestricted Subsidiary, in an aggregate principal amount amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (iv), not to exceed $25.0 million at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5v) the incurrence by the Issuer Company or any of its Restricted Subsidiary Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or incurred the net proceeds of which are used to extend, renew, refund, refinance, replace, defease or discharge discharge, any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture Agreement to be incurred under Section 4.10(a), this clause 5.7(a) hereof or clauses (5) or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Dateii), (3iii), (4iv), (v), (xiii), (xv) or (11xvi) of this Section 4.10(b5.7(b);
(6vi) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposes;
(7) the incurrence intercompany Indebtedness owing to and held by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) 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 (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Issuer or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and 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 Issuer, or the Note Guarantee, in the case of a Subsidiary Guarantor; and
(i1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer Company or a Restricted Subsidiary and of the Company; and
(ii2) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer Company or a Restricted Subsidiary shall of the Company, will be deemed, in each case, to constitute a new an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, which new incurrence is that was not permitted by this clause (21vi);
(22vii) the issuance by any of the Company’s Restricted Subsidiary Subsidiaries to the Issuer Company or to any other of its Restricted Subsidiary Subsidiaries of shares of preferred stock; provided, however, that:
(a1) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer Company or a Restricted SubsidiarySubsidiary of the Company; and
(b2) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer Company or a Restricted Subsidiary shall of the Company, will be deemed, in each case, to constitute a new an issuance of such preferred stock by such Restricted Subsidiary, which new issuance is Subsidiary that was not permitted by this clause (22vii);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (aviii) the Issuer incurrence of a Guarantee by the Company or any Subsidiary Guarantor of its Restricted Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary of the Company that was permitted to be incurred by the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions another provision of this IndentureSection 5.7; provided that in if the event such Indebtedness that is being Guaranteed guaranteed is Subordinated Indebtedness, then the related Guarantee shall be subordinated in right of payment to the Notes same extent as the contractual subordination applicable to the Indebtedness guaranteed;
(ix) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business; provided that, upon the drawing of such letters of credit or the Note Guaranteeincurrence of such Indebtedness, such obligations are reimbursed within one year following such drawing or incurrence;
(x) the incurrence by the Company of Indebtedness to the extent that the net proceeds thereof are promptly deposited to fully defease or to fully satisfy and discharge the Notes;
(xi) Indebtedness consisting of the financing of insurance premiums in customary amounts consistent with the operations and business of the Company and its Restricted Subsidiaries in the ordinary course of business;
(xii) the incurrence by the Company or any of its Restricted Subsidiaries 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 or assumed in connection with the disposition of any business, assets or Capital Stock of a 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 its Restricted Subsidiaries in connection with such disposition;
(xiii) the incurrence of Permitted Public Finance Instruments not to exceed $175.0 million in aggregate principal amount at any one time outstanding;
(xiv) the incurrence of the EB-5 Preferred Stock; provided that if the EB-5 Preferred Stock constitutes Disqualified Stock, the aggregate liquidation preference EB-5 Preferred Stock that may be incurred pursuant to this clause 5.7(b)(xiv) shall not exceed $50.0 million;
(xv) the incurrence of Permitted Acquisition Indebtedness; and
(xvi) 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, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (xvi), not to exceed (a) the case may be, and greater of $25.0 million or (b) Non-Guarantors 10% of Indebtedness incurred by other Non-Guarantors in accordance with the Company’s Consolidated Tangible Assets.
(c) Notwithstanding the foregoing provisions of this IndentureSection 5.7, the Company will not at any time permit Consolidated Net Funded Debt to exceed the sum of (i) $300.0 million plus (ii) the aggregate principal amount of the Exempt Funded Debt. For purposes of determining compliance with this Section 5.7, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (i) through (xvi) above or is entitled to be incurred pursuant to Section 5.7(a) hereof, the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 5.7. Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Agreement will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (i) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified 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 5.7; provided, in each such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges of the Company as accrued. Notwithstanding any other provision of this Section 5.7, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 5.7 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:
(i) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(ii) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(A) the Fair Market Value of such asset at the date of determination; and
(B) the amount of the Indebtedness of the other Person; and
(iii) the principal amount of the Indebtedness, in the case of any other Indebtedness.
Appears in 2 contracts
Samples: Note Purchase Agreement (Hall of Fame Resort & Entertainment Co), Note Purchase Agreement (Hall of Fame Resort & Entertainment Co)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and shall 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 Issuer and its Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Issuer’s Restricted Subsidiaries Guarantors may incur Indebtedness (including Acquired Debt) or issue shares of preferred stock, if, after giving effect thereto and the application of the proceeds therefrom, either (i) if the Fixed Charge Coverage Ratio for the IssuerCompany’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 2.0 to 1.0, or determined on a pro forma basis (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as including a pro forma application of the end of net proceeds therefrom), as if the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is had been incurred or such the Disqualified Stock or the preferred stock is had been issued, as the case may be, would have been less than or equal to 1.75 to 1.0at the beginning of such four-quarter period.
(b) The provisions of Section 4.10(a4.09(a) shall hereof will not prohibit the incurrence of any Indebtedness that meets of the following criteria or the issuance items of any preferred stock that meets the following criteria, as applicable Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or any Restricted Subsidiary of Indebtedness pursuant to Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, in an aggregate principal amount at any one time outstanding not to exceed the greater of $1,500 million and 22.5% of Consolidated Tangible Assets at the time of incurrence;
(2) the Existing Indebtedness;
(3) the incurrence by the Issuer of Indebtedness represented by the Initial Notes issued on the Issue Date and replacement Notes in respect thereof, if any (and the incurrence by any Subsidiary Guarantor of any related Note Guarantee);
(4) the incurrence or issuance by the Issuer or any Restricted Subsidiary of the Issuer of Indebtedness (including Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction), Disqualified Stock or preferred stock, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development or improvement of plant, equipment or other property used or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvement, in an aggregate principal amount at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5) the incurrence by the Issuer or any Restricted Subsidiary of Permitted Refinancing Indebtedness in exchange for, or incurred to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause (5) or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4) or (11) of this Section 4.10(b);
(6) the incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposes;
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) 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 (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Issuer or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and 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 Issuer, or the Note Guarantee, in the case of a Subsidiary Guarantor; and
(i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, which new incurrence is not permitted by this clause (21);
(22) the issuance by any Restricted Subsidiary to the Issuer or to any other Restricted Subsidiary of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be subordinated in right of payment to the Notes or the Note Guarantee, as the case may be, and (b) Non-Guarantors of Indebtedness incurred by other Non-Guarantors in accordance with the provisions of this Indenture; and
Appears in 2 contracts
Samples: Indenture (Ion Geophysical Corp), Indenture (Coeur D Alene Mines Corp)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt), and shall 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 Issuer and its Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Issuer’s Restricted Subsidiaries Guarantors may incur Indebtedness (including Acquired Debt) or issue shares of preferred stock, if, after giving effect thereto and the application of the proceeds therefrom, either (i) if the Fixed Charge Coverage Ratio for the Issuer’s Company's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such preferred stock is issued, as the case may be, would have been at least 2.0 (a) 2.25 to 1.01, if the date of such incurrence or issuance is on or prior to December 15, 2007, or (iib) 2.50 to 1, if the Indebtedness to Consolidated Tangible Net Worth Ratio as date of such incurrence or issuance is after December 15, 2007, in each case, determined on a pro forma basis (including a pro forma application of the end of net proceeds therefrom), as if the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is had been incurred or such the Disqualified Stock or the preferred stock is had been issued, as the case may be, would have been less than or equal to 1.75 to 1.0at the beginning of such four-quarter period.
(b) The provisions of Section 4.10(a4.09(a) shall hereof will not prohibit the incurrence of any Indebtedness that meets of the following criteria or the issuance items of any preferred stock that meets the following criteria, as applicable Indebtedness (collectively, “"Permitted Debt”"):
(1) the incurrence by the Issuer or Company and any Restricted Subsidiary Guarantor of Indebtedness pursuant to and letters of credit under Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, 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 $480.0 million less the greater aggregate amount of $1,500 million all mandatory repayments of the principal of any term Indebtedness under Credit Facilities (other than repayments that are concurrently refunded or refinanced) that have been made by the Company or any of its Restricted Subsidiaries since the Issue Date and 22.5% less the aggregate amount of Consolidated Tangible Assets at all Net Proceeds of Asset Sales applied by the time Company or any of incurrenceits Restricted Subsidiaries since the Issue Date to permanently repay any term Indebtedness under a Credit Facility 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 Issuer Company and the Guarantors of Indebtedness represented by the Initial Notes and the related Note Guarantees to be issued on the Issue Date and replacement the Exchange Notes in respect thereof, if any (and the incurrence by any Subsidiary Guarantor of any related Note Guarantee)Guarantees to be issued pursuant to this Indenture and the Registration Rights Agreement;
(4) the incurrence or issuance by the Issuer Company or any of its Restricted Subsidiary of the Issuer Subsidiaries of Indebtedness (including represented by Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction)Obligations, Disqualified Stock mortgage financings, purchase money obligations or preferred stocksimilar obligations, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, leaseuse, installation, development installation or improvement of plantproperty, plant or equipment used in the business of the Company or other property used or useful in a Permitted Business which occurs within 365 days any of such purchase, design, construction, lease, installation, development or improvementits Restricted Subsidiaries, in an aggregate principal amount amount, 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 $20.0 million at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5) the incurrence by the Issuer Company or any of its Restricted Subsidiary Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or incurred the net proceeds of which are used to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause (54.09(a) hereof or clause clauses (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4), (5), (11) or (1112) of this Section 4.10(b4.09(b);
(6) the incurrence by the Issuer 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 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 shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the 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 not other than for speculative purposes;
(79) the guarantee by the Company or any of the Guarantors of Indebtedness of the Company or a Restricted Subsidiary of the Company that was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu in right of payment with the Notes, then the Guarantee shall be subordinated or pari passu in right of payment, as applicable, to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ ' compensation claims, self-insurance obligations, bankers’ ' acceptances, performance and surety bonds, completion guarantees, standby letters of credit, performance bondsstatutory claims of lessors, completion bondslicensees, bid bondscontractors, surety bondsfranchisees or customers, appeal bondsin each case, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) 11) the incurrence by the Issuer 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 in the ordinary course of businessfunds, so long as such Indebtedness is extinguished covered within five Business DaysDays after incurrence;
(912) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from agreements for indemnification or purchase price adjustment obligations of the Issuer Company or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligationsSubsidiary, in each case, incurred or assumed in connection with the acquisition or disposition or acquisition of any business, assets or Equity Interests Capital Stock of the Issuer or any such a Restricted Subsidiary; provided that the maximum liability in respect of all such obligations shall not exceed the gross proceeds actually paid or received by the Company and any Restricted Subsidiary, including the Fair Market Value of non-cash proceeds;
(1013) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness resulting from endorsements to the extent the net proceeds thereof are promptly deposited to defease the Notes or satisfy and discharge this Indenture under Article 8 or 11 hereof;
(14) the incurrence by the Company or any of negotiable its Restricted Subsidiaries of Indebtedness arising in connection with endorsement of instruments for collection deposit in the ordinary course of business;
(1115) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired incurrence by the Issuer or any Restricted Subsidiary Company of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this IndentureQualified Affiliate Debt; provided that immediately after giving effect to such acquisition, any of the following is true:and
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(1316) the incurrence or issuance by the Issuer Company of additional Indebtedness or a Disqualified Stock or by any Restricted Subsidiary of the Issuer of additional Indebtedness 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 pursuant to this clause (16), not to exceed the greater of $150.0 million 10.0 million. The Company will not incur, and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations will not permit any Guarantor to suppliersincur, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE including Permitted Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Issuer or any Subsidiary Guarantor that is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and contractually 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 any other Indebtedness of the Issuer, Company or the Note Guarantee, in the case of a Subsidiary Guarantor; and
(i) any subsequent issuance or transfer of Equity Interests that results in any such Guarantor unless such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, which new incurrence is not permitted by this clause (21);
(22) the issuance by any Restricted Subsidiary to the Issuer or to any other Restricted Subsidiary of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be 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 solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. For purposes of determining compliance with this Section 4.09, in the Note Guaranteeevent that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (16) above or is entitled to be incurred pursuant to Section 4.09(a) hereof, the Company will be permitted to classify such item of Indebtedness on the date of its incurrence in any manner that complies with this Section 4.09, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09 and such item of Indebtedness (or portion thereof, as applicable) will be treated as having been incurred pursuant to only such clause or clauses or Section 4.09(a). Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment or accretion of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on preferred stock in the form of additional shares of the same class of preferred stock will not be deemed to be an incurrence of Indebtedness or an issuance of preferred stock for purposes of this Section 4.09; provided, in each such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges of the Company as 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. The amount of any Indebtedness outstanding as of any date will be:
(1) the accreted value of the Indebtedness, in the case may beof any Indebtedness issued with original issue discount;
(2) the principal amount of the Indebtedness, and in the case of any other Indebtedness; and
(b3) Non-Guarantors in respect of Indebtedness incurred of another Person secured by other Non-Guarantors in accordance with a Lien on the provisions assets of this Indenturethe specified Person, the lesser of:
(A) the Fair Market Value of such assets at the date of determination; and
(B) the amount of the Indebtedness of the other Person.
Appears in 2 contracts
Samples: Indenture (M & F Worldwide Corp), Indenture (M & F Worldwide Corp)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Borrower will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and shall the Borrower 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 Issuer and its Restricted Subsidiaries Borrower may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the Issuer’s Restricted Subsidiaries may incur Indebtedness or issue shares of preferred stock, if, after giving effect thereto and the application of the proceeds therefrom, either (i) if the Fixed Charge Coverage Ratio for the IssuerBorrower’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding in accordance with “Other Reports” below would have been at least 2.0 to 1, determined on a pro forma basis (including a pro forma application of the date on which such net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related thereto), as if the additional Indebtedness is had been incurred (and such transaction had occurred) or such the preferred stock is or Disqualified Stock had been issued, as the case may be, would have been at least 2.0 to 1.0, or (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as beginning of such four-quarter period. The provisions described in the end of the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been less than or equal to 1.75 to 1.0.
(b) Section 4.10(a) shall paragraph will not prohibit the incurrence of any Indebtedness that meets of the following criteria or the issuance items of any preferred stock that meets the following criteria, as applicable Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or any Restricted Subsidiary of Indebtedness pursuant to Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, in an aggregate principal amount at any one time outstanding not to exceed the greater of $1,500 million and 22.5% of Consolidated Tangible Assets at the time of incurrence;
(2) the Existing Indebtedness;
(3) the incurrence by the Issuer of Indebtedness represented by the Initial Notes issued on the Issue Date and replacement Notes in respect thereof, if any (and the incurrence by any Subsidiary Guarantor of any related Note Guarantee);
(4) the incurrence or issuance by the Issuer or any Restricted Subsidiary of the Issuer of Indebtedness (including Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction), Disqualified Stock or preferred stock, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development or improvement of plant, equipment or other property used or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvement, in an aggregate principal amount at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5) the incurrence by the Issuer or any Restricted Subsidiary of Permitted Refinancing Indebtedness in exchange for, or incurred to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause (5) or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4) or (11) of this Section 4.10(b);
(6) the incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposes;
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) 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 (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Issuer or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and 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 Issuer, or the Note Guarantee, in the case of a Subsidiary Guarantor; and
(i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, which new incurrence is not permitted by this clause (21);
(22) the issuance by any Restricted Subsidiary to the Issuer or to any other Restricted Subsidiary of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be subordinated in right of payment to the Notes or the Note Guarantee, as the case may be, and (b) Non-Guarantors of Indebtedness incurred by other Non-Guarantors in accordance with the provisions of this Indenture; and
Appears in 2 contracts
Samples: Loan Agreement (Westlake Chemical Corp), Loan Agreement (Westlake Chemical Corp)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company shall not issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or shares of preferred stock; provided, however, that the Issuer and its Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) or issue shares of Disqualified Stock, and the Issuer’s any Restricted Subsidiaries Subsidiary may incur Indebtedness (including Acquired Debt), issue shares of Disqualified Stock and issue shares of preferred stock, if, after giving effect thereto and the application of the proceeds therefrom, either (i) if the Fixed Charge Coverage Ratio for the IssuerCompany’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 preferred stock is issued, as the case may be, issued would have been at least 2.0 to 1.0, or determined on a pro forma basis (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as including a pro forma application of the end of net proceeds therefrom), as if the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is had been incurred or such Disqualified Stock or preferred stock is had been issued, as the case may be, would have been less than or equal to 1.75 to 1.0.at the beginning of such four-quarter period. The first paragraph of this Section 4.09 shall not prohibit:
(b) Section 4.10(a) shall not prohibit the incurrence of any Indebtedness that meets the following criteria or the issuance of any preferred stock that meets the following criteria, as applicable (collectively, “Permitted Debt”):
(1i) the incurrence by the Issuer Company or any of its Restricted Subsidiary Subsidiaries of Indebtedness pursuant to and letters of credit under one or more Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, in an aggregate principal amount at any one time outstanding under this clause (i) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed the greater of $1,500 million and 22.5% of Consolidated Tangible Assets at the time of incurrence1,700.0 million;
(2) the Existing Indebtedness;
(3ii) the incurrence by the Issuer Company and its Restricted Subsidiaries of Existing Indebtedness (other than Indebtedness described in clauses (i), (iii) and (xviii);
(iii) the incurrence by the Company and any Guarantor of Indebtedness represented by the Initial Notes (other than Additional Notes) and the Exchange Notes issued on the Issue Date in exchange therefor and replacement Notes in respect thereof, if any (and the incurrence by any Subsidiary Guarantor Guarantees of any related Note Guarantee)the foregoing;
(4a) the incurrence or issuance by the Issuer or any Restricted Subsidiary of the Issuer of Indebtedness (including constituting Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction)(b) Indebtedness, Disqualified Stock or and preferred stock, in each case, stock incurred or issued for by the purpose of financing all Company or any part of its Restricted Subsidiaries to finance the purchase price or cost of designpurchase, construction, lease, installation, development lease or improvement of plant, property (real or personal) or equipment or (other property than software) that is used or useful in a Permitted Business which occurs within 365 days (but excluding the purchase of Capital Stock of any Person), provided that the aggregate amount of Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (iv)(b) when aggregated with the then outstanding amount of such purchase, design, construction, lease, installation, development or improvement, obligations under clause (v) incurred to refinance such obligations initially incurred in an aggregate principal amount reliance on this clause (iv)(b) does not exceed 7.5% of Consolidated Net Tangible Assets (determined as of the time of such incurrence) at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5v) the incurrence by the Issuer Company or any of its Restricted Subsidiary Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or incurred the net proceeds of which are used to extend, renew, refund, refinance, replace, defease refinance or discharge any replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause (5) v), the first paragraph of this Section 4.09 or clause clauses (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Dateii), (3iii), (4iv), (x) or (11xvi) of this Section 4.10(b)paragraph and related interest, premiums, fees and other Obligations;
(6vi) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of intercompany 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, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Notes, in the case of the Company, or the Subsidiary Guarantee, in the case of a Guarantor; and
(1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness, Disqualified Stock or preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company and (2) any sale or other transfer of any such 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 neither the Company nor a Restricted Subsidiary of the Company shall be deemed, in each case, to constitute an incurrence of such 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 (vi);
(vii) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposesObligations;
(7viii) the incurrence Guarantee by the Issuer Company or any a Restricted Subsidiary of its Restricted Subsidiaries the Company of Indebtedness of the Company or a Restricted Subsidiary of the Company that was permitted to be incurred by another provision of this Section 4.09; provided that in the event such Indebtedness that is being guaranteed is (a) pari passu with the Notes or a Subsidiary Guarantee, as the case may be, then the related Guarantee 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 such Subsidiary Guarantee, as the case may be;
(ix) 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 of unrealized losses or charges in respect of workers’ compensation claimsHedging Obligations (including those resulting from the application of ASC Topic 815 (formerly SFAS 133) and similar provisions), self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the each case will be deemed not to be an incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrencean issuance of Disqualified Stock or preferred stock for purposes of this covenant;
(8) 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 (except in the case of daylight overdraftsx) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer Company or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations earn-out or other similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests 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 Issuer or any consideration actually received (or, in the case of an acquisition, paid) by the Company and its Restricted Subsidiaries in connection with such Restricted Subsidiarytransaction;
(10xi) Indebtedness supported by one or more letters of credit 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 letter of credit provided for therein; provided, further, that upon any reduction, cancellation or termination of the applicable letter of credit, there shall be deemed to be an incurrence of Indebtedness resulting 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 replacement of such letter of credit;
(xii) Indebtedness arising from endorsements the honoring by a bank or other financial institution of negotiable instruments for collection a check, draft or similar instrument inadvertently drawn against insufficient funds in the ordinary course of business; provided, however, that such Indebtedness is extinguished within ten Business Days of incurrence;
(11xiii) Acquired Debt 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 4.09), 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 or in connection with judgments that do not result in a Default or an Event of Default and all reimbursement obligations under such letters of credit;
(xiv) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness, Disqualified Stock or preferred stock in an aggregate principal amount (or accreted value or liquidation preference, as applicable) at any time outstanding not to exceed $500.0 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 Issuer Company or its a Restricted Subsidiaries Subsidiary incurred to provide all finance an acquisition or a portion of the funds utilized to acquire (y) Persons that are acquired by the Issuer Company or any Restricted Subsidiary of or merged into the Issuer (including by way of merger, amalgamation Company or consolidation) a Restricted Subsidiary in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisitionacquisition or merger, any of the following is true:either
(a) the Issuer 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 4.10(a);4.09, or
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect is equal to such acquisition would be or greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio such ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisitionmerger;
(12xvii) Indebtedness of the Issuer Company or a any of its Restricted Subsidiaries to an Unrestricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accountsfor money borrowed; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Issuer or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and 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 Issuer, or the Note Guarantee, in the case of a Subsidiary Guarantor; and
(i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, which new incurrence is not permitted by this clause (21);
(22) the issuance by any Restricted Subsidiary to the Issuer or to any other Restricted Subsidiary of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be subordinated in right of payment to the Notes or the Note such Restricted Subsidiary’s Subsidiary Guarantee, as the case may be, 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 exercise any other remedies with respect thereto until 91 days after the Stated Maturity of the Notes; and
(bxviii) Non-Guarantors of Indebtedness incurred by the Company or any Restricted Subsidiary with respect to Digital Projector Financing in an aggregate principal amount incurred not to exceed (i) $70.0 million during the period from the Start Date to the first anniversary thereof; (ii) $70.0 million during the period from the first anniversary of the Start Date to the second anniversary of the Start Date and (iii) $60.0 million after the second anniversary of the Start 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 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 that is not a Guarantor may incur any Indebtedness if the proceeds are used to refinance Indebtedness of the Company or a Guarantor (other Non-Guarantors than a refinancing of all the Notes). For purposes of determining compliance with this Section 4.09, in accordance with the provisions event that an item of proposed Indebtedness (including Acquired Debt) meets the criteria of more than one of the categories described in clauses (i) through (xviii) above, or is entitled to be incurred pursuant to the first paragraph of this Indenture; andSection 4.09, the Company shall be permitted to classify and divide and later classify, reclassify and divide (in whole or in part in its sole discretion) such item of Indebtedness in any manner that complies with this Section 4.09, provided that all Indebtedness outstanding on the Issue Date under the Credit Agreement 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 Indebtedness outstanding on the Issue Date under the Credit Agreement. 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 shall not be deemed to be exceeded solely as a result of fluctuations in the exchange rate of currencies. The principal amount of any Disqualified Stock of the Company or a Restricted Subsidiary, or preferred stock of a Restricted Subsidiary that is not a Guarantor, will be equal to the greater of the maximum mandatory redemption or repurchase price (not including, in either case, any redemption or repurchase premium) or the liquidation preference thereof. This Indenture does not treat (i) unsecured Indebtedness as subordinated to secured Indebtedness merely because it is unsecured, (ii) 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 same collateral, (iii) any Indebtedness as subordinated to any other Indebtedness merely because of maturity date, order of payment or order of application of funds or (iv) Indebtedness that is not Guaranteed as subordinated to Indebtedness that is Guaranteed merely because of such Guarantee.
Appears in 2 contracts
Samples: Indenture (Cinemark Holdings, Inc.), Indenture (Cinemark Usa Inc /Tx)
Incurrence of Indebtedness and Issuance of Preferred Stock. (ai) The Issuer Company shall not, and shall not permit any of its Restricted Subsidiaries Subsidiary to, create, issue, assume, guarantee or in any manner become directly or indirectlyindirectly liable for the payment of, or otherwise incur (collectively, "incur"), with respect to any Indebtedness (including Acquired DebtIndebtedness and the issuance of Disqualified Stock), and shall not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, except that the Issuer Company and its Restricted Subsidiaries any Subsidiary Guarantors may incur Indebtedness (including Acquired Debt) and the Issuer’s Restricted Subsidiaries may issue shares of preferred stock, if, after giving effect thereto and at the application time of the proceeds therefromsuch event, either (i) the Fixed Charge Coverage Ratio for the Issuer’s most recently ended immediately preceding four full fiscal quarters for which internal financial statements are available immediately preceding available, taken as one accounting period, would have been equal to at least 2.0 to 1.0.
(ii) In making the date on which foregoing calculation for any four-quarter period that includes the Closing Date, pro forma effect will be given to the Transaction, as if such additional transactions had occurred at the beginning of such four-quarter period. In addition (but without duplication), in making the foregoing calculation, pro forma effect will be given to:
(1) the incurrence of such Indebtedness is and (if applicable) the application of the net proceeds therefrom, including to refinance other Indebtedness, as if such Indebtedness was incurred and the application of such proceeds occurred at the beginning of such four-quarter period;
(2) the incurrence, repayment or retirement of any other Indebtedness by the Company or its Restricted Subsidiaries since the first day of such preferred stock is issuedfour-quarter period as if such Indebtedness was incurred, repaid or retired at the beginning of such four-quarter period; and
(3) the acquisition (whether by purchase, merger or otherwise) or disposition (whether by sale, merger or otherwise) of any company, entity or business acquired or disposed of by the Company or its Restricted Subsidiaries, as the case may be, would have been since the first day of such four-quarter period, as if such acquisition or disposition occurred at least 2.0 to 1.0, the beginning of such four-quarter period. In making a computation under the foregoing clause (1) or (ii2), (A) the amount of Indebtedness to Consolidated Tangible Net Worth Ratio as under a revolving credit facility will be computed based on the average daily balance of such Indebtedness during such four-quarter period, (B) if such Indebtedness bears, at the option of the end Company, a fixed or floating rate of interest, interest thereon will be computed by applying, at the option of the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding Company, either the date on which such additional Indebtedness is incurred fixed or such preferred stock is issuedfloating rate, as and (C) the case may be, would have been less than or equal to 1.75 to 1.0.
(b) Section 4.10(a) shall not prohibit the incurrence amount of any Indebtedness that meets bears interest at a floating rate will be calculated as if the rate in effect on the date of determination had been the applicable rate for the entire period (taking into account any Hedging Obligations applicable to such Indebtedness if such Hedging Obligations have a remaining term at the date of determination in excess of 12 months).
(iii) Notwithstanding the foregoing, the Company may, and may permit its Restricted Subsidiaries to, incur the following criteria or the issuance of any preferred stock that meets the following criteria, as applicable Indebtedness (collectively, “"Permitted Debt”Indebtedness"):
(1) Indebtedness of the Company or any Subsidiary Guarantor under the Credit Agreement (and the incurrence by the Issuer or any Restricted Subsidiary Guarantor of Indebtedness pursuant to Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, guarantees thereof) in an aggregate principal amount at any one time outstanding not to exceed $375,000,000, less any amounts applied to the greater permanent reduction of $1,500 million and 22.5% such credit facilities pursuant to the provisions of Consolidated Tangible Assets at the time of incurrenceSection 5(j);
(2) Indebtedness represented by the Existing IndebtednessNotes (other than the Additional Notes) and the Guarantees;
(3) the incurrence by the Issuer of Indebtedness represented by the Initial Notes issued on the Issue Date and replacement Notes in respect thereof, if any (and the incurrence by any Subsidiary Guarantor of any related Note Guarantee)Existing Indebtedness;
(4) the incurrence or issuance by the Issuer or any Restricted Subsidiary of the Issuer of Indebtedness (including Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction), Disqualified Stock or preferred stock, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development or improvement of plant, equipment or other property used or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvement, in an aggregate principal amount at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5) the incurrence by the Issuer or any Restricted Subsidiary Company of Permitted Refinancing Indebtedness in exchange for, or incurred the net cash proceeds of which are used to extend, renew, refund, refinance, refinance or replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was is permitted by this Indenture to be incurred under Section 4.10(aclause (2) or (3) above;
(5) Indebtedness owed by the Company to any Restricted Subsidiary or owed by any Restricted Subsidiary to the Company or a Restricted Subsidiary (provided that such Indebtedness is held by the Company or such Restricted Subsidiary); provided that:
(A) any Indebtedness of the Company or any Subsidiary Guarantor owing to any such Restricted Subsidiary is unsecured and subordinated in right of payment from and after such time as the Notes shall become due and payable (whether at Stated Maturity, acceleration, or otherwise) to the payment and performance of the Company's obligations under the Notes or the Subsidiary Guarantor's obligations under its Guarantee, as the case may be; and
(B) (x) 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 thereof and (y) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary 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 (5) or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4) or (11) of this Section 4.10(b);
(6) Indebtedness of the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Subsidiary under Hedging Obligations not for speculative purposes;
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided;
(7) Indebtedness of the Company or any Restricted Subsidiary consisting of guarantees, howeverindemnities or obligations in respect of purchase price adjustments in connection with the acquisition or disposition of assets, that upon the drawing including, without limitation, shares of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrenceCapital Stock;
(8) either (A) Capitalized Lease Obligations of the incurrence by the Issuer Company or any Restricted Subsidiary or (B) Indebtedness under purchase money mortgages or secured by purchase money security interests so long as (x) such Indebtedness is not secured by any property or assets of its the Company or any Restricted Subsidiaries Subsidiary other than the property and assets so acquired and (y) such Indebtedness is created within 90 days of the acquisition of the related property; provided that the aggregate amount of Indebtedness under clauses (A) and (B) does not exceed 15% of Consolidated Tangible Assets at any one time outstanding;
(9) Guarantees by any Restricted Subsidiary made in accordance with the provisions of Section 5(s);
(10) 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 in the ordinary course of business, so long as ; provided that such Indebtedness is extinguished within five Business Days;
(9) the incurrence two business days of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of businessincurrence;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer Company or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiaries; provided, however, that:
(a) if Subsidiaries represented by letters of credit for the Issuer or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and 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 account of the Issuer, or the Note Guarantee, in the case of a Subsidiary Guarantor; and
(i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, which new in order to provide security for workers' compensation claims, payment obligations in connection with self-insurance or similar requirements in the ordinary course of business;
(12) the incurrence is not permitted of Non-Recourse Indebtedness by Permitted Joint Ventures that are Restricted Subsidiaries;
(13) Indebtedness incurred by a Receivables Subsidiary pursuant to a Receivables Program; provided that, after giving effect to any such incurrence of Indebtedness, the aggregate principal amount of all Indebtedness incurred under this clause (21);
(2213) the issuance by any Restricted Subsidiary to the Issuer or to any other Restricted Subsidiary of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiaryand then outstanding does not exceed $30,000,000; and
(b14) Indebtedness of the Company, any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is or any Permitted Joint Venture not permitted by any other clause of this clause (22);definition, in an aggregate principal amount not to exceed $30,000,000 at any one time outstanding.
(23iv) Guarantees For purposes of determining compliance with this Section 5(i), in the event that any proposed Indebtedness meets the criteria of more than one of the categories of Permitted Indebtedness described in clauses (other than Guarantees 1) through (14) of Designated SPE Debt) by (a) the Issuer Section 5(i)(iii), or any Subsidiary Guarantor of Indebtedness permitted is entitled to be incurred by pursuant to Section 5(i)(i), the Issuer Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any Restricted Subsidiary manner that complies with this covenant. Indebtedness under the Credit Agreement immediately following the Acquisition shall be deemed to have been incurred on the date of the Issuer Acquisition in accordance with reliance on the provisions exception provided by clause (1) of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be subordinated in right of payment to the Notes or the Note Guarantee, as the case may be, and (b) Non-Guarantors of Indebtedness incurred by other Non-Guarantors in accordance with the provisions of this Indenture; andSection 5(i)(iii).
Appears in 2 contracts
Samples: Note Purchase Agreement (Jw Childs Equity Partners Ii Lp), Note Purchase Agreement (Signal Medical Services)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt), and the Company shall, and shall not permit any of the Guarantors to, issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries that do not guarantee the Notes to issue any shares of preferred stock; provided, however, that the Issuer Company and its Restricted Subsidiaries any Guarantor may incur Indebtedness (including Acquired Debt) and the Issuer’s Restricted Subsidiaries may or issue shares of preferred stockDisqualified Stock, if, after giving effect thereto and the application of the proceeds therefrom, either (i) if the Fixed Charge Coverage Ratio for the Issuer’s Company's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock Disqualified Stock is issued would have been at least (a) 2.25 to 1.0, if such incurrence or issuance is on or prior to April 1, 2004 or (b) 2.50 to 1.0, if such incurrence or issuance is after April 1, 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 Disqualified Stock had been issued, as the case may be, would have been at least 2.0 to 1.0, or (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as beginning of the end of the Issuer’s most recently ended fiscal such four-quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been less than or equal to 1.75 to 1.0.period;
(b) The provisions of Section 4.10(a4.09(a) shall will not prohibit the incurrence of any Indebtedness that meets of the following criteria or the issuance items of any preferred stock that meets the following criteria, as applicable Indebtedness (collectively, “"Permitted Debt”"):
(1) the incurrence by the Issuer or Company and any Restricted Subsidiary Guarantor of additional Indebtedness pursuant to and letters of credit under Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, 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 Subsidiaries thereunder) not to exceed the greater of (x) $1,500 235.0 million (provided that such amount shall be reduced to the extent of any 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 and 22.5% shall thereafter be increased to an amount not greater than $235.0 million to the extent of Consolidated Tangible Assets at any increase in the time commitment under any Credit Facility resulting from or relating to the termination of any Qualified Receivables Transaction or the elimination of any Receivables Subsidiary) or (y) the amount of the 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 Issuer Company and the Guarantors of Indebtedness represented by the Initial Notes and the related Subsidiary Guarantees to be issued on the Issue Date and replacement Notes in respect thereof, if any (date of this Indenture and the incurrence by any Exchange Notes and the related Subsidiary Guarantor of any related Note Guarantee)Guarantees to be issued pursuant to the Registration Rights Agreement;
(4) the incurrence or issuance by the Issuer Company or any of its Restricted Subsidiary of the Issuer Subsidiaries of Indebtedness (including including, without limitation, Capital Lease Obligations and Indebtedness Obligations) incurred in connection with a sale/leaseback transaction), Disqualified Stock or preferred stock, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development construction or improvement of plantproperty, plant or equipment used in the business of the Company or other property used or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvementRestricted Subsidiary, in an aggregate principal amount amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed $10.0 million at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5) the incurrence by the Issuer Company or any of its Restricted Subsidiary Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or incurred the net proceeds of which are used to extend, renew, refund, refinance, replace, defease refinance or discharge any replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under this Section 4.10(a), this clause (54.09(a) or clause clauses (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4), (5), (10) or (1113) of this Section 4.10(b4.09(b);
(6) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposes;
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) 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 (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer Company and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Issuer Company or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary GuarantorIndebtedness, 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 IssuerCompany, or the Note GuaranteeSubsidiary Guarantee (other than in the case of intercompany Indebtedness of a Guarantor to the Company), in the case of a Subsidiary GuarantorGuarantor except to the extent such Notes are pledged as collateral for Senior Debt; and
(i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer 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 Issuer Company or a Restricted Subsidiary shall of the Company; will be deemed, in each case, to constitute a new an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, which new incurrence is that was not permitted by this clause (216);
(227) the issuance incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations in the ordinary course of business or to the extent required under the Credit Facilities;
(8) the guarantee by the Company or any of the Guarantors of Indebtedness of the Company or a Restricted Subsidiary of the Company that was permitted to be incurred by another provision of this Section 4.09;
(9) the incurrence by the Company's 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 will be deemed to constitute an incurrence of Indebtedness by a Restricted Subsidiary of the Company that was not permitted by this clause (9);
(10) the incurrence by the Company or any Restricted Subsidiary of 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 or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition; provided, however, that (i) such Indebtedness is not reflected on the balance sheet of the Company or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes 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 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 Company and/or the Restricted Subsidiary in connection with such disposition;
(11) the incurrence by any Foreign Subsidiaries of the Company 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 Indebtedness incurred pursuant to this clause (11), not to exceed $10.0 million;
(12) the incurrence by a Receivables Subsidiary of Indebtedness in a Qualified Receivables Transaction that is without recourse to the Issuer Company or to any other Restricted Subsidiary of shares the Company or their assets (other than such Receivables Subsidiary and its assets and, as to the Company or any of preferred stock; providedits Restricted Subsidiaries, howeverother than pursuant to representations, that:
(awarranties, covenants and indemnities customary for such transactions) any subsequent issuance or transfer of Equity Interests that results in and is not guaranteed by any such preferred stock being held by a Person other than the Issuer or a Restricted SubsidiaryPerson; and
(b13) the incurrence by the Company or any sale of the Guarantors of additional Indebtedness in an aggregate principal amount (or other transfer accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (13), not to exceed $7.0 million. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any such preferred stock 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 a Person that is not either the Issuer be an incurrence of Indebtedness or a Restricted Subsidiary shall be deemedan issuance of Disqualified Stock for purposes of this Section 4.09; provided, in each such case, to constitute a new issuance that the amount thereof is included in Fixed Charges of such preferred stock by such Restricted Subsidiarythe Company as accrued. For purposes of determining compliance with this Section 4.09, which new issuance in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (13) above, or is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of Indebtedness permitted entitled to be incurred pursuant to this Section 4.09(a), the Company will, in its sole discretion, be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will be deemed to have been incurred on such date in reliance on the exception provided by the Issuer or any Restricted Subsidiary clause (1) of the Issuer in accordance with the provisions definition of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be subordinated in right of payment to the Notes or the Note Guarantee, as the case may be, and (b) Non-Guarantors of Indebtedness incurred by other Non-Guarantors in accordance with the provisions of this Indenture; andPermitted Debt.
Appears in 2 contracts
Samples: Indenture (Icon Health & Fitness Inc), Indenture (Icon Health & Fitness Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Parent and the Company will not, and shall will not permit any of its their 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 shall not neither the Parent nor the Company will issue any Disqualified Stock, nor permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Issuer and its Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) and the Issuer’s Restricted Subsidiaries may issue shares of preferred stock, if, after giving effect thereto and the application of the proceeds therefrom, either (i) the Fixed Charge Coverage Ratio for the Issuer’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been at least 2.0 to 1.0, or (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as of the end of the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been less than or equal to 1.75 to 1.0.
(b) The provisions of Section 4.10(a4.09(a) shall hereof will not prohibit the incurrence of any Indebtedness that meets of the following criteria or the issuance items of any preferred stock that meets the following criteria, as applicable Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or Company and any Restricted Subsidiary Guarantor of Indebtedness pursuant and letters of credit under Credit Facilities, which may be senior in right of payment to Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted SubsidiaryNotes, 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 Parent, the Company and their Restricted Subsidiaries thereunder) not to exceed the greater $50.0 million, provided, that, not more than $25.0 million of $1,500 million and 22.5% of Consolidated Tangible Assets such Indebtedness at the any one time of incurrenceoutstanding under this clause (1) shall be term indebtedness;
(2) the incurrence by the Parent, the Company and their Restricted Subsidiaries of Existing IndebtednessIndebtedness (including Indebtedness arising under the Floating Rate Notes, the Unsecured Floating Rate Notes, and the related agreements and instruments);
(3) the incurrence by the Issuer Company and the Guarantors of Indebtedness represented by the Initial Notes and the related Note Guarantees to be issued on the Issue Date and replacement Notes in respect thereof, if any (and the incurrence by any Subsidiary Guarantor date of any related Note Guarantee)this Indenture;
(4) the incurrence or issuance by the Issuer Parent, the Company or any of their Restricted Subsidiary of the Issuer Subsidiaries of Indebtedness (including represented by Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction)Obligations, Disqualified Stock mortgage financings or preferred stockpurchase money obligations, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development installation or improvement of plantproperty, plant or equipment used in the business of the Parent, the Company or other property used or useful in a Permitted Business which occurs within 365 days any of such purchase, design, construction, lease, installation, development or improvementtheir Restricted Subsidiaries, in an aggregate principal amount amount, 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 $10.0 million at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5) Indebtedness of a Subsidiary incurred and outstanding on or prior to the date on which such Subsidiary was acquired by the Parent, the Company or a Restricted Subsidiary (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 Parent, the Company or a Restricted Subsidiary); 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 Parent, the Company or a Restricted Subsidiary, the Parent or 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 Issuer Parent, the Company or any of their Restricted Subsidiary Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or incurred the net proceeds of which are used to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause (5a) above or clause clauses (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4), (5), (6) or (1113) of this Section 4.10(b4.09(b);
(6) the incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposes;
(7) the incurrence by the Issuer Parent, the Company or any of its their Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) 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 (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer Parent, the Company and any of its the Parent’s Wholly-Owned Restricted Subsidiaries; provided, however, that:
(aA) if the Issuer Company or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee payee is not the Issuer Company or a Subsidiary Guarantor, 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 IssuerCompany, 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 Issuer Parent, the Company or a Wholly-Owned Restricted Subsidiary of the Parent and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer Parent, the Company or a Wholly-Owned Restricted Subsidiary shall of the Parent, will be deemed, in each case, to constitute a new an incurrence of such Indebtedness by the Issuer Parent, the Company or such Restricted Subsidiary, as the case may be, which new incurrence is that was not permitted by this clause (217);
(22) 8) the issuance by any of the Company’s Restricted Subsidiary Subsidiaries to the Issuer Company, the Parent or to any other of its Wholly-Owned Restricted Subsidiary Subsidiaries of 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 Issuer Parent, the Company or a Wholly-Owned Restricted SubsidiarySubsidiary of the Parent; and
(bB) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer Parent, the Company or a Wholly-Owned Restricted Subsidiary shall of the Parent, will be deemed, in each case, to constitute a new an issuance of such preferred stock by such Restricted Subsidiary, which new issuance is Subsidiary that was not permitted by this clause (22)8);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a9) the Issuer incurrence by the Parent, the Company or any Subsidiary Guarantor of their Restricted Subsidiaries of Hedging Obligations and cash management obligations in the ordinary course of business;
(10) the guarantee by the Company or any of the Guarantors of Indebtedness of the Parent, the Company or a Restricted Subsidiary of the Parent that was permitted to be incurred by the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions another provision of this IndentureSection 4.09; provided that in if the event such Indebtedness that being guaranteed is being Guaranteed is Subordinated Indebtednesssubordinated to or pari passu with the Notes, then the related Guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(11) the incurrence by the Parent, the Company or any of their Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, performance and surety bonds in the ordinary course of business;
(12) the incurrence by the Parent, the Company or any of 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 Days; and
(13) the incurrence by the Company or the Guarantors of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed $35.0 million. The Parent and the Company will not incur, and will not permit any other Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Parent, the Company or such other 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 Parent, the Company or any other Guarantor solely by virtue of being unsecured or by virtue of holders of secured Indebtedness having entered into inter-creditor agreements giving one or more of such holders priority over the Note Guaranteeother holders in the Collateral held by them or by 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 Sections 4.09(b)(1) through (13) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified 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 of any such accrual, accretion or payment is included in Fixed Charges of the Company as accrued. Notwithstanding any other provision of this Section 4.09, the maximum amount of Indebtedness that the Parent, 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. The amount of any Indebtedness outstanding as of any date will be:
(1) the accreted value of the Indebtedness, in the case may beof any Indebtedness issued with the original issue discount;
(2) the principal amount of the Indebtedness, and in the case of any other Indebtedness; and
(b3) Non-Guarantors in respect of Indebtedness incurred of another Person secured by other Non-Guarantors in accordance with a Lien on the provisions assets of this Indenturethe specified Person, the lesser of:
(A) the Fair Market Value of such assets at the date of determination; and
(B) the amount of the Indebtedness of the other Person.
Appears in 2 contracts
Samples: Indenture (Angiotech America, Inc.), Indenture (Angiotech Pharmaceuticals Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt); the Company will not, and shall will not permit any of its Restricted Subsidiaries to, issue any Disqualified Stock; and the Company will not permit any of its Restricted Subsidiaries to issue any shares of other preferred stocksecurities; provided, however, that the Issuer Company and any of its Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and any of the IssuerCompany’s Restricted Subsidiaries may issue shares of other preferred stocksecurities, if, after giving effect thereto and the application of the proceeds therefrom, either (i) the Fixed Charge Coverage Ratio for the IssuerCompany’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 other preferred stock is securities are issued, the Fixed Charge Coverage Ratio 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 Disqualified Stock or other preferred securities had been issued, as the case may be, would have been at least 2.0 to 1.0, or (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as beginning of the end of the Issuer’s most recently ended fiscal such four-quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been less than or equal to 1.75 to 1.0period.
(b) Section 4.10(a4.09(a) shall will not prohibit the incurrence of any Indebtedness that meets of the following criteria items of Indebtedness or the issuance of any preferred stock that meets the following criteria, as applicable Disqualified Stock described in clause (15) below (collectively, “Permitted Debt”):) or the issuance of any preferred securities described in clause (11) below:
(1) the incurrence by the Issuer Company or any of its Restricted Subsidiary Subsidiaries of additional Indebtedness pursuant under one or more Credit Facilities, provided that, after giving effect to Credit Facilities or Project Loansany such incurrence, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, in an aggregate principal amount at any one time 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 Subsidiaries thereunder) and then outstanding does not to exceed the greater of (a) $1,500 1,000.0 million and 22.5or (b) $475.0 million plus 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets at the time of incurrenceAssets;
(2) the incurrence by the Company or its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuer Issuers and the Guarantors of Indebtedness represented by (a) the Initial Notes and the related Subsidiary Guarantees issued on the Issue Date date of this Indenture and replacement (b) the Exchange Notes in respect thereof, if any (and the incurrence by related Subsidiary Guarantees issued pursuant to any Subsidiary Guarantor of any related Note Guarantee)Registration Rights Agreement;
(4) the incurrence or issuance by the Issuer Company or any of its Restricted Subsidiary of the Issuer Subsidiaries of Indebtedness (including represented by Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction)Obligations, Disqualified Stock mortgage financings or preferred stockpurchase money obligations, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development installation or improvement of plantproperty, plant or equipment used in the business of the Company or other property used or useful in a Permitted Business which occurs within 365 days of such purchaseRestricted Subsidiary, design, construction, lease, installation, development or improvement, in an aggregate principal amount at any time outstanding, together with any including all Permitted Refinancing Indebtedness in respect thereofincurred to extend, refinance, renew, replace, defease, refund or discharge 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 (a) $25.0 million and 1.0or (b) 2.5% of the Company’s Adjusted Consolidated Net Tangible Assets at the time of incurrencesuch time;
(5) the incurrence by the Issuer Company or any of its Restricted Subsidiary Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or incurred the net proceeds of which are used to extend, refinance, renew, refund, refinance, replace, defease defease, refund or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause (54.09(a) or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4), (5), (15) or (1116) of this Section 4.10(b4.09(b);
(6) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Hedging intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company is the obligor on such Indebtedness and a Guarantor is not the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations 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 Subsidiary Guarantee of 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 or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is neither the Company nor a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not for speculative purposespermitted by this clause (6);
(7) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of obligations under Hedging Contracts;
(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;
(9) 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;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligationsobligations or bid, bankers’ acceptancesplugging and abandonment, letters of creditappeal, performance bonds, completion bonds, bid bonds, surety bonds, appeal bondsreimbursement, performance, surety and similar bonds and completion guarantees issued or provided for the account of the Company and compliance guarantees or other similar obligations incurred 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);
(11) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any preferred securities; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that upon results in any such preferred securities being held by a Person other than the drawing Company or a Restricted Subsidiary of letters the Company; and
(b) any sale or other transfer of credit for reimbursement obligationsany such preferred securities to a Person that is neither the Company nor a Restricted Subsidiary of the Company, or the incurrence will be deemed, in each case, to constitute an issuance of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following preferred securities by such drawing or incurrenceRestricted Subsidiary that was not permitted by this clause (11);
(8) 12) the incurrence by the Issuer 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 in the ordinary course of businessfunds, so long as such Indebtedness is extinguished covered within five Business Days;
(913) the incurrence of Indebtedness any obligation arising from agreements of the Issuer Company or a any Restricted Subsidiary of the Issuer Company providing for indemnification, adjustment of purchase price, holdbackearn outs, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests Capital Stock of a Restricted Subsidiary of the Issuer or any Company in a transaction permitted by this Indenture, provided such Restricted Subsidiary;
(10) obligation is not reflected on the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock face of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion balance sheet of the funds utilized to acquire Persons that are acquired by the Issuer Company or any Restricted Subsidiary of the Issuer Company;
(including 14) the incurrence by way the Company or any of mergerits Restricted Subsidiaries of liability in respect of the Indebtedness of any Unrestricted Subsidiary or any Joint Venture but only to the extent that such liability is the result of the Company’s or any such Restricted Subsidiary’s being a general partner or member of, amalgamation or consolidation) in accordance with the terms owner of this Indenture; an Equity Interest in, such Unrestricted Subsidiary or Joint Venture and not as guarantor of such Indebtedness and provided that immediately after giving effect to any such acquisitionincurrence, the aggregate principal amount of all Indebtedness incurred under this clause (14) and then outstanding does not exceed $25.0 million;
(15) Permitted Acquisition Indebtedness; and
(16) the incurrence by the Company or any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 its Restricted Subsidiaries of additional Indebtedness pursuant to Section 4.10(a);
(b) or the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary Company of the Issuer of Indebtedness any Disqualified Stock in an aggregate principal amount amount, 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 (or accreted value, as applicable) at any time outstanding16), not to exceed the greater of (i) $150.0 50.0 million and 3.0(ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations Assets. The Company will not incur, and will not permit any Guarantor to suppliersincur, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE including Permitted Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Issuer or any Subsidiary Guarantor that is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and contractually 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 any other Indebtedness of the Issuer, Company or the Note Guarantee, in the case of a Subsidiary Guarantor; and
(i) any subsequent issuance or transfer of Equity Interests that results in any such Guarantor unless such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, which new incurrence is not permitted by this clause (21);
(22) the issuance by any Restricted Subsidiary to the Issuer or to any other Restricted Subsidiary of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be also contractually subordinated in right of payment to the Notes or the Note Guaranteeapplicable Subsidiary Guarantee on substantially identical terms; provided, as however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the case may beCompany 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 (including Acquired Debt) meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (16) above, or is entitled to be incurred pursuant to Section 4.09(a), the Company will be permitted to divide, classify, redivide and reclassify such item of Indebtedness on the date of its incurrence, or later divide, classify, redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Any Indebtedness outstanding under Credit Facilities on the date of this Indenture will initially be deemed to have been incurred on such date under Section 4.09(a). 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 (b) Non-Guarantors the payment of dividends on Disqualified Stock in the form of additional securities of the same class of Disqualified Stock will not be deemed to be an incurrence of Indebtedness incurred by other Non-Guarantors in accordance with the provisions or an issuance of Disqualified Stock for purposes of this IndentureSection 4.09; andprovided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued. 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.
Appears in 2 contracts
Samples: Indenture (Legacy Reserves Inc.), Indenture (Legacy Reserves Lp)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company shall not issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or shares of preferred stock; provided, however, that the Issuer and its Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) or issue shares of Disqualified Stock, and the Issuer’s any Restricted Subsidiaries Subsidiary may incur Indebtedness (including Acquired Debt), issue shares of Disqualified Stock and issue shares of preferred stock, if, after giving effect thereto and the application of the proceeds therefrom, either (i) if the Fixed Charge Coverage Ratio for the IssuerCompany’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 preferred stock is issued, as the case may be, issued would have been at least 2.0 to 1.0, or determined on a pro forma basis (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as including a pro forma application of the end of net proceeds therefrom), as if the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is had been incurred or such Disqualified Stock or preferred stock is had been issued, as the case may be, would have been less than or equal to 1.75 to 1.0at the beginning of such four-quarter period.
(b) Section 4.10(a4.09(a) shall not prohibit the incurrence of any Indebtedness that meets the following criteria or the issuance of any preferred stock that meets the following criteria, as applicable (collectively, “Permitted Debt”):prohibit:
(1i) the incurrence by the Issuer Company or any of its Restricted Subsidiary Subsidiaries of Indebtedness pursuant to and letters of credit under one or more Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, in an aggregate principal amount at any one time outstanding under this clause (i) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed the greater of $1,500 million and 22.5% of Consolidated Tangible Assets at the time of incurrence1,700.0 million;
(2) the Existing Indebtedness;
(3ii) the incurrence by the Issuer Company and its Restricted Subsidiaries of Existing Indebtedness (other than Indebtedness described in clauses (i), (iii) and (xviii) of this Section 4.09(b));
(iii) the incurrence by the Company and any Guarantor of Indebtedness represented by the Initial Notes issued on the Issue Date (other than Additional Notes) and replacement Notes in respect thereof, if any (and the incurrence by any Subsidiary Guarantor Guarantees of any related Note Guarantee)the foregoing;
(4a) the incurrence or issuance by the Issuer or any Restricted Subsidiary of the Issuer of Indebtedness (including Capital constituting Finance Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction)(b) Indebtedness, Disqualified Stock or and preferred stock, in each case, stock incurred or issued for by the purpose of financing all Company or any part of its Restricted Subsidiaries to finance the purchase price or cost of design, constructionpurchase, lease, installationimprovement, development remodeling or improvement refurbishing of plant, property (real or personal) or equipment or other property that is used or useful in a Permitted Business which occurs within 365 days (but excluding the purchase of Capital Stock of any Person), provided that the aggregate amount of Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (iv)(b) does not exceed 15.0% of Consolidated Net Tangible Assets (determined as of the time of such purchase, design, construction, lease, installation, development or improvement, in an aggregate principal amount incurrence) at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5v) the incurrence by the Issuer Company or any of its Restricted Subsidiary Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or incurred the net proceeds of which are used to extend, renew, refund, refinance, replace, defease refinance or discharge any replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause (5v), Section 4.09(a) or clause clauses (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Dateii), (3iii), (4iv), (x) or (11xvi) of this Section 4.10(b)4.09(b) and related interest, premiums, fees and other Obligations;
(6vi) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of intercompany 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, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Notes, in the case of the Company, or the Subsidiary Guarantee, in the case of a Guarantor; and
(B) (1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness, Disqualified Stock or preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company and (2) any sale or other transfer of any such 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 neither the Company nor a Restricted Subsidiary of the Company shall be deemed, in each case under this clause (vi)(B), to constitute an incurrence of such 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 (vi);
(vii) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposesObligations;
(7viii) the incurrence Guarantee by the Issuer Company or any a Restricted Subsidiary of its Restricted Subsidiaries the Company of Indebtedness of the Company or a Restricted Subsidiary of the Company that was permitted to be incurred by another provision of this Section 4.09; provided that in the event such Indebtedness that is being guaranteed is (a) pari passu with the Notes or a Subsidiary Guarantee, as the case may be, then the related Guarantee 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 such Subsidiary Guarantee, as the case may be;
(ix) 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 of unrealized losses or charges in respect of workers’ compensation claimsHedging Obligations (including those resulting from the application of ASC Topic 815 and similar provisions), self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the each case will be deemed not to be an incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrencean issuance of Disqualified Stock or preferred stock for purposes of this covenant;
(8) 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 (except in the case of daylight overdraftsx) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer Company or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations earn-out or other similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests 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 Issuer or any consideration actually received (or, in the case of an acquisition, paid) by the Company and its Restricted Subsidiaries in connection with such Restricted Subsidiarytransaction;
(10xi) Indebtedness supported by one or more letters of credit incurred under a Credit Facility in accordance with and pursuant to clause (i) of this Section 4.09(b); 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 letter of credit provided for therein; provided, further, that upon any reduction, cancellation or termination of the applicable letter of credit, there shall be deemed to be an incurrence of Indebtedness resulting 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 replacement of such letter of credit;
(xii) Indebtedness arising from endorsements the honoring by a bank or other financial institution of negotiable instruments for collection a check, draft or similar instrument inadvertently drawn against insufficient funds in the ordinary course of business; provided, however, that such Indebtedness is extinguished within ten Business Days of incurrence;
(11xiii) Acquired Debt 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 4.09), 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 or in connection with judgments that do not result in a Default or an Event of Default and all reimbursement obligations under such letters of credit;
(xiv) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness, Disqualified Stock or preferred stock in an aggregate principal amount (or accreted value or liquidation preference, as applicable) at any time outstanding not to exceed $600.0 million;
(xv) Construction Indebtedness and Permitted Refinancing Indebtedness incurred in respect thereof in an aggregate principal amount that does not exceed $300.0 million at any time outstanding;
(xvi) Indebtedness, Disqualified Stock or preferred stock of (x) the Issuer Company or its a Restricted Subsidiaries Subsidiary incurred to provide all finance an acquisition or a portion of the funds utilized to acquire (y) Persons that are acquired by the Issuer Company or any Restricted Subsidiary of or merged into the Issuer (including by way of merger, amalgamation Company or consolidation) a Restricted Subsidiary in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisitionacquisition or merger, any of the following is true:either
(aA) the Issuer Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to test set forth in the Issuer’s actual first sentence of this Section 4.09, or
(B) the Fixed Charge Coverage Ratio is equal to or greater than such ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisitionmerger;
(12xvii) Indebtedness of the Issuer Company or a any of its Restricted Subsidiaries to an Unrestricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accountsfor money borrowed; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Issuer or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and 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 Issuer, or the Note Guarantee, in the case of a Subsidiary Guarantor; and
(i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, which new incurrence is not permitted by this clause (21);
(22) the issuance by any Restricted Subsidiary to the Issuer or to any other Restricted Subsidiary of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be subordinated in right of payment to the Notes or the Note such Restricted Subsidiary’s Subsidiary Guarantee, as the case may be, 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 exercise any other remedies with respect thereto until 91 days after the final Stated Maturity of the Notes; and
(bxviii) Non-Guarantors of Indebtedness incurred by the Company or any Restricted Subsidiary with respect to Digital Projector Financing in an aggregate principal amount incurred not to exceed (i) $70.0 million during the period from June 9, 2009 to the first anniversary thereof; (ii) $70.0 million during the period from the first anniversary of such date to the second anniversary of such date and (iii) $60.0 million; provided that any unused or repaid amounts may be carried forward and used in subsequent periods without limitation.
(c) 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 Non-Guarantors than a refinancing of all the Notes).
(d) For purposes of determining compliance with this Section 4.09, in accordance the event that an item of proposed Indebtedness (including Acquired Debt) meets the criteria of more than one of the categories described in clauses (i) through (xviii) of Section 4.09(b), or is entitled to be incurred pursuant to Section 4.09(a), the Company shall be permitted to classify and divide and later classify, reclassify and divide (in whole or in part in its sole discretion) such item of Indebtedness in any manner that complies with this Section 4.09, provided that all Indebtedness outstanding on the provisions Issue Date under the Credit Agreement shall be deemed to have been incurred on the Issue Date pursuant to clause (i) of Section 4.09(b) and the Company shall not be permitted to later reclassify all or any portion of such Indebtedness outstanding on the Issue Date under the Credit Agreement. Notwithstanding any other provision of this Indenture; andSection 4.09, 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 the exchange rate of currencies. The principal amount of any Disqualified Stock of the Company or a Restricted Subsidiary, or preferred stock of a Restricted Subsidiary that is not a Guarantor, will be equal to the greater of the maximum mandatory redemption or repurchase price (not including, in either case, any redemption or repurchase premium) or the liquidation preference thereof.
(e) This Indenture does not treat (i) unsecured Indebtedness as subordinated to secured Indebtedness merely because it is unsecured, (ii) 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 same collateral, (iii) any Indebtedness as subordinated to any other Indebtedness merely because of maturity date, order of payment or order of application of funds or (iv) Indebtedness that is not Guaranteed as subordinated to Indebtedness that is Guaranteed merely because of such Guarantee.
Appears in 2 contracts
Samples: Indenture (Cinemark Holdings, Inc.), Indenture (Cinemark Usa Inc /Tx)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guaranty or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt), and shall not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that that, so long as no Default or Event of Default has occurred and is continuing, the Issuer Company and its Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) and the Issuer’s Restricted Subsidiaries may issue shares of preferred stock, if, after giving effect thereto and the application of the proceeds therefrom, either (i) if the Fixed Charge Coverage Ratio for the Issuer’s Company's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been at least 2.0 1.8 to 1.01, or determined on a pro forma basis (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as including a pro forma application of the end of Net Proceeds therefrom), as if the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is had been incurred or at the beginning of such preferred stock is issued, as the case may be, would have been less than or equal to 1.75 to 1.0.four-quarter period. The foregoing provisions will not apply to:
(b) Section 4.10(a) shall not prohibit the incurrence of any Indebtedness that meets the following criteria or the issuance of any preferred stock that meets the following criteria, as applicable (collectively, “Permitted Debt”):
(1i) the incurrence by the Issuer or any Company and its Restricted Subsidiary Subsidiaries of Indebtedness pursuant to the Bank Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, Facility in an aggregate principal amount outstanding at the time of any one time outstanding incurrence not to exceed the greater of $1,500 million and 22.5(x) 65% of Consolidated Tangible Assets at inventory plus 85% of accounts receivable of the time Company and its Subsidiaries (in each case as determined in accordance with GAAP, but excluding accounts receivable that are past due by more than 60 days and accounts receivable of incurrenceLily Cups, Inc. ("Lily Canada")), and (y) $215.0 million, reduced, in the case of clause (y), by the amount of the proceeds of any Asset Sales applied to (A) the repayment of principal of term loans thereunder (but only if such loans are outstanding pursuant to this clause (i) and not clause (xii) of this covenant) and (B) the permanent reduction to the revolving loan commitments thereunder (but only to the extent revolving loan commitments so reduced relate to Indebtedness outstanding pursuant to this clause (i) and not clause (xii) of this covenant;
(2ii) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3iii) the incurrence of Indebtedness represented by the Note;
(iv) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness represented by the Initial Notes issued on the Issue Date and replacement Notes in respect thereof, if any (and the incurrence by any Subsidiary Guarantor of any related Note Guarantee);
(4) the incurrence or issuance by the Issuer or any Restricted Subsidiary of the Issuer of Indebtedness (including Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction)Obligations, Disqualified Stock mortgage financings or preferred stockpurchase money obligations, in each case, case incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development construction or improvement of plantproperty, plant or equipment used in the business of the Company or other property used or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvementRestricted Subsidiary, in an aggregate principal amount not to exceed $25.0 million at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5v) the incurrence by the Issuer or any Restricted Subsidiary of Permitted Refinancing Indebtedness in exchange for, or incurred to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause (5) or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4) or (11) of this Section 4.10(b);
(6) the incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposes;
(7) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) 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 (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such a new Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance was incurred by the Issuer prior owner of such assets or a such Restricted Subsidiary prior to such acquisition by the Company or one of its Restricted Subsidiaries and was not incurred in connection with, or in contemplation of, such acquisition by the Issuer Company or one of Indebtedness in an aggregate it Restricted Subsidiaries; and provided further that the principal amount (or accreted value, as applicable) at of such Indebtedness, together with any time outstandingother outstanding Indebtedness incurred pursuant to this clause (v), does not exceed $25.0 million;
(vi) the incurrence of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries;
(vii) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Debt in exchange for, or the net proceeds of which are used to extend, refinance, renew, replace, defease or refund Indebtedness that was permitted by this Agreement to be incurred;
(viii) the incurrence by the Company's Unrestricted Subsidiaries of Non-Recourse Debt; provided, that if, and to the extent 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;
(ix) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations, performance bonds, letter of credit obligations and bank overdrafts incurred in the ordinary course of business or relating to (as determined in good faith by the Board of Directors) or required by the terms of any Indebtedness permitted to be incurred pursuant to this Section 4(e);
(x) Indebtedness of Lily Canada under the Lily Credit Facility, not to exceed the greater of $150.0 million and 3.0(1) 65% of Consolidated Tangible Assets inventory plus 85% of the Issuer accounts receivable of Lily Canada and (2) Cn. $30.0 million at the any time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliersoutstanding, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after Indebtedness is without recourse to the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money Company or any Hedging Obligations;
(16) Indebtedness of the Issuer its Subsidiaries or any Restricted Subsidiary of the Issuer consisting of their respective assets (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4than Lily Canada and its assets);
(20xi) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries Indebtedness of the Issuer of Indebtedness Global Cup, S.A. de C.V., Rentactivos, S.A. de C.V., Servicios Tanairi, S.A. de C.V. and Paper Cups de Mexico, S.A. de C.V. (other than Designated SPE Debt"Global") incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.565% of Consolidated Tangible Assets inventory plus 85% of accounts receivable of Global, provided that such Indebtedness is without recourse to the Issuer at the time Company or any of incurrence;its Subsidiaries or any of their respective assets (other than Global and its assets); and
(21xii) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer Company and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Issuer or Subsidiaries of additional Indebtedness in an aggregate amount not to exceed $25.0 million at any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and 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 Issuer, or the Note Guarantee, in the case of a Subsidiary Guarantor; and
(i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, which new incurrence is not permitted by this clause (21);
(22) the issuance by any Restricted Subsidiary to the Issuer or to time outstanding. Notwithstanding any other Restricted Subsidiary provision of shares of preferred stock; providedthis Section 4(e), however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor guarantee of Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions terms of this Indenture; provided that in Agreement at the event time such Indebtedness that is being Guaranteed is Subordinated was incurred will not constitute a separate incurrence of Indebtedness, then the related Guarantee shall be subordinated in right of payment to the Notes or the Note Guarantee, as the case may be, and (b) Non-Guarantors of Indebtedness incurred by other Non-Guarantors in accordance with the provisions of this Indenture; and.
Appears in 1 contract
Samples: Note Purchase Agreement (Sweetheart Holdings Inc \De\)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall not, and shall not permit Neither Icahn Enterprises nor any of its Restricted Subsidiaries to, directly or indirectlyGuarantor will create, incur, issue, assume, guarantee or otherwise become liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and shall not permit neither Icahn Enterprises nor any of its Restricted Subsidiaries to Guarantor will issue any shares of preferred stockDisqualified Stock; provided, however, that the Issuer and its Restricted Subsidiaries Icahn Enterprises or any Guarantor may incur Indebtedness (including Acquired Debt) and the Issuer’s Restricted Subsidiaries may or issue shares of preferred stockDisqualified Stock, if, if immediately after giving effect thereto and to the incurrence of additional Indebtedness (including Acquired Debt) or issuance of Disqualified Stock (including a pro forma application of the net proceeds therefrom), either (i) the Fixed Charge Coverage Ratio for the Issuer’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been at least 2.0 to 1.0, or (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as ratio of the end aggregate principal amount of all outstanding Indebtedness (excluding Indebtedness incurred pursuant to clauses (4), (7) and (8) of Section 4.08(b)) of Icahn Enterprises and any Guarantor, determined on a consolidated basis between Icahn Enterprises and any Guarantor but on a non-consolidated basis with the IssuerSubsidiaries of Icahn Enterprises (other than any Guarantor) and otherwise in accordance with GAAP, (including an amount of Indebtedness equal to the principal amount of any Guarantees by Icahn Enterprises or any Guarantor of any Indebtedness of a Person (that is not Icahn Enterprises or a Subsidiary) to the extent such Guarantees were not included in computing Icahn Enterprises’ or any Guarantor’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding outstanding Indebtedness) to the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may beAdjusted Controlled Entity Net Worth, would have been less than or equal 1.15 to 1.75 to 1.01.
(b) The provisions of Section 4.10(a4.08(a) shall will not prohibit the incurrence of any Indebtedness that meets of the following criteria or the issuance items of any preferred stock that meets the following criteria, as applicable Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer Icahn Enterprises or any Restricted Subsidiary Guarantor of Indebtedness represented by the Notes to be issued on the date of this Indenture and the exchange Notes to be issued pursuant to Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, in an aggregate principal amount at any one time outstanding not to exceed the greater of $1,500 million and 22.5% of Consolidated Tangible Assets at the time of incurrenceRegistration Rights Agreement;
(2) the incurrence by Icahn Enterprises or any Guarantor of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance or replace Indebtedness (other than intercompany Indebtedness) that was incurred under Section 4.08(a) or clauses (1), (2) or (9) of this Section 4.08(b) or any Existing Indebtedness;
(3) the incurrence by Icahn Enterprises or any Guarantor of intercompany Indebtedness between or among Icahn Enterprises and any of its Subsidiaries (including Icahn Enterprises Holdings) or the Issuer issuance of Indebtedness represented by the Initial Notes issued on the Issue Date and replacement Notes in respect thereof, if any (and the incurrence Disqualified Stock by any Subsidiary Guarantor of any related Note Guarantee)to Icahn Enterprises;
(4) the incurrence or issuance by the Issuer Icahn Enterprises or any Restricted Subsidiary Guarantor of the Issuer of Indebtedness (including Capital Lease Hedging Obligations and Indebtedness that are incurred in connection with a sale/leaseback transaction), Disqualified Stock or preferred stock, in each case, incurred or issued for the purpose normal course of financing all or any part of the purchase price or cost of design, construction, lease, installation, development or improvement of plant, equipment or other property used or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvement, in an aggregate principal amount at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrencebusiness;
(5) the incurrence by the Issuer Icahn Enterprises or any Restricted Subsidiary of Permitted Refinancing Indebtedness in exchange for, or incurred to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause (5) or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4) or (11) of this Section 4.10(b);
(6) the incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposes;
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) the incurrence by the Issuer 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 (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of businessfunds, so long as such Indebtedness is extinguished covered within five Business Days;
(96) the incurrence by Icahn Enterprises or any Guarantor of the Existing Indebtedness;
(7) Indebtedness arising from agreements of the Issuer any agreement entered into by Icahn Enterprises or a Restricted Subsidiary of the Issuer Icahn Enterprises Holdings providing for indemnification, purchase price adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiaryan asset sale;
(108) Indebtedness of Icahn Enterprises or any Guarantor attributable to Bad Boy Guarantees; and
(9) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer Icahn Enterprises or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 Guarantor of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of 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 Indebtedness incurred pursuant to this clause (9); not to exceed the greater $10.0 million at any one time outstanding. Neither Icahn Enterprises nor any Guarantor will incur any Indebtedness (including Permitted Debt) that is contractually subordinated in right of $150.0 million and 3.0% payment to any other Indebtedness of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer Icahn Enterprises or any Restricted Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant payment to the terms of a joint venture agreement Notes and the Note Guarantee, as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landownerapplicable, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiarieson substantially identical terms; provided, however, that:
that no Indebtedness of Icahn Enterprises or any Guarantor shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of Icahn Enterprises 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. To the extent Icahn Enterprises or any Guarantor incurs any intercompany Indebtedness, (a) if the Issuer Icahn Enterprises or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary GuarantorIndebtedness, such Indebtedness (other than intercompany Indebtedness of any Guarantor to or from Icahn Enterprises or another Guarantor) 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 Issuer, or the Note Guarantee, in the case of a Subsidiary Guarantor; and
Notes and (ib)(i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer Icahn Enterprises or a Restricted Subsidiary of Icahn Enterprises (including any Guarantor) and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer Icahn Enterprises or a Restricted Subsidiary of Icahn Enterprises (including any Guarantor) shall be deemed, in each case, to constitute a new an incurrence of such Indebtedness by Icahn Enterprises or any Guarantor, that is not intercompany Indebtedness; provided that in the Issuer case of clause (a), that no restriction on the payment of principal, interest or other obligations in connection with such Restricted Subsidiaryintercompany 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 Section 4.08, 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 (9) above or is entitled to be incurred pursuant to Section 4.08(a), in each case, as of the date of incurrence thereof, Icahn Enterprises shall, in its sole discretion, classify (or later reclassify in whole or in part, in its sole discretion) such item of Indebtedness in any manner that complies with this Section 4.08 and such Indebtedness will be treated as having been incurred pursuant to such clauses or Section 4.08(a), as the case may be, which new designated by Icahn Enterprises. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest or Other Liquidated Damages on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Stock in the form of additional shares of the same class of Disqualified Stock will not be deemed to be an incurrence is of Indebtedness or an issuance of Disqualified Stock for purposes of this Section 4.08. Notwithstanding any other provision of this Section 4.08, the maximum amount of Indebtedness that Icahn Enterprises or any Guarantor may incur pursuant to this Section 4.08 shall not permitted by this clause 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:
(21)1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(222) the issuance by any Restricted Subsidiary to principal amount of the Issuer or to Indebtedness, in the case of any other Restricted Subsidiary of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted SubsidiaryIndebtedness; and
(b3) any sale or other transfer in respect of any such preferred stock to Indebtedness of another Person secured by a Person that is not either Lien on the Issuer or a Restricted Subsidiary shall be deemedassets of the specified Person, in each case, to constitute a new issuance the lesser of:
(A) the Fair Market Value of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);assets at the date of determination; and
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (aB) the Issuer or any Subsidiary Guarantor of Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary amount of the Issuer in accordance with Indebtedness of the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be subordinated in right of payment to the Notes or the Note Guarantee, as the case may be, and (b) Non-Guarantors of Indebtedness incurred by other Non-Guarantors in accordance with the provisions of this Indenture; andPerson.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer Parent Entity and the Company shall not, and shall not permit any of its Restricted their 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 shall not issue any Disqualified Stock and shall not permit the Parent Entity to issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Issuer and its Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Issuer’s Restricted Subsidiaries Company's Subsidiary Guarantors may incur Indebtedness or issue shares of preferred stock, if, after giving effect thereto and if the application Leverage Ratio of Paperweight Development Corp. at the proceeds therefrom, either (i) time of incurrence of such Indebtedness or the Fixed Charge Coverage Ratio for the Issuer’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which issuance of such additional Indebtedness is incurred Disqualified Stock or such preferred stock is issuedstock, as the case may be, would have been at least 2.0 to 1.0, or (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as of the end of the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been less than or equal to 1.75 to 1.0.
(b) Section 4.10(a) shall not prohibit the incurrence of any Indebtedness that meets the following criteria or the issuance of any preferred stock that meets the following criteria, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or any Restricted Subsidiary of Indebtedness pursuant to Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, in an aggregate principal amount at any one time outstanding not to exceed the greater of $1,500 million and 22.5% of Consolidated Tangible Assets at the time of incurrence;
(2) the Existing Indebtedness;
(3) the incurrence by the Issuer of Indebtedness represented by the Initial Notes issued on the Issue Date and replacement Notes in respect thereof, if any (and the incurrence by any Subsidiary Guarantor of any related Note Guarantee);
(4) the incurrence or issuance by the Issuer or any Restricted Subsidiary of the Issuer of Indebtedness (including Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction), Disqualified Stock or preferred stock, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development or improvement of plant, equipment or other property used or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvement, in an aggregate principal amount at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5) the incurrence by the Issuer or any Restricted Subsidiary of Permitted Refinancing Indebtedness in exchange for, or incurred to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause (5) or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4) or (11) of this Section 4.10(b);
(6) the incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposes;
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) 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 (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by as of such date and to the Issuer or a Restricted Subsidiary use of proceeds therefrom as if the same had occurred at the beginning of the Issuer most recently ended four full fiscal quarter period of Indebtedness in an aggregate principal amount (or accreted valuePaperweight Development Corp. for which internal financial statements are available, as applicable) at any time outstanding, not to exceed the would have been no greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiaries; provided, however, thatthan:
(a) 3.25 to 1, if the Issuer such incurrence or any Subsidiary Guarantor issuance is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantorprior to September 30, such Indebtedness must be unsecured and 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 Issuer, or the Note Guarantee, in the case of a Subsidiary Guarantor; and
(i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, which new incurrence is not permitted by this clause (21)2002;
(22) the issuance by any Restricted Subsidiary to the Issuer or to any other Restricted Subsidiary of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(b) any sale 2.50 to 1, if such incurrence or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22)after September 30, 2002 but on or prior to September 30, 2003;
(23c) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer 2.25 to 1, if such incurrence or any Subsidiary Guarantor of Indebtedness permitted issuance is after September 30, 2003 but on or prior to be incurred by the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions of this IndentureSeptember 30, 2004; provided that in the event such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be subordinated in right of payment to the Notes or the Note Guarantee, as the case may be, and (b) Non-Guarantors of Indebtedness incurred by other Non-Guarantors in accordance with the provisions of this Indenture; andor
Appears in 1 contract
Samples: Indenture (Appleton Papers Inc/Wi)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt), and shall the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stockstock (other than Permitted Debt); provided, however, that the Issuer and its Restricted Subsidiaries Company and/or the Guarantors may incur additional Indebtedness (including Acquired Debt) and the Issuer’s Restricted Subsidiaries may or issue shares of preferred stockDisqualified Stock, if, after giving effect thereto and the application of the proceeds therefrom, either (i) if the Fixed Charge Coverage Ratio for the Issuer’s Company's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 2.5 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the preferred stock is or Disqualified Stock had been issued, as the case may be, would have been at least 2.0 to 1.0, or (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as of the end of the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been less than or equal to 1.75 to 1.0.
(b) Section 4.10(a) shall not prohibit the incurrence of any Indebtedness that meets the following criteria or the issuance of any preferred stock that meets the following criteria, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or any Restricted Subsidiary of Indebtedness pursuant to Credit Facilities or Project Loans, including any Guarantee beginning of such Indebtedness or four-quarter period. The Company will not incur any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, in an aggregate principal amount at any one time outstanding not to exceed the greater of $1,500 million and 22.5% of Consolidated Tangible Assets at the time of incurrence;
(2) the Existing Indebtedness;
(3) the incurrence by the Issuer of Indebtedness represented by the Initial Notes issued on the Issue Date and replacement Notes in respect thereof, if any (and the incurrence by any Subsidiary Guarantor of any related Note Guarantee);
(4) the incurrence or issuance by the Issuer or any Restricted Subsidiary of the Issuer of Indebtedness (including Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction), Disqualified Stock or preferred stock, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development or improvement of plant, equipment or other property used or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvement, in an aggregate principal amount at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5) the incurrence by the Issuer or any Restricted Subsidiary of Permitted Refinancing Indebtedness in exchange for, or incurred to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany IndebtednessDebt) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause (5) or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4) or (11) of this Section 4.10(b);
(6) the incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposes;
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) 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 (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Issuer or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and contractually 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 any other Indebtedness of the Issuer, or the Note Guarantee, in the case of a Subsidiary Guarantor; and
(i) any subsequent issuance or transfer of Equity Interests that results in any Company unless such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, which new incurrence is not permitted by this clause (21);
(22) the issuance by any Restricted Subsidiary to the Issuer or to any other Restricted Subsidiary of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be also contractually subordinated in right of payment to the Notes on substantially identical terms; provided, however, that no Indebtedness of the Company 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 the Note Guarantee, as the case may be, and (b) Non-Guarantors of Indebtedness incurred by other Non-Guarantors in accordance with the provisions of this Indenture; andbeing secured on a junior basis.
Appears in 1 contract
Samples: Indenture (Barneys New York Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt), ) and shall not permit any of its that the Company's Restricted Subsidiaries to will not issue any shares of preferred stockstock (other than to the Company or a Wholly Owned Restricted Subsidiary of the Company); provided, however, that the Issuer Company and its Restricted Subsidiaries the Guarantors may incur Indebtedness (including Acquired Debt) and if the Issuer’s Restricted Subsidiaries may issue shares of preferred stock, if, after giving effect thereto and the application of the proceeds therefrom, either (i) the Fixed Charge Consolidated Interest Coverage Ratio for the Issuer’s Company's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been at least 2.0 to 1.01, or determined on a pro forma basis (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as including a pro forma application of the end net proceeds therefrom), as if the additional Indebtedness had been incurred at the beginning of such four-quarter period. The provisions of the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been less than or equal first paragraph of this covenant will not apply to 1.75 to 1.0.
(b) Section 4.10(a) shall not prohibit the incurrence of any Indebtedness that meets of the following criteria or the issuance of any preferred stock that meets the following criteria, as applicable (collectively, “"Permitted Debt”"):
(1i) the incurrence by the Issuer or any Restricted Subsidiary Company and the Guarantors of Indebtedness pursuant to Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, in an aggregate principal amount at any one time outstanding not to exceed the greater of $1,500 million and 22.5% of Consolidated Tangible Assets at the time of incurrence;
under (2a) the Existing Indebtedness;
New Credit Facility and (3b) the incurrence by the Issuer of Indebtedness represented by the Initial Notes issued on the Issue Date and replacement Notes in respect thereof, if any (and the incurrence by any Subsidiary Guarantor of any related Note Guarantee);
(4) the incurrence or issuance by the Issuer or any Restricted Subsidiary of the Issuer of Indebtedness (including Capital Lease Obligations and purchase money financing in respect of property, plant and equipment, provided that the aggregate amount of Indebtedness incurred in connection with a sale/leaseback transaction), Disqualified Stock or preferred stock, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development or improvement of plant, equipment or other property used or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvement, in an aggregate principal amount at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not pursuant to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5) the incurrence by the Issuer or any Restricted Subsidiary of Permitted Refinancing Indebtedness in exchange for, or incurred to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause (5i) or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4) or (11) of this Section 4.10(b);
(6) the incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations shall not for speculative purposes;
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) 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 (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of (1) $100.0 230.0 million and 2.5(2) the sum of (A) 80% of Consolidated Tangible Assets the consolidated accounts receivable of the Issuer at Company as shown on the time Company's most recent balance sheet, plus (B) 60% of incurrencethe consolidated inventory of the Company as shown on the Company's most recent balance sheet, plus (C) 50% of the consolidated property, plant and equipment, net of depreciation, of the Company as shown on the Company's most recent balance sheet;
(21ii) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Issuer or any Subsidiary Guarantor is the obligor on such Indebtedness Company and the obligee is not the Issuer or a Subsidiary Guarantor, such Guarantors of Indebtedness must be unsecured and subordinated in right of payment to the prior payment in full in cash of all Obligations then due with respect to represented by the Notes, in the case of the Issuer, or the Note Guarantee, in the case of a Subsidiary Guarantor; and
(i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary Guarantees and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, which new incurrence is not permitted by this clause (21)Indenture;
(22iii) the issuance incurrence by any the Company and its Restricted Subsidiary to Subsidiaries of the Issuer or to any other Restricted Subsidiary of shares of preferred stock; provided, however, that:Existing Indebtedness;
(aiv) the incurrence by the Company and the Guarantors of additional Indebtedness in an aggregate amount not to exceed $10.0 million at any subsequent issuance or transfer time outstanding;
(v) the incurrence by the Company and the Guarantors of Equity Interests that results Indebtedness in any such preferred stock being held by a Person other than connection with the Issuer acquisition of assets or a new Restricted Subsidiary; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be subordinated in right of payment to the Notes or the Note Guarantee, as the case may be, and (b) Non-Guarantors of Indebtedness incurred by other Non-Guarantors in accordance with the provisions of this Indenture; andwas incurred
Appears in 1 contract
Samples: Indenture (Allied Holdings Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, incur, with respect to incur any Indebtedness (including Acquired Debt), and the Company shall not issue any Disqualified Stock, and shall not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that (1) the Issuer Company and its Restricted Subsidiaries any Guarantor may incur Indebtedness (including Acquired Debt) and (b) the Issuer’s Restricted Subsidiaries Company may issue shares of preferred stockDisqualified Stock, if, after giving effect thereto and the application of the proceeds therefromin each case, either (i) the Fixed Charge Charged Coverage Ratio for the Issuer’s Company's most recently ended fiscal four full fiscal quarters for which internal the Company has filed financial statements are available immediately with the Commission preceding the date on which such additional Indebtedness is incurred or such preferred stock Disqualified Stock is issued, as the case may be, would have been at least 2.0 2.25 to 1.0, or determined on a pro forma basis (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as including a pro forma application of the end of net proceeds therefrom), as if the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is had been incurred or such preferred stock is the Disqualified Stock had been issued, as the case may be, would have been less than or equal to 1.75 to 1.0at the beginning of such four-quarter period.
(b) Section 4.10(aIn addition to the foregoing, the Company and any Restricted Subsidiary (except as specified below) shall not prohibit the incurrence of any Indebtedness that meets may incur the following criteria or the issuance types of any preferred stock that meets the following criteria, as applicable (collectively, “Permitted Debt”):Indebtedness:
(1i) the incurrence by the Issuer Company or any Restricted Subsidiary Guarantor of additional Indebtedness pursuant to and letters of credit under one or more Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt and guarantees thereof by the Issuer or any Restricted Subsidiary, in an aggregate principal amount at any one time outstanding not to exceed the greater of $1,500 million and 22.5% of Consolidated Tangible Assets at the time of incurrence;
(2) the Existing Indebtedness;
(3) the incurrence by the Issuer of Indebtedness represented by the Initial Notes issued on the Issue Date and replacement Notes in respect thereof, if any (and the incurrence by any Subsidiary Guarantor of any related Note Guarantee);
(4) the incurrence or issuance by the Issuer or any Restricted Subsidiary of the Issuer of Indebtedness (including Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction), Disqualified Stock or preferred stock, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development or improvement of plant, equipment or other property used or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvement, in an aggregate principal amount at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5) the incurrence by the Issuer or any Restricted Subsidiary of Permitted Refinancing Indebtedness in exchange for, or incurred to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause (5) or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4) or (11) of this Section 4.10(b);
(6) the incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposes;
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of businessGuarantors; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) 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 (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Issuer or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and 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 Issuer, or the Note Guarantee, in the case of a Subsidiary Guarantor; and
(i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, which new incurrence is not permitted by this clause (21);
(22) the issuance by any Restricted Subsidiary to the Issuer or to any other Restricted Subsidiary of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be subordinated in right of payment to the Notes or the Note Guarantee, as the case may be, and (b) Non-Guarantors of Indebtedness incurred by other Non-Guarantors in accordance with the provisions of this Indenture; andthe
Appears in 1 contract
Samples: Indenture (Grant Prideco Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries Subsidiary to, Incur, directly or indirectly, incur, with respect to any Indebtedness (including Acquired Debt), and shall not permit any of its Restricted Subsidiaries to issue any shares of preferred stockIndebtedness; provided, however, that the Issuer Company and its the Restricted Subsidiaries may incur will be entitled to Incur Indebtedness (including Acquired Debt) and the Issuer’s Restricted Subsidiaries may issue shares of preferred stock, if, on the date of such Incurrence and after giving effect thereto and on a pro forma basis, the application of the proceeds therefrom, either (i) the Fixed Charge Consolidated Coverage Ratio for the Issuer’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been at least exceeds 2.0 to 1.0; provided, or (ii) that the amount of Indebtedness that may be incurred pursuant to Consolidated Tangible Net Worth Ratio as of the end of the Issuer’s most recently ended fiscal quarter for which internal financial statements foregoing by Restricted Subsidiaries that are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been less than or equal to 1.75 to 1.0not Guarantors shall not exceed $5.0 million at any one time outstanding.
(b) Notwithstanding Section 4.10(a) shall not prohibit 4.09(a), the incurrence Company and its Restricted Subsidiaries will be entitled to Incur any or all of any Indebtedness that meets the following criteria or the issuance of any preferred stock that meets the following criteria, as applicable (collectively, “Permitted Debt”):Indebtedness:
(1) the incurrence Indebtedness Incurred by the Issuer Company or any Restricted Subsidiary under the ABL Credit Facility and the issuance and creation of Indebtedness pursuant letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by have a principal amount equal to the Issuer or any Restricted Subsidiary, face amount thereof) in an aggregate principal amount at any one time outstanding not to exceed the greater of (A) $1,500 25.0 million and 22.5% or (B) the Borrowing Base as of Consolidated Tangible Assets at the time any date of incurrenceIncurrence;
(2) the Existing Indebtedness;
(3) the incurrence Indebtedness owed to and held by the Issuer of Indebtedness represented by the Initial Notes issued on the Issue Date and replacement Notes in respect thereof, if any (and the incurrence by any Subsidiary Guarantor of any related Note Guarantee);
(4) the incurrence Company or issuance by the Issuer or any a Restricted Subsidiary of the Issuer of Indebtedness (including Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction), Disqualified Stock or preferred stock, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development or improvement of plant, equipment or other property used or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvement, in an aggregate principal amount at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5) the incurrence by the Issuer or any Restricted Subsidiary of Permitted Refinancing Indebtedness in exchange for, or incurred to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause (5) or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4) or (11) of this Section 4.10(b);
(6) the incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposes;
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of businessSubsidiary; provided, however, that upon the drawing (A) any subsequent issuance or transfer of letters any Capital Stock which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any subsequent transfer of credit for reimbursement obligations, or the incurrence of such Indebtedness (other reimbursement-type Indebtedness with respect than to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) 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 (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer Company or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligationsSubsidiary) shall be deemed, in each case, incurred or assumed in connection with to constitute the disposition or acquisition Incurrence of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods obligor thereon and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiaries; provided, however, that:
(aB) if the Issuer or any Subsidiary Guarantor Company is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary GuarantorIndebtedness, such Indebtedness must be unsecured and is expressly subordinated in right of payment to the prior payment in full in cash of all Obligations then due obligations with respect to the Notes, in the case of the Issuer, or the Note Guarantee, in the case of a Subsidiary Guarantor; Notes and
(i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, which new incurrence is not permitted by this clause (21);
(22) the issuance by any Restricted Subsidiary to the Issuer or to any other Restricted Subsidiary of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be subordinated in right of payment to the Notes or the Note Guarantee, as the case may be, and (b) Non-Guarantors of Indebtedness incurred by other Non-Guarantors in accordance with the provisions of this Indenture; and
Appears in 1 contract
Samples: Indenture (PRETIUM CANADA Co)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Parent will not, and shall will not permit any of its Restricted Subsidiaries Subsidiary to, Incur, directly or indirectly, incur, with respect to any Indebtedness (including Acquired Debt)Indebtedness, and shall the Parent will not issue any Disqualified Stock and will not permit any of its the Restricted Subsidiaries to issue any shares of preferred stockPreferred Stock; provided, however, that the Issuer Parent will be entitled to Incur Indebtedness or issue Disqualified Stock and its any Restricted Subsidiaries may incur Subsidiary will be entitled to Incur Indebtedness (including Acquired Debt) and the Issuer’s Restricted Subsidiaries may or issue shares of preferred stock, Preferred Stock if, on the date of such Incurrence or issuance and after giving effect thereto and the application of the proceeds therefromon a pro forma basis, either (i) the Fixed Charge Coverage Ratio for the Issuer’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been be at least 2.0 to 1.0, 1.0 or (ii) the Consolidated Total Debt Ratio would be no greater than 6.0 to 1.0; provided that, in each case, the then outstanding aggregate principal amount of Indebtedness to Consolidated Tangible Net Worth Ratio as of the end of the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred (including acquired Indebtedness) and Preferred Stock that may be Incurred or such preferred stock is issued, as applicable, pursuant to this paragraph by Non-Guarantor Subsidiaries (other than the case may be, would have been less than or equal to 1.75 to 1.0Issuer) shall not exceed the greater of $75.0 million and 10.0% of Consolidated Adjusted EBITDA.
(b) Notwithstanding Section 4.10(a) shall not prohibit 4.09(a), the incurrence Parent and the Restricted Subsidiaries will be entitled to Incur any or all of any Indebtedness that meets the following criteria or the issuance of any preferred stock that meets the following criteria, as applicable Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or any Restricted Subsidiary of (A) Indebtedness Incurred pursuant to the Credit Facilities or Project LoansAgreement; provided, including however, that, immediately after giving effect to any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by Incurrence, the Issuer or any Restricted Subsidiary, in an aggregate principal amount at any one time outstanding of all Indebtedness Incurred under this clause (1)(A) and then outstanding, does not to exceed (i) $1,750.0 million plus (ii) the greater of $1,500 760.0 million and 22.5100% Consolidated Adjusted EBITDA; provided, further, that only $500 million of such Indebtedness Incurred under this clause (1)(A) may be Priority Payment Lien Obligations; and (B)(i) Pari Passu Payment Lien Obligations if, after giving pro forma effect to such Incurrence, the Consolidated Tangible Assets at First Lien Secured Debt Ratio would be no greater than 4.0 to 1.0 (and, for the time avoidance of incurrencedoubt, this clause (i) shall only be available for the Incurrence of Pari Passu Payment Lien Obligations and not for any Priority Payment Lien Obligations), (ii) Junior Lien Indebtedness if, after giving pro forma effect to such Incurrence, the Consolidated Secured Debt Ratio would be no greater than 5.0 to 1.0 (and, for the avoidance of doubt, this clause (ii) shall only be available for the Incurrence of Junior Lien Indebtedness), and (iii) any Permitted Refinancing Indebtedness in respect of such Indebtedness Incurred pursuant to this clause (1)(B);
(2) Indebtedness owed to and held by the Existing IndebtednessParent or a Restricted Subsidiary; provided, however, that (i) any subsequent issuance or transfer of any Capital Stock that results in any such Indebtedness being held by a Person other than the Parent or a Restricted Subsidiary and (ii) any subsequent transfer of such Indebtedness (other than to the Parent or a Restricted Subsidiary) shall be deemed, in each case, to constitute the Incurrence of such Indebtedness by the obligor thereon that was not permitted by this clause (2);
(3) the incurrence Incurrence by the Issuer and any Guarantor of Indebtedness represented by the Initial Notes issued on the Issue Date and replacement Notes in respect (other than any Additional Notes), including any Guarantee thereof, if any (and the incurrence by any Subsidiary Guarantor of any related Note Guarantee);
(4) Indebtedness that is outstanding on the incurrence Issue Date (other than Indebtedness described in clause (1) or issuance (3) of this Section 4.09(b));
(5) Indebtedness of a Restricted Subsidiary Incurred and outstanding on or prior to the date on which such Subsidiary was acquired by the Issuer Parent (other than Indebtedness Incurred in connection with, or to provide all or any Restricted Subsidiary portion of the Issuer funds or credit support utilized to consummate, the transaction or series of related transactions pursuant to which such Subsidiary became a Subsidiary or was acquired by the Parent); provided, however, that on the date of such acquisition and after giving effect thereto on a pro forma basis, (i) the Parent would be entitled to Incur at least $1.00 of additional Indebtedness pursuant to clause (including Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction)a) of this Section 4.09, Disqualified Stock (ii) the Fixed Charge Coverage Ratio would be equal to or preferred stockgreater than 1.75 to 1.0 or (iii) the Fixed Charge Coverage Ratio would not be lower or the Consolidated Total Debt Ratio would not be higher, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development or improvement of plant, equipment or other property used or useful in a Permitted Business which occurs within 365 days of than it was immediately prior to such purchase, design, construction, lease, installation, development or improvement, in an aggregate principal amount at any time outstanding, together with any acquisition;
(6) Permitted Refinancing Indebtedness in respect thereof, not of Indebtedness Incurred pursuant to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5) the incurrence by the Issuer or any Restricted Subsidiary of Permitted Refinancing Indebtedness in exchange for, or incurred to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause (54.09(a) or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3Sections 4.09(b)(3), (4), (5), (22) or this clause (11) of this Section 4.10(b6);
(67) the incurrence Swap Obligations directly related to Indebtedness permitted to be Incurred by the Issuer or any of its Parent and the Restricted Subsidiaries pursuant to this Indenture or entered into in the ordinary course of Hedging Obligations business and not for speculative purposes;
(78) obligations in respect of (i) the incurrence worker’s compensation and self-insurance and performance, bid, stay, customs, appeal, replevin and surety bonds and performance and completion guarantees and letters of credit supporting such obligations provided by the Issuer Parent or any Restricted Subsidiary and (ii) trade letters of credit and deferred compensation, severance, pension and health and welfare retirement benefits or the equivalent to current or former officers, directors and employees of the Parent or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrenceSubsidiaries;
(8) the incurrence by the Issuer or any of its Restricted Subsidiaries of 9) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft draft, credit card, purchase card or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds and similar liabilities in the ordinary course of businessbusiness or consistent with industry practice or other treasury, so long as depositary and cash management services in the ordinary course of business or consistent with industry practice; provided that (i) such Indebtedness (other than credit or purchase cards) is extinguished within five ten (10) Business DaysDays of notification to the Issuer of its incurrence and (ii) such Indebtedness in respect of credit or purchase cards is extinguished within 60 days from its Incurrence;
(910) the incurrence Indebtedness consisting of Indebtedness arising from agreements of any Guarantee by (i) the Issuer or a Guarantor of Indebtedness or other Obligations of the Parent or any of the Restricted Subsidiaries, (ii) a Foreign Restricted Subsidiary of Indebtedness or other Obligations of another Foreign Restricted Subsidiary or (iii) a Non-Guarantor Subsidiary (other than the Issuer providing for indemnificationIssuer) of Indebtedness or other Obligations of another Non-Guarantor Subsidiary (other than the Issuer), adjustment in each case so long as the Incurrence of purchase pricesuch guaranteed Indebtedness or other obligations by the Parent or such Restricted Subsidiary is permitted under the terms of this Indenture; provided, holdbackthat, contingency payment obligations 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;
(11) (i) Capital Lease Obligations and (ii) Attributable Debt, and Permitted Refinancing Indebtedness in respect thereof, in an aggregate principal amount on the date of Incurrence that, when taken together with the principal amount of all other Indebtedness then outstanding and Incurred pursuant to this clause (11), does not exceed the greater of $200.0 million and 25.0% of Consolidated Adjusted EBITDA;
(12) Indebtedness of Non-Guarantor Subsidiaries (other than the Issuer) and Foreign Restricted Subsidiaries in an aggregate principal amount on the date of Incurrence that, when taken together with the principal amount of all other Indebtedness then outstanding and Incurred pursuant to this clause (12), does not exceed the greater of $75.0 million and 10.0% of Consolidated Adjusted EBITDA;
(13) Indebtedness Incurred in respect of Purchase Money Indebtedness and Permitted Refinancing Indebtedness in respect thereof, in an aggregate principal amount on the date of Incurrence that, when taken together with the principal amount of all other Indebtedness then outstanding and Incurred pursuant to this clause (13), does not exceed the greater of $150.0 million and 20.0% of Consolidated Adjusted EBITDA;
(14) Indebtedness of the Parent or any of the Restricted Subsidiaries consisting of (i) the financing of insurance premiums with the providers of such insurance or their affiliates, (ii) take-or-pay or similar obligationsobligations contained in supply agreements or (iii) customer deposits and advance payments received from customers for goods and services purchased, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(1115) Acquired Debt Indebtedness of the Parent or any of the Restricted Subsidiaries 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;
(16) Indebtedness in an aggregate amount not to exceed the foreign currency equivalent of the greater of $100.0 million and 12.25% of Consolidated Adjusted EBITDA in respect of letters of credit denominated in currencies other than U.S. dollars;
(17) Foreign Jurisdiction Deposits;
(18) Indebtedness consisting of guarantees of indebtedness or preferred stock other obligations of joint ventures permitted under clause (19) of the definition of “Permitted Investments”;
(19) Indebtedness Incurred in connection with judgments, decrees, attachments, awards or appeals that do not constitute an Event of Default under Section 6.01(a)(6);
(20) Indebtedness in the form of (i) guarantees of loans and advances to officers, directors, agents, consultants and employees, in an aggregate amount not to exceed the greater of $30.0 million and 5.0% of Consolidated Adjusted EBITDA at any one time outstanding, and (ii) reimbursements owed to officers, directors, agents, consultants and employees of the Parent or any of its Subsidiaries;
(21) Indebtedness consisting of obligations to make payments to current or former officers, directors and employees of the Parent or any of its Subsidiaries, their respective estates, spouses or former spouses with respect to the cancellation, purchase or redemption of Equity Interests of the Parent or any of its Subsidiaries, to the extent permitted under Section 4.07(b)(5);
(22) Indebtedness of the Issuer or its Restricted Subsidiaries a Guarantor incurred in connection with or in contemplation of, or to provide all or a any portion of the funds or credit support utilized to acquire Persons that are acquired consummate, the acquisition by the Issuer or any Restricted Subsidiary such Guarantor of the Issuer property used or useful in a Permitted Business (including by way a Product) (whether through the direct purchase of mergerassets or the purchase of Capital Stock of, amalgamation or consolidation) in accordance with merger or consolidation with, any Person owning such assets); provided, however, on the terms date of this Indenture; provided that immediately such Incurrence and after giving effect to such acquisitionthereto on a pro forma basis, any of the following is true:
(a) the Issuer Parent would be permitted to incur at least $1.00 of additional Indebtedness pursuant to clause (a) of this Section 4.10(a)4.09;
(b23) Non-Recourse Debt; provided, however, that the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect aggregate principal amount of any such Indebtedness, when taken together with all other Indebtedness Incurred pursuant to such acquisition would be this clause (23) and then outstanding, does not exceed the greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to of $100.0 million and 12.5% of Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisitionAdjusted EBITDA;
(1224) Indebtedness consisting of obligations under any Permitted Convertible Indebtedness Call Transaction;
(25) Indebtedness of the Issuer Parent or a Restricted Subsidiary of any of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness Subsidiaries in an aggregate principal amount on the date of Incurrence that, when taken together with all other Indebtedness of the Parent and the Restricted Subsidiaries then outstanding and Incurred pursuant to this clause (25), does not exceed the greater of $230.0 million and 30.0% of Consolidated Adjusted EBITDA, in each case, plus 100% of the net proceeds received by the Parent from the issuance or accreted value, as applicablesale of Equity Interests (other than from (i) at any time outstanding, Disqualified Stock or (ii) the Rights Offerings);
(26) Indebtedness Incurred pursuant to a Permitted Receivables Facility in an amount not to exceed the greater of $150.0 380.0 million and 3.050.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;Adjusted EBITDA; and
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(1627) Indebtedness of the Issuer joint ventures and/or any Indebtedness incurred on behalf thereof or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence representing guarantees of Indebtedness by of joint ventures in an aggregate principal amount on the Issuer or a Restricted Subsidiary date of Incurrence that, when taken together with the Issuer deemed to exist principal amount of all other Indebtedness then outstanding and Incurred pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
this clause (18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures27), in an amount does not to exceed at any time outstanding the greater of $100.0 75.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Issuer or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and 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 Issuer, or the Note Guarantee, in the case of a Subsidiary Guarantor; and
(i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, which new incurrence is not permitted by this clause (21);
(22) the issuance by any Restricted Subsidiary to the Issuer or to any other Restricted Subsidiary of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be subordinated in right of payment to the Notes or the Note Guarantee, as the case may be, and (b) Non-Guarantors of Indebtedness incurred by other Non-Guarantors in accordance with the provisions of this Indenture; and10.0
Appears in 1 contract
Samples: Indenture (Endo, Inc.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt), ) and the Company shall not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that so long as no Default or Event of Default has occurred or is continuing, the Issuer Company and its Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) and the Issuer’s Restricted Subsidiaries may issue shares of preferred stock, if, after giving effect thereto and the application of the proceeds therefrom, either (i) if the Fixed Charge Coverage Ratio for the Issuer’s Company's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been at least 2.0 1.75 to 1.01, or (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as of the end of the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which if such additional Indebtedness is incurred prior to March 15, 2000, or at least 2.0 to 1, if such preferred stock additional Indebtedness is issuedincurred on or after March 15, 2000, in each case, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the case may be, would have additional Indebtedness had been less than or equal to 1.75 to 1.0.
(b) Section 4.10(a) incurred at the beginning of such four-quarter period. The provisions of the first paragraph of this covenant shall not prohibit apply to the incurrence of any Indebtedness that meets of the following criteria or the issuance items of any preferred stock that meets the following criteria, as applicable Indebtedness (collectively, “"Permitted Debt”"):
(1i) the incurrence by the Issuer or any Company and its Restricted Subsidiary Subsidiaries of Indebtedness pursuant to Credit Facilities from a bank or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, other financial institution in an aggregate principal amount not to exceed $200.0 million at any one time outstanding not outstanding, less any Net Proceeds of Asset Sales applied to exceed the greater of $1,500 million and 22.5% of Consolidated Tangible Assets at the time of incurrencepermanently reduce any such Indebtedness pursuant to Section 4.10 hereof;
(2) the Existing Indebtedness;
(3ii) the incurrence by the Issuer Company and its Restricted Subsidiaries of the Existing Indebtedness, other than pursuant to the Xxxxx Credit Facility or the Sweetheart Credit Facilities;
(iii) the incurrence by the Company of Indebtedness represented by the Initial Senior Secured Discount Notes, the Senior Secured Discount Notes issued on Indenture, the Issue Date Subordinated Notes and replacement this Indenture and the issuance of additional Subordinated Notes in respect thereof, if any connection with the Company's interest payment obligations under the Subordinated Notes;
(and iv) the incurrence by any Subsidiary Guarantor of any related Note Guarantee);
(4) the incurrence or issuance by the Issuer Company or any of its Restricted Subsidiary of the Issuer Subsidiaries of Indebtedness (including represented by Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction)Obligations, Disqualified Stock mortgage financings or preferred stockpurchase money obligations, in each case, case incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development construction or improvement of plantproperty, plant or equipment used in the business of the Company or other property used or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvementRestricted Subsidiary, in an aggregate principal amount not to exceed $5.0 million at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5v) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness in connection with the acquisition of assets or a new Restricted Subsidiary; provided that such Indebtedness was incurred by the prior owner of such assets or such Restricted Subsidiary prior to such acquisition by the Company or one of its Restricted Subsidiaries and was not incurred in connection with, or in contemplation of, such acquisition by the Company or one of its Restricted Subsidiaries; and provided further that the principal amount (or accreted value, as applicable) of such Indebtedness, together with any other outstanding Indebtedness incurred pursuant to this clause (v) and any Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (v), does not exceed $5.0 million;
(vi) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or incurred the net proceeds of which are used to extend, renew, refund, refinance, replace, defease refinance or discharge any replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause the first paragraph hereof or clauses (5) or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Dateii), (3iii), (4iv) or (11v) of this Section 4.10(b)paragraph;
(6vii) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposes;
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) 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 (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer Company and any of its Restricted Subsidiaries; provided, however, that:
that (a) if the Issuer or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and 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 Issuer, or the Note Guarantee, in the case of a Subsidiary Guarantor; and
(i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer Company or a Restricted Subsidiary thereof and (iib) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer Company or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute a new an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, which new incurrence is that was not permitted by this clause (21vii);
(22viii) the issuance incurrence by the Company or any of its Restricted Subsidiary to Subsidiaries of Hedging Obligations that are incurred for the Issuer purpose of fixing or hedging interest rate risk with respect to any other Restricted Subsidiary floating rate Indebtedness that is permitted by the terms of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiarythis Indenture to be outstanding; and
(bix) the incurrence by the Company or any sale of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or other transfer accreted value, as applicable) not to exceed $25.0 million at any one time outstanding. For purposes of determining compliance with this covenant, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (i) through (ix) above or is entitled to be incurred pursuant to the first paragraph of this covenant, the Company shall, in its sole discretion, classify such item of Indebtedness in any such preferred stock manner that complies with this covenant. Accrual of interest, accretion or amortization of original issue discount, and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms shall not be deemed to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemedan incurrence of Indebtedness for purposes of this Section; provided, in each such case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance that the amount thereof is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary included in Fixed Charges of the Issuer in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be subordinated in right of payment to the Notes or the Note Guarantee, Company as the case may be, and (b) Non-Guarantors of Indebtedness incurred by other Non-Guarantors in accordance with the provisions of this Indenture; andaccrued.
Appears in 1 contract
Samples: Indenture (Sf Holdings Group Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt), ) and that the Company shall not issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Issuer Company and its any Restricted Subsidiaries Subsidiary may incur Indebtedness (including Acquired Debt) and the Issuer’s Restricted Subsidiaries may or issue shares of preferred stock, if, after giving effect thereto and the application of the proceeds therefrom, either (i) stock if the Fixed Charge Coverage Ratio for the Issuer’s Company's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, issued would have been at least 2.0 to 1.0, or determined on a pro forma basis (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as including a pro forma application of the end of net proceeds therefrom), as if the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred had been incurred, or such the preferred stock is had been issued, as the case may be, would have been less than or equal to 1.75 to 1.0.
(b) at the beginning of such four-quarter period. The provisions of the first paragraph of this Section 4.10(a) 4.09 shall not prohibit apply to the incurrence of any Indebtedness that meets of the following criteria or the issuance items of any preferred stock that meets the following criteria, as applicable Indebtedness (collectively, “"Permitted Debt”"):
(1i) the incurrence by the Issuer or any Restricted Subsidiary Company of additional Indebtedness pursuant to under Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt (and the guarantee thereof by the Issuer or any Restricted Subsidiary, Guarantors) in an aggregate principal amount outstanding pursuant to this clause (i) at any one time (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), including all Permitted Refinancing Indebtedness then outstanding incurred to refund, refinance or replace any other Indebtedness incurred pursuant to this clause (i), not to exceed $375.0 million less the greater aggregate amount of $1,500 million and 22.5% all Net Proceeds of Consolidated Tangible Assets at the time of incurrenceAsset Sales applied to repay any such Indebtedness pursuant to Section 4.10;
(2ii) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3iii) the incurrence by the Issuer Company and the Guarantors of $180.0 million in aggregate principal amount of the Notes and the Subsidiary Guarantees thereof;
(iv) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by the Initial Notes issued on the Issue Date and replacement Notes in respect thereof, if any (and the incurrence by any Subsidiary Guarantor of any related Note Guarantee);
(4) the incurrence or issuance by the Issuer or any Restricted Subsidiary of the Issuer of Indebtedness (including Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction)Obligations, Disqualified Stock mortgage financings or preferred stockpurchase money obligations, in each case, case incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development construction or improvement of plantproperty, plant or equipment used in the business of the Company or other property used or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvementRestricted Subsidiary, in an aggregate principal amount amount, including all Permitted Refinancing Indebtedness then outstanding incurred to refund, refinance or replace any other Indebtedness incurred pursuant to this clause (iv), not to exceed $30.0 million at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5v) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness in connection with the acquisition of assets or a new Restricted Subsidiary; provided that such Indebtedness was incurred by the prior owner of such assets or such Restricted Subsidiary prior to such acquisition by the Company or one of its Restricted Subsidiaries and was not incurred in connection with, or in contemplation of, such acquisition by the Company or one of its Restricted Subsidiaries; and provided further that the principal amount (or accreted value, as applicable) of such Indebtedness, together with any other outstanding Indebtedness incurred pursuant to this clause (v), does not exceed $10.0 million;
(vi) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or incurred the net proceeds of which are used to extend, renew, refund, refinance, refinance or replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause (5) or clause (2) (other than the Existing Notes which are being repurchased intercompany Indebtedness or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), Indebtedness incurred pursuant to clause (3), (4i) or (11) of this Section 4.10(babove);
(6vii) the incurrence Indebtedness incurred by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposes;
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in constituting reimbursement obligations with respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, to letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred credit issued in the ordinary course of businessbusiness in respect of workers' compensation claims 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 for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoingsuch Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) 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 (except in the case of daylight overdraftsviii) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer Company or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations price or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests 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 such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer Company or any Restricted Subsidiary of (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms balance sheet shall not be deemed to be reflected on such balance sheet for purposes of this Indenture; provided that immediately after 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 such acquisition, any of the following is true:
(asubsequent changes in value) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance actually received by the Issuer or a Company and its Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments Subsidiaries in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligationsdisposition;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21ix) the incurrence by the Issuer Company or any of its Restricted Subsidiary Subsidiaries of intercompany Indebtedness between or among the Issuer Company and any of its Restricted Subsidiaries; provided, however, that:
that (aA) if the Issuer or any Subsidiary Guarantor Company is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary GuarantorIndebtedness, such Indebtedness must be unsecured and is expressly subordinated in right of payment to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Issuer, or the Note Guarantee, in the case of a Subsidiary Guarantor; and
Notes and (iB)(1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer Company or a one of its Restricted Subsidiary Subsidiaries and (ii2) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer Company or a one of its Restricted Subsidiary Subsidiaries shall be deemed, in each case, to constitute a new an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be;
(x) the incurrence by the Company or any of the Guarantors of Hedging Obligations that are incurred for the purpose of (A) fixing, which new hedging or capping interest rate risk with respect to any floating rate Indebtedness that is permitted by the terms of this Indenture to be outstanding or (B) protecting the Company and its Restricted Subsidiaries against changes in currency exchange rates;
(xi) the guarantee by the Company or any of the Guarantors of Indebtedness of the Company or a Restricted Subsidiary of the Company that was permitted to be incurred by another provision of this Section 4.09;
(xii) the incurrence is by the Company's 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 of the Company that was not permitted by this clause (21xii), and the issuance of preferred stock by Unrestricted Subsidiaries;
(22xiii) obligations in respect of performance and surety bonds and completion guarantees provided by the issuance by Company or any Restricted Subsidiary to Subsidiaries in the Issuer or to any other Restricted Subsidiary ordinary course of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiarybusiness; and
(bxiv) the incurrence by the Company or any sale of 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 then outstanding incurred to refund, refinance or replace any other transfer of any such preferred stock Indebtedness incurred pursuant to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22xiv);
(23) Guarantees (other than Guarantees , not to exceed $50.0 million. For purposes of Designated SPE Debt) by (a) determining compliance with this Section 4.09, in the Issuer or any Subsidiary Guarantor event that an item of Indebtedness permitted meets the criteria of more than one of the categories of Permitted Debt described in clauses (i) through (xiv) above or is entitled to be incurred by pursuant to the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions first paragraph of this Indenture; provided Section 4.09, the Company shall, in its sole discretion, classify, or later reclassify, such item of Indebtedness in any manner that complies with this covenant. Accrual of interest, the accretion of accreted value and the payment of interest in the event such form of additional Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall not be subordinated in right of payment deemed to the Notes or the Note Guarantee, as the case may be, and (b) Non-Guarantors be an incurrence of Indebtedness incurred by other Non-Guarantors in accordance with the provisions for purposes of this Indenture; andSection 4.09.
Appears in 1 contract
Samples: Indenture (L-3 Communications SPD Technologies Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer Holdings shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively “incur”) any Indebtedness (including Acquired Debt), ) and shall not permit any of its Restricted Subsidiaries (other than the Company or any Guarantor) to issue any shares of preferred stockPreferred Stock; provided, however, that the Issuer Holdings and its any Restricted Subsidiaries Subsidiary may incur Indebtedness (including Acquired Debt) and the Issuer’s any Restricted Subsidiaries Subsidiary may issue shares of preferred stock, if, after giving effect thereto and the application of the proceeds therefrom, either (i) Preferred Stock if the Fixed Charge Coverage Ratio of Holdings for the Issuer’s its 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 preferred stock Preferred Stock is issued would have been at least 2.0 to 1 determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Preferred Stock had been issued, as the case may be, would have been and the application of proceeds therefrom had occurred at least 2.0 to 1.0, or (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as beginning of such four-quarter period; provided that the end of the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been less than or equal to 1.75 to 1.0.
(b) Section 4.10(a) shall not prohibit the incurrence of any Indebtedness that meets the following criteria or the issuance of any preferred stock that meets the following criteria, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or any Restricted Subsidiary maximum principal amount of Indebtedness pursuant to Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, in an aggregate principal amount at any one time Preferred Stock outstanding not to exceed the greater of $1,500 million and 22.5% of Consolidated Tangible Assets at the time of incurrence;
(2) the Existing Indebtedness;
(3) the incurrence by the Issuer of Indebtedness represented by the Initial Notes issued on the Issue Date and replacement Notes in respect thereof, if any (and the incurrence by any Subsidiary Guarantor of any related Note Guarantee);
(4) the incurrence or issuance by the Issuer or any Restricted Subsidiary of the Issuer of Indebtedness (including Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction), Disqualified Stock or preferred stock, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development or improvement of plant, equipment or other property used or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvement, in an aggregate principal amount at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5) the incurrence by the Issuer or any Restricted Subsidiary of Permitted Refinancing Indebtedness in exchange for, or incurred to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to may be incurred under Section 4.10(a), pursuant to this clause (5) or clause (2) paragraph by Restricted Subsidiaries (other than the Existing Notes which are being repurchased or redeemed with Company, the net proceeds of the Initial Notes issued on the Issue Date), (3), (4) or (11) of this Section 4.10(b);
(6) the incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposes;
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, selfCo-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) 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 (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer issuer and any of its Restricted Subsidiaries; provided, however, that:
(aGuarantor) if the Issuer or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee is shall not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and 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 Issuer, or the Note Guarantee, in the case of a Subsidiary Guarantor; and
(i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, which new incurrence is not permitted by this clause (21);
(22) the issuance by any Restricted Subsidiary to the Issuer or to any other Restricted Subsidiary of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be subordinated in right of payment to the Notes or the Note Guarantee, as the case may be, and (b) Non-Guarantors of Indebtedness incurred by other Non-Guarantors in accordance with the provisions of this Indenture; andexceed $250.0 million.
Appears in 1 contract
Samples: Indenture (Warner Chilcott PLC)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt), ) and shall that 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 Issuer and its Restricted Subsidiaries Company may incur Indebtedness (including Acquired 4 5 Debt) and the Issuer’s Restricted Subsidiaries Company may issue shares of preferred stockDisqualified Stock if the Company's Debt to Cash Flow Ratio would have been no greater than 5.5 to 1, ifin the case of any such incurrence or issuance on or before December 31, after giving effect thereto and 2000, or no greater than 5.0 to 1, in the case of any such incurrence or issuance at any time thereafter, in each case, determined on a pro forma basis (including a pro forma application of the net proceeds therefromthereof), either (i) as if the Fixed Charge Coverage Ratio for the Issuer’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred had been incurred, or such preferred stock is the Disqualified Stock had been issued, as the case may be, would have been at least 2.0 to 1.0, or (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as beginning of the end applicable four full fiscal quarter period. The Company shall not incur any Indebtedness that is contractually subordinated to any other Indebtedness of the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which Company unless such additional Indebtedness is incurred or such preferred stock is issuedalso contractually subordinated to the Senior Notes on substantially identical terms; provided, as however, that no Indebtedness of the case may be, would have been less than or equal Company shall be deemed to 1.75 be contractually subordinated to 1.0any other Indebtedness of the Company solely by virtue of being unsecured.
(b) The provisions of Section 4.10(a4.09(a) shall not prohibit apply to the incurrence of any Indebtedness that meets of the following criteria or the issuance items of any preferred stock that meets the following criteria, as applicable Indebtedness (collectively, “"Permitted Debt”"):
(1i) the incurrence by the Issuer Company or any its Restricted Subsidiary Subsidiaries of Indebtedness pursuant to under Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by Facilities; provided that the Issuer or any Restricted Subsidiary, in an aggregate principal amount of all Indebtedness (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company thereunder) outstanding under all Credit Facilities 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 $40.0 million less the aggregate amount of all Net Proceeds of Asset Sales that have been applied since the date of this Indenture to repay Indebtedness under Credit Facilities (or any such Permitted Refinancing Indebtedness) pursuant to Section 4.10 hereof, provided, further, that the aggregate principal amount of Indebtedness at any one time outstanding under Credit Facilities that is incurred by, or secured by the Capital Stock or assets of, any Restricted Subsidiary that is located, or that derives substantially all of its revenue from the conduct of business, in Peru shall not to exceed the greater of $1,500 million and 22.5% of Consolidated Tangible Assets at the time of incurrence15.0 million;
(2ii) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3iii) the incurrence by the Issuer Company of Indebtedness represented by the Initial Notes issued on the Issue Date and replacement Notes in respect thereof, if any (and the incurrence by any Subsidiary Guarantor of any related Note Guarantee)Notes;
(4) the incurrence or issuance by the Issuer or any Restricted Subsidiary of the Issuer of Indebtedness (including Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction), Disqualified Stock or preferred stock, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development or improvement of plant, equipment or other property used or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvement, in an aggregate principal amount at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5iv) the incurrence by the Issuer or any Restricted Subsidiary of Permitted Refinancing Indebtedness in exchange for, or incurred to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause (5) or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4) or (11) of this Section 4.10(b);
(6) the incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposes;
(7) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) 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 (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real propertyassets or a new Restricted Subsidiary, to entitle, develop or construct infrastructure thereupon;
(19) provided that such Indebtedness consisting of Indebtedness issued was incurred by the Issuer prior owner of such assets or any Restricted such Subsidiary of the Issuer prior to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other such acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer Company or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Issuer or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and 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 Issuer, or the Note Guarantee, in the case of a Subsidiary Guarantor; and
(i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary and (ii) any sale was not Incurred in connection with, or other transfer of any in contemplation of, such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new incurrence of such Indebtedness acquisition by the Issuer Company or such Restricted Subsidiary, as the case may be, which new incurrence is not permitted by this clause (21);
(22) the issuance by any Restricted Subsidiary to the Issuer or to any other Restricted Subsidiary of shares of preferred stock; : and provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be subordinated in right of payment to the Notes or the Note Guarantee, as the case may be, and (b) Non-Guarantors of Indebtedness incurred by other Non-Guarantors in accordance with the provisions of this Indenture; and
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer Prior to the Acquisition Closing Date, the Company shall not incur any Indebtedness except the following:
(1) the Notes in an aggregate principal amount not to exceed $175.0 million; and
(2) Indebtedness that is not secured by a Lien on any assets, property or Capital Stock owned by the Company or any of the Company's Subsidiaries, the proceeds of which Indebtedness are used solely for deposit (or the purchase of Government Securities to be deposited) with the Trustee in an amount not to exceed the amount necessary, together with net proceeds to the Company from the issuance of the Notes, to enable the Company to make the Initial Deposit.
(b) From and after the Acquisition Closing Date, the Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, incur, with respect to incur any Indebtedness (including Acquired Debt), and the Company shall not issue any Disqualified Stock, and shall not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that (1) the Issuer Company and its Restricted Subsidiaries any Guarantor may incur Indebtedness (including Acquired Debt) and (b) the Issuer’s Restricted Subsidiaries Company may issue shares of preferred stockDisqualified Stock, if, after giving effect thereto and the application of the proceeds therefromin each case, either (i) the Fixed Charge Coverage Ratio for the Issuer’s Company's most recently ended fiscal four full fiscal quarters for which internal the Company has filed financial statements are available immediately with the Commission preceding the date on which such additional Indebtedness is incurred or such preferred stock Disqualified Stock is issued, as the case may be, would have been at least 2.0 2.25 to 1.0, or determined on a pro forma basis (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as including a pro forma application of the end of net proceeds therefrom), as if the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is had been incurred or such preferred stock is the Disqualified Stock had been issued, as the case may be, would have been less than or equal to 1.75 to 1.0at the beginning of such four-quarter period.
(bc) Section 4.10(aIn addition to the foregoing, the Company and any Restricted Subsidiary (except as specified below) shall not prohibit the incurrence of any Indebtedness that meets may incur the following criteria or the issuance types of any preferred stock that meets the following criteria, as applicable Indebtedness (collectively, “"Permitted Debt”"):
(1i) the incurrence by the Issuer Company or any Restricted Subsidiary Guarantor of additional Indebtedness pursuant to and letters of credit under one or more Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt and guarantees thereof by the Issuer or any Restricted SubsidiaryGuarantors; provided, in an however, that the aggregate principal amount of all Indebtedness incurred by the Company and the Guarantors pursuant to this clause (i) and by the Foreign Restricted Subsidiaries pursuant to clause (viii) below (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 at any one time outstanding does not to exceed the greater of $1,500 million and 22.5% of Consolidated Tangible Assets at the time of incurrence190.0 million;
(2ii) the incurrence by the Company and the Restricted Subsidiaries of the Existing Indebtedness;
(3iii) the incurrence by the Issuer Company of Indebtedness represented by the Initial Notes issued on the Issue Date and replacement Notes in respect thereof, if any (and the incurrence by any the Guarantors of the Subsidiary Guarantor Guarantees of any related Note Guarantee)those Notes;
(4iv) the incurrence or issuance by the Issuer Company, or by any Restricted Subsidiary of the Issuer that is a Guarantor, of Indebtedness (including represented by Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction)Obligations, Disqualified Stock mortgage financings or preferred stockpurchase money obligations, in each case, case incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development construction or improvement of plantproperty, plant or equipment used in the Company's business or other property used or useful in a Permitted Business which occurs within 365 days the business of such purchase, design, construction, lease, installation, development or improvementthat Restricted Subsidiary, in an aggregate principal amount not to exceed $10.0 million at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5v) the incurrence by the Issuer Company or any of its Restricted Subsidiary Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or incurred the net proceeds of which are used to extend, renew, refund, refinance, replace, defease refinance or discharge any replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause (5) or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4) or (11b) of this Section 4.10(b4.09 or clauses (ii), (iii) or (iv) of this Section 4.09(c); provided, however, that no Restricted Subsidiary that is not a Guarantor may refund, refinance or replace Indebtedness previously incurred by the Company or by any Restricted Subsidiary that is a Guarantor;
(6vi) the incurrence by the Issuer 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 a Guarantor is the obligor on such intercompany Indebtedness, such intercompany Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to, in the case of the Company, the Notes, and, in the case of a Guarantor, the Subsidiary Guarantees; and
(B) (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 that is a Guarantor and (2) any sale or other transfer of any such Indebtedness to a person that is not either the Company or a Restricted Subsidiary 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 (vi);
(vii) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposesObligations;
(7viii) Indebtedness of the Foreign Restricted Subsidiaries that are not Guarantors in an aggregate principal amount not to exceed $25.0 million; provided that the aggregate principal amount of all Indebtedness incurred by the Foreign Restricted Subsidiaries pursuant to this clause (viii) and by the Company and the Guarantors pursuant to clause (i) above (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 at any one time does not exceed $190.0 million;
(ix) the guarantee by the Company or any of the Guarantors of Indebtedness of the Company or of any of the Guarantors that was permitted to be incurred by another provision of this Section 4.09; and -57-
(x) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) 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 (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer Company or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of 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 Indebtedness incurred pursuant to this clause (x), not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;35.0 million.
(14d) The maximum amount of Indebtedness that the incurrence of guarantees by the Issuer Company or a Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded, with respect to any outstanding Indebtedness, due solely to fluctuations in the exchange rates of currencies.
(e) For purposes of determining compliance with this covenant, in the event that an item of proposed Indebtedness, including Acquired Debt, meets the criteria of more than one of the Issuer categories of Permitted Debt described in clauses (c)(i) through (x) of this Section 4.09 as of the date of incurrence thereof, or is entitled to be incurred pursuant to clause (b) of this Section 4.09 as of the date of incurrence thereof or pursuant to any combination of the foregoing as of the date of incurrence thereof, the Company shall, in its sole discretion, classify (or later classify or reclassify) in whole or in part, in the ordinary course Company's sole discretion, such item of business Indebtedness in respect any manner that complies with this Section 4.09. Accrual of obligations interest or dividends, the accretion of accreted value or liquidation preference and the payment of interest or dividends in the form of additional Indebtedness or Disqualified Stock will not be deemed to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the be an incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Issuer or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and 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 Issuer, or the Note Guarantee, in the case of a Subsidiary Guarantor; and
(i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, which new incurrence is not permitted by this clause (21);
(22) the issuance by any Restricted Subsidiary to the Issuer or to any other Restricted Subsidiary of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions Disqualified Stock for purposes of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be subordinated in right of payment to the Notes or the Note Guarantee, as the case may be, and (b) Non-Guarantors of Indebtedness incurred by other Non-Guarantors in accordance with the provisions of this Indenture; andSection 4.09.
Appears in 1 contract
Samples: Indenture (Grant Prideco Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), neither the Company nor any Restricted Subsidiary will issue any Disqualified Stock, and shall the Company will not permit any of its Restricted Subsidiaries to issue any shares of preferred stockPreferred Stock; provided, however, that the Issuer Company and its Restricted Subsidiaries any Guarantor may incur Indebtedness (including Acquired Debt) and the Issuer’s Restricted Subsidiaries may or issue shares of preferred stockDisqualified Stock, if, after giving effect thereto and the application of the proceeds therefrom, either (i) if the Fixed Charge Coverage Ratio for the IssuerCompany’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness or such Disqualified Stock is 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 additional Indebtedness had been incurred or such preferred stock is Disqualified Stock had been issued, as the case may be, would have been at least 2.0 to 1.0, or (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as beginning of the end of the Issuer’s most recently ended fiscal such four-quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been less than or equal to 1.75 to 1.0period.
(b) The provisions of Section 4.10(a3.3(a) hereof shall not prohibit the incurrence of any Indebtedness that meets of the following criteria or the issuance items of any preferred stock that meets the following criteria, as applicable Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or any Restricted Subsidiary of Indebtedness pursuant to Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, in an aggregate principal amount at any one time outstanding not to exceed the greater of $1,500 million and 22.5% of Consolidated Tangible Assets at the time of incurrence;
(2) the Existing Indebtedness;
(3) the incurrence by the Issuer of Indebtedness represented by the Initial Notes issued on the Issue Date and replacement Notes in respect thereof, if any (and the incurrence by any Subsidiary Guarantor of any related Note Guarantee);
(4) the incurrence or issuance by the Issuer or any Restricted Subsidiary of the Issuer of Indebtedness (including Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction), Disqualified Stock or preferred stock, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development or improvement of plant, equipment or other property used or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvement, in an aggregate principal amount at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5) the incurrence by the Issuer or any Restricted Subsidiary of Permitted Refinancing Indebtedness in exchange for, or incurred to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause (5) or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4) or (11) of this Section 4.10(b);
(6) the incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposes;
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) 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 (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Issuer or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and 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 Issuer, or the Note Guarantee, in the case of a Subsidiary Guarantor; and
(i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, which new incurrence is not permitted by this clause (21);
(22) the issuance by any Restricted Subsidiary to the Issuer or to any other Restricted Subsidiary of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be subordinated in right of payment to the Notes or the Note Guarantee, as the case may be, and (b) Non-Guarantors of Indebtedness incurred by other Non-Guarantors in accordance with the provisions of this Indenture; and
Appears in 1 contract
Samples: Indenture (Venoco, Inc.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, incur, with respect to indirectly Incur any Indebtedness (including Acquired Debt), ) and shall the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; providedPreferred Stock, however, provided that the Issuer Company may Incur Indebtedness, and its Restricted Subsidiaries any other Credit Party (other than GCUK, Global Marine or any of their Subsidiaries) may incur Indebtedness (including Acquired Debt) and Indebtedness, at any time after the Issuer’s Restricted Subsidiaries may issue shares of preferred stock, if, after giving effect thereto and date upon which at least one complete fiscal quarter has elapsed subsequent to the application Issue Date for which financial statements of the proceeds therefrom, either Company are available if:
(i) the Fixed Charge Coverage Company's Consolidated Leverage Ratio for is less than 3.00 to 1; and
(ii) any such Indebtedness is (A) expressly subordinated in right of payment to the Issuer’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding Company's or such other Credit Party's, as applicable, obligations under this Indenture, (B) does not require or permit payment of principal thereon prior to the date that is 91 days after the Stated Maturity of the principal amount of the Notes, (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 such additional Indebtedness the Notes mature and (D) is incurred not convertible or such preferred stock is issuedexchangeable into any security or instrument that does not comply with the restrictions in the foregoing sub-clauses (A), as the case may be, would have been at least 2.0 to 1.0, or (B) and (C); provided that this clause (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as of the end of the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been less than or equal to 1.75 to 1.0.
(b) Section 4.10(a) shall not prohibit the incurrence Company or any other 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 (it 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) of Section 4.15 hereof, except as otherwise permitted by this Indenture). Notwithstanding the foregoing, the provisions of the preceding paragraph will not apply to the Incurrence of any Indebtedness that meets of the following criteria or the issuance items of any preferred stock that meets the following criteria, as applicable (collectively, “Permitted Debt”):Indebtedness:
(1a) the incurrence Incurrence by the Issuer or any Restricted Subsidiary Guarantor (other than GCUK, Global Marine or any of their Subsidiaries) of Indebtedness pursuant to Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by under the Issuer or any Restricted Subsidiary, Working Capital Facility in an aggregate principal amount at any one time outstanding not to exceed the greater of $1,500 million and 22.5% of Consolidated Tangible Assets at the time of incurrence;
(2) the Existing Indebtedness;
(3) the incurrence by the Issuer of Indebtedness represented by the Initial Notes issued on the Issue Date and replacement Notes in respect thereof, if any (and the incurrence by any Subsidiary Guarantor of any related Note Guarantee);
(4) the incurrence or issuance by the Issuer or any Restricted Subsidiary of the Issuer of Indebtedness (including Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction), Disqualified Stock or preferred stock, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development or improvement of plant, equipment or other property used or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvement, in an aggregate principal amount at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5) the incurrence by the Issuer or any Restricted Subsidiary of Permitted Refinancing Indebtedness in exchange for, or incurred to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause (5) or clause (2a) (other than with letters of credit being deemed to have a principal amount equal to the Existing Notes which are being repurchased or redeemed with the net proceeds maximum potential liability of the Initial Notes issued on the Issue Date), (3), (4) or (11) of this Section 4.10(b);
(6) the incurrence by the Issuer or any of Company and its Restricted Subsidiaries of Hedging Obligations not for speculative purposes;
(7thereunder) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) 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 (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Issuer or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and 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 Issuer, or the Note Guarantee, in the case of a Subsidiary Guarantor; and
(i) any subsequent issuance or transfer of Equity Interests that results the Working Capital Facility Limit then in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary and effect minus (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, which new incurrence is not permitted by this clause (21);
(22) the issuance by any Restricted Subsidiary to the Issuer or to any other Restricted Subsidiary of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor aggregate outstanding amount of Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary of the Issuer outstanding in accordance connection with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be subordinated in right of payment to the Notes or the Note Guarantee, as the case may be, and (b) Non-Guarantors of Indebtedness incurred by other Non-Guarantors in accordance with the provisions of this Indenture; andQualified Receivables Transactions;
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall not, and shall not permit Neither Icahn Enterprises nor any of its Restricted Subsidiaries to, directly or indirectlyGuarantor will create, incur, issue, assume, guarantee or otherwise become liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and shall not permit neither Icahn Enterprises nor any of its Restricted Subsidiaries to Guarantor will issue any shares of preferred stockDisqualified Stock; provided, however, that the Issuer and its Restricted Subsidiaries Icahn Enterprises or any Guarantor may incur Indebtedness (including Acquired Debt) and the Issuer’s Restricted Subsidiaries may or issue shares of preferred stockDisqualified Stock, if, if immediately after giving effect thereto and to the incurrence of additional Indebtedness (including Acquired Debt) or issuance of Disqualified Stock (including a pro forma application of the net proceeds therefrom), either (i) the Fixed Charge Coverage Ratio for the Issuer’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been at least 2.0 to 1.0, or (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as ratio of the end aggregate principal amount of all outstanding Indebtedness (excluding Indebtedness incurred pursuant to clauses (4), (7) and (8) of Section 4.08(b)) of Icahn Enterprises and any Guarantor, determined on a consolidated basis between Icahn Enterprises and any Guarantor but on a non-consolidated basis with the IssuerSubsidiaries of Icahn Enterprises (other than any Guarantor) and otherwise in accordance with GAAP, (including an amount of Indebtedness equal to the principal amount of any Guarantees by Icahn Enterprises or any Guarantor of any Indebtedness of a Person (that is not Icahn Enterprises or a Subsidiary) to the extent such Guarantees were not included in computing Icahn Enterprises’ or any Guarantor’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding outstanding Indebtedness) to the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may beAdjusted Controlled Entity Net Worth, would have been less than or equal 1.15 to 1.75 to 1.01.
(b) The provisions of Section 4.10(a4.08(a) shall will not prohibit the incurrence of any Indebtedness that meets of the following criteria or the issuance items of any preferred stock that meets the following criteria, as applicable Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer Icahn Enterprises or any Restricted Subsidiary Guarantor of Indebtedness represented by the Notes to be issued on the date of this Indenture and the exchange Notes to be issued pursuant to Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, in an aggregate principal amount at any one time outstanding not to exceed the greater of $1,500 million and 22.5% of Consolidated Tangible Assets at the time of incurrenceRegistration Rights Agreement;
(2) the incurrence by Icahn Enterprises or any Guarantor of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance or replace Indebtedness (other than intercompany Indebtedness) that was incurred under Section 4.08(a) or clauses (1), (2) or (9) of this Section 4.08(b) or any Existing Indebtedness;
(3) the incurrence by Icahn Enterprises or any Guarantor of intercompany Indebtedness between or among Icahn Enterprises and any of its Subsidiaries (including Icahn Enterprises Holdings) or the Issuer issuance of Indebtedness represented by the Initial Notes issued on the Issue Date and replacement Notes in respect thereof, if any (and the incurrence Disqualified Stock by any Subsidiary Guarantor of any related Note Guarantee)to Icahn Enterprises;
(4) the incurrence or issuance by the Issuer Icahn Enterprises or any Restricted Subsidiary Guarantor of the Issuer of Indebtedness (including Capital Lease Hedging Obligations and Indebtedness that are incurred in connection with a sale/leaseback transaction), Disqualified Stock or preferred stock, in each case, incurred or issued for the purpose normal course of financing all or any part of the purchase price or cost of design, construction, lease, installation, development or improvement of plant, equipment or other property used or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvement, in an aggregate principal amount at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrencebusiness;
(5) the incurrence by the Issuer Icahn Enterprises or any Restricted Subsidiary of Permitted Refinancing Indebtedness in exchange for, or incurred to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause (5) or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4) or (11) of this Section 4.10(b);
(6) the incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposes;
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) the incurrence by the Issuer 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 (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of businessfunds, so long as such Indebtedness is extinguished covered within five Business Days;
(96) the incurrence by Icahn Enterprises or any Guarantor of the Existing Indebtedness;
(7) Indebtedness arising from agreements of the Issuer any agreement entered into by Icahn Enterprises or a Restricted Subsidiary of the Issuer Icahn Enterprises Holdings providing for indemnification, purchase price adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiaryan asset sale;
(108) Indebtedness of Icahn Enterprises or any Guarantor attributable to Bad Boy Guarantees; and
(9) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer Icahn Enterprises or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 Guarantor of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of 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 Indebtedness incurred pursuant to this clause (9); not to exceed the greater $10.0 million at any one time outstanding. Neither Icahn Enterprises nor any Guarantor will incur any Indebtedness (including Permitted Debt) that is contractually subordinated in right of $150.0 million and 3.0% payment to any other Indebtedness of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer Icahn Enterprises or any Restricted Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant payment to the terms of a joint venture agreement Notes and the Note Guarantee, as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landownerapplicable, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiarieson substantially identical terms; provided, however, that:
that no Indebtedness of Icahn Enterprises or any Guarantor shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of Icahn Enterprises 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. To the extent Icahn Enterprises or any Guarantor incurs any intercompany Indebtedness, (a) if the Issuer Icahn Enterprises or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary GuarantorIndebtedness, such Indebtedness (other than intercompany Indebtedness of any Guarantor to or from Icahn Enterprises or another Guarantor) 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 Issuer, or the Note Guarantee, in the case of a Subsidiary Guarantor; and
Notes and (ib)(i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer Icahn Enterprises or a Restricted Subsidiary of Icahn Enterprises (including any Guarantor) and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer Icahn Enterprises or a Restricted Subsidiary of Icahn Enterprises (including any Guarantor) shall be deemed, in each case, to constitute a new an incurrence of such Indebtedness by Icahn Enterprises or any Guarantor, that is not intercompany Indebtedness; provided that in the Issuer case of clause (a), that no restriction on the payment of principal, interest or other obligations in connection with such Restricted Subsidiaryintercompany 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 4.08, 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 (9) above or is entitled to be incurred pursuant to Section 4.08(a), in each case, as of the date of incurrence thereof, Icahn Enterprises shall, in its sole discretion, classify (or later reclassify in whole or in part, in its sole discretion) such item of Indebtedness in any manner that complies with this Section 4.08 and such Indebtedness will be treated as having been incurred pursuant to such clauses or Section 4.08(a), as the case may be, which new designated by Icahn Enterprises. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest or Other Liquidated Damages on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Stock in the form of additional shares of the same class of Disqualified Stock will not be deemed to be an incurrence is of Indebtedness or an issuance of Disqualified Stock for purposes of this Section 4.08. Notwithstanding any other provision of this Section 4.08, the maximum amount of Indebtedness that Icahn Enterprises or any Guarantor may incur pursuant to this Section 4.08 shall not permitted by this clause 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:
(21)1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(222) the issuance by any Restricted Subsidiary to principal amount of the Issuer or to Indebtedness, in the case of any other Restricted Subsidiary of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted SubsidiaryIndebtedness; and
(b3) any sale or other transfer in respect of any such preferred stock to Indebtedness of another Person secured by a Person that is not either Lien on the Issuer or a Restricted Subsidiary shall be deemedassets of the specified Person, in each case, to constitute a new issuance the lesser of:
(A) the Fair Market Value of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);assets at the date of determination; and
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (aB) the Issuer or any Subsidiary Guarantor of Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary amount of the Issuer in accordance with Indebtedness of the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be subordinated in right of payment to the Notes or the Note Guarantee, as the case may be, and (b) Non-Guarantors of Indebtedness incurred by other Non-Guarantors in accordance with the provisions of this Indenture; andPerson.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company shall not issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or shares of preferred stock; provided, however, that the Issuer and its Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) or issue shares of Disqualified Stock, and the Issuer’s any Restricted Subsidiaries Subsidiary may incur Indebtedness (including Acquired Debt), issue shares of Disqualified Stock and issue shares of preferred stock, if, after giving effect thereto and the application of the proceeds therefrom, either (i) if the Fixed Charge Coverage Ratio for the IssuerCompany’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 preferred stock is issued, as the case may be, issued would have been at least 2.0 to 1.0, or determined on a pro forma basis (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as including a pro forma application of the end of net proceeds therefrom), as if the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is had been incurred or such Disqualified Stock or preferred stock is had been issued, as the case may be, would have been less than or equal to 1.75 to 1.0.at the beginning of such four-quarter period. The first paragraph of this Section 4.09 shall not prohibit:
(b) Section 4.10(a) shall not prohibit the incurrence of any Indebtedness that meets the following criteria or the issuance of any preferred stock that meets the following criteria, as applicable (collectively, “Permitted Debt”):
(1i) the incurrence by the Issuer Company or any of its Restricted Subsidiary Subsidiaries of Indebtedness pursuant to and letters of credit under one or more Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, in an aggregate principal amount at any one time outstanding under this clause (i) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed the greater of $1,500 million and 22.5% of Consolidated Tangible Assets at the time of incurrence1,700.0 million;
(2) the Existing Indebtedness;
(3ii) the incurrence by the Issuer Company and its Restricted Subsidiaries of Existing Indebtedness (other than Indebtedness described in clauses (i) and (iii);
(iii) the incurrence by the Company and any Guarantor of Indebtedness represented by the Initial Notes (other than Additional Notes) and the Exchange Notes issued on the Issue Date in exchange therefor and replacement Notes in respect thereof, if any (and the incurrence by any Subsidiary Guarantor Guarantees of any related Note Guarantee)the foregoing;
(4iv) the incurrence or issuance by the Issuer or any Restricted Subsidiary of the Issuer of Indebtedness (including Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transactionother than Deemed Capitalized Leases), Disqualified Stock or and preferred stock, in each case, stock incurred or issued for by the purpose of financing all Company or any part of its Restricted Subsidiaries to finance the purchase price or cost of designpurchase, construction, lease, installation, development lease or improvement of plant, property (real or personal) or equipment or (other property than software) that is used or useful in a Permitted Business which occurs within 365 days (but excluding the purchase of Capital Stock of any Person), provided that the aggregate amount of Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (iv) when aggregated with the then outstanding amount of such purchase, design, construction, lease, installation, development or improvement, obligations under clause (v) incurred to refinance such obligations initially incurred in an aggregate principal amount reliance on this clause (iv) does not exceed 5.0% of Consolidated Net Tangible Assets (determined as of the time of such incurrence) at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5v) the incurrence by the Issuer Company or any of its Restricted Subsidiary Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or incurred the net proceeds of which are used to extend, renew, refund, refinance, replace, defease refinance or discharge any replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause (5) v), the first paragraph of this Section 4.09 or clause clauses (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Dateii), (3iii), (4iv), (x) or (11xvi) of this Section 4.10(b)paragraph and related interest, premiums, fees and other Obligations;
(6vi) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of intercompany 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, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Notes, in the case of the Company, or the Subsidiary Guarantee, in the case of a Guarantor; and
(1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness, Disqualified Stock or preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company and (2) any sale or other transfer of any such 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 neither the Company nor a Restricted Subsidiary of the Company shall be deemed, in each case, to constitute an incurrence of such 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 (vi);
(vii) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposesObligations;
(7viii) the incurrence Guarantee by the Issuer Company or any a Restricted Subsidiary of its Restricted Subsidiaries the Company of Indebtedness of the Company or a Restricted Subsidiary of the Company that was permitted to be incurred by another provision of this Section; provided that in the event such Indebtedness that is being guaranteed is (a) pari passu with the Notes or a Subsidiary Guarantee, as the case may be, then the related Guarantee 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 such Subsidiary Guarantee, as the case may be;
(ix) 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 of unrealized losses or charges in respect of workers’ compensation claimsHedging Obligations (including those resulting from the application of FAS 133, self-insurance obligationsASC Topic 815 and similar provisions), bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the each case will be deemed not to be an incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrencean issuance of Disqualified Stock or preferred stock for purposes of this covenant;
(8) 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 (except in the case of daylight overdraftsx) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer Company or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations earn-out or other similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests 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 Issuer or any consideration actually received (or, in the case of an acquisition, paid) by the Company and its Restricted Subsidiaries in connection with such Restricted Subsidiarytransaction;
(10xi) Indebtedness supported by one or more letters of credit 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 letter of credit provided for therein; provided further, that upon any reduction, cancellation or termination of the applicable letter of credit, there shall be deemed to be an incurrence of Indebtedness resulting 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 replacement of such letter of credit;
(xii) Indebtedness arising from endorsements the honoring by a bank or other financial institution of negotiable instruments for collection a check, draft or similar instrument inadvertently drawn against insufficient funds in the ordinary course of business; provided, however, that such Indebtedness is extinguished within ten Business Days of incurrence;
(11xiii) Acquired Debt 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 or in connection with judgments that do not result in a Default or an Event of Default and all reimbursement obligations under such letters of credit;
(xiv) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness, Disqualified Stock or preferred stock that is not secured by a Lien in an aggregate principal amount (or accreted value or liquidation preference, as applicable) at any time outstanding not to exceed $350.0 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 Issuer Company or its a Restricted Subsidiaries Subsidiary incurred to provide all finance an acquisition or a portion of the funds utilized to acquire (y) Persons that are acquired by the Issuer Company or any Restricted Subsidiary of or merged into the Issuer (including by way of merger, amalgamation Company or consolidation) a Restricted Subsidiary in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisitionacquisition or merger, any of the following is true:either
(a) the Issuer 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 4.10(a);4.09, or
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect is equal to such acquisition would be or greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio such ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisitionmerger;
(12xvii) Indebtedness of the Issuer Company or a any of its Restricted Subsidiaries to an Unrestricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accountsfor money borrowed; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Issuer or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and 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 Issuer, or the Note Guarantee, in the case of a Subsidiary Guarantor; and
(i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, which new incurrence is not permitted by this clause (21);
(22) the issuance by any Restricted Subsidiary to the Issuer or to any other Restricted Subsidiary of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be subordinated in right of payment to the Notes or the Note such Restricted Subsidiary’s Subsidiary Guarantee, as the case may be, 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 exercise any other remedies with respect thereto until 91 days after the Stated Maturity of the Notes; and
(bxviii) Non-Guarantors of Indebtedness incurred by the Company or any Restricted Subsidiary with respect to Digital Projector Financing in an aggregate principal amount incurred not to exceed (i) $70.0 million during the period from the Start Date to the first anniversary thereof; (ii) $70.0 million during the period from the first anniversary of the Start Date to the second anniversary of the Start Date; and (iii) $60.0 million after the second anniversary of the Start 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 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 that is not a Guarantor may incur any Indebtedness (other Non-Guarantors than Senior Debt) 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 accordance with the provisions event that an item of proposed Indebtedness (including Acquired Debt) meets the criteria of more than one of the categories described in clauses (i) through (xviii) above, or is entitled to be incurred pursuant to the first paragraph of this Indenture; andSection 4.09, the Company shall be permitted to classify (or later classify or reclassify in whole or in part in its sole discretion) 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 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 Indebtedness under the Credit Agreement outstanding on the Issue Date. 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 the exchange rate of currencies. The principal amount of any Disqualified Stock of the Company or a Restricted Subsidiary, or preferred stock of a Restricted Subsidiary that is not a Guarantor, will be equal to the greater of the maximum mandatory redemption or repurchase price (not including, in either case, any redemption or repurchase premium) or the liquidation preference thereof.
Appears in 1 contract
Samples: Indenture (Cinemark Usa Inc /Tx)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and shall 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 Issuer and its Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Issuer’s Restricted Subsidiaries Guarantors may incur Indebtedness (including Acquired Debt) or issue shares of preferred stock, if, after giving effect thereto and the application of the proceeds therefrom, either (i) if the Fixed Charge Coverage Ratio for the IssuerCompany’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 2.0 2.00 to 1.01.00, or determined on a pro forma basis (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as including a pro forma application of the end of net proceeds therefrom), as if the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is had been incurred or such the Disqualified Stock or the preferred stock is had been issued, as the case may be, would have been less than or equal to 1.75 to 1.0and the net proceeds therefrom applied, at the beginning of such four-quarter period.
(b) The provisions of Section 4.10(a4.09(a) shall hereof will not prohibit the incurrence of any Indebtedness that meets of the following criteria or the issuance of any preferred stock that meets the following criteria, as applicable (collectively, “Permitted Debt”):following:
(1) the incurrence by the Issuer Company or any of its Restricted Subsidiary Subsidiaries of additional Indebtedness pursuant to and letters of credit under Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, 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) $1,500 25.0 million and 22.5(ii) 7.5% of Consolidated Net Tangible Assets at Assets, less (b) the time aggregate amount of incurrenceall Net 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 and effect a corresponding commitment reduction thereunder pursuant to Section 4.10(b)(1);
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuer Company and the Guarantors of Indebtedness represented by the Initial Notes and the related Note Guarantees to be issued on the Issue Date and replacement Notes in respect thereof, if any (date of this Indenture and the incurrence by any Subsidiary Guarantor of any Exchange Notes and the related Note Guarantee)Guarantees to be issued pursuant to the Registration Rights Agreement;
(4) the incurrence or issuance by the Issuer Company or any of its Restricted Subsidiary of the Issuer Subsidiaries of Indebtedness (including represented by Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction)Obligations, Disqualified Stock Financing Obligations, mortgage financings or preferred stockpurchase money obligations, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development installation or improvement of plantproperty, plant or equipment used in the business of the Company or other property used or useful in a Permitted Business which occurs within 365 days any of such purchase, design, construction, lease, installation, development or improvementits Restricted Subsidiaries, in an aggregate principal amount amount, 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 7.5% of Consolidated Net Tangible Assets of the Company (measured as of the date of the applicable incurrence) at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5) the incurrence by the Issuer Company or any of its Restricted Subsidiary Subsidiaries of Attributable Debt in respect of Sale/Leaseback Transactions, in an aggregate principal amount not to exceed the greater of (a) $25.0 million and (b) the minimum amount that would cause the Consolidated Secured Leverage Ratio of the Company to be greater than 4.75 to 1.00 as of the date of such Sale/Leaseback Transaction; provided, however, that in no event will the aggregate principal amount of Attributable Debt in respect of Sale/Leaseback Transactions outstanding pursuant to this clause (5), as of the date of any Sale/Leaseback Transaction entered into pursuant to this clause (5), exceed $75.0 million;
(6) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or incurred the net proceeds of which are used to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), the first paragraph of this clause (5) covenant or clause clauses (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4), (6), (13) or (1120) of this Section 4.10(b4.09(b);
(67) the incurrence by the Issuer 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) (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 of the Company and (2) 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 (7);
(8) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the 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 (8);
(9) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations not (excluding Hedging Obligations entered into for speculative purposes);
(710) the guarantee by the Company or any of 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;
(11) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, or performance, completion and compliance guarantees surety, statutory or other similar obligations incurred appeal bonds in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) 12) the incurrence by the Issuer 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 in the ordinary course of businessfunds, so long as such Indebtedness is extinguished covered within five Business Days;
(913) the incurrence by the Company or any of Indebtedness arising from agreements its Restricted Subsidiaries of Acquired Debt (other than Acquired Debt incurred in connection with, or to provide all or any portion of the Issuer funds or credit support utilized to consummate the transaction or series of transactions which results in the incurrence by the Company or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this IndentureDebt); provided that immediately on the date of such incurrence of Acquired Debt and after giving pro forma effect to such acquisitionthereto, any of the following is true:
either (a) the Issuer Company would be permitted have been able to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.10(a);
4.09(a) or (b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition for the Company would be equal to or greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio for the Company immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than transaction or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness series of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrencetransactions);
(14) the incurrence of guarantees by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness owed on a Restricted Subsidiary short-term basis of the Issuer no longer than 30 days to banks and other financial institutions incurred in the ordinary course of business with such banks and financial institutions that arises in respect of obligations connection with ordinary banking arrangements to suppliers, customers, franchisees, lessors and licensees manage cash balances of the Issuer or any Company and its Restricted Subsidiary of the IssuerSubsidiaries;
(15) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case case, incurred in the ordinary course of business;
(16) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness representing deferred compensation to employees of the Company and its Restricted Subsidiaries incurred in the ordinary course of business;
(17) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness by in respect of any bankers’ acceptance, bank guarantees, letter of credit, warehouse receipt or similar facilities, and reinvestment obligations related thereto, incurred in the Issuer or a Restricted Subsidiary ordinary course of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution thereinbusiness;
(18) obligations of the Issuer incurrence by the Company or any of its Restricted Subsidiary Subsidiaries of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into Guarantees incurred in the ordinary course of business in connection with respect of obligations of (or to) suppliers, customers, franchisees, lessors and licensees that, in each case, are not Affiliates of the acquisition Company or any of real property, to entitle, develop or construct infrastructure thereuponits Restricted Subsidiaries;
(19) Indebtedness consisting the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness issued incurred by the Issuer Company or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer Company to the extent described in Section 4.08(b)(4);that the net proceeds thereof are promptly deposited to defease, redeem or to satisfy and discharge the Notes; and
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer Company or any Restricted Subsidiary Guarantor of intercompany Indebtedness between in an aggregate principal amount (or among 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 pursuant to this clause (20), not to exceed the Issuer and any greater of its Restricted Subsidiaries; provided, however, that:
(a) if $25.0 million and (b) 7.5% of Consolidated Net Tangible Assets (determined as of the Issuer or date of the applicable incurrence pursuant to this clause (20)), (the items of Indebtedness and, in the case of clause (8), preferred stock, specified in clauses (1)-(20) above are collectively referred to as “Permitted Debt”). The Company will not incur, and will not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and contractually 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 any other Indebtedness of the Issuer, Company or the Note Guarantee, in the case of a Subsidiary Guarantor; and
(i) any subsequent issuance or transfer of Equity Interests that results in any such Guarantor unless such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, which new incurrence is not permitted by this clause (21);
(22) the issuance by any Restricted Subsidiary to the Issuer or to any other Restricted Subsidiary of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be 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 Company 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 (20) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness (other than the Notes and the Note GuaranteeGuarantees) under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest or preferred stock dividends, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles and the payment of dividends on preferred stock or Disqualified Stock in the form of additional 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, in each such case, that the amount thereof is included in Fixed Charges 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 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. The amount of any Indebtedness outstanding as of any date will be:
(1) the accreted value of the Indebtedness, in the case may beof any Indebtedness issued with original issue discount;
(2) the principal amount of the Indebtedness, and in the case of any other Indebtedness; and
(b3) Non-Guarantors in respect of Indebtedness incurred of another Person secured by other Non-Guarantors in accordance with a Lien on the provisions assets of this Indenturethe specified Person, the lesser of:
(A) the Fair Market Value of such assets at the date of determination; and
(B) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Samples: Indenture (Carmike Cinemas Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), neither the Company nor any Restricted Subsidiary will issue any Disqualified Stock and shall the Company will not permit any of its other Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Issuer Company and its any Restricted Subsidiaries Subsidiary may incur Indebtedness (including Acquired Debt) and the Issuer’s Restricted Subsidiaries may or issue shares of preferred stockDisqualified Stock, if, after giving effect thereto and the application of the proceeds therefrom, either (i) if the Fixed Charge Coverage Ratio for the IssuerCompany’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 preferred stock Disqualified Stock is 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 additional Indebtedness had been incurred or the Disqualified Stock had been issued, as the case may be, would have been at least 2.0 to 1.0, or (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as beginning of the end of the Issuer’s most recently ended fiscal such four-quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been less than or equal to 1.75 to 1.0period.
(b) The provisions of Section 4.10(a4.09(a) shall hereof will not prohibit the incurrence of any Indebtedness that meets of the following criteria or the issuance items of any preferred stock that meets the following criteria, as applicable Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer Company and or any Restricted Subsidiary of additional Indebtedness pursuant to (including letters of credit) under one or more Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, 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 Subsidiaries thereunder) not to exceed an amount equal to the greater of (a) $1,500 1,100.0 million and 22.5(b) 30% of Consolidated Tangible Assets at ACNTA as of the time date of such incurrence;
(2) the incurrence by the Company or any of its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuer of Indebtedness Company and the Guarantors represented by the Initial Notes and the related Guarantees to be issued on the Issue Date and replacement any Exchange Notes and related Guarantees issued in respect thereof, if any (and exchange therefor pursuant to the incurrence by any Subsidiary Guarantor of any related Note Guarantee)Registration Rights Agreement;
(4) the incurrence or issuance by the Issuer Company or any of its Restricted Subsidiary of the Issuer Subsidiaries of Indebtedness (including represented by Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction)Obligations, Disqualified Stock mortgage financings or preferred stockpurchase money obligations, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development installation or improvement of plantproperty, plant or equipment used in the business of the Company or other property used or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvementRestricted Subsidiaries, in an aggregate principal amount amount, 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 $35.0 million at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5) the incurrence by the Issuer Company or any of its Restricted Subsidiary Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or incurred the net proceeds of which are used to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a4.09(a) hereof or clauses (2), (3) or (12) of this Section 4.09(b) or this clause (5) or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4) or (11) of this Section 4.10(b);
(6) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Hedging intercompany Indebtedness, Disqualified Stock or preferred stock between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company is the obligor on such Indebtedness and a Guarantor is not the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, or if a Guarantor is the obligor on such Indebtedness and neither the Company nor another Guarantor is the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Guarantee of such Guarantor; and
(B) any (i) subsequent issuance or transfer of Equity Interests that results in any such Indebtedness, Disqualified Stock or preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company, and (ii) sale or other transfer of any such Indebtedness, Disqualified Stock or preferred stock to a Person that is not for speculative purposeseither the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such 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 incurrence by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations;
(8) the guarantee by the Company or any of the Guarantors of Indebtedness of the Company or any Guarantor that was permitted to be incurred by another provision of this Section 4.09;
(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 incurrence by the Company or any of its Unrestricted Subsidiaries of Non-Recourse Debt of an Unrestricted Subsidiary provided, however, that if any such Indebtedness ceases to be Non-Recourse Debt of an Unrestricted Subsidiary, such event will be deemed to constitute an incurrence of Indebtedness by a Restricted Subsidiary that is not permitted by this clause (10);
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bondsbid, performance, completion surety and compliance guarantees or other similar obligations incurred 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 and any of its Restricted Subsidiaries with respect to letters of credit supporting such obligations (in each case other than 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 upon at the drawing time such Restricted Subsidiary is acquired by the Company, the Company would have been able to incur $1.00 of letters of credit for reimbursement obligations, or additional Indebtedness pursuant to Section 4.09(a) after giving effect to the incurrence of other reimbursement-type Indebtedness with respect such Indebtedness, Disqualified Stock or preferred stock pursuant to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrencethis clause (12);
(8) 13) the incurrence by the Issuer 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 in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer Company or a any of its Restricted Subsidiary of the Issuer Subsidiaries providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations price or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests Capital Stock of a Subsidiary, provided that the Issuer or any 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 SubsidiarySubsidiaries in connection with such disposition;
(1014) the incurrence by the Company or any of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;50.0 million; and
(15) Indebtedness to the incurrence extent the proceeds 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 by (including Acquired Debt) meets the Issuer or a Restricted Subsidiary criteria of more than one of the Issuer categories of Permitted Debt described in respect clauses (1) through (15) of obligations this Section 4.09, or is entitled to pay be incurred pursuant to Section 4.09(a), the deferred purchase price of goods Company will be permitted to classify (or services later classify or progress payments reclassify in connection with whole or in part in its sole discretion) such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence item of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or in any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement manner that complies with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting this covenant. The amount of Indebtedness issued by at a price that is less than the Issuer or any Restricted Subsidiary principal amount thereof will be equal to the amount of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, liability in each case to finance the repurchase, redemption or other acquisition or retirement for value respect thereof determined in accordance with GAAP. Indebtedness of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer Person existing at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Issuer or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and 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 Issuer, or the Note Guarantee, in the case of a Subsidiary Guarantor; and
(i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or becomes a Restricted Subsidiary shall be deemeddeemed to have been incurred by the Company and the Restricted Subsidiary at the time such Person becomes a Restricted Subsidiary. 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 covenant; provided, in each such case, to constitute a new incurrence of such Indebtedness by that the Issuer or such Restricted Subsidiary, as the case may be, which new incurrence amount thereof is not permitted by this clause (21);
(22) the issuance by any Restricted Subsidiary to the Issuer or to any other Restricted Subsidiary of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results included in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary Fixed Charges of the Issuer in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be subordinated in right of payment to the Notes or the Note Guarantee, Company as the case may be, and (b) Non-Guarantors of Indebtedness incurred by other Non-Guarantors in accordance with the provisions of this Indenture; andaccrued.
Appears in 1 contract
Samples: Indenture (Energy Xxi (Bermuda) LTD)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt), ) and shall 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 Issuer and its Restricted Subsidiaries Company or any of the Guarantors may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the Issuer’s Restricted Subsidiaries Guarantors may issue shares of preferred stock, if, after giving effect thereto and the application of the proceeds therefrom, either (i) stock if the Fixed Charge Coverage Ratio for the Issuer’s Company's most recently ended four full fiscal quarters for which internal financial statements are available to management immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or preferred stock is issued would have been at least 2.25 to 1 determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or preferred stock had been issued, as the case may be, would have been at least 2.0 to 1.0, or (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as beginning of the end of the Issuer’s most recently ended fiscal such four-quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been less than or equal to 1.75 to 1.0period.
(b) The provisions of Section 4.10(a4.09(a) shall will not prohibit the incurrence of any Indebtedness that meets of the following criteria or the issuance items of any preferred stock that meets the following criteria, as applicable Indebtedness (collectively, “"Permitted Debt”"):
(1) the incurrence by the Issuer or any Restricted Subsidiary Company of additional Indebtedness pursuant to and letters of credit under Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, 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 (x) $1,500 40.0 million and 22.5% or (y) the amount of Consolidated Tangible Assets the Borrowing Base as of the date of such incurrence; provided that the aggregate principal amount at the any one time of incurrenceoutstanding under this clause (1) may not exceed $60.0 million;
(2) the incurrence by the Company and its Restricted Subsidiaries of Existing Indebtedness;
(3) the incurrence by the Issuer Company and the Guarantors of Indebtedness represented by the Initial Notes and the Guarantees to be issued on the Issue Date and replacement Notes in respect thereof, if any (date hereof and the incurrence by any Subsidiary Guarantor of any Exchange Notes and the related Note Guarantee)Guarantees to be issued pursuant to the Registration Rights Agreement;
(4) the incurrence or issuance by the Issuer Company or any of its Restricted Subsidiary of the Issuer Subsidiaries of Indebtedness (including represented by Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction)Obligations, Disqualified Stock mortgage financings or preferred stockpurchase money obligations, in each case, case incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development construction or improvement of plantproperty, plant or equipment used in the business of the Company or other property used such Restricted Subsidiary (whether through the direct purchase of assets or useful in a Permitted Business which occurs within 365 days the Capital Stock of any Person owning such purchase, design, construction, lease, installation, development or improvementAssets), in an aggregate principal amount or accreted value, as applicable, including all Permitted Refinancing Indebtedness issued to refund, replace or refinance any Indebtedness incurred pursuant to this clause (4), not to exceed $7.5 million at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5) the incurrence by the Issuer Company or any of its Restricted Subsidiary Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or incurred the net proceeds of which are used to extend, renew, refund, refinance, replace, purchase, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause (54.09(a) hereof or clause clauses (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4) or and (1112) of this Section 4.10(b4.09(b);
(6) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposes;
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) 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 (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer Company and any of its Restricted Subsidiaries; provided, however, that:
(aA) if the Issuer Company or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary GuarantorIndebtedness, 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 IssuerCompany, or the Note GuaranteeGuarantee of such Guarantor, 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 Issuer 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 Issuer Company or a Restricted Subsidiary of the Company shall be deemed, in each case, to constitute a new an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, which new incurrence is not permitted by this clause (21);
(227) the issuance incurrence by the Company or its Restricted Subsidiaries of Hedging Obligations in the ordinary course of business and not for speculative purposes;
(8) the Guarantee by the Company or any of its Restricted Subsidiary to Subsidiaries of Indebtedness of the Issuer Company or to any other a Restricted Subsidiary of shares the Company that was permitted to be incurred by another provision of preferred stockthis covenant, provided that if the Indebtedness being guaranteed is subordinated to the Notes or any Guarantee, then the Guarantee shall be subordinated to the same extent as the Indebtedness guaranteed;
(9) the incurrence by the Company's Unrestricted Subsidiaries of Non-Recourse Debt; provided, however, that: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;
(a10) Indebtedness incurred by the Company or any subsequent issuance of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including without limitation, to letters of credit in respect to workers' compensation claims or transfer self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers' compensation claims; provided, however, that upon the drawing of Equity Interests that results such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(11) obligations in respect of performance and surety bonds and completion guarantees provided by the Company or any such preferred stock being held by a Person other than Restricted Subsidiary in the Issuer or a Restricted Subsidiaryordinary course of business; and
(b12) the incurrence by the Company or any sale of its Restricted Subsidiaries of additional Indebtedness, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any other transfer of any such preferred stock Indebtedness incurred pursuant to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (2212);
, not to exceed $10.0 million. The Company will not incur, and will not permit any Guarantor to incur, any Indebtedness (23) Guarantees (other than Guarantees of Designated SPE including Permitted Debt) by (a) the Issuer or that is contractually subordinated in right of payment to any Subsidiary Guarantor of other Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions of this Indenture; provided that in the event Company or such Guarantor unless such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be also contractually subordinated in right of payment to the Notes and the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness of the Company 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 by virtue of being secured on a first or junior Lien basis. For purposes of determining compliance with this Section 4.09, in the Note Guaranteeevent that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (12) above or is entitled to be incurred pursuant to Section 4.09(a) hereof, the Company will be permitted to classify such item of Indebtedness on the date of its incurrence in any manner that complies with this covenant. In addition, the Company may, at any time, change the classification of an item of Indebtedness (or any portion thereof) to any other clause or to Section 4.09(a) provided that the Company would be permitted to incur such item of Indebtedness (or portion thereof) pursuant to such other clause or Section 4.09(a) hereof, as the case may be, at such time of reclassification. 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 (b) Non-Guarantors 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 incurred by other Non-Guarantors in accordance with the provisions or an issuance of Disqualified Stock for purposes of this Indenturecovenant; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued. 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. The amount of any Indebtedness outstanding as of any date will be:
(1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(A) the Fair Market Value of such asset at the date of determination, and
(B) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Samples: Indenture (Osullivan Industries Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt), and shall the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; providedPROVIDED, howeverHOWEVER, that the Issuer and its Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) and the Issuer’s Restricted Subsidiaries may or issue shares of preferred stockDisqualified Stock, if, after giving effect thereto and the application of the proceeds therefrom, either (i) if the Fixed Charge Coverage Ratio for the Issuer’s Company's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock Disqualified Stock is issued would have been at least 2.5 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or Disqualified Stock had been issued, as the case may be, would have been at least 2.0 to 1.0, or (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as beginning of the end such four-quarter period. The first paragraph of the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been less than or equal to 1.75 to 1.0.
(b) Section 4.10(a) shall this covenant will not prohibit the incurrence of any Indebtedness that meets of the following criteria or the issuance items of any preferred stock that meets the following criteria, as applicable Indebtedness (collectively, “"Permitted Debt”"):
(1) the incurrence by the Issuer or Company and any Restricted Subsidiary Guarantor of additional Indebtedness pursuant to and letters of credit under Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, 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 maximum of $150.0 million, LESS the aggregate amount of all Net Proceeds from Asset Sales applied by H&E or any of its Restricted Subsidiaries since the date of this Indenture to repay, repurchase, or redeem Senior Debt pursuant to clause (1) of the third paragraph of Section 4.10 to the extent such Net Proceeds exceed $25 million in the aggregate since the date of this Indenture, PROVIDED that if after giving effect to the incurrence of any Indebtedness pursuant to this clause (1), the Fixed Charge Coverage Ratio for the Company's most recently ended four full fiscal quarters for which internal financial statements are then available would exceed 2.5 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), then such maximum amount shall be the greater of (x) $1,500 150.0 million, LESS the aggregate amount of all Net Proceeds from Asset Sales applied by H&E or any of its Restricted Subsidiaries since the date of this Indenture to repay, repurchase, or redeem Senior Debt pursuant to clause (1) of the third paragraph of Section 4.10 to the extent such Net Proceeds exceed $25 million and 22.5% in the aggregate since the date of Consolidated Tangible Assets at this Indenture or (y) the time of incurrenceBorrowing Base;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuer Company and the Guarantors of Indebtedness represented by the Initial Notes, the Senior Subordinated Notes and the related Subsidiary Guarantees to be issued on the Issue Date and replacement Notes in respect thereof, if any (date of this Indenture and the incurrence by any Exchange Notes and the related Subsidiary Guarantor of any related Note Guarantee)Guarantees relating to the Notes and the Senior Subordinated Notes to be issued pursuant to the respective registration rights agreements;
(4) the incurrence or issuance by the Issuer Company or any of its Restricted Subsidiary of the Issuer Subsidiaries of Indebtedness represented by purchase money obligations to finance the purchase of inventory held for sale or lease (including Capital Lease Obligations and Indebtedness incurred rental equipment) in connection with a sale/leaseback transaction), Disqualified Stock or preferred stock, the ordinary course of business not to exceed $125.0 million in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development or improvement of plant, equipment or other property used or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvement, in an aggregate principal amount at any one time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5) the incurrence by the Issuer Company or any of its Restricted Subsidiary Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or incurred the net proceeds of which are used to extend, renew, refund, refinance, replace, defease refinance or discharge any replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), the first paragraph of this clause (5) covenant or clause clauses (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4) 4)(a), (5), or (1110) of this Section 4.10(b)paragraph;
(6) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposes;
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) 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 (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer Company and any of its Restricted Subsidiaries; providedPROVIDED, howeverHOWEVER, that:
(a) if the Issuer Company or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary GuarantorIndebtedness, 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, Notes in the case of the IssuerCompany, 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 Issuer 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 Issuer Company or a Restricted Subsidiary shall of the Company; will be deemed, in each case, to constitute a new an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, which new incurrence is that was not permitted by this clause (216);
(227) the issuance incurrence by the Company or any of its Restricted Subsidiary to Subsidiaries of Hedging Obligations that are incurred in the Issuer ordinary course of business for the purpose of fixing or to any other Restricted Subsidiary of shares of preferred stock; providedhedging interest rate risk, however, that:currency risk or commodity risk and not for speculative purposes;
(a) 8) the guarantee by the Company or any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(b) any sale or other transfer Guarantors of any such preferred stock to a Person that is not either Indebtedness of the Issuer Company or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of Indebtedness Company that was permitted to be incurred by another provision of this covenant;
(9) the Issuer 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 covenant; PROVIDED, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued;
(10) Indebtedness incurred by the Company or any of its Restricted Subsidiary 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 to workers' compensation claims 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;
(11) obligations in respect of performance and surety bonds and completion guarantees provided by the Company or any of its Restricted Subsidiaries in the ordinary course of business; and
(12) the incurrence by the Company or the Guarantors of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding under this clause (12), including all Permitted Refinancing indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (12), not to exceed $15.0 million. The Company will not incur any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Issuer in accordance with the provisions of this Indenture; provided that in the event Company unless such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be also contractually subordinated in right of payment to the Notes on substantially identical terms; PROVIDED, HOWEVER, that no Indebtedness of the Company will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured, being secured to a lesser extent or being secured by a Lien of lower priority. 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 (12) above, or is entitled to be incurred pursuant to the first paragraph of this covenant, the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, in any manner that complies with this covenant. Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. In addition, the Company may, at any time, change the classification of an item of Indebtedness (or any portion thereof) to any other clause or to the first paragraph of this covenant provided that the Company or its Restricted Subsidiaries would be permitted to incur such item of Indebtedness (or portion thereof) pursuant to such other clause or the Note Guaranteefirst paragraph of this covenant, as the case may be, and (b) Non-Guarantors at such time of Indebtedness incurred by other Non-Guarantors in accordance with the provisions of this Indenture; andreclassification.
Appears in 1 contract
Samples: Indenture (H&e Finance Corp)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company shall not issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Issuer and its Restricted Subsidiaries may incur Indebtedness stock or other equity interests (including Acquired Debt) and the Issuer’s Restricted Subsidiaries may issue shares of preferred stock, if, after giving effect thereto and the application of the proceeds therefrom, either (i) the Fixed Charge Coverage Ratio for the Issuer’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred other than common stock or such preferred stock is issued, as the case may be, would have been at least 2.0 to 1.0, or (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as of the end of the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been less than or equal to 1.75 to 1.0other common equity interests).
(b) The provisions of Section 4.10(a4.08(a) hereof shall not prohibit the incurrence of any Indebtedness that meets of the following criteria or the issuance items of any preferred stock that meets the following criteria, as applicable Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or any Restricted Subsidiary of Indebtedness pursuant to Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, in an aggregate principal amount at any one time outstanding not to exceed the greater of $1,500 million and 22.5% of Consolidated Tangible Assets at the time of incurrence;
(2) the Existing Indebtedness;
(3) the incurrence by the Issuer of Indebtedness represented by the Initial Notes issued on the Issue Date and replacement Notes in respect thereof, if any (Company and the incurrence by any Subsidiary Guarantor of any related Note Guarantee);
(4) the incurrence or issuance by the Issuer or any Restricted Subsidiary Company of the Issuer of Indebtedness (including Capital Lease Obligations Notes and Indebtedness incurred in connection with a sale/leaseback transaction), Disqualified Stock or preferred stock, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development or improvement of plant, equipment or other property used or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvement, in an aggregate principal amount at any time outstanding, together with Note Guarantees and any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5) the incurrence by the Issuer or any Restricted Subsidiary of Permitted Refinancing Indebtedness in exchange for, or that is incurred to extend, renew, refund, refinance, replace, defease defease, extend or discharge any other Indebtedness incurred pursuant to this clause (1);
(2) the incurrence by the Company or any of its Subsidiaries that are Grantors of intercompany Indebtedness between or among the Company and/or any of its Subsidiaries that are Grantors;
(3) the issuance by any Subsidiary of the Company to the Company or to any of its Subsidiaries of shares of stock or other than intercompany equity interests;
(4) the incurrence by the Company or any of its Subsidiaries of Hedging Obligations in the Ordinary Course of Business;
(5) the Guarantee (including by way of co-obligation or assumption) by the Company or any Subsidiary of the Company of Indebtedness of the Company or a Subsidiary of the Company that is a Grantor (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 by this Indenture to be incurred under Section 4.10(a), this clause (5) or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4) or (11) by another provision of this Section 4.10(b)4.08; 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 or assumed;
(6) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposes;
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness or reimbursement obligations in respect of workers’ compensation claims, self-insurance obligationsobligations (including reinsurance), bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, bonds and surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred bonds in the ordinary course Ordinary Course of business; provided, however, that upon the drawing Business (including without limitation in respect of letters of credit for reimbursement customs obligations, or landing fees, taxes, airport charges, overfly rights and any other obligations to airport and governmental authorities);
(7) the incurrence by the Company or any of other reimbursement-type its Subsidiaries of Indebtedness in respect of any overdrafts and related liabilities arising from treasury, depository and cash management services or in connection with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrenceany automated clearing house transfers of funds;
(8) the incurrence by the Issuer reimbursement obligations in respect of standby or any documentary letters of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank credit or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Daysbanker’s acceptances;
(9) the incurrence of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed ordinary course surety and appeal bonds (other than in connection with the disposition or acquisition debt for borrowed money) that do not secure judgments that constitute an Event of any business, assets or Equity Interests of the Issuer or any such Restricted SubsidiaryDefault;
(10) Indebtedness of the incurrence Company or any of Indebtedness resulting from endorsements of negotiable instruments for collection its Subsidiaries (x) to Credit Card, travel charge or clearing house processors in connection with Credit Card processing, travel charge or clearinghouse services incurred in the ordinary course Ordinary Course of businessBusiness, whether in the form of hold-backs or otherwise and (y) in respect of Credit Card purchase for operations in the Ordinary Course of Business, collectively, in an aggregate amount outstanding at any time not to exceed $5.0 million;
(11) Acquired Debt or the incurrence of Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer Company or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation its Subsidiaries owed to one or consolidation) more Persons in accordance connection with the terms financing of this Indenture; provided that immediately after giving effect to such acquisition, any insurance premiums in the Ordinary Course of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisitionBusiness;
(12) Indebtedness of the Issuer Company or a Restricted Subsidiary any of its Subsidiaries consisting of customary take-or-pay or like obligations contained in supply, maintenance, repair, power-by-the-hour, overhaul or like agreements entered into in the Issuer in respect Ordinary Course of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or lessBusiness;
(13) the incurrence or issuance by the Issuer Company or a Restricted Subsidiary any of the Issuer its Subsidiaries of Aircraft Indebtedness in an aggregate principal amount (or accreted value, as applicable) outstanding at any time outstanding, not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence100.0 million;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer Company or any Restricted Subsidiary of the Issuerits Subsidiaries of Permitted Pari Passu Debt in an aggregate principal amount outstanding at any time not to exceed $25.0 million;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer Company or any of its Subsidiaries owed to one or more Persons, in respect an aggregate principal amount outstanding at any time not to exceed $5.0 million, of the following: (a) obligations under Operating Leases (excluding Operating Leases for aircraft), (b) obligations under maintenance deferral agreements, (c) any deferral of pre-delivery payments relating to pay the deferred purchase price of goods or services or progress payments aircraft, (c) any air traffic liability, (d) any payment obligations in connection with such goods and services; provided that such health or other types of social security benefits, (f) any payment obligations are incurred in connection with open accounts extended by suppliers lease maintenance return conditions on customary trade terms leased aircraft or (which require that all such payments be made within 60 days after the incurrence of the related obligationg) in the ordinary course of business any reserves for capital tax obligations and not in connection with the borrowing of money or (h) any Hedging Obligationsreserves for obligations under land leases;
(16) the incurrence of Indebtedness of the Issuer Company or any Restricted Subsidiary of its Subsidiaries owed to one or more Persons as a result of obligations under Operating Leases for aircraft, so long as any Liens related to such Indebtedness are subject and subordinate to the Lien of the Issuer consisting of (a) Collateral Agent on the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;Collateral
(17) the incurrence of Indebtedness by representing Finance Lease Obligations with respect to Ground Service Equipment and office equipment used in the Issuer or a Restricted Subsidiary Ordinary Course of Business, in an aggregate amount outstanding at any time not to exceed $3.0 million; and
(18) any Indebtedness listed on Schedule 4.07(b)(18).
(c) None of the Issuer following shall constitute an incurrence of Indebtedness or an issuance of preferred stock or Disqualified Stock for purposes of this Section 4.08:
(1) the accrual of interest or preferred stock dividends;
(2) the accretion or amortization of original issue discount;
(3) the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms;
(4) the reclassification of preferred stock or any other instrument or transaction as Indebtedness due to a change in accounting principles or in GAAP; and
(5) the payment of dividends on preferred stock or Disqualified Stock in the form of additional shares of the same class of preferred stock or Disqualified Stock.
(d) 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 of its Subsidiaries may incur pursuant to this Section 4.08 shall not be deemed to exist pursuant to the terms of a joint venture agreement be exceeded solely as a result of the failure of the Issuer fluctuations in exchange rates or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;currency values.
(18e) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value The amount of any Management Warrants or other Equity Interests Indebtedness outstanding as of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiaries; provided, however, thatdate shall be:
(a1) if the Issuer or any Subsidiary Guarantor is accreted value of the obligor on Indebtedness as of such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and subordinated in right of payment to the prior payment in full in cash of all Obligations then due with respect to the Notesdate, in the case of any Indebtedness issued with original issue discount; and
(2) the Issuer, or principal amount of the Note GuaranteeIndebtedness as of such date, in the case of a Subsidiary Guarantor; and
(i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, which new incurrence is not permitted by this clause (21);
(22) the issuance by any Restricted Subsidiary to the Issuer or to any other Restricted Subsidiary of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be subordinated in right of payment to the Notes or the Note Guarantee, as the case may be, and (b) Non-Guarantors of Indebtedness incurred by other Non-Guarantors in accordance with the provisions of this Indenture; and.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt), ) and the Company shall not issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Issuer and its Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) or issue shares of Disqualified Stock, and the Issuer’s Company's Restricted Subsidiaries may incur Indebtedness or issue shares of preferred stock, if, after giving effect thereto and the application of the proceeds therefrom, either (i) if the Fixed Charge Coverage Ratio for the Issuer’s Company's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock Disqualified Stock is issued would have been at least 2.0 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Preferred Stock or the Disqualified Stock had been issued, as the case may be, would have been at least 2.0 to 1.0, or (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as beginning of such four-quarter period; The provisions of the end first paragraph of the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been less than or equal to 1.75 to 1.0.
(b) this Section 4.10(a) 4.09 shall not prohibit apply to the incurrence of any Indebtedness that meets of the following criteria or the issuance items of any preferred stock that meets the following criteria, as applicable Indebtedness (collectively, “"Permitted Debt”"):
(1) the incurrence by the Issuer or any Restricted Subsidiary of Indebtedness pursuant to Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, in an aggregate principal amount at any one time outstanding not to exceed the greater of $1,500 million and 22.5% of Consolidated Tangible Assets at the time of incurrence;
(2) the Existing Indebtedness;
(3) the incurrence by the Issuer of Indebtedness represented by the Initial Notes issued on the Issue Date and replacement Notes in respect thereof, if any (and the incurrence by any Subsidiary Guarantor of any related Note Guarantee);
(4) the incurrence or issuance by the Issuer or any Restricted Subsidiary of the Issuer of Indebtedness (including Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction), Disqualified Stock or preferred stock, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development or improvement of plant, equipment or other property used or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvement, in an aggregate principal amount at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5) the incurrence by the Issuer or any Restricted Subsidiary of Permitted Refinancing Indebtedness in exchange for, or incurred to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause (5) or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4) or (11) of this Section 4.10(b);
(6) the incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposes;
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) 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 (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Issuer or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and 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 Issuer, or the Note Guarantee, in the case of a Subsidiary Guarantor; and
(i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, which new incurrence is not permitted by this clause (21);
(22) the issuance by any Restricted Subsidiary to the Issuer or to any other Restricted Subsidiary of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be subordinated in right of payment to the Notes or the Note Guarantee, as the case may be, and (b) Non-Guarantors of Indebtedness incurred by other Non-Guarantors in accordance with the provisions of this Indenture; and
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company shall not issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Issuer and its Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Issuer’s Restricted Subsidiaries Guarantors may incur Indebtedness or issue shares of preferred stock, ifin each case, after giving effect thereto and the application of the proceeds therefrom, either (i) if the Fixed Charge Coverage Ratio for the Issuer’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding applicable Financial Covenant Period would have been at least 2.0 to 1 determined on a pro forma basis (including a pro forma application of the date on which such net proceeds therefrom), as if the additional Indebtedness is had been incurred or such the Disqualified Stock or preferred stock is had been issued, as the case may be, would have been at least 2.0 to 1.0, or (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as beginning of the end of the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been less than or equal to 1.75 to 1.0that Financial Covenant Period.
(b) The first paragraph of this Section 4.10(a) 4.09 shall not prohibit the incurrence of any Indebtedness that meets of the following criteria or the issuance items of any preferred stock that meets the following criteria, as applicable Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or Company and any of its Restricted Subsidiary Subsidiaries of additional Indebtedness pursuant to and letters of credit under Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, 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 outstanding face amount thereof that has not been reimbursed) not to exceed $1.3 billion (provided that such amount shall be reduced to the greater extent of $1,500 million any reduction or elimination of any commitment under any Credit Facility resulting from or relating to the formation of any Receivables Subsidiary or the completion of any Qualified Receivables Transaction) less the aggregate amount of all Net Proceeds of Assets 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 and 22.5% of Consolidated Tangible Assets at the time of incurrenceeffect a corresponding commitment reduction thereunder pursuant to Section 4.10 hereof;
(2) the incurrence by the Company and its Restricted Subsidiaries of Existing Indebtedness;
(3) the incurrence by the Issuer Company and the Guarantors of Indebtedness represented by the Initial Notes to be issued on the Issue Date and replacement Notes in respect thereof, if any (date of this Indenture and the incurrence related Subsidiary Guarantees, the Euro Notes to be issued on the date of the Euro Indenture and the related subsidiary guarantees, the Exchange Notes and the related Subsidiary Guarantees to be issued as contemplated by any Subsidiary Guarantor of any the Registration Rights Agreement and the Euro Exchange Notes and the related Note Guarantee)subsidiary guarantees to be issued as contemplated by the Euro Registration Rights Agreement;
(4) the incurrence or issuance by the Issuer Company or any of its Restricted Subsidiary of the Issuer Subsidiaries of Indebtedness (including represented by Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction)Obligations, Disqualified Stock mortgage financings or preferred stockpurchase money obligations, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development construction or improvement of plantproperty, plant or equipment used in the business of the Company or other property used or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvementthat Restricted Subsidiary, in an aggregate principal amount amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed $25.0 million at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5) the incurrence by the Issuer Company or any of its Restricted Subsidiary Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or incurred the net proceeds of which are used to extend, renew, refund, refinance, replace, defease refinance or discharge any replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under the first paragraph of this Section 4.10(a), this clause (5) 4.09 or clause clauses (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4), (5), (14), (15) or (1117) of this Section 4.10(b4.09(b);
(6) the incurrence by the Issuer 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 the Indebtedness, that Indebtedness (unless pledged as security for Obligations under the Credit Facilities) must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Notes, in the case of the Company, or the Subsidiary Guarantees, in the case of a Guarantor; and
(i) any subsequent issuance or transfer of Equity Interests that results in that Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company (other than as security for Obligations under the Credit Facilities) and (ii) any sale or other transfer (other than as security for Obligations under the Credit Facilities) of that Indebtedness by the Company or a Restricted Subsidiary of the Company 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, as of the date of issuance, transfer or sale, as the case may be, of that Indebtedness by the Company or that Restricted Subsidiary, as the case may be, that is not permitted by this clause (6);
(7) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations entered into the ordinary course of business to hedge or mitigate risks to which the Company or any of its Restricted Subsidiaries is exposed in the conduct of its business or the management of its liabilities and not for speculative purposes;
(78) the guarantee by the Company or any of the Guarantors of Indebtedness of the Company or a Restricted Subsidiary of the Company that was permitted to be incurred by another provision of this Section 4.09;
(9) 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 of Indebtedness or an issuance of Disqualified Stock for purposes of this Section 4.09; provided, in each such case, to the extent relevant to any calculation under this Indenture, that the amount thereof is included in Fixed Charges of the Company as accrued;
(10) 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 $100.0 million at any time outstanding;
(11) 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 that 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 those transactions) and is not guaranteed by the Company or any other Subsidiary of the Company (other than that Receivables Subsidiary);
(12) the incurrence by the Issuer Company and any Restricted Subsidiary of statutory obligations, surety or appeal bonds, performance bonds or other obligations of a like nature incurred in the ordinary course of business of the Company or that Restricted Subsidiary, as the case may be;
(13) Indebtedness incurred by the Company or any of its Restricted Subsidiaries consisting of advances received in the ordinary course of business for cash management purposes from any Unrestricted Subsidiary;
(14) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that issuable upon the drawing conversion or exchange of letters shares of credit for reimbursement obligations, or Disqualified Stock issued in accordance with the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrenceFixed Charge Coverage Ratio test set forth in Section 4.09(a) hereof;
(8) 15) start-up working capital advances from Unilever to the incurrence by the Issuer Company or any of its Restricted Subsidiaries of pursuant to the Sales Agency Agreement;
(16) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft draft, or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business; provided, so long as such however, that the Indebtedness is extinguished within five Business Days;business days of incurrence; and
(917) the incurrence of Indebtedness arising from agreements of by the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer Company or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted valueor, as applicablewith respect to Indebtedness issued at a discount, the original principal amount at the date of incurrence) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (17), not to exceed $10.0 million. For purposes of determining compliance with this Section 4.09:
(1) in the greater event that an item of $150.0 million and 3.0% proposed Indebtedness meets the criteria of Consolidated Tangible Assets more than one of the Issuer categories of Permitted Debt described in clauses (1) through (17) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, the Company shall be permitted to (a) classify that item of Indebtedness on the date of its incurrence in any manner that complies with this Section 4.09 and (b) after the incurrence of any Permitted Indebtedness pursuant to the provisions described in this Section 4.09(b), reclassify such Indebtedness to any other type of Permitted Indebtedness permitted by the provisions described in this Section 4.09(b), provided, that the Indebtedness, at the time of incurrencereclassification, could have been incurred as such other type of Permitted Indebtedness;
(142) Indebtedness under Credit Facilities outstanding on the incurrence of guarantees date on which Notes are first issued and authenticated under this Indenture will be deemed to have been incurred on that date in reliance on the exception provided by the Issuer or a Restricted Subsidiary clause (1) of the Issuer in the ordinary course definition of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;Permitted Debt; and
(153) for purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness by denominated in a foreign currency, the Issuer or a Restricted Subsidiary dollar-equivalent principal amount of that Indebtedness incurred pursuant thereto shall be calculated based on the Issuer relevant currency exchange rate in respect of obligations to pay effect on the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided date that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Issuer or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and subordinated in right of payment to the prior payment in full in cash of all Obligations then due with respect to the Notesincurred, in the case of the Issuerterm Indebtedness, or the Note Guaranteefirst committed, in the case of a Subsidiary Guarantor; and
(i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, which new incurrence is not permitted by this clause (21);
(22) the issuance by any Restricted Subsidiary to the Issuer or to any other Restricted Subsidiary of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions of this Indenturerevolving credit Indebtedness; provided that if that Indebtedness is incurred to refinance other Indebtedness denominated in a foreign currency, and that refinancing would cause the event such applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of that refinancing, the U.S. dollar-denominated restriction will be deemed not to have been exceeded so long as the principal amount of that refinancing Indebtedness does not exceed the principal amount of that Indebtedness being refinanced. The principal amount of any Indebtedness incurred to refinance other Indebtedness, if incurred in a different currency from the Indebtedness being refinanced, will be calculated based on the currency exchange rate applicable to the currencies in which that refinancing Indebtedness is denominated that is being Guaranteed is Subordinated Indebtedness, then in effect on the related Guarantee shall be subordinated in right date of payment to the Notes or the Note Guarantee, as the case may be, and (b) Non-Guarantors of Indebtedness incurred by other Non-Guarantors in accordance with the provisions of this Indenture; andrefinancing.
Appears in 1 contract
Samples: Indenture (Johnson Polymer Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer Amkor shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee, or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired DebtIndebtedness), and shall Amkor 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 Issuer Amkor and its any Restricted Subsidiaries Subsidiary that is a Subsidiary Guarantor may incur Indebtedness (including Acquired Debt) Indebtedness), and the Issuer’s Restricted Subsidiaries Amkor may issue shares of Disqualified Stock, and any Restricted Subsidiary that is a Subsidiary Guarantor may issue preferred stock, if, after giving effect thereto and if the application of the proceeds therefrom, either (i) the Fixed Charge Consolidated Interest Expense Coverage Ratio for the IssuerAmkor’s most recently ended four full fiscal quarters 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 preferred stock is issued, as the case may be, issued would have been at least 2.0 to 1.0, or determined on a pro forma basis (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as including a pro forma application of the end of net proceeds therefrom), as if the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred had been incurred, or such the Disqualified Stock or preferred stock is had been issued, as the case may be, would have been less than or equal to 1.75 to 1.0.
(b) Section 4.10(a) shall not prohibit and the incurrence of any Indebtedness that meets proceeds thereof applied, at the following criteria or the issuance of any preferred stock that meets the following criteria, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or any Restricted Subsidiary of Indebtedness pursuant to Credit Facilities or Project Loans, including any Guarantee beginning of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, in an aggregate principal amount at any one time outstanding not to exceed the greater of $1,500 million and 22.5% of Consolidated Tangible Assets at the time of incurrence;
(2) the Existing Indebtedness;
(3) the incurrence by the Issuer of Indebtedness represented by the Initial Notes issued on the Issue Date and replacement Notes in respect thereof, if any (and the incurrence by any Subsidiary Guarantor of any related Note Guarantee);
(4) the incurrence or issuance by the Issuer or any Restricted Subsidiary of the Issuer of Indebtedness (including Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction), Disqualified Stock or preferred stock, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development or improvement of plant, equipment or other property used or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvement, in an aggregate principal amount at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5) the incurrence by the Issuer or any Restricted Subsidiary of Permitted Refinancing Indebtedness in exchange for, or incurred to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause (5) or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4) or (11) of this Section 4.10(b);
(6) the incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposes;
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, selffour-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) 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 (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Issuer or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and 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 Issuer, or the Note Guarantee, in the case of a Subsidiary Guarantor; and
(i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, which new incurrence is not permitted by this clause (21);
(22) the issuance by any Restricted Subsidiary to the Issuer or to any other Restricted Subsidiary of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be subordinated in right of payment to the Notes or the Note Guarantee, as the case may be, and (b) Non-Guarantors of Indebtedness incurred by other Non-Guarantors in accordance with the provisions of this Indenture; andquarter period.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall will not, and shall will 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 shall the Issuer will not permit any of its Restricted Subsidiaries Subsidiary to issue any shares of preferred stockPreferred Stock; provided, however, that the Issuer and its any Restricted Subsidiaries Subsidiary may incur Indebtedness (including Acquired Debt) and the Issuer’s any Restricted Subsidiaries Subsidiary may issue shares of preferred stock, if, after giving effect thereto and the application of the proceeds therefrom, either (i) Preferred Stock if the Fixed Charge Coverage Ratio for the Issuer’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock Preferred Stock is issued would have been at least 2.00 to 1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Preferred Stock had been issued, as the case may be, would have been and the application of proceeds therefrom had occurred at least 2.0 to 1.0, or (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as beginning of the end of the Issuer’s most recently ended fiscal such four-quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been less than or equal to 1.75 to 1.0period.
(b) The foregoing provisions of Section 4.10(a4.2(a) shall will not prohibit the incurrence of any Indebtedness that meets of the following criteria or the issuance of any preferred stock that meets the following criteria, as applicable (collectively, “Permitted Debt”):
(1) the incurrence Indebtedness incurred by the Issuer or any a Restricted Subsidiary of Indebtedness pursuant to under Credit Facilities or Project Loanstogether with the incurrence of the guarantees thereunder and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, in up to an aggregate principal amount at any one time outstanding not to exceed the greater of (x) $1,500 2,250.0 million and 22.5% (y) an amount such that the Consolidated Net Secured Leverage Ratio of the Issuer shall not exceed 2.50 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), provided, that for purposes of calculating the Consolidated Tangible Assets at Net Secured Leverage Ratio pursuant to this clause (1)(y), any Indebtedness under a revolving credit facility shall be computed based on the time average daily balance of incurrencesuch Indebtedness during the applicable four-quarter reference period;
(2) the Existing Indebtedness;
(3) the incurrence by the Issuer of Indebtedness represented by the Initial Notes issued on the Issue Date (including any Guarantee);
(3) Existing Indebtedness (other than Indebtedness described in clauses (1) and replacement Notes in respect thereof, if any (and the incurrence by any Subsidiary Guarantor of any related Note Guarantee2));
(4) the incurrence Indebtedness (including Capitalized Lease Obligations) incurred or issuance issued by the Issuer or any Restricted Subsidiary of to finance the Issuer of Indebtedness (including Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction)purchase, Disqualified Stock or preferred stock, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development lease or improvement of plant, property (real or personal) or equipment or other property that is used or useful in a Permitted Business which occurs within 365 days (whether through the direct purchase of assets or the Capital Stock of any Person owning such purchase, design, construction, lease, installation, development or improvement, assets) in an aggregate principal amount that, including all Refinancing Indebtedness incurred to renew, refund, refinance, replace defease or discharge any Indebtedness then outstanding incurred pursuant to this clause (4), does not at any one time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to outstanding exceed the greater of (x) $25.0 200.0 million and 1.0(y) 4.0% of Consolidated Tangible Assets at the time of incurrenceTotal Assets;
(5) the incurrence Indebtedness incurred by the Issuer or any Restricted Subsidiary constituting reimbursement obligations with respect to letters of Permitted Refinancing Indebtedness credit issued in exchange forthe ordinary course of business, or incurred to extendincluding, renewwithout limitation, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause (5) or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds letters of the Initial Notes issued on the Issue Date), (3), (4) or (11) of this Section 4.10(b);
(6) the incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposes;
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness credit in respect of workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such reimbursement-type obligations are reimbursed within 30 days following such drawing or incurrenceregarding workers’ compensation claims;
(8) the incurrence by the Issuer or any of its Restricted Subsidiaries of 6) 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 in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for customary indemnification, adjustment of purchase price, holdback, contingency payment obligations price or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary (other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the Issuerpurpose of financing such acquisition) and earnout provisions or contingent payments in respect of purchase price or adjustment of purchase price or similar obligations in acquisition agreements;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(167) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer and any of its Restricted SubsidiariesSubsidiary; provided, however, that:
that (aA) 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 or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee owing to a Restricted Subsidiary that is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and is expressly subordinated in right of payment to the prior payment in full in cash of all Obligations then due obligations of the Issuer with respect to the Notes, in the case Notes or of the Issuer, or the Note such Guarantor with respect to its Guarantee, in the case of a Subsidiary Guarantor; and;
(i) any subsequent issuance or transfer 8) shares of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or Preferred Stock of a Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness issued to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, which new incurrence is not permitted by this clause (21);
(22) the issuance by any Restricted Subsidiary to the Issuer or to any other Restricted Subsidiary of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(b) provided that any sale 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 preferred stock shares of Preferred Stock (except to the Issuer or a Person 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 or (C) commodity risk or otherwise entered into in the ordinary course of business;
(10) self-insurance and obligations in respect of performance, bid, appeal 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 provided in the ordinary course of business, including those incurred to secure health, safety and environmental obligations in the ordinary course of business;
(a) Indebtedness or Preferred Stock of the Issuer or any Restricted Subsidiary in an aggregate principal amount or liquidation preference up to 100% of the net cash proceeds received by the Issuer since immediately after the Issue Date from the issue or sale of Equity Interests of the Issuer and, to the extent actually contributed to the Issuer, the Issuer’s direct or indirect parent entities or cash contributed to the capital of the Issuer (in each case, other than Excluded Contributions or proceeds of Disqualified Stock or sales of Equity Interests to the Issuer or any of its Subsidiaries) as determined in accordance with clauses (iii)(B) and (iii)(C) of Section 4.1(a)(4) and (b) Indebtedness of the Issuer or any Restricted Subsidiary or Preferred Stock of any Restricted Subsidiary not either 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 the greater of (x) $250.0 million and (y) 5.0% of Total Assets; provided, that any Indebtedness or Preferred Stock incurred pursuant to this clause (11)(b) shall cease to be deemed incurred or outstanding for purposes of this clause (11)(b) but shall be deemed incurred for the purposes of Section 4.2(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 4.2(a) without reliance on this clause (11)(b);
(12) any guarantee by the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such preferred stock Indebtedness or obligations incurred by such Restricted Subsidiary, which new issuance Subsidiary is not permitted by under the terms of this clause (22)Indenture;
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a13) the Issuer or any Subsidiary Guarantor of Indebtedness permitted to be incurred incurrence by the Issuer or any Restricted Subsidiary of Indebtedness or Preferred Stock that serves to refund or refinance any Indebtedness incurred as permitted under Section 4.2(a) and clause (2), (3), (4) and (11)(a) above, this clause (13) or 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 to the Notes, such Refinancing Indebtedness is subordinated to the Notes 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 a Guarantor or (y) Indebtedness or Preferred Stock of the Issuer or a Restricted Subsidiary that refinances Indebtedness or Preferred Stock of an Unrestricted Subsidiary and (D) shall not be in a 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 fees and expenses incurred in connection with such Refinancing Indebtedness;
(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 provisions terms of this Indenture; provided that such Indebtedness or Preferred Stock is not incurred in connection with or in contemplation of such acquisition or merger; and provided, further, that after giving effect to such acquisition or merger, either (A) the Issuer or such Restricted Subsidiary would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.2(a) or (B) the Fixed Charge Coverage Ratio would not be lower than immediately prior to such acquisition;
(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;
(16) Indebtedness of the Issuer or any 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;
(17) Indebtedness consisting of (x) the financing of insurance premiums or (y) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(18) Indebtedness of Foreign Subsidiaries of the Issuer; provided, however, that the aggregate principal amount of Indebtedness outstanding at any one time incurred under this clause (18) does not exceed the greater of (x) $250.0 million and (y) 5.0% of Total Assets;
(19) Indebtedness incurred after the Issue Date on behalf of or representing guarantees of Indebtedness of joint ventures and non-wholly owned subsidiaries that are not Guarantors outstanding at any one time incurred under this clause (19) not to exceed the greater of (x) $350.0 million and (y) 7.5% of Total Assets at any time outstanding;
(20) Indebtedness incurred by a Securitization Subsidiary in a Qualified Securitization Financing that is not recourse to the Issuer or any Restricted Subsidiary other than a Securitization Subsidiary (except for Standard Securitization Undertakings); and
(21) all premium (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (1) through (20) above.
(c) For purposes of determining compliance with this Section 4.2:
(1) 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 (21) above, or is entitled to be incurred pursuant to Section 4.2(a), the Issuer will be permitted, in its sole discretion, to classify and later from time to time reclassify such item of Indebtedness in any manner that complies with this Section 4.2, and such item of Indebtedness will be treated as having been incurred pursuant to only one of such categories;
(2) the outstanding principal amount of any particular Indebtedness shall be counted only once such that (without limitation) any obligation arising under any guarantee, Lien, letter of credit or similar instrument supporting such Debt shall be disregarded;
(3) accrual of interest or dividends, the accretion of accreted value and the payment of interest or dividends in the form of additional Indebtedness or Preferred Stock will not be deemed to be an incurrence of Indebtedness or Preferred Stock for purposes of this Section 4.2;
(4) Indebtedness under the Credit Agreement and any other Credit Facility outstanding on the date on which Notes are first issued and authenticated under this Indenture will be deemed to have been incurred on such date in reliance on the exception provided by Section 4.2(b)(1);
(5) where Indebtedness is denominated in a currency other than U.S. dollars, the amount of such Indebtedness will be the U.S. Dollar Equivalent determined on the date of such incurrence; provided, however, that if any such Indebtedness that is being Guaranteed denominated in a different currency is Subordinated subject to a currency Hedge Agreement with respect to U.S. dollars covering principal payable on such Indebtedness, then the related Guarantee amount of such Indebtedness expressed in U.S. dollars will be adjusted to take into account the effect of such agreement; provided further, however, that if any Indebtedness is incurred to refinance other Indebtedness denominated in a currency other than U.S. dollars, and such refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if the U.S. Dollar Equivalent is calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar- denominated restriction shall be subordinated deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness (denominated in right such non-U.S. dollar currency) does not exceed the principal amount of payment such Indebtedness being Refinanced (denominated in the same currency) except to the Notes or extent that such U.S. Dollar Equivalent was determined based on a currency Hedge Agreement, in which case the Note Guarantee, as principal amount of the case may be, and (b) Non-Guarantors of Refinancing Indebtedness incurred by other Non-Guarantors will be determined in accordance with the provisions of this Indenturepreceding sentence; and
(6) the maximum amount of Indebtedness that the Issuer and the Restricted Subsidiaries may incur pursuant to this Section 4.2 shall not be deemed to be exceeded, with respect to any outstanding Indebtedness, solely as a result of fluctuations in the exchange rate of currencies. Unsecured Indebtedness will not be treated as subordinated or junior to Secured Indebtedness merely because it is unsecured nor will Senior Indebtedness be treated as subordinated or junior to any other Senior Indebtedness merely because it has a junior priority with respect to the same collateral.
Appears in 1 contract
Samples: First Supplemental Indenture (Rockwood Holdings, Inc.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer Company shall not, and shall not cause or 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 shall the Company will not and will not permit any Restricted Subsidiary to issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Issuer Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and its the Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) and the Issuer’s Restricted Subsidiaries may or issue shares of Disqualified Stock or preferred stock, if, after giving effect thereto and the application of the proceeds therefrom, either (i) if the Fixed Charge Coverage Ratio for the IssuerCompany’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 2.0 to 1.0, or determined on a pro forma basis (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as including a pro forma application of the end of net proceeds therefrom), as if the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is had been incurred or such the Disqualified Stock or the preferred stock is had been issued, as the case may be, would have been less than or equal to 1.75 to 1.0at the beginning of such four-quarter period.
(b) Section 4.10(a2.01(a) shall not not, however, prohibit the incurrence of any Indebtedness that meets of the following criteria or the issuance items of any preferred stock that meets the following criteriaIndebtedness, as applicable without duplication (collectively, “Permitted Debt”):
(1i) Indebtedness under the incurrence by the Issuer or any Restricted Subsidiary of Indebtedness pursuant to Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, in an aggregate principal amount at any one time outstanding not to exceed the greater of $1,500 4,000.0 million and 22.57.5% of Consolidated Total Tangible Assets of the Company, (ii) Indebtedness under the EIB Facility in an aggregate principal amount at any time outstanding not to exceed the greater of €203.4 million and 0.6% of Total Tangible Assets of the Company, (iii) Indebtedness under the Existing Revolving Facility in an aggregate principal amount at any time outstanding not to exceed the greater of incurrence(x) the sum of $1,700.0 million, €1,000.0 million and £300.0 million and (y) 7.3% of Total Tangible Assets of the Company, (iv) Indebtedness under the Existing First-Priority Secured Notes in an aggregate principal amount at any time outstanding not to exceed the greater of $4,192.0 million and 9.7% of Total Tangible Assets of the Company, (v) Indebtedness under the Existing Term Loan Facility in an aggregate principal amount at any time outstanding not to exceed the greater of (x) the sum of $1,860.0 million and €800.0 million and (y) 6.3% of Total Tangible Assets of the Company, (vi) Indebtedness under the 2026 Second-Priority Secured Notes in an aggregate principal amount at any time outstanding not to exceed the greater of (x) the sum of $775.0 million and €425.0 million and (y) 2.6% of Total Tangible Assets of the Company and (vii) Indebtedness under the 2027 Second-Priority Secured Notes in an aggregate principal amount at any time outstanding not to exceed the greater of (x) $900.0 million and (y) 1.7% of Total Tangible Assets of the Company;
(2) the Existing Indebtedness;
(3) the incurrence by the Issuer Company and its Restricted Subsidiaries of (i) Existing Indebtedness represented by (other than Indebtedness under the Initial Convertible Notes, the EIB Facility, the Existing Term Loan Facility, the Existing First-Priority Secured Notes, the 2026 Second-Priority Secured Notes, the 2027 Second-Priority Secured Notes issued on and the Issue Date and replacement Notes 2026 Unsecured Notes), (ii) Indebtedness in respect thereof, if any (and the incurrence by any Subsidiary Guarantor of any related Note Guarantee);
(4) the incurrence or issuance by the Issuer or any Restricted Subsidiary of the Issuer of Indebtedness (including Capital Lease Obligations 2026 Unsecured Notes and Indebtedness incurred in connection with a sale/leaseback transaction), Disqualified Stock or preferred stock, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development or improvement of plant, equipment or other property used or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvementrelated guarantees, in an aggregate principal amount at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, outstanding not to exceed the greater of (x) the sum of (1) $25.0 1,450.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5) the incurrence by the Issuer or any Restricted Subsidiary of Permitted Refinancing Indebtedness in exchange for, or incurred to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause (5) or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4) or (11) of this Section 4.10(b);
(6) the incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposes;
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) 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 (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Issuer or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and 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 Issuer, or the Note Guarantee, in the case of a Subsidiary Guarantor; and
(i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, which new incurrence is not permitted by this clause (21);
(22) the issuance by any Restricted Subsidiary to the Issuer or to any other Restricted Subsidiary of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be subordinated in right of payment to the Notes or the Note Guarantee, as the case may be, and (b) Non-Guarantors of Indebtedness incurred by other Non-Guarantors in accordance with the provisions of this Indenture; andLON59053763
Appears in 1 contract
Samples: Amendment Agreement Relating to a Multicurrency Revolving Facilities Agreement (Carnival PLC)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt), ) and the Company shall not issue any Disqualified Stock and shall not permit any of its their Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that stock unless the Issuer and its Restricted Subsidiaries may incur Indebtedness Leverage Ratio would have been not greater than 8.75 to 1.0 determined on a pro forma basis (including Acquired Debt) and the Issuer’s Restricted Subsidiaries may issue shares of preferred stock, if, after giving effect thereto and the a pro forma application of the net proceeds therefrom), either (i) as if the Fixed Charge Coverage Ratio for the Issuer’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred had been incurred, or such preferred stock is the Disqualified Stock had been issued, as the case may be, would have been at least 2.0 to 1.0, or (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as beginning of the end of the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding quarter. So long as no Default shall have occurred and be continuing or would be caused thereby, the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been less than or equal to 1.75 to 1.0.
(b) Section 4.10(a) first paragraph of this covenant shall not prohibit the incurrence of any Indebtedness that meets of the following criteria or the issuance items of any preferred stock that meets the following criteria, as applicable Indebtedness (collectively, “"Permitted Debt”"):
(1) the incurrence by the Issuer or any Company and its Restricted Subsidiary Subsidiaries of Indebtedness pursuant to under the Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by Facilities; provided that the Issuer or any Restricted Subsidiary, in an aggregate principal amount at of all Indebtedness of the Company and its Restricted Subsidiaries outstanding under all Credit Facilities after giving effect to such incurrence does not exceed an amount equal to $3.5 billion less the aggregate amount of all Net Proceeds of Asset Sales applied by the Company or any one time outstanding not of its Subsidiaries in the case of an Asset Sale since the Existing Notes Issue Date to exceed the greater of $1,500 million and 22.5% of Consolidated Tangible Assets at the time of incurrencerepay Indebtedness under a Credit Facility pursuant to Section 4.11;
(2) the incurrence by the Company and its Restricted Subsidiaries of Existing IndebtednessIndebtedness (other than the Credit Facilities);
(3) the incurrence by the Issuer Company of Indebtedness represented by the Initial Notes issued on under this Indenture that are issued in exchange for Term Advances of like principal amount pursuant to the Issue Date and replacement Notes in respect thereof, if any (and the incurrence by any Subsidiary Guarantor of any related Note Guarantee)Senior Bridge Loan Agreement;
(4) the incurrence or issuance by the Issuer Company or any of its Restricted Subsidiary of the Issuer Subsidiaries of Indebtedness (including represented by Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction)Obligations, Disqualified Stock mortgage financings or preferred stockpurchase money obligations, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of construction or improvement (including, without limitation, the cost of design, development, construction, leaseacquisition, transportation, installation, development improvement, and migration) of Productive Assets of the Company or improvement any of plant, equipment or other property used or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvementits Restricted Subsidiaries, in an aggregate principal amount not to exceed $75 million at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5) the incurrence by the Issuer Company or any of its Restricted Subsidiary Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or incurred the net proceeds of which are used to extend, renew, refund, refinance, refinance or replace, defease in whole or discharge any in part, Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), the first paragraph of this clause (5) covenant or clause clauses (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4) or (11) of this Section 4.10(b)paragraph;
(6) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposes;
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) 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 (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer Company and any of its Wholly Owned Restricted Subsidiaries; provided, however, provided that:
(a) if the Issuer or any Subsidiary Guarantor Company is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary GuarantorIndebtedness, 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 Issuer, or the Note Guarantee, in the case of a Subsidiary Guarantor; and
(i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer Company or a Wholly Owned Restricted Subsidiary thereof and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer Company or a Wholly Owned Restricted Subsidiary thereof, shall be deemed, in each case, to constitute a new an incurrence of such Indebtedness by the Issuer Company or such any of its Restricted Subsidiary, as the case may be, which new incurrence is Subsidiaries that was not permitted by this clause (216);
(227) the issuance incurrence by the Company or any of its Restricted Subsidiary to Subsidiaries of Hedging Obligations that are incurred for the Issuer purpose of fixing or hedging interest rate risk with respect to any other floating rate Indebtedness that is permitted by the terms of the Indentures to be outstanding;
(8) the guarantee by the Company of Indebtedness of a Restricted Subsidiary of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests the Company that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of Indebtedness was permitted to be incurred by another provision of this Section 4.10;
(9) the Issuer incurrence by the Company or any of its Restricted Subsidiary Subsidiaries of the Issuer additional Indebtedness in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be subordinated in right of payment an aggregate principal amount at any time outstanding not to the Notes or the Note Guarantee, as the case may be, and (b) Non-Guarantors of Indebtedness incurred by other Non-Guarantors in accordance with the provisions of this Indenture; andexceed $300 million;
Appears in 1 contract
Samples: Senior Bridge Loan Agreement (Charter Communications Holdings Capital Corp)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt), Indebtedness) and that the Company shall not issue and shall not permit any of its Restricted Subsidiaries to issue any shares of preferred stockDisqualified Stock (other than the Preferred Stock); provided, however, that the Issuer and Company or its Restricted Subsidiaries may incur Indebtedness (including Acquired DebtIndebtedness) and the Issuer’s Restricted Subsidiaries may or issue shares of preferred stock, if, after giving effect thereto and the application of the proceeds therefrom, either (i) Disqualified Stock if the Fixed Charge Coverage Ratio for the Issuer’s Company's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock Disqualified Stock is issued would have been (A) at least 2.25 to 1.0 if such date is prior to September 15, 2000 and (B) 2.50 to 1.0 if such date is on or after September 15, 2000, 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 had been issued, as the case may be, would have been at least 2.0 to 1.0, or (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as beginning of the end of the Issuer’s most recently ended fiscal such four-quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been less than or equal to 1.75 to 1.0.period. The foregoing provisions will not apply to:
(b) Section 4.10(a) shall not prohibit the incurrence of any Indebtedness that meets the following criteria or the issuance of any preferred stock that meets the following criteria, as applicable (collectively, “Permitted Debt”):
(1i) the incurrence by the Issuer Company or any of its Restricted Subsidiary Subsidiaries of Indebtedness and reimbursement obligations in respect of letters of credit pursuant to the Senior Credit Facilities or Project Loans, including any Guarantee Facility (with letters of such Indebtedness or any Guarantee credit being deemed to have a principal amount equal to the maximum potential liability of Designated SPE Debt by the Issuer or any Company and its Restricted Subsidiary, Subsidiaries thereunder) in an aggregate principal amount at any one time outstanding not to exceed an amount equal to (x) the greater of (1) the amount of the Borrowing Base and (2) $1,500 150.0 million and 22.5% less the aggregate amount of Consolidated Tangible Assets at all Net Proceeds of Asset Sales applied to permanently reduce the time of incurrencetotal commitments with respect to such Indebtedness pursuant to the Section 4.10 hereof plus (y) $50.0 million less any outstanding Indebtedness incurred pursuant to clause (viii) below;
(2ii) the incurrence by the Company or any of its Restricted Subsidiaries of the Existing Indebtedness;
(3iii) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness represented by the Initial Notes, the New Notes issued on and the Issue Date and replacement Notes in respect thereof, if any Subsidiary Guarantees;
(and iv) the incurrence by any Subsidiary Guarantor of any related Note Guarantee);
(4) the incurrence or issuance by the Issuer Company or any of its Restricted Subsidiary of the Issuer Subsidiaries of Indebtedness (including represented by Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction)Obligations, Disqualified Stock mortgage or preferred stockconstruction financing or purchase money obligations, in each case, case incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development construction or improvement of plant, equipment or other property used in the business of the Company or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvementRestricted Subsidiary, in an aggregate principal amount at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed $30.0 million in any fiscal year; provided that the greater principal amount (or, in the case of $25.0 million and 1.0% a Capital Lease Obligation, the amount required to be capitalized on a balance sheet under GAAP) of Consolidated Tangible Assets at such Indebtedness when incurred shall not exceed the time purchase price and/or actual cost of incurrenceconstruction or improvement, as the case may be, to which such incurrence relates;
(5v) the incurrence by the Issuer Company or any of its Restricted Subsidiary Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or incurred the net proceeds of which are used to extend, refinance, renew, refund, refinance, replace, defease or discharge any refund, Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause (5) or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4) or (11) of this Section 4.10(b);incurred; 44
(6vi) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposes;
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) 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 (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer Company and any of its Wholly Owned Restricted Subsidiaries; provided, however, that:
(a) if the Issuer or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and 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 Issuer, or the Note Guarantee, in the case of a Subsidiary Guarantor; and
that (i) any subsequent issuance or transfer (other than for security purposes) of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or a Wholly Owned Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer Company or a Wholly Owned Restricted Subsidiary shall be deemed, in each case, to constitute a new an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be;
(vii) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred for the purpose of fixing or hedging interest rate risk with respect to any floating rate Indebtedness that is permitted by the terms of this Indenture to be outstanding;
(viii) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness (in addition to Indebtedness permitted by any other clause of this paragraph) in an aggregate principal amount at any time outstanding not to exceed $50.0 million less the amount of any Indebtedness incurred pursuant to clause (i)(y) of this paragraph;
(ix) the incurrence by the Company or any of its Restricted Subsidiaries of Acquired Indebtedness, which new incurrence provided that such Indebtedness (A) is not permitted by this clause incurred in contemplation of the acquisition to which it relates and (21B) is nonrecourse to the Company and its Restricted Subsidiaries, or to any of their respective assets (other than the acquired Subsidiary and its Subsidiaries, or the acquired assets, as applicable);
(22x) the issuance incurrence by any Restricted Subsidiary the Company of Indebtedness pursuant to Exchange Debentures described under clause (2) of the Issuer or to any other Restricted Subsidiary definition of shares of preferred stock; provided, however, that:Exchange Debentures;
(axi) the Guarantee of any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted SubsidiaryIndebtedness otherwise permitted to be incurred pursuant to this Indenture; and
(bxii) any sale or other transfer Obligations in respect of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be subordinated in right of payment to the Notes or the Note Guarantee, as the case may be, performance and (b) Non-Guarantors of Indebtedness incurred by other Non-Guarantors in accordance with the provisions of this Indenture; andsurety bonds.
Appears in 1 contract
Samples: Indenture (Jitney Jungle Stores of America Inc /Mi/)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt), and the Company shall not issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Issuer Company and its Restricted Subsidiaries any Guarantor may incur Indebtedness (including Acquired Debt) and ), the Issuer’s Restricted Subsidiaries Company may issue shares of Disqualified Stock or any Guarantor may issue preferred stock, if, after giving effect thereto and the application of the proceeds therefrom, either (i) if the Fixed Charge Coverage Ratio for the Issuer’s Company's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is to be incurred or such Disqualified Stock or preferred stock is to be issued would have been at least 2.25 to 1.0, if such incurrence is on or prior to October 1, 2005 and 2.50 to 1.0 if such incurrence is after October 1, 2005, determined, in each case, on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or preferred stock had been issued, as the case may be, would have been at least 2.0 to 1.0, or (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as beginning of the end of the Issuer’s most recently ended fiscal such four-quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been less than or equal to 1.75 to 1.0period.
(b) The provisions of Section 4.10(a4.09(a) shall not prohibit the incurrence of any Indebtedness that meets of the following criteria or the issuance items of any preferred stock that meets the following criteria, as applicable Indebtedness (collectively, “"Permitted Debt”"):
(1i) the incurrence by the Issuer Company and/or any Guarantor of additional Indebtedness and letters of credit under one or any Restricted Subsidiary of Indebtedness pursuant to more Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, in an aggregate principal amount amount, at any one time outstanding under this clause (i) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and the Guarantors thereunder), not to exceed the greater of $1,500 million and 22.5% of Consolidated Tangible Assets at the time of incurrence75,000,000;
(2ii) the incurrence by the Company and its Restricted Subsidiaries of Existing Indebtedness;
(3iii) the incurrence by the Issuer Company and the Guarantors of Indebtedness represented by the Initial Notes and the related Subsidiary Guarantees issued on the Issue Date and replacement Exchange Notes in respect thereof, if any and the related Subsidiary Guarantees to be issued pursuant to the Registration Rights Agreement;
(and iv) the incurrence by any Subsidiary Guarantor of any related Note Guarantee);
(4) the incurrence or issuance by the Issuer Company or any of its Restricted Subsidiary of the Issuer Subsidiaries of Indebtedness (including represented by Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction)Obligations, Disqualified Stock mortgage financings or preferred stockpurchase money obligations, in each case, case incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development installation or improvement of plantproperty, plant or equipment used in the business of the Company or other property used or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvementRestricted Subsidiary, in an aggregate principal amount amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any other Indebtedness incurred pursuant to this clause (iv), not to exceed $5,000,000 at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5v) the incurrence by the Issuer Company or any of its Restricted Subsidiary Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or incurred the net proceeds of which are used to extend, renew, refund, refinance, refinance or replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause (54.09(a) hereof or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Dateii), (3), (4iii) or (11v) of this Section 4.10(b4.09(b);
(6vi) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Hedging 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, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the 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 (II) any sale or other transfer of any such Indebtedness to a Person that is not for speculative purposeseither the Company or a Restricted Subsidiary of the 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 (vi);
(7vii) the incurrence by the Issuer Company or any of its Subsidiaries of Hedging Obligations;
(viii) the Guarantee by the Company or any of the Guarantors of Indebtedness of the Company or any Guarantor that was permitted to be incurred by another provision of this Section 4.09;
(ix) the incurrence by the Company's 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 of the Company that was not permitted by this clause (ix);
(x) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ ' compensation claims, self-insurance obligations, bankers’ ' acceptances, letters of credit, and performance bonds, and surety bonds and completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) xi) the incurrence by the Issuer 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 in the ordinary course of businessfunds, so long as such Indebtedness is extinguished covered within five Business Daysbusiness days;
(9xii) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from agreements consisting of the Issuer guarantees, indemnities, holdbacks or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment obligations in respect of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed price adjustments in connection with the acquisition or disposition or acquisition of any businessassets; provided, assets or Equity Interests however, that such Indebtedness is not reflected on the balance sheet of the Issuer Company or any such Restricted Subsidiary;; and
(10xiii) the incurrence by the Company or any of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of 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 Indebtedness incurred pursuant to this clause (xiii), not to exceed $20,000,000. The accrual of interest, the greater accretion or amortization of $150.0 million original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the accumulation of dividends on Disqualified Stock or preferred stock (to the extent not paid) and 3.0% the payment of Consolidated Tangible Assets dividends on Disqualified Stock or preferred stock in the form of additional shares of the Issuer at the time same class of incurrence;
(14) the incurrence of guarantees by the Issuer Disqualified Stock or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations preferred stock shall not be deemed to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the be an incurrence of Indebtedness by the Issuer or a Restricted Subsidiary an issuance of the Issuer in respect Disqualified Stock or preferred stock for purposes of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and servicesthis Section 4.09; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangementsprovided, in each case such case, that the amount thereof is included in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary Fixed Charges of the Issuer deemed to exist pursuant Company as accrued. Notwithstanding anything to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landownercontrary in this Section 4.09, in each case entered into in no event will the ordinary course of business in connection with the acquisition of real property, to entitle, develop Company or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiaries; provided, however, that:
(a) if Subsidiaries be permitted to refinance the Issuer or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and subordinated in right of payment to the prior payment in full in cash of all Obligations then due with respect to the Convertible Senior Subordinated Notes, in whole or in part, with the case proceeds of the Issuer, or the Note GuaranteeSenior Debt. For purposes of determining compliance with this Section 4.09, in the case event that an item of a Subsidiary Guarantor; and
Indebtedness (including Acquired Debt) meets the criteria of more than one of the categories of Permitted Debt described in clauses (i) any subsequent issuance through (xiii) of Section 4.09(b) hereof, or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, which new incurrence is not permitted by this clause (21);
(22) the issuance by any Restricted Subsidiary to the Issuer or to any other Restricted Subsidiary of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of Indebtedness permitted entitled to be incurred pursuant to Section 4.09(a) hereof, the Company shall be permitted to divide and classify (or later classify or reclassify) in whole or in part, in its sole discretion, such item of Indebtedness in any manner that complies with this Section 4.09. Notwithstanding anything to the contrary contained in this Section 4.09, any increase in the amount of Indebtedness solely by reason of currency fluctuation shall not be considered an incurrence of Indebtedness for purposes of this Section 4.09. For purposes of determining compliance with this Section 4.09, the Issuer or U.S. dollar-equivalent principal amount of Indebtedness denominated in any Restricted Subsidiary currency other than U.S. dollars shall be calculated based on the relevant currency exchange rate in effect as of the Issuer in accordance with the provisions of this Indenture; provided that in the event date such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be subordinated in right of payment to the Notes or the Note Guarantee, as the case may be, and (b) Non-Guarantors of Indebtedness incurred by other Non-Guarantors in accordance with the provisions of this Indenture; andincurred.
Appears in 1 contract
Samples: Indenture (Interactive Voice Media (Sacramento) Corp.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company shall not issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Issuer Company and its Restricted Subsidiaries any Guarantor may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the Issuer’s Restricted Subsidiaries any Guarantor may issue shares of preferred stock, if, after giving effect thereto and in each case, the application of the proceeds therefrom, either (i) the Company’s Fixed Charge Coverage Ratio for the Issuer’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been at least 2.0 to 1.0, or determined on a pro forma basis (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as including a pro forma application of the end net proceeds therefrom). The provisions of the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been less than or equal to 1.75 to 1.0.
(b) Section 4.10(a) first paragraph of this covenant shall not prohibit apply to the incurrence of any Indebtedness that meets of the following criteria or the issuance items of any preferred stock that meets the following criteria, as applicable Indebtedness (collectively, “Permitted Debt”):
(1i) the incurrence by the Issuer Company or any of its Restricted Subsidiary Subsidiaries of Indebtedness and letters of credit pursuant to one or more Credit Facilities or Project Loans, including any Guarantee (with letters of such Indebtedness or any Guarantee credit being deemed to have an outstanding amount equal to the maximum potential liability of Designated SPE Debt by the Issuer or any Restricted Subsidiary, Company thereunder) in an aggregate principal amount at any one time outstanding under this clause (i) not to exceed the greater of (A) $1,500 million and 22.5350,000,000, (B) 25% of Consolidated Tangible Assets at or (C) the time aggregate principal amount of Indebtedness outstanding under this clause (i) immediately prior to such incurrence;
(2) the Existing Indebtedness;
(3ii) the incurrence by the Issuer Company and the Guarantors of Indebtedness represented by the Initial Notes issued (but not Additional Notes) and the Subsidiary Guarantees;
(iii) Indebtedness outstanding on the Issue Date (other than Indebtedness described in clauses (i) and replacement Notes in respect thereof, if any (and the incurrence by any Subsidiary Guarantor ii) of any related Note Guarantee)this Section 4.09;
(4) the incurrence or issuance by the Issuer or any Restricted Subsidiary of the Issuer of Indebtedness (including Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction), Disqualified Stock or preferred stock, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development or improvement of plant, equipment or other property used or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvement, in an aggregate principal amount at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5iv) the incurrence by the Issuer Company or any of its Restricted Subsidiary Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or incurred the net proceeds of which are used to extend, refinance, renew, refund, refinance, replace, defease or discharge any refund, Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(apursuant to clause (ii), (iii), this clause (5iv) or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4xiii) or (11) pursuant to the first paragraph of this Section 4.10(b)4.09;
(6v) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that (i) if the Company or any Guarantor is the obligor on such Indebtedness and the obligee is a Restricted Subsidiary that is not a Guarantor, such Indebtedness is expressly subordinate to the payment in full of all Obligations with respect to the Notes and (ii) (A) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary and (B) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary 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;
(vi) the incurrence by the Company or any of its Restricted Subsidiaries of Purchase Money Indebtedness (or Capital Lease Obligations), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace Purchase Money Indebtedness incurred pursuant to this clause (vi);
(vii) the incurrence by the Company or any of its Restricted Subsidiaries of obligations in the ordinary course of 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 originally 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;
(viii) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposes;
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion purposes and compliance guarantees or other similar obligations incurred in the ordinary course of business;
(ix) the guarantee by the Company or any Restricted Subsidiary of the Company of Indebtedness of the Company or a Restricted Subsidiary of the Company that was permitted to be incurred by another provision of this covenant; provided that the guarantee of any Indebtedness under this clause (ix) by a Restricted Subsidiary of the Company that ceases to be a Restricted Subsidiary shall be deemed a Restricted Investment (or, if applicable, a Permitted Investment) at the time such Restricted Subsidiary’s status terminates in an amount equal to the maximum principal amount so guaranteed, for so long as, and to the extent that, such guarantee remains outstanding;
(x) the issuance by a Restricted Subsidiary of the Company of preferred stock to the Company or to any of its Restricted Subsidiaries; provided, however, that upon any subsequent event or issuance or transfer of any Equity Interests that results in the drawing owner of letters such preferred stock ceasing to be the Company or any of credit for reimbursement obligationsits Restricted Subsidiaries or any subsequent transfer of such preferred stock to a Person, other than the Company or the incurrence one of other reimbursement-type Indebtedness with respect its Restricted Subsidiaries, shall be deemed to the foregoing, be an issuance of preferred stock by such obligations are reimbursed within 30 days following such drawing or incurrenceSubsidiary that was not permitted by this clause (x);
(8) xi) the incurrence by the Issuer 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 in the ordinary course of businessfunds, so long as such Indebtedness is extinguished covered within five Business Days;
(9xii) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from agreements consisting of the Issuer guarantees, indemnities, holdbacks or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment obligations in respect of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed price adjustments in connection with the acquisition or disposition or acquisition of any business, assets or Equity Interests Capital Stock of the Issuer Company or any Restricted Subsidiary; provided that such Indebtedness is not reflected on the balance sheet of the Company or any Restricted Subsidiary;
(10xiii) Indebtedness of Persons incurred and outstanding on the incurrence of date on which such Person was acquired by the Company or any Restricted Subsidiary, or merged or consolidated with or into the Company or any Restricted Subsidiary (other than Indebtedness resulting from endorsements of negotiable instruments for collection incurred in connection with, or in contemplation of, such acquisition, merger or consolidation); provided, however, that at the ordinary course of business;
(11) Acquired Debt time such Person or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that assets is/are acquired by the Issuer Company or a Restricted Subsidiary, or merged or consolidated with the Company or any Restricted Subsidiary of the Issuer (including by way of mergerSubsidiary, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately and after giving pro forma effect to the incurrence of such acquisitionIndebtedness pursuant to this clause (xiii) and any other related Indebtedness, any of the following is true:
either (aA) the Issuer Company would be permitted have been able to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater test under the first paragraph of this Section 4.09; or (B) the Fixed Charge Coverage Ratio of the Company and its Restricted Subsidiaries is no less than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition, merger or consolidation; orand
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13xiv) the incurrence or issuance by the Issuer Company or a any of its Restricted Subsidiary of the Issuer Subsidiaries of Indebtedness (in addition to Indebtedness permitted by any other clause of this paragraph) in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, outstanding not to exceed $30,000,000. For purposes of determining compliance with this covenant, in the greater event that an item of $150.0 million and 3.0% Indebtedness meets the criteria of Consolidated Tangible Assets more than one of the Issuer categories of Permitted Debt described in clauses (i) through (xiv) above or is entitled to be incurred pursuant to the first paragraph of this covenant, the Company may, in its sole discretion, divide and classify such item of Indebtedness at the time of incurrence;
(14) incurrence or later classify, reclassify or divide such item of Indebtedness in any manner that complies with this covenant 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 hereof. 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 guarantees by Indebtedness for purposes of this covenant. In addition, the Issuer or a maximum amount of Indebtedness that the Company and its Restricted Subsidiary Subsidiaries may incur pursuant to this covenant will not be deemed to be exceeded, with respect to any outstanding Indebtedness, due solely to the result of the Issuer fluctuations in the ordinary course exchange rates of business in respect currencies. For the purposes of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or determining compliance with any Restricted Subsidiary of the Issuer;
(15) U.S. dollar-denominated restriction on the incurrence of Indebtedness by denominated in a foreign currency, the Issuer or a Restricted Subsidiary U.S. dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the earlier of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided date that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Issuer or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and subordinated in right of payment to the prior payment in full in cash of all Obligations then due with respect to the Noteswas incurred, in the case of the Issuerterm Indebtedness, or the Note Guaranteefirst committed, in the case of revolving credit Indebtedness; provided that if such Indebtedness is incurred to refinance other Indebtedness denominated in a Subsidiary Guarantor; and
(i) any subsequent issuance or transfer 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 Equity Interests that results in any such refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such Permitted Refinancing Indebtedness does not exceed the principal amount of such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary and (ii) any sale or other transfer refinanced. The principal amount of any Indebtedness incurred to refinance other Indebtedness, if incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such Permitted Refinancing Indebtedness to a Person is denominated that is not either in effect on the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new incurrence date of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, which new incurrence is not permitted by this clause (21);
(22) the issuance by any Restricted Subsidiary to the Issuer or to any other Restricted Subsidiary of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be subordinated in right of payment to the Notes or the Note Guarantee, as the case may be, and (b) Non-Guarantors of Indebtedness incurred by other Non-Guarantors in accordance with the provisions of this Indenture; andrefinancing.
Appears in 1 contract
Samples: Indenture (Gulfmark Offshore Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries Subsidiary to, Incur, directly or indirectly, incur, with respect to any Indebtedness (including Acquired Debt)Indebtedness, and shall the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stockPreferred Stock; provided, however, that the Issuer Company will be entitled to Incur Indebtedness or issue Disqualified Stock and its any Restricted Subsidiaries may incur Subsidiary will be entitled to Incur Indebtedness (including Acquired Debt) and the Issuer’s Restricted Subsidiaries may or issue shares of preferred stock, Preferred Stock if, on the date of such Incurrence or issuance and after giving effect thereto and the application of the proceeds therefromon a pro forma basis, either (i) the Fixed Charge Coverage Ratio for the Issuer’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been be at least 2.0 to 1.0, or (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as of the end of the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been less than or equal to 1.75 to 1.0.
(b) Notwithstanding Section 4.10(a) shall not prohibit 4.09(a), the incurrence Company and the Restricted Subsidiaries will be entitled to Incur any or all of any Indebtedness that meets the following criteria or the issuance of any preferred stock that meets the following criteria, as applicable Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or any Restricted Subsidiary of Indebtedness Incurred pursuant to the Credit Facilities or Project LoansAgreement; provided, including however, that, immediately after giving effect to any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by Incurrence, the Issuer or any Restricted Subsidiary, in an aggregate principal amount at any one time of all Indebtedness Incurred under this clause (1) and then outstanding does not exceed $3.4 billion; provided, that the Company or its Restricted Subsidiaries can Incur additional Secured Indebtedness under this clause (1) if, after giving pro forma effect to exceed such Incurrence, the Consolidated Senior Secured Debt Ratio would be no greater of $1,500 million and 22.5% of Consolidated Tangible Assets at the time of incurrencethan 3.5 to 1.0;
(2) Indebtedness owed to and held by the Existing IndebtednessCompany or a Restricted Subsidiary; provided, however, that (i) any subsequent issuance or transfer of any Capital Stock that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary and (ii) any subsequent transfer of such Indebtedness (other than to the Company or a Restricted Subsidiary) shall be deemed, in each case, to constitute the Incurrence of such Indebtedness by the obligor thereon that was not permitted by this clause (2);
(3) the incurrence by the Issuer of Indebtedness represented by the Initial Notes issued on the Issue Date and replacement Notes in respect thereof, if (including any (and the incurrence by Note Guarantee but excluding any Subsidiary Guarantor of any related Note GuaranteeAdditional Notes);
(4) Indebtedness outstanding on the incurrence Issue Date (other than Indebtedness described in clause (1), (2) or issuance (3) of this Section 4.09(b));
(5) Indebtedness of a Restricted Subsidiary Incurred and outstanding on or prior to the date on which such Subsidiary was acquired by the Issuer or any Restricted Subsidiary of the Issuer of Company (other than Indebtedness (including Capital Lease Obligations and Indebtedness incurred Incurred in connection with a sale/leaseback transaction)with, Disqualified Stock or preferred stock, in each case, incurred or issued for the purpose of financing to provide all or any part portion of the purchase price funds or cost credit support utilized to consummate, the transaction or series of designrelated transactions pursuant to which such Subsidiary became a Subsidiary or was acquired by the Company); provided, constructionhowever, lease, installation, development or improvement of plant, equipment or other property used or useful in a Permitted Business which occurs within 365 days that on the date of such purchaseacquisition and after giving effect thereto on a pro forma basis, design, construction, lease, installation, development either (i) the Company would be entitled to Incur at least $1.00 of additional Indebtedness pursuant to the first paragraph of this covenant or improvement, in an aggregate principal amount (ii) the Fixed Charge Coverage Ratio of the Company (A) would be at any time outstanding, together with any least 1.75 to 1.0 and (B) would be greater than such Fixed Charge Coverage Ratio immediately prior to such acquisition;
(6) Permitted Refinancing Indebtedness in respect thereof, not of Indebtedness Incurred pursuant to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5) the incurrence by the Issuer or any Restricted Subsidiary of Permitted Refinancing Indebtedness in exchange for, or incurred to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause (54.09(a) or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3Sections 4.09(b)(3), (4), (5), (6) or (11) of this Section 4.10(b22);
(67) the incurrence Hedging Obligations directly related to Indebtedness permitted to be Incurred by the Issuer or any of Company and its Restricted Subsidiaries pursuant to this Indenture or entered into in the ordinary course of Hedging Obligations business and not for speculative purposes;
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness 8) obligations in respect of workers’ worker’s compensation claims, self-and self insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, and performance, bid, stay, customs, appeal, replevin and surety bonds and performance and completion and compliance guarantees provided by the Company or other similar obligations incurred any Restricted Subsidiary in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) the incurrence by the Issuer or any of its Restricted Subsidiaries of 9) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft draft, credit card, purchase card or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer business or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection other cash management services in the ordinary course of business; provided that (i) such Indebtedness (other than credit or purchase cards) is extinguished within ten business days of notification to the Company of its incurrence and (ii) such Indebtedness in respect of credit or purchase cards is extinguished within 60 days from its Incurrence;
(1110) Acquired Debt Indebtedness consisting of any Guarantee by (i) the Company or a Guarantor of Indebtedness or preferred stock other Obligations of the Issuer Company or its Restricted Subsidiaries incurred to provide all or a portion any of the funds utilized to acquire Persons that are acquired Restricted Subsidiaries, (ii) a Foreign Subsidiary of Indebtedness or other Obligations of another Foreign Subsidiary or (iii) a Non-Guarantor Subsidiary of Indebtedness or other Obligations of another Non-Guarantor Subsidiary, in each case so long as the Incurrence of such guaranteed Indebtedness or other obligations by the Issuer Company or any such Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with is permitted under the terms of this Indenture; provided that immediately after giving effect if the Indebtedness being guaranteed is subordinated to such acquisitionor pari passu with the Notes, any of then the following is true:
(a) Guarantee must be subordinated or pari passu, as applicable, to the Issuer would be permitted to incur at least $1.00 of additional same extent as the Indebtedness pursuant to Section 4.10(a)guaranteed;
(b11) (i) Capital Lease Obligations and (ii) Attributable Debt, and Permitted Refinancing Indebtedness in respect thereof, in an aggregate principal amount on the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect date of Incurrence that, when taken together with the principal amount of all other Indebtedness then outstanding and Incurred pursuant to such acquisition would be this clause (11), does not exceed the greater than of $150.0 million or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition2.5% of Total Assets;
(12) Indebtedness of Foreign Subsidiaries and Non-Guarantor Subsidiaries in an aggregate principal amount on the Issuer date of Incurrence that, when taken together with the principal amount of all other Indebtedness then outstanding and Incurred pursuant to this clause (12), does not exceed the greater of $350.0 million or a Restricted Subsidiary 5.0% of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or lessTotal Assets;
(13) Indebtedness Incurred after the incurrence or issuance by the Issuer or a Restricted Subsidiary Issue Date in respect of the Issuer of Purchase Money Indebtedness and Permitted Refinancing Indebtedness in respect thereof, in an aggregate principal amount on the date of Incurrence that, when taken together with the principal amount of all other Indebtedness then outstanding and Incurred pursuant to this clause (or accreted value13), as applicable) at any time outstanding, does not to exceed the greater of $150.0 250.0 million and or 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrenceTotal Assets;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer Company or any Restricted Subsidiary of the Issuer Restricted Subsidiaries consisting of (ai) the financing of insurance premiums with the providers of such insurance or their affiliates or (bi) take-or-pay obligations contained in supply arrangementsagreements, in each case case, in the ordinary course of business;
(1715) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist Company or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the terms of Credit Agreement in a joint venture agreement as a result principal amount not in excess of the failure stated amount of such letter of credit;
(16) Indebtedness in an aggregate amount not to exceed the foreign currency equivalent of the Issuer greater of $150.0 million or any Restricted Subsidiary 2.5% of the Issuer to make a required capital contribution thereinTotal Assets in respect of letters of credit denominated in currencies other than U.S. dollars;
(17) Foreign Jurisdiction Deposits;
(18) Indebtedness consisting of guarantees of indebtedness or other obligations of the Issuer or any Restricted Subsidiary joint ventures permitted under clause (19)(a) of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course definition of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon“Permitted Investments;”
(19) Indebtedness consisting Incurred in connection with judgments, decrees, attachments or awards that do not constitute an Event of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Default under Section 4.08(b)(46.01(6);
(20) Guarantees issued from time Indebtedness in the form of (i) guarantees of loans and advances to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures)officers, directors, consultants and employees, in an aggregate amount not to exceed $20.0 million at any one time outstanding the greater of $100.0 million outstanding, and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence(ii) reimbursements owed to officers, directors, consultants and employees;
(21) Indebtedness consisting of obligations to make payments to current or former officers, directors and employees, their respective estates, spouses or former spouses with respect to the incurrence cancellation, purchase or redemption of Equity Interests of the Company to the extent permitted under Section 4.07(b)(5);
(22) Indebtedness of the Company or a Guarantor incurred in connection with or in contemplation of, or to provide all or any portion of the funds or credit support utilized to consummate, the acquisition by the Issuer Company or such Guarantor of property used or useful in a Permitted Business (including a Product) (whether through the direct purchase of assets or the purchase of Capital Stock of, or merger or consolidation with, any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer and any of its Restricted SubsidiariesPerson owning such assets); provided, however, that:on the date of such Incurrence and after giving effect thereto on a pro forma basis, the Fixed Charge Coverage Ratio (A) would be at least 1.75 to 1.0 and (B) would be greater than such Fixed Charge Coverage Ratio immediately prior to such Incurrence;
(a23) if Non-Recourse Debt; provided, however, that the Issuer aggregate principal amount of any such Indebtedness, when taken together with all other Indebtedness Incurred pursuant to this clause (23) and then outstanding, does not exceed the greater of $150.0 million or 2.5% of Total Assets;
(24) Indebtedness consisting of obligations under any Subsidiary Guarantor is the obligor on such Permitted Convertible Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and 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 Issuer, or the Note Guarantee, in the case of a Subsidiary GuarantorCall Transaction; and
(i25) any subsequent issuance Indebtedness of the Company or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary and (ii) any sale or other transfer of any such of its Restricted Subsidiaries in an aggregate principal amount on the date of Incurrence that, when taken together with all other Indebtedness of the Company and its Restricted Subsidiaries then outstanding and Incurred pursuant to a Person this clause (25), does not exceed the greater of $350.0 million or 5.0% of Total Assets.
(c) For purposes of determining compliance with this Section 4.09:
(1) all Indebtedness outstanding under the Credit Agreement on the Issue Date will be treated as Incurred under clause (1) of the immediately preceding paragraph;
(2) in the event that is not either an item of Indebtedness (or any portion thereof) meets the Issuer or a Restricted Subsidiary shall be deemedcriteria of more than one of the types of Indebtedness described in Section 4.09, the Company, in each caseits sole discretion, will classify such item of Indebtedness (or any portion thereof) at the time of Incurrence and will only be required to constitute a new incurrence include the amount and type of such Indebtedness by in one of the Issuer clauses of Section 4.09(b) (provided that any Indebtedness originally classified as Incurred pursuant to any of clauses (2) through (25) of Section 4.09(b) may later be reclassified as having been Incurred pursuant to Section 4.09(a) or any other of clauses (2) through (25) of Section 4.09(b) to the extent that such Restricted Subsidiaryreclassified Indebtedness could be Incurred pursuant to Section 4.09(a) or one of clauses (2) through (25) of Section 4.09(b), as the case may be, which new incurrence is not permitted by this clause (21if it were Incurred at the time of such reclassification);
(223) the issuance by any Restricted Subsidiary Company will be entitled to divide and classify an item of Indebtedness in more than one of the Issuer or to any other Restricted Subsidiary types of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results Indebtedness described in any such preferred stock being held by a Person other than the Issuer or a Restricted SubsidiarySection 4.09; and
(b4) with respect to Indebtedness permitted under Section 4.09(b)(4) in respect of Sale Leaseback Transactions that are not Capital Lease Obligations on the Issue Date, any sale or other transfer reclassification of such Sale Leaseback Transactions as Capital Lease Obligations shall not be deemed an Incurrence of Indebtedness for purposes of this covenant.
(d) For purposes of determining compliance with any such preferred stock to U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a Person that is not either the Issuer or a Restricted Subsidiary foreign currency shall be deemedcalculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in each casethe case of term debt, to constitute a new issuance or first committed, in the case of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions of this Indenturerevolving credit debt; provided that in the event 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 Permitted Refinancing Indebtedness does not exceed the principal amount of such Indebtedness being Refinanced.
(e) The principal amount of any Indebtedness incurred to Refinance other Indebtedness, if incurred in a different currency from the Indebtedness being Refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Indebtedness is denominated that is being Guaranteed in effect on the date of such Refinancing.
(f) The Company will not, and will not permit any Guarantor to, directly or indirectly incur any Indebtedness (including Permitted Indebtedness) that is Subordinated Indebtednesssubordinated or junior in right of payment to any Indebtedness of the Company or such Guarantor, then as the related Guarantee shall be case may be, unless such Indebtedness is expressly subordinated in right of payment to the Notes or the applicable Note GuaranteeGuarantee to the extent and in the same manner as such Indebtedness is subordinated to other Indebtedness of the Company or such Guarantor, as the case may be, ; provided that (i) unsecured Indebtedness shall not be treated as subordinated or junior to any other Indebtedness merely because it is unsecured and (bii) Non-Guarantors Indebtedness shall not be treated as subordinated or junior in right of payment to other Indebtedness incurred by other Non-Guarantors in accordance merely because such Indebtedness has a junior priority with the provisions of this Indenture; andrespect to any collateral.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer Company shall not, and shall not cause or 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 shall the Company will not and will not permit any Restricted Subsidiary to issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Issuer Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and its the Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) and the Issuer’s Restricted Subsidiaries may or issue shares of Disqualified Stock or preferred stock, if, after giving effect thereto and the application of the proceeds therefrom, either (i) if the Fixed Charge Coverage Ratio for the IssuerCompany’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 2.0 to 1.0, or determined on a pro forma basis (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as including a pro forma application of the end of net proceeds therefrom), as if the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is had been incurred or such the Disqualified Stock or the preferred stock is had been issued, as the case may be, would have been less than or equal to 1.75 to 1.0at the beginning of such four-quarter period.
(b) Section 4.10(a4.06(a) shall not not, however, prohibit the incurrence of any Indebtedness that meets of the following criteria or the issuance items of any preferred stock that meets the following criteriaIndebtedness, as applicable without duplication (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or any Restricted Subsidiary of Indebtedness pursuant to Credit Facilities or Project Loans(i) Indebtedness, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by under the Issuer or any Restricted Subsidiary, in an aggregate principal amount at any one time outstanding not to exceed the greater of $1,500 million and 22.5% of Consolidated Tangible Assets at the time of incurrence;
(2) the Existing Indebtedness;
(3) the incurrence by the Issuer of Indebtedness represented by the Initial Notes issued on the Issue Date and replacement Notes in respect thereof, if any (and the incurrence by any Subsidiary Guarantor of any related Note Guarantee);
(4) the incurrence or issuance by the Issuer or any Restricted Subsidiary of the Issuer of Indebtedness (including Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction), Disqualified Stock or preferred stock, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development or improvement of plant, equipment or other property used or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvementCredit Facilities, in an aggregate principal amount at any time outstanding, together with any including all Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5) the incurrence by the Issuer or any Restricted Subsidiary of Permitted Refinancing Indebtedness in exchange for, or incurred to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture incurred pursuant to be incurred under Section 4.10(a), this clause (5) or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4) or (11) of this Section 4.10(b4.06(b)(1)(i);
(6) the incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposes;
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) 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 (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 4,500.0 million and 3.08.6% of Consolidated Total Tangible Assets of the Issuer at Company, (ii) Indebtedness, including under the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures)EIB Facility, 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 Section 4.06(b)(1)(ii), not to exceed at any time outstanding the greater of $100.0 €203.4 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Issuer or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and 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 Issuer, or the Note Guarantee, in the case of a Subsidiary Guarantor; and
(i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, which new incurrence is not permitted by this clause (21);
(22) the issuance by any Restricted Subsidiary to the Issuer or to any other Restricted Subsidiary of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be subordinated in right of payment to the Notes or the Note Guarantee, as the case may be, and (b) Non-Guarantors of Indebtedness incurred by other Non-Guarantors in accordance with the provisions of this Indenture; and
Appears in 1 contract
Samples: Indenture (Carnival PLC)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) Section 4.09 of the Indenture is hereby amended and restated in its entirety to read as follows: “The Issuer Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company shall not issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Issuer Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and its the Company’s Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) and the Issuer’s Restricted Subsidiaries may or issue shares of preferred stock, ifif the Company’s Debt to Cash Flow Ratio at the time of incurrence of such Indebtedness or the issuance of such Disqualified Stock or preferred stock, after giving pro forma effect thereto to such incurrence or issuance as of such date and to the application use of proceeds therefrom as if the same had occurred at the beginning of the proceeds therefrom, either (i) the Fixed Charge Coverage Ratio for the Issuer’s most recently ended four full fiscal quarters quarter period of the Company for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may beavailable, would have been at least 2.0 no greater than 5.0 to 1.0, or (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as 1. The first paragraph of the end of the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been less than or equal to 1.75 to 1.0.
(b) this Section 4.10(a) shall 4.09 will not prohibit the incurrence of any Indebtedness that meets of the following criteria or the issuance items of any preferred stock that meets the following criteria, as applicable Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or any Restricted Subsidiary of Indebtedness pursuant to Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, in an aggregate principal amount at any one time outstanding not to exceed the greater of $1,500 million and 22.5% of Consolidated Tangible Assets at the time of incurrence;
(2) the Existing Indebtedness;
(3) the incurrence by the Issuer of Indebtedness represented by the Initial Notes issued on the Issue Date and replacement Notes in respect thereof, if any (and the incurrence by any Subsidiary Guarantor of any related Note Guarantee);
(4) the incurrence or issuance by the Issuer or any Restricted Subsidiary of the Issuer of Indebtedness (including Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction), Disqualified Stock or preferred stock, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development or improvement of plant, equipment or other property used or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvement, in an aggregate principal amount at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5) the incurrence by the Issuer or any Restricted Subsidiary of Permitted Refinancing Indebtedness in exchange for, or incurred to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause (5) or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4) or (11) of this Section 4.10(b);
(6) the incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposes;
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) 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 (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Issuer or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and 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 Issuer, or the Note Guarantee, in the case of a Subsidiary Guarantor; and
(i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, which new incurrence is not permitted by this clause (21);
(22) the issuance by any Restricted Subsidiary to the Issuer or to any other Restricted Subsidiary of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be subordinated in right of payment to the Notes or the Note Guarantee, as the case may be, and (b) Non-Guarantors of Indebtedness incurred by other Non-Guarantors in accordance with the provisions of this Indenture; and
Appears in 1 contract
Samples: Supplemental Indenture (Dobson Communications Corp)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer Company shall not, and shall not cause or permit any of its Restricted the Subsidiaries to, directly or indirectly, create, incur, assume, issue, guarantee or in any manner become liable for or with respect to, contingently or otherwise (in each case, to “incur”), the payment of, any Indebtedness (including any Acquired Debt), and shall not permit any of its Restricted Subsidiaries to Indebtedness) or issue any shares of preferred stock; Preferred Stock, provided, however, that the Issuer Company and, to the extent specifically set forth below, the Guarantors and its Restricted the Subsidiaries may incur Indebtedness (including Acquired Debt) each and the Issuer’s Restricted Subsidiaries may issue shares of preferred stock, if, after giving effect thereto and the application all of the proceeds therefrom, either (i) the Fixed Charge Coverage Ratio for the Issuer’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been at least 2.0 to 1.0, or (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as of the end of the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been less than or equal to 1.75 to 1.0.
(b) Section 4.10(a) shall not prohibit the incurrence of any Indebtedness that meets the following criteria or the issuance of any preferred stock that meets the following criteria, as applicable (collectively, “Permitted DebtIndebtedness”):
(1i) Indebtedness of the incurrence by Company or the Issuer or any Restricted Subsidiary of Indebtedness pursuant to Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by SPV under the Issuer or any Restricted Subsidiary, SPV Financing Agreement in an aggregate principal amount at any one time outstanding not to exceed $58.8 million, less (x) any mandatory prepayment made thereunder or scheduled payments made thereunder and (y) the greater amount of $1,500 million and 22.5% any such Indebtedness repaid with the Net Cash Proceeds of Consolidated Tangible Assets at the time of incurrenceany Asset Sale or Casualty Event;
(2ii) the Existing Senior Indebtedness;
(3iii) Subordinated Indebtedness or Preferred Stock of the Company or any Guarantor in an aggregate principal amount or liquidation value at any one time outstanding not to exceed $12.0 million;
(iv) Indebtedness of (i) the Company pursuant to the Series A Notes and Indebtedness of any Guarantor pursuant to a Subsidiary Guarantee of the Series A Notes and (ii) the Company pursuant to the Series B Notes;
(v) Indebtedness of the Company or any Subsidiary outstanding at the Closing Time;
(vi) Indebtedness of the Company owing to a Wholly Owned Subsidiary for so long as such Indebtedness is owing to a Wholly Owned Subsidiary; provided that any Indebtedness of the Company to any Wholly Owned Subsidiary is Subordinated Indebtedness, pursuant to a written agreement, to the Company’s obligations under this Agreement and the Series A Notes; provided, further, that disposition, pledge or transfer of any such Indebtedness to a Person (other than a disposition, pledge or transfer to a Wholly Owned Subsidiary) shall be deemed to be an incurrence of such Indebtedness by the Company not permitted by this clause (vi);
(vii) Indebtedness of a Wholly Owned Subsidiary owing to and held by the Company or another Wholly Owned Subsidiary which is unsecured; provided that (a) any disposition, pledge or transfer of any such Indebtedness to a Person (other than the Company or a Wholly Owned Subsidiary) shall be deemed to be an incurrence of such Indebtedness by the obligor not permitted by this clause (vii), and (b) any transaction pursuant to which any Wholly Owned Subsidiary, which has Indebtedness owing to the Company or any other Wholly Owned Subsidiary, ceases to be a Wholly Owned Subsidiary shall be deemed to be the incurrence of Indebtedness by such Wholly Owned Subsidiary that is not permitted by this clause (vii); provided, further, that if such Indebtedness is incurred by a non-Guarantor (other than Terremark Latin America (Brasil) Ltda. or any future Wholly Owned Subsidiary that is a Foreign Subsidiary) then such incurrence must also comply with clause (e) of the definition of “Permitted Investments”;
(viii) the incurrence by the Issuer Company or any Subsidiary of Indebtedness represented by the Initial Notes issued Company of Hedging Obligations that are incurred in the ordinary course of business of the Company or such Subsidiary or the SPV Financing Agreement as in effect on the Issue Date date hereof and replacement Notes not for speculative purposes; provided that, in respect thereof, if any (and the incurrence by any Subsidiary Guarantor case of any Hedging Obligation that relates to (i) interest rate risk, the notional principal amount of such Hedging Obligation does not exceed the principal amount of the Indebtedness to which such Hedging Obligation related Note Guarantee)and (ii) currency risk, such Hedging Obligation does not increase the Indebtedness of the Company and its Subsidiaries outstanding other than as a result of fluctuations in foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder;
(4ix) Indebtedness of the incurrence or issuance by the Issuer Company or any Restricted Subsidiary of the Issuer of Indebtedness (including Capital represented by Capitalized Lease Obligations and or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with a sale/leaseback transaction), Disqualified Stock the acquisition or preferred stock, development of real or personal movable or immovable property in each case, case incurred or issued for the purpose of financing or refinancing all or any part of the purchase price or cost of design, construction, lease, installation, development construction or improvement of plant, equipment or other property used in the business of the Company or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvementSubsidiary, in an aggregate principal amount at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, pursuant to this clause (ix) not to exceed $24.0 million at any one time outstanding; provided that no more than $3.0 million of such Indebtedness may be at any one time outstanding at Subsidiaries that are not Guarantors; provided that the greater principal amount of $25.0 million and 1.0% of Consolidated Tangible Assets any Indebtedness permitted under this clause (ix) did not in each case at the time of incurrenceincurrence exceed the Fair Market Value, as determined by the Company or such Subsidiary in good faith, of the property to which it relates; provided, further, that any such Indebtedness permitted under this clause (ix) is either (A) Subordinated Indebtedness or (B) with respect to any real or personal property other than the specific property being financed or refinanced, secured by a Lien which is junior to the Liens granted pursuant to the Security Documents;
(5x) the incurrence by the Issuer or any Restricted Subsidiary of Permitted Refinancing Indebtedness in exchange for, or incurred to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause (5) or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4) or (11) of this Section 4.10(b);
(6) the incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposes;
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, credit to support workers compensation obligations and bankers acceptances and performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion bonds and compliance performance guarantees or other similar obligations incurred in of the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) the incurrence by the Issuer 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 in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligationsGuarantor, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business consistent with past practice, not to exceed $3.0 million in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or aggregate at any Restricted Subsidiary of the Issuertime outstanding;
(15xi) Preferred Stock of NAP Madrid issued to the incurrence Company or any Guarantor in consideration for the transfer of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and servicesassets; provided that all shares of such obligations Preferred Stock that are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments required to be made within 60 days after the incurrence of the related obligationpledged pursuant to Section 7.12(b) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligationsshall have been pledged as Collateral;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (axii) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures)Company’s guarantee, in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets €570,000, of the Issuer at the time of incurrence;lease to be transferred by TerreNAP Data Centers, Inc. to NAP Madrid; and
(21xiii) any renewals, extensions, substitutions, refundings, refinancings or replacements (collectively, a “refinancing”) of any Indebtedness described in clauses (i), (ii), (iii), (iv) and (v) above, including any successive refinancings so long as the aggregate principal amount of Indebtedness represented thereby is not increased by such refinancing plus the lesser of (I) the incurrence by stated amount of any premium or other payment required to be paid in connection with such a refinancing pursuant to the Issuer terms of the Indebtedness being refinanced or any Restricted Subsidiary (II) the amount of intercompany Indebtedness between premium or among other payment actually paid at such time to refinance the Issuer and any Indebtedness, plus, in either case, the amount of its Restricted Subsidiaries; provided, however, that:
(a) if expenses of the Issuer or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee is not the Issuer Company or a Subsidiary Guarantor, of the Company incurred in connection with such Indebtedness must be unsecured refinancing and subordinated in right of payment to the prior payment in full in cash of all Obligations then due with respect to the Notes, (A) in the case of any refinancing of Indebtedness that is Subordinated Indebtedness, such new Indebtedness is subordinated to the Issuer, Series A Notes at least to the same extent as the Indebtedness being refinanced and (B) such refinancing does not reduce the Average Life to Stated Maturity or the Note Guarantee, in the case of a Subsidiary Guarantor; and
(i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new incurrence Stated Maturity of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, which new incurrence is not permitted by this clause (21);
(22) the issuance by any Restricted Subsidiary to the Issuer or to any other Restricted Subsidiary of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; andIndebtedness.
(b) any sale or other transfer For purposes of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemeddetermining compliance with this Section 8.04, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions of this Indenture; provided that in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (i) through (xi) of the immediately preceding paragraph (a), the Company shall, in its sole discretion, classify such item of Indebtedness in any manner that complies with this Section 8.04 and will only be required to include the amount and type of such Indebtedness that is being Guaranteed is Subordinated Indebtednessin one of such clauses. Accrual of interest, then accretion of accreted value and the related Guarantee payment of interest through the issuance of securities paid-in-kind shall not be subordinated in right of payment deemed to the Notes or the Note Guarantee, as the case may be, and (b) Non-Guarantors be an incurrence of Indebtedness incurred by other Non-Guarantors in accordance with the provisions for purposes of this Indenture; andSection 8.04.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall will not, and shall will not permit any of its Restricted Subsidiaries Subsidiary to, incur, directly or indirectly, incur, with respect to any Indebtedness (including Acquired Debt), and shall not permit any of its Restricted Subsidiaries to issue any shares of preferred stockIndebtedness; provided, however, provided that the Issuer and its or any Restricted Subsidiaries Subsidiary may incur Indebtedness (including Acquired Debt) and the Issuer’s Restricted Subsidiaries may issue shares of preferred stock, if, immediately after giving effect thereto to such incurrence, the Consolidated Coverage Ratio is at least 2.0 to 1.0 (determined on a pro forma basis, including a pro forma application of the net proceeds therefrom, as if the additional Indebtedness had been incurred, and the application of the proceeds therefrom, either had occurred at the beginning of the applicable four-quarter period), so long as the aggregate Indebtedness incurred pursuant to this proviso by Restricted Subsidiaries that are not Subsidiary Guarantors does not exceed $50.0 million at any one time outstanding (i) this proviso, the Fixed Charge “Coverage Ratio for the Issuer’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been at least 2.0 to 1.0, or (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as of the end of the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been less than or equal to 1.75 to 1.0Exception”).
(b) Section 4.10(a4.09(a) shall will not prohibit the incurrence of any Indebtedness that meets the following criteria or the issuance of any preferred stock that meets the following criteria, as applicable Indebtedness (collectively, “Permitted DebtIndebtedness”):
(1) the incurrence by the Issuer or any Restricted Subsidiary of Indebtedness pursuant to Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, in an aggregate principal amount at any one time outstanding not to exceed the greater of $1,500 million and 22.5% of Consolidated Tangible Assets at the time of incurrence;
(2) the Existing Indebtedness;
(3) the incurrence by the Issuer of Indebtedness represented by the Initial Notes issued on the Issue Date and replacement Notes in respect thereof, if any (and the incurrence by any Subsidiary Guarantor of any related Note Guarantee)Guarantees;
(4) the incurrence or issuance by the Issuer or any Restricted Subsidiary of the Issuer of Indebtedness (including Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction), Disqualified Stock or preferred stock, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development or improvement of plant, equipment or other property used or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvement, in an aggregate principal amount at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5) the incurrence by the Issuer or any Restricted Subsidiary of Permitted Refinancing Indebtedness in exchange for, or incurred to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause (5) or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4) or (11) of this Section 4.10(b);
(6) the incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposes;
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) 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 (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of to the Issuer consisting of extent outstanding on the Issue Date (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of businessother than Indebtedness under Credit Facilities);
(173) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary under Credit Facilities in an aggregate amount at any time outstanding pursuant to this clause (3) (after giving effect to the application of any proceeds of such Indebtedness as of the date of the incurrence thereof), taken together with the aggregate amount outstanding at such time pursuant to clause (19) below, not to exceed the greater of (i) $400.0 million; and (ii) the sum of (x) $100.0 million, (y) 65% of the net book value of the Inventory of the Issuer and the Restricted Subsidiaries and (z) 85% of the net book value of the accounts receivable of the Issuer and the Restricted Subsidiaries, in each case determined on a consolidated basis in accordance with GAAP on a pro forma basis after giving effect to make a required capital contribution thereinany transactions consummated in connection with the incurrence of such Indebtedness;
(184) obligations Refinancing Indebtedness in respect of Indebtedness incurred pursuant to the Coverage Ratio Exception, clause (1) of this Section 4.09(b) (including the Exchange Notes and any Guarantees thereof), clause (2) of this Section 4.09(b) (other than any Indebtedness owed to the Issuer or any of its Restricted Subsidiary Subsidiaries), this clause (4), or clause (16) of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereuponthis Section 4.09(b);
(195) Indebtedness consisting of Indebtedness issued owed by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of Subsidiary; provided that (i) any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time such Indebtedness owed by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred shall be subordinated by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Issuer or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and subordinated in right of payment terms to the prior payment in full in cash of all Obligations then due with respect to the Notes, and any such Indebtedness owed by any Subsidiary Guarantor shall be subordinated by its terms to the prior payment in full in cash of all Obligations with respect to the case Guarantee of the Issuer, or the Note Guarantee, in the case of a such Subsidiary Guarantor; and
and (iii) any subsequent issuance or transfer of Equity Interests that results in any if such Indebtedness being becomes held by a Person other than the Issuer or a any Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemedSubsidiary, in each case, to constitute a new incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, which new incurrence is Subsidiary shall be deemed to have incurred Indebtedness not permitted by this clause (215);
(226) (x) the issuance guarantee by any Restricted Subsidiary to the Issuer or to any other Restricted Subsidiary of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of Indebtedness permitted to be incurred by of the Issuer or a Subsidiary Guarantor and (y) the guarantee by any Restricted Subsidiary that is not a Subsidiary Guarantor of the Issuer in accordance with the provisions Indebtedness of this Indentureany other Restricted Subsidiary that is not a Subsidiary Guarantor; provided that that, in each case, the event such Indebtedness that being guaranteed is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be subordinated in right of payment incurred pursuant to the Notes Coverage Ratio Exception or the Note Guarantee, as the case may be, and is Permitted Indebtedness;
(b7) Non-Guarantors of Indebtedness incurred by other Non-Guarantors in accordance with the provisions of this Indenture; andHedging Obligations;
Appears in 1 contract
Samples: Indenture (Koppers Holdings Inc.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt)Indebtedness, and shall 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 Issuer and its Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) and the Issuer’s Restricted Subsidiaries may issue shares of preferred stock, if, after giving effect thereto and the application of the proceeds therefrom, either (i) the Fixed Charge Coverage Ratio for the Issuer’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been at least 2.0 to 1.0, or (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as of the end of the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been less than or equal to 1.75 to 1.0.
(b) The provisions of Section 4.10(a) shall hereof will not prohibit the incurrence of any Indebtedness that meets of the following criteria or the issuance items of any preferred stock that meets the following criteria, as applicable Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or any Restricted Subsidiary Holdings of Indebtedness pursuant to (including letters of credit) under the Credit Facilities Agreement consisting of (a) such amounts issued and outstanding on the Issue Date (which, for the avoidance of doubt, cannot be redrawn once repaid or Project Loansprepaid), including any Guarantee of such plus (b) Indebtedness or any Guarantee of Designated SPE Debt by under the Issuer or any Restricted Subsidiary, Credit Agreement incurred after the Issue Date in an aggregate principal amount at any one time outstanding not to exceed $6 million in the greater aggregate unless, prior to the incurrence of $1,500 million and 22.5% such additional Indebtedness under this Section 4.10(b), the Special Member provides a written notice to the Trustee of Consolidated Tangible Assets at the time of its consent to such incurrence;
(2) the Existing Indebtednessincurrence by the Company and the Guarantors of Indebtedness represented by (a) the Notes to be issued on the Issue Date and the related Note Guarantees (including any increase in principal amount as a result of a PIK Payment and any PIK Interest Notes in respect thereof) and (b) the Holdings Notes outstanding on the Issue Date and the related guarantees thereof (including any increase in principal amount and any PIK interest notes in respect thereof, in each case as a result of a PIK payment);
(3) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness represented arising from the honoring by the Initial Notes issued on the Issue Date and replacement Notes in respect thereofa bank or other financial institution of a check, if any (and the incurrence by any Subsidiary Guarantor of any related Note Guarantee)draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(4) the incurrence or issuance by the Issuer Company or any of its Restricted Subsidiary of the Issuer of Indebtedness (including Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction), Disqualified Stock or preferred stock, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development or improvement of plant, equipment or other property used or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvement, in an aggregate principal amount at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5) the incurrence by the Issuer or any Restricted Subsidiary Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or incurred the net proceeds of which are used to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause clauses (51) or clause and (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4) or (11) of this Section 4.10(b) or this clause (4);
(65) the incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposes;
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) the incurrence by the Issuer 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 in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;Tax Receivable Agreement; and
(9) the incurrence of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(216) the incurrence by the Issuer Company or any of its Restricted Subsidiary Subsidiaries of intercompany Indebtedness between or among the Issuer Company and any of its Restricted Subsidiaries; provided, however, that:
(aA) if the Issuer Company or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee payee is not the Issuer Company or a Subsidiary Guarantor, 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 IssuerCompany, 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 Issuer 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 Issuer Company or a Restricted Subsidiary shall of the Company will be deemed, in each case, to constitute a new an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, which new incurrence is that was not permitted by this clause (216);
(227) Indebtedness in respect of bid, performance or surety bonds, appeal bonds, workers’ compensation claims, self-insurance obligations and bankers acceptances issued for the issuance by any Restricted Subsidiary to account of the Issuer or to any other Restricted Subsidiary of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer Company or a Restricted SubsidiarySubsidiary in the ordinary course of business (including those incurred to secure health, safety and environmental obligations in the ordinary course of business);
(8) Indebtedness in the ordinary course of business owed to any person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance to the Loan Parties, pursuant to reimbursement or indemnification obligations to such person; and
(b9) any sale or other transfer Indebtedness representing deferred compensation to employees incurred in the ordinary course of business.
(c) The amount of any such preferred stock to a Person that is not either Indebtedness outstanding as of any date will be:
(1) the Issuer or a Restricted Subsidiary shall be deemedaccreted value of the Indebtedness, in each case, to constitute a new issuance the case of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22)any Indebtedness issued with original issue discount;
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a2) the Issuer or principal amount of the Indebtedness, in the case of any Subsidiary Guarantor other Indebtedness; and
(3) in respect of Indebtedness permitted to be incurred of another Person secured by a Lien on the Issuer or any Restricted Subsidiary assets of the Issuer in accordance with specified Person, the provisions lesser of:
(A) the Fair Market Value of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be subordinated in right asset at such date of payment to the Notes or the Note Guarantee, as the case may be, and (b) Non-Guarantors of Indebtedness incurred by other Non-Guarantors in accordance with the provisions of this Indenturedetermination; and
(B) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Samples: Restructuring Support Agreement (Global Brokerage, Inc.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall not, and shall not permit any of its Restricted Subsidiaries toNo Company Entity will, 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)Indebtedness, and shall not permit or issue any Disqualified Stock, except for any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Issuer and its Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) and the Issuer’s Restricted Subsidiaries may issue shares of preferred stock, if, after giving effect thereto and the application of the proceeds therefrom, either (i) the Fixed Charge Coverage Ratio for the Issuer’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been at least 2.0 to 1.0, or (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as of the end of the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been less than or equal to 1.75 to 1.0.
(b) Section 4.10(a) shall not prohibit the incurrence of any Indebtedness that meets the following criteria or the issuance items of any preferred stock that meets the following criteria, as applicable Indebtedness (collectively, “Permitted DebtIndebtedness”):
(1) Indebtedness under the incurrence by the Issuer or any Restricted Subsidiary of Indebtedness pursuant to Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, 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 thereunder) not to exceed the greater of $1,500 142.0 million plus any Incremental LC Facility, and 22.5% of Consolidated Tangible Assets at the time of incurrenceany Replacement Credit Facilities (less, if applicable, any Guarantees issued pursuant to clause (13) below);
(2) the Existing IndebtednessNote Guarantees and guarantees of the Note Guarantors of Indebtedness of the Company under the Credit Facilities (including any Incremental LC Facility and any Replacement Credit Facilities);
(3) the incurrence by Wildcat Sale Leaseback to the Issuer of extent constituting Indebtedness;
(4) Indebtedness represented by the Initial Notes issued on the Issue Date and replacement Notes in respect thereof, if (including any (and the incurrence by any Subsidiary Guarantor of any related Note Guarantee);
(45) Indebtedness of any Project Company represented by (i) secured equipment or similar financings (where the incurrence security interests are incurred, and the Indebtedness secured thereby is created, within 60 days after the acquisition or issuance by the Issuer or any Restricted Subsidiary construction of the Issuer of Indebtedness (including Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction)relevant property, Disqualified Stock plant or preferred stockequipment) or purchase money obligations, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development installation or improvement of plantproperty, plant or equipment or other property used or useful in a Permitted Business which occurs within 365 days the business of such purchase, design, construction, lease, installation, development or improvementthe Project Companies in the ordinary course and (ii) Capital Lease Obligations of any Project Company, in an aggregate principal amount not to exceed $10.0 million at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5) the incurrence by the Issuer or any Restricted Subsidiary of Permitted Refinancing Indebtedness in exchange for, or incurred to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause (5) or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4) or (11) of this Section 4.10(b);
(6) the incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposes;
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, and surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred bonds in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) the incurrence by the Issuer or any of its Restricted Subsidiaries of 7) 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 in the ordinary course of businessfunds, so long as such Indebtedness is extinguished covered within five Business Days;
(8) contingent obligations arising from indemnities provided under the Financing Documents and the Project Contracts;
(9) the incurrence of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of Project Company under Permitted Commodity Hedge Agreements to the Issuer or any such Restricted Subsidiaryextent constituting Indebtedness;
(10) the incurrence of Indebtedness resulting arising from endorsements of negotiable instruments for collection netting services, overdraft protection, cash management obligations and otherwise in connection with deposit, securities and commodities accounts in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of intercompany loans among the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, Company and/or any of the following is true:
(a) Project Companies resulting from the Issuer would be permitted flow of funds among the Company Entities, so long as such loans are fully subordinated to incur at least $1.00 of additional Indebtedness the Senior Obligations pursuant to Section 4.10(a);
(b) an agreement containing the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to terms attached as Exhibit F hereto and not secured by any of the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisitionCollateral;
(12) unsecured Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accountsan aggregate amount at any time outstanding not to exceed $10.0 million; provided that such Indebtedness remains outstanding for ten Business Days or less;and
(13) the incurrence or issuance any Guaranty by the Issuer or Company on behalf of a Restricted Subsidiary Project Company to secure obligations under a Project Contract related to decommissioning costs for the benefit of a Governmental Authority, to the Issuer of Indebtedness in an extent such credit support is required by applicable law, up to a maximum aggregate principal amount (or accreted value, as applicable) at any time outstandingequal to an amount that, when combined with the aggregate amount of all outstanding LC Loans and the available amount of all outstanding Letters of Credit (but excluding LC Loans and Letters of Credit under any Incremental LC Facility) does not to exceed $132.0 million.
(b) For purposes of determining compliance with this Section 4.07, in the greater event that an item of $150.0 million and 3.0% Indebtedness meets the criteria of Consolidated Tangible Assets more than one of the Issuer at the time categories of incurrence;
Permitted Indebtedness described in clauses (141) the incurrence through (12) of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of paragraph (a) the financing of insurance premiums above, or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed is entitled to exist be incurred pursuant to the terms first paragraph of a joint venture agreement as a result this Section 4.07, the Company will be permitted to classify and later reclassify such item of Indebtedness on the date of its incurrence in any manner that complies with this Section 4.07 and will be entitled to divide the amount and type of such Indebtedness among more than one of such clauses under this Section 4.07. Indebtedness under the Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the failure definition of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;Permitted Indebtedness. All Indebtedness shall be denominated in U.S. dollars.
(18c) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value The amount of any Management Warrants or other Equity Interests Indebtedness outstanding as of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiaries; provided, however, thatdate will be:
(a1) if the Issuer or any Subsidiary Guarantor is accreted value of the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and subordinated in right of payment to the prior payment in full in cash of all Obligations then due with respect to the NotesIndebtedness, in the case of any Indebtedness issued with original issue discount;
(2) the Issuer, or principal amount of the Note GuaranteeIndebtedness, in the case of a Subsidiary Guarantorany other Indebtedness; and
(i3) any subsequent issuance or transfer in respect of Equity Interests that results in any such Indebtedness being held of another Person secured by a Person other than Lien on the Issuer or a Restricted Subsidiary and (ii) any sale or other transfer assets of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemedspecified Person, in each case, to constitute a new incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, which new incurrence is not permitted by this clause (21);
(22) the issuance by any Restricted Subsidiary to the Issuer or to any other Restricted Subsidiary of shares of preferred stock; provided, however, thatlesser of:
(aA) any subsequent issuance or transfer the Fair Market Value of Equity Interests that results in any such preferred stock being held by a Person other than assets at the Issuer or a Restricted Subsidiarydate of determination; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (aB) the Issuer or any Subsidiary Guarantor of Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary amount of the Issuer in accordance with Indebtedness of the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be subordinated in right of payment to the Notes or the Note Guarantee, as the case may be, and (b) Non-Guarantors of Indebtedness incurred by other Non-Guarantors in accordance with the provisions of this Indenture; andPerson.
Appears in 1 contract
Samples: Indenture (Exelon Generation Co LLC)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt), ) and the Company shall not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that so long as no Default or Event of Default has occurred or is continuing, the Issuer Company and its Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) and the Issuer’s Restricted Subsidiaries may issue shares of preferred stock, if, after giving effect thereto and the application of the proceeds therefrom, either (i) if the Fixed Charge Coverage Ratio for the Issuer’s Company"s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been at least 2.0 1.75 to 1.01, or (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as of the end of the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which if such additional Indebtedness is incurred prior to March 15, 2000, or at least 2.0 to 1, if such preferred stock additional Indebtedness is issuedincurred on or after March 15, 2000, in each case, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the case may be, would have additional Indebtedness had been less than or equal to 1.75 to 1.0.
(b) Section 4.10(a) incurred at the beginning of such four-quarter period. The provisions of the first paragraph of this covenant shall not prohibit apply to the incurrence of any Indebtedness that meets of the following criteria or the issuance items of any preferred stock that meets the following criteria, as applicable Indebtedness (collectively, “"Permitted Debt”"):
(1i) the incurrence by the Issuer or any Company and its Restricted Subsidiary Subsidiaries of Indebtedness pursuant to Credit Facilities from a bank or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, other financial institution in an aggregate principal amount not to exceed $200.0 million at any one time outstanding not outstanding, less any Net Proceeds of Asset Sales applied to exceed the greater of $1,500 million and 22.5% of Consolidated Tangible Assets at the time of incurrencepermanently reduce any such Indebtedness pursuant to Section 4.10 hereof;
(2) the Existing Indebtedness;
(3ii) the incurrence by the Issuer Company and its Restricted Subsidiaries of the Existing Indebtedness, other than pursuant to the Xxxxx Credit Facility or the Sweetheart Credit Facilities;
(iii) the incurrence by the Company of Indebtedness represented by the Initial Senior Secured Discount Notes, the Senior Secured Discount Notes issued on Indenture, the Issue Date Subordinated Notes and replacement this Indenture and the issuance of additional Subordinated Notes in respect thereof, if any connection with the Company's interest payment obligations under the Subordinated Notes;
(and iv) the incurrence by any Subsidiary Guarantor of any related Note Guarantee);
(4) the incurrence or issuance by the Issuer Company or any of its Restricted Subsidiary of the Issuer Subsidiaries of Indebtedness (including represented by Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction)Obligations, Disqualified Stock mortgage financings or preferred stockpurchase money obligations, in each case, case incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development construction or improvement of plantproperty, plant or equipment used in the business of the Company or other property used or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvementRestricted Subsidiary, in an aggregate principal amount not to exceed $5.0 million at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5v) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness in connection with the acquisition of assets or a new Restricted Subsidiary; provided that such Indebtedness was incurred by the prior owner of such assets or such Restricted Subsidiary prior to such 42 acquisition by the Company or one of its Restricted Subsidiaries and was not incurred in connection with, or in contemplation of, such acquisition by the Company or one of its Restricted Subsidiaries; and provided further that the principal amount (or accreted value, as applicable) of such Indebtedness, together with any other outstanding Indebtedness incurred pursuant to this clause (v) and any Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (v), does not exceed $5.0 million;
(vi) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or incurred the net proceeds of which are used to extend, renew, refund, refinance, replace, defease refinance or discharge any replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause the first paragraph hereof or clauses (5) or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Dateii), (3iii), (4iv) or (11v) of this Section 4.10(b)paragraph;
(6vii) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposes;
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) 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 (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer Company and any of its Restricted Subsidiaries; provided, however, that:
that (a) if the Issuer or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and 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 Issuer, or the Note Guarantee, in the case of a Subsidiary Guarantor; and
(i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer Company or a Restricted Subsidiary thereof and (iib) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer Company or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute a new an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, which new incurrence is that was not permitted by this clause (21vii);
(22viii) the issuance incurrence by the Company or any of its Restricted Subsidiary to Subsidiaries of Hedging Obligations that are incurred for the Issuer purpose of fixing or hedging interest rate risk with respect to any other Restricted Subsidiary floating rate Indebtedness that is permitted by the terms of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiarythis Indenture to be outstanding; and
(bix) the incurrence by the Company or any sale of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or other transfer accreted value, as applicable) not to exceed $25.0 million at any one time outstanding. For purposes of determining compliance with this covenant, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (i) through (ix) above or is entitled to be incurred pursuant to the first paragraph of this covenant, the Company shall, in its sole discretion, classify such item of Indebtedness in any such preferred stock manner that complies with this covenant. Accrual of interest, accretion or amortization of original issue discount, and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms shall not be deemed to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemedan incurrence of Indebtedness for purposes of this Section; provided, in each such case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance that the amount thereof is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary included in Fixed Charges of the Issuer in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be subordinated in right of payment to the Notes or the Note Guarantee, Company as the case may be, and (b) Non-Guarantors of Indebtedness incurred by other Non-Guarantors in accordance with the provisions of this Indenture; andaccrued.
Appears in 1 contract
Samples: Indenture (Sf Holdings Group Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt), ) and that the Company shall not issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Issuer Company and its any Restricted Subsidiaries Subsidiary may incur Indebtedness (including Acquired Debt) and the Issuer’s Restricted Subsidiaries may or issue shares of preferred stock, if, after giving effect thereto and the application of the proceeds therefrom, either (i) stock if the Fixed Charge Coverage Ratio for the Issuer’s Company's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, issued would have been at least 2.0 to 1.0, or determined on a pro forma basis (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as including a pro forma application of the end of net proceeds therefrom), as if the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred had been incurred, or such the preferred stock is had been issued, as the case may be, would have been less than or equal to 1.75 to 1.0.
(b) at the beginning of such four-quarter period. The provisions of the first paragraph of this Section 4.10(a) 4.09 shall not prohibit apply to the incurrence of any Indebtedness that meets of the following criteria or the issuance items of any preferred stock that meets the following criteria, as applicable Indebtedness (collectively, “"Permitted Debt”"):
(1i) the incurrence by the Issuer or any Restricted Subsidiary Company of additional Indebtedness pursuant to under Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt (and the guarantee thereof by the Issuer or any Restricted Subsidiary, Guarantors) in an aggregate principal amount outstanding pursuant to this clause (i) at any one time (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), including all Permitted Refinancing Indebtedness then outstanding incurred to refund, refinance or replace any other Indebtedness incurred pursuant to this clause (i), not to exceed $375.0 million less the greater aggregate amount of $1,500 million and 22.5% all Net Proceeds of Consolidated Tangible Assets at the time of incurrenceAsset Sales applied to repay any such Indebtedness pursuant to Section 4.10;
(2ii) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3iii) the incurrence by the Issuer Company and the Guarantors of $200.0 million in aggregate principal amount of the Notes and the Subsidiary Guarantees thereof;
(iv) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by the Initial Notes issued on the Issue Date and replacement Notes in respect thereof, if any (and the incurrence by any Subsidiary Guarantor of any related Note Guarantee);
(4) the incurrence or issuance by the Issuer or any Restricted Subsidiary of the Issuer of Indebtedness (including Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction)Obligations, Disqualified Stock mortgage financings or preferred stockpurchase money obligations, in each case, case incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development construction or improvement of plantproperty, plant or equipment used in the business of the Company or other property used or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvementRestricted Subsidiary, in an aggregate principal amount amount, including all Permitted Refinancing Indebtedness then outstanding incurred to refund, refinance or replace any other Indebtedness incurred pursuant to this clause (iv), not to exceed $30.0 million at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5v) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness in connection with the acquisition of assets or a new Restricted Subsidiary; provided that such Indebtedness was incurred by the prior owner of such assets or such Restricted Subsidiary prior to such acquisition by the Company or one of its Restricted Subsidiaries and was not incurred in connection with, or in contemplation of, such acquisition by the Company or one of its Restricted Subsidiaries; and provided further that the principal amount (or accreted value, as applicable) of such Indebtedness, together with any other outstanding Indebtedness incurred pursuant to this clause (v), does not exceed $10.0 million;
(vi) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or incurred the net proceeds of which are used to extend, renew, refund, refinance, refinance or replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause (5) or clause (2) (other than the Existing Notes which are being repurchased intercompany Indebtedness or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), Indebtedness incurred pursuant to clause (3), (4i) or (11) of this Section 4.10(babove);
(6vii) the incurrence Indebtedness incurred by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposes;
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in constituting reimbursement obligations with respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, to letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred credit issued in the ordinary course of businessbusiness in respect of workers' compensation claims 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 for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoingsuch Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) 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 (except in the case of daylight overdraftsviii) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer Company or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations price or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests 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 such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer Company or any Restricted Subsidiary of (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms balance sheet shall not be deemed to be reflected on such balance sheet for purposes of this Indenture; provided that immediately after 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 such acquisition, any of the following is true:
(asubsequent changes in value) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance actually received by the Issuer or a Company and its Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments Subsidiaries in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligationsdisposition;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21ix) the incurrence by the Issuer Company or any of its Restricted Subsidiary Subsidiaries of intercompany Indebtedness between or among the Issuer Company and any of its Restricted Subsidiaries; provided, however, that:
that (aA) if the Issuer or any Subsidiary Guarantor Company is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary GuarantorIndebtedness, such Indebtedness must be unsecured and is expressly subordinated in right of payment to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Issuer, or the Note Guarantee, in the case of a Subsidiary Guarantor; and
Notes and (iB)(1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer Company or a one of its Restricted Subsidiary Subsidiaries and (ii2) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer Company or a one of its Restricted Subsidiary Subsidiaries shall be deemed, in each case, to constitute a new an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be;
(x) the incurrence by the Company or any of the Guarantors of Hedging Obligations that are incurred for the purpose of (A) fixing, which new hedging or capping interest rate risk with respect to any floating rate Indebtedness that is permitted by the terms of this Indenture to be outstanding or (B) protecting the Company and its Restricted Subsidiaries against changes in currency exchange rates;
(xi) the guarantee by the Company or any of the Guarantors of Indebtedness of the Company or a Restricted Subsidiary of the Company that was permitted to be incurred by another provision of this Section 4.09;
(xii) the incurrence is by the Company's 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 of the Company that was not permitted by this clause (21xii), and the issuance of preferred stock by Unrestricted Subsidiaries;
(22xiii) obligations in respect of performance and surety bonds and completion guarantees provided by the issuance by Company or any Restricted Subsidiary to Subsidiaries in the Issuer or to any other Restricted Subsidiary ordinary course of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiarybusiness; and
(bxiv) the incurrence by the Company or any sale of 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 then outstanding incurred to refund, refinance or replace any other transfer of any such preferred stock Indebtedness incurred pursuant to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22xiv);
(23) Guarantees (other than Guarantees , not to exceed $50.0 million. For purposes of Designated SPE Debt) by (a) determining compliance with this Section 4.09, in the Issuer or any Subsidiary Guarantor event that an item of Indebtedness permitted meets the criteria of more than one of the categories of Permitted Debt described in clauses (i) through (xiv) above or is entitled to be incurred by pursuant to the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions first paragraph of this Indenture; provided Section 4.09, the Company shall, in its sole discretion, classify, or later reclassify, such item of Indebtedness in any manner that complies with this covenant. Accrual of interest, the accretion of accreted value and the payment of interest in the event such form of additional Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall not be subordinated in right of payment deemed to the Notes or the Note Guarantee, as the case may be, and (b) Non-Guarantors be an incurrence of Indebtedness incurred by other Non-Guarantors in accordance with the provisions for purposes of this Indenture; andSection 4.09.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and shall 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 Issuer and its Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Issuer’s Restricted Subsidiaries Guarantors may incur Indebtedness (including Acquired Debt) or issue shares of preferred stock, if, after giving effect thereto and the application of the proceeds therefrom, either (i) if the Fixed Charge Coverage Ratio for the IssuerCompany’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 2.0 2.00 to 1.01.00, or determined on a pro forma basis (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as including a pro forma application of the end of net proceeds therefrom), as if the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is had been incurred or such the Disqualified Stock or the preferred stock is had been issued, as the case may be, would have been less than or equal to 1.75 to 1.0and the net proceeds therefrom applied, at the beginning of such four-quarter period.
(b) The provisions of Section 4.10(a4.09(a) shall hereof will not prohibit the incurrence of any Indebtedness that meets of the following criteria or the issuance of any preferred stock that meets the following criteria, as applicable (collectively, “Permitted Debt”):following:
(1) the incurrence by the Issuer Company or any of its Restricted Subsidiary Subsidiaries of additional Indebtedness pursuant to and letters of credit under Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, 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) $1,500 50.0 million and 22.5(ii) 10.0% of Consolidated Net Tangible Assets at Assets, less (b) the time aggregate amount of incurrenceall Net 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 and effect a corresponding commitment reduction thereunder pursuant to Section 4.10(b)(1);
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuer Company and the Guarantors of Indebtedness represented by the Initial Notes and the related Note Guarantees to be issued on the Issue Date and replacement Notes in respect thereof, if any (and the incurrence by any Subsidiary Guarantor date of any related Note Guarantee)this Indenture;
(4) the incurrence or issuance by the Issuer Company or any of its Restricted Subsidiary of the Issuer Subsidiaries of Indebtedness (including represented by Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction)Obligations, Disqualified Stock mortgage financings or preferred stockpurchase money obligations, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development installation or improvement of plantproperty, plant or equipment used in the business of the Company or other property used or useful in a Permitted Business which occurs within 365 days any of such purchase, design, construction, lease, installation, development or improvementits Restricted Subsidiaries, in an aggregate principal amount at any time outstandingamount, together with any including all Permitted Refinancing Indebtedness in respect thereofincurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (a) $25.0 100.0 million and 1.0(b) 12.5% of Consolidated Net Tangible Assets of the Company (measured as of the date of the applicable incurrence) at the any time of incurrenceoutstanding;
(5) the incurrence by the Issuer Company or any of its Restricted Subsidiary Subsidiaries of Attributable Debt in respect of (a) Sale/Leaseback Transactions or (b) Construction Indebtedness and Permitted Refinancing Indebtedness incurred in respect thereof, in an aggregate principal amount not to exceed $75.0 million;
(6) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or incurred the net proceeds of which are used to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), the first paragraph of this clause (5) covenant or clause clauses (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4), (6), (13) or (1120) of this Section 4.10(b4.09(b);
(67) the incurrence by the Issuer 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) (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 of the Company and (2) 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 (7);
(8) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the 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 (8);
(9) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations not (excluding Hedging Obligations entered into for speculative purposes);
(710) the guarantee by the Company or any of 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;
(11) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, or performance, completion and compliance guarantees surety, statutory or other similar obligations incurred appeal bonds in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) 12) the incurrence by the Issuer 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 in the ordinary course of businessfunds, so long as such Indebtedness is extinguished covered within five Business Days;
(913) the incurrence by the Company or any of Indebtedness arising from agreements its Restricted Subsidiaries of Acquired Debt (other than Acquired Debt incurred in connection with, or to provide all or any portion of the Issuer funds or credit support utilized to consummate the transaction or series of transactions which results in the incurrence by the Company or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this IndentureDebt); provided that immediately on the date of such incurrence of Acquired Debt and after giving pro forma effect to such acquisitionthereto, any of the following is true:
either (a) the Issuer Company would be permitted have been able to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.10(a);
4.09(a) or (b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition for the Company would be equal to or greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio for the Company immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than transaction or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness series of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrencetransactions);
(14) the incurrence of guarantees by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness owed on a Restricted Subsidiary short-term basis of the Issuer no longer than 30 days to banks and other financial institutions incurred in the ordinary course of business with such banks and financial institutions that arises in respect of obligations connection with ordinary banking arrangements to suppliers, customers, franchisees, lessors and licensees manage cash balances of the Issuer or any Company and its Restricted Subsidiary of the IssuerSubsidiaries;
(15) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case case, incurred in the ordinary course of business;
(16) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness representing deferred compensation to employees of the Company and its Restricted Subsidiaries incurred in the ordinary course of business;
(17) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness by in respect of any bankers’ acceptance, bank guarantees, letter of credit, warehouse receipt or similar facilities, and reinvestment obligations related thereto, incurred in the Issuer or a Restricted Subsidiary ordinary course of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution thereinbusiness;
(18) obligations of the Issuer incurrence by the Company or any of its Restricted Subsidiary Subsidiaries of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into Guarantees incurred in the ordinary course of business in connection with respect of obligations of (or to) suppliers, customers, franchisees, lessors and licensees that, in each case, are not Affiliates of the acquisition Company or any of real property, to entitle, develop or construct infrastructure thereuponits Restricted Subsidiaries;
(19) Indebtedness consisting the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness issued incurred by the Issuer Company or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer Company to the extent described in Section 4.08(b)(4);that the net proceeds thereof are promptly deposited to defease, redeem or to satisfy and discharge the Notes; and
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer Company or any Restricted Subsidiary Guarantor of intercompany Indebtedness between in an aggregate principal amount (or among 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 pursuant to this clause (20), not to exceed the Issuer and any greater of its Restricted Subsidiaries; provided, however, that:
(a) if $50.0 million and (b) 7.5% of Consolidated Net Tangible Assets (determined as of the Issuer or date of the applicable incurrence pursuant to this clause (20)), (the items of Indebtedness and, in the case of clause (8), preferred stock, specified in clauses (1)-(20) above are collectively referred to as “Permitted Debt”). The Company will not incur, and will not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and contractually 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 any other Indebtedness of the Issuer, Company or the Note Guarantee, in the case of a Subsidiary Guarantor; and
(i) any subsequent issuance or transfer of Equity Interests that results in any such Guarantor unless such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, which new incurrence is not permitted by this clause (21);
(22) the issuance by any Restricted Subsidiary to the Issuer or to any other Restricted Subsidiary of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be 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 Company 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 (20) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness (other than the Notes and the Note GuaranteeGuarantees) under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest or preferred stock dividends, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles and the payment of dividends on preferred stock or Disqualified Stock in the form of additional 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, in each such case, that the amount thereof is included in Fixed Charges 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 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. The amount of any Indebtedness outstanding as of any date will be:
(1) the accreted value of the Indebtedness, in the case may beof any Indebtedness issued with original issue discount;
(2) the principal amount of the Indebtedness, and in the case of any other Indebtedness; and
(b3) Non-Guarantors in respect of Indebtedness incurred of another Person secured by other Non-Guarantors in accordance with a Lien on the provisions assets of this Indenturethe specified Person, the lesser of:
(A) the Fair Market Value of such assets at the date of determination; and
(B) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Samples: Indenture (Carmike Cinemas Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt), and shall the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries Subsidiary that is not a Guarantor to issue any shares of preferred stock; provided, however, that the Issuer and its Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Issuer’s Restricted Subsidiaries may incur Indebtedness or Restricted Subsidiaries that are not a Guarantors may issue shares of preferred stock, if, after giving effect thereto and the application of the proceeds therefrom, either (i) if the Fixed Charge Coverage Ratio for the Issuer’s Company's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or preferred stock is issued would have been at least 2.0 to 1.0 prior to June 15, 2005 and at least 2.25 to 1.0 thereafter, 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 had been issued, as the case may be, would have been at least 2.0 to 1.0, or (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as beginning of the end of the Issuer’s most recently ended fiscal such four-quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been less than or equal to 1.75 to 1.0period.
(b) The provisions of Section 4.10(a4.09(a) shall will not prohibit the incurrence of any Indebtedness that meets of the following criteria or the issuance items of any preferred stock that meets the following criteria, as applicable Indebtedness (collectively, “"Permitted Debt”"):
(1) (a) the incurrence by the Issuer or Company and any Restricted Subsidiary of Indebtedness pursuant to and letters of credit under the revolving facility component of the Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, in an aggregate principal amount at any one time outstanding under this clause (1)(a) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Subsidiaries thereunder) not to exceed $150.0 million less the greater aggregate amount of $1,500 million and 22.5% all Net Proceeds of Consolidated Tangible Assets at the time of incurrence;
(2) the Existing Indebtedness;
(3) the incurrence Asset Sales applied by the Issuer of Indebtedness represented by the Initial Notes issued on the Issue Date and replacement Notes in respect thereof, if any (and the incurrence by any Subsidiary Guarantor of any related Note Guarantee);
(4) the incurrence or issuance by the Issuer or any Restricted Subsidiary of the Issuer of Indebtedness (including Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction), Disqualified Stock or preferred stock, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development or improvement of plant, equipment or other property used or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvement, in an aggregate principal amount at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5) the incurrence by the Issuer or any Restricted Subsidiary of Permitted Refinancing Indebtedness in exchange for, or incurred to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause (5) or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4) or (11) of this Section 4.10(b);
(6) the incurrence by the Issuer Company or any of its the Restricted Subsidiaries of Hedging Obligations not for speculative purposes;
(7) to repay any Indebtedness under the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion Credit Facilities and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by effect 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 in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness corresponding commitment reduction thereunder pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Issuer or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and 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 Issuer, or the Note Guarantee, in the case of a Subsidiary Guarantor4.10 hereof; and
(i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, which new incurrence is not permitted by this clause (21);
(22) the issuance by any Restricted Subsidiary to the Issuer or to any other Restricted Subsidiary of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be subordinated in right of payment to the Notes or the Note Guarantee, as the case may be, and (b) Non-Guarantors of Indebtedness incurred by other Non-Guarantors in accordance with the provisions of this Indenture; and
Appears in 1 contract
Samples: Indenture (Trimas Corp)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, incurcreate, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt), Indebtedness) and the Company shall not issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Issuer and its Restricted Subsidiaries Company may incur Indebtedness (including Acquired DebtIndebtedness) and the Issuer’s Restricted Subsidiaries may or issue shares of preferred stock, Disqualified Stock if, after giving effect thereto and the application of the proceeds therefrom, either :
(i) the Fixed Charge Coverage Ratio for the Issuer’s Company's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock Disqualified Stock is issued would have been at least (A) from the Issue Date to December 31, 1999, 2.25 to 1 and (B) thereafter, 2.5 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock had been issued, as the case may be, would have been at least 2.0 to 1.0, or the beginning of such four-quarter period; and
(ii) the Weighted Average Life to Maturity of such Indebtedness is equal to Consolidated Tangible Net Worth Ratio as or greater than the remaining Weighted Average Life to Maturity of the end of the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issuedNotes, as the case may be, would have been less than or equal to 1.75 to 1.0.
provided that this clause (b) Section 4.10(aii) shall not prohibit apply in the case of Acquired Indebtedness. The provisions of the first paragraph of this Section 4.09 shall not apply to the incurrence of any Indebtedness that meets of the following criteria or the issuance items of any preferred stock that meets the following criteria, as applicable Indebtedness (collectively, “"Permitted Debt”Indebtedness"):
(1i) the incurrence by the Issuer or any Restricted Subsidiary Company and its Subsidiaries of the Existing Indebtedness other than the Notes;
(ii) the incurrence by the Company on the date hereof of Indebtedness pursuant to Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt represented by the Issuer or any Restricted Subsidiary, Notes in an aggregate principal amount at any one time outstanding not to exceed the greater of $1,500 100.0 million and 22.5% of Consolidated Tangible Assets at the time of incurrenceGuarantees thereof by the Guarantors;
(2) the Existing Indebtedness;
(3iii) the incurrence by the Issuer Company or any of its Subsidiaries of Indebtedness represented by the Initial Notes issued on the Issue Date and replacement Notes in respect thereof, if any (and the incurrence by any Subsidiary Guarantor of any related Note Guarantee);
(4) the incurrence or issuance by the Issuer or any Restricted Subsidiary of the Issuer of Indebtedness (including Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction)Obligations, Disqualified Stock mortgage financings or preferred stockpurchase money obligations, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development construction or improvement of plantproperty, plant or equipment used in the business of the Company or other property used or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvementSubsidiary, in an aggregate principal amount not to exceed $5.0 million at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5iv) the incurrence by the Issuer Company or any Restricted Subsidiary of its Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or incurred the net proceeds of which are used to extend, renew, refund, refinance, replace, defease refinance or discharge any replace Indebtedness (other than intercompany Indebtedness) that was permitted by this the Indenture to be incurred under Section 4.10(a), this clause (5) or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4) or (11) of this Section 4.10(b)incurred;
(6v) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposes;
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) 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 (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer Company and any of its Restricted Wholly Owned Subsidiaries; provided, however, that:
provided that (aA) if the Issuer or any Subsidiary Guarantor Company is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary GuarantorIndebtedness, such Indebtedness must be unsecured and is expressly subordinated in right of payment to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Issuer, or the Note Guarantee, in the case of a Subsidiary Guarantor; and
Notes and (iB)(1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer Company or a Restricted Wholly Owned Subsidiary and (ii2) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer Company or a Restricted Wholly Owned Subsidiary shall be deemed, in each case, to constitute a new an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, which new incurrence is not permitted by this clause (21);
(22vi) the issuance incurrence by any Restricted Subsidiary to the Issuer or to any other Restricted Subsidiary Company of shares Hedging Obligations in the ordinary course of preferred stock; provided, however, that:business;
(avii) any subsequent issuance the incurrence of Indebtedness in connection with one or transfer more standby letters of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer credit, guarantees, performance or a Restricted Subsidiary; and
(b) any sale surety bonds or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemedreimbursement obligations, in each case, to constitute issued in the ordinary course of business and not in connection with the borrowing of money or the obtaining of advances or credit (other than (A) advances or credit on open account, includible in current liabilities, for goods and services in the ordinary course of business and on terms and conditions customary in a new issuance Permitted Business and (B) the extension of such preferred stock credit represented by such Restricted Subsidiaryletter of credit, which new issuance guarantee, bond or other obligations itself), provided that any draw under or call upon any of the foregoing is not permitted by repaid in full within 45 days, and provided further that the aggregate amount of all Indebtedness incurred pursuant to this clause (22)vii) shall not exceed $5.0 million at any time outstanding;
(23viii) Guarantees the incurrence of Indebtedness arising from agreements of the Company or a 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 Subsidiary (other than Guarantees guarantees of Designated SPE Debt) Indebtedness incurred by any Person acquiring all or a portion of such business, assets or Subsidiary for the purpose of financing such acquisition), provided that the maximum aggregate liability of all such Indebtedness shall at no time exceed 50% of the gross proceeds actually received by the Company or such Subsidiary in connection with such disposition;
(aix) the Issuer guarantee by the Company or any Subsidiary Guarantor of the Guarantors of Indebtedness of the Company or a Subsidiary of the Company that is a Guarantor that was permitted to be incurred by another provision of this covenant;
(x) the Issuer incurrence by Pretzel Time of Indebtedness under a working capital facility, provided that the aggregate principal amount of all Indebtedness (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Pretzel Time thereunder) outstanding thereunder 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 (x), does not exceed an amount equal to $1.0 million;
(xi) the incurrence by the Company of additional Indebtedness (including Indebtedness under a Credit Facility) in an aggregate principal amount (or accreted value, as applicable), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any other Indebtedness incurred pursuant to this clause (xi), not to exceed $15.0 million at any time outstanding;
(xii) the incurrence by the Company or any Restricted of its subsidiaries of Acquired Indebtedness in an aggregate amount not to exceed $5.0 million at any time outstanding;
(xiii) the guarantee by the Company or any of its Subsidiaries (other than MFB) of operating store lease obligations of the Company or any of its Subsidiaries or any franchisee of the Company or any of its Subsidiaries in the ordinary course of business and consistent with past practice;
(xiv) the guarantee by any Subsidiary of the Issuer Company of Indebtedness of the Company under any Credit Facility otherwise permitted to be incurred under the Indenture;
(xv) the incurrence by the Company of Indebtedness in accordance the form of notes issued in connection with the provisions repurchase, redemption, acquisition or retirement of this Indenture; provided that Equity Interests of the Company or any Subsidiary of the Company in the event such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be an amount not to exceed $500,000 at any time outstanding and subordinated in right of payment to the Notes Notes; and
(xvi) the incurrence by the Company of Indebtedness or the Note Guarantee, as guarantee by the case may be, and (b) Non-Guarantors Company of Indebtedness incurred by other Non-Guarantors franchisees in accordance connection with the provisions cost of purchasing a franchise and the cost of equipment in connection with the set-up of a franchise, provided that such Indebtedness or guarantee does not exceed $3.0 million at any time outstanding. 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 Indebtedness described in clauses (i) through (xvi) above or is entitled to be incurred pursuant to the first paragraph of this Indenture; andSection 4.09, the Company shall, in its sole discretion, classify such item of Indebtedness in any manner that complies with this Section 4.09 and such item of Indebtedness will be treated as having been incurred pursuant to only one of such clauses or pursuant to the first paragraph hereof. Accrual of interest and the accretion of accreted value shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.09.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer Company shall not, and shall not cause or 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 shall the Company will not and will not permit any Restricted Subsidiary to issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Issuer Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and its the Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) and the Issuer’s Restricted Subsidiaries may or issue shares of preferred stock, if, after giving effect thereto and the application of the proceeds therefrom, either (i) if the Fixed Charge Coverage Ratio for the IssuerCompany’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 2.0 to 1.0, or determined on a pro forma basis (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as including a pro forma application of the end of net proceeds therefrom), as if the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is had been incurred or such the Disqualified Stock or the preferred stock is had been issued, as the case may be, would have been less than or equal to 1.75 to 1.0at the beginning of such four-quarter period.
(b) Section 4.10(a4.06(a) shall not not, however, prohibit the incurrence of any Indebtedness that meets of the following criteria or the issuance items of any preferred stock that meets the following criteriaIndebtedness, as applicable without duplication (collectively, “Permitted Debt”):
(1i) Indebtedness under the incurrence by the Issuer or any Restricted Subsidiary of Indebtedness pursuant to Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, in an aggregate principal amount at any one time outstanding not to exceed the greater of $1,500 3,000.04,500.0 million and 22.56.98.6% of Consolidated Total Tangible Assets at the time of incurrence;
(2) the Existing Indebtedness;
(3) the incurrence by the Issuer of Indebtedness represented by the Initial Notes issued on the Issue Date and replacement Notes in respect thereof, if any (and the incurrence by any Subsidiary Guarantor of any related Note Guarantee);
(4) the incurrence or issuance by the Issuer or any Restricted Subsidiary of the Issuer of Company, (ii) Indebtedness (including Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction), Disqualified Stock or preferred stock, in each case, incurred or issued for under the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development or improvement of plant, equipment or other property used or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvement, EIB Facility in an aggregate principal amount at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, outstanding not to exceed the greater of $25.0 €203.4 million and 1.00.6% of Consolidated Total Tangible Assets at of the time of incurrence;
Company, (5iii) the incurrence by the Issuer or any Restricted Subsidiary of Permitted Refinancing Indebtedness in exchange for, or incurred to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause (5) or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4) or (11) of this Section 4.10(b);
(6) the incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposes;
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) 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 (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness Multicurrency Facility in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, outstanding not to exceed the greater of (x) the sum of $150.0 1,700.0 million, €1,000.0 million and 3.0£300.0 million and (y) 7.3% of Consolidated Total Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Issuer or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and 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 Issuer, or the Note Guarantee, in the case of a Subsidiary Guarantor; and
(i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, which new incurrence is not permitted by this clause (21);
(22) the issuance by any Restricted Subsidiary to the Issuer or to any other Restricted Subsidiary of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be subordinated in right of payment to the Notes or the Note Guarantee, as the case may be, and (b) Non-Guarantors of Indebtedness incurred by other Non-Guarantors in accordance with the provisions of this Indenture; andthe
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer Company shall not, and shall not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly, incurincur any Indebtedness, with respect to any Indebtedness (including Acquired Debt), other than Permitted Indebtedness, and the Company shall not issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; providedPreferred Capital Stock, however, that the Issuer and its Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) and the Issuer’s Restricted Subsidiaries may issue shares of preferred stock, if, in each case unless immediately after giving effect thereto to the incurrence of such Indebtedness or the issuance of such Disqualified Stock or Preferred Capital Stock and the receipt and application of the net proceeds therefrom, either including, without limitation, the application or use of the net proceeds therefrom to repay Indebtedness or make any Restricted Payment, (i) the Fixed Charge Coverage Consolidated Debt to Annualized Operating Cash Flow Ratio for the Issuer’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been at least 2.0 be (A) less than 7.0 to 1.0, if prior to December 31, 2005 and (B) less than 6.0 to 1.0, if on or after December 31, 2005 or (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as of the end of the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as in the case may beof any incurrence of Indebtedness prior to December 31, 2005 only, Consolidated Debt would have been be equal to or less than or equal to 1.75 to 1.075% of Total Invested Capital.
(b) So long as no Default or Event of Default shall have occurred and be continuing or would be caused thereby, paragraph (a) of this Section 4.10(a) 4.9 shall not prohibit the incurrence of any Indebtedness that meets of the following criteria or the issuance items of any preferred stock that meets the following criteria, as applicable Indebtedness (collectively, “"Permitted Debt”Indebtedness"):
(1i) the incurrence by the Issuer or any Restricted Subsidiary Company and the Guarantors of Indebtedness pursuant to Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt represented by the Issuer or any Restricted Subsidiary, in an aggregate principal amount at any one time outstanding not Notes and the related Note Guarantees to exceed be issued on the greater of $1,500 million and 22.5% of Consolidated Tangible Assets at the time of incurrenceIssue Date;
(2) the Existing Indebtedness;
(3ii) the incurrence by the Issuer Company and any Guarantor of Indebtedness under Credit Facilities; provided that the aggregate principal amount of all Indebtedness of the Company and the Guarantors outstanding under all Credit Facilities at any time outstanding, after giving effect to such incurrence, does not exceed the sum of (A) $330.0 million less any amounts outstanding under paragraph (iii) below, plus (B) 80% of Qualified Receivables, which sum shall be permanently reduced by the aggregate amount of all Net Proceeds of Asset Sales applied since the Issue Date to repay Indebtedness under a Credit Facility pursuant to Section 4.10;
(iii) the incurrence by the Company or any Guarantor of Indebtedness represented by the Initial Notes issued on the Issue Date and replacement Notes in respect thereof, if any (and the incurrence by any Subsidiary Guarantor of any related Note Guarantee);
(4) the incurrence or issuance by the Issuer or any Restricted Subsidiary of the Issuer of Indebtedness (including Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction), Disqualified Stock or preferred stockPurchase Money Indebtedness, in each case, (A) incurred or issued for the purpose of leasing or financing all or any part of the purchase price or cost of design, construction, lease, installation, development construction or improvement of plantinventory, property, plant or equipment used in the business of the Company or other property used or useful in a Permitted Business which occurs within 365 days any of such purchaseits Restricted Subsidiaries, design, construction, lease, installation, development or improvementincluding telephone and computer systems and operating facilities, in an aggregate principal amount not to exceed $5.0 million at any time outstandingoutstanding and (B) such Indebtedness shall not constitute more than 100% (determined in accordance with GAAP in good faith by the Board of Directors) to the Company or such Restricted Subsidiary, together with any Permitted Refinancing Indebtedness in respect thereofas applicable, not to exceed of the greater cost of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrenceproperty so purchased, constructed, improved or leased;
(5iv) the incurrence by the Issuer Company or any Restricted Subsidiary Guarantor of Permitted Refinancing Indebtedness in exchange for, or incurred the net proceeds of which are used to extend, renew, refund, refinance, refinance or replace, defease or discharge any Indebtedness (Indebtedness, other than intercompany Indebtedness) , that was permitted by this Indenture to be incurred under Section 4.10(a), this clause paragraph (5) or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4) or (11a) of this Section 4.10(b)4.9 or clause (i) of this paragraph;
(6v) the incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposes;
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) 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 (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer Company and any of its Wholly-Owned Restricted SubsidiariesSubsidiaries that are Guarantors; provided, however, that:
(aA) if the Issuer Company or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary GuarantorIndebtedness, 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 IssuerCompany, or the Note GuaranteeGuarantee of such Guarantor, in the case of a Subsidiary Guarantor; and
(i1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer Company or a one of its Wholly-Owned Restricted Subsidiary Subsidiaries and (ii2) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer Company or a one of its Wholly-Owned Restricted Subsidiary Subsidiaries, shall be deemed, in each case, to constitute a new an incurrence of such Indebtedness by the Issuer Company or such Wholly-Owned Restricted Subsidiary, as the case may be, which new incurrence is that was not permitted by this clause (21v);
(22vi) the issuance incurrence by the Company or any Restricted Subsidiary to Guarantor of Hedging Obligations that are incurred for the Issuer purpose of fixing or hedging interest rate risk with respect to any other Restricted Subsidiary of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(b) any sale or other transfer of any such preferred stock to a Person floating rate Indebtedness that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by the terms of this clause (22)Indenture to be outstanding;
(23vii) the Guarantee by the Company or any of the Guarantors of Indebtedness that was permitted to be incurred by another provision of this Section 4.9;
(viii) the accrual of interest and the payment of dividends on Disqualified Stock in the form of additional shares of the same class of Disqualified Stock;
(ix) Indebtedness (A) in respect of performance, surety or appeal bonds or bankers' acceptances provided in the ordinary course of business and (B) arising from agreements providing for indemnification, adjustment of purchase price or similar obligations, or from Guarantees or letters of credit, surety bonds or performance bonds securing any obligations of the Company or any of its Restricted Subsidiaries pursuant to such agreements, in any case incurred in connection with the disposition of any business, assets or Restricted Subsidiary (other than Guarantees of Designated SPE Debt) Indebtedness incurred by a Person acquiring all or any portion of such business, assets or Restricted Subsidiary for the purpose of financing such acquisition), in a principal amount not to exceed the gross proceeds actually received by the Company or any Restricted Subsidiary in connection with such disposition;
(ax) the Issuer or any Subsidiary Guarantor of Indebtedness permitted to be incurred incurrence by the Issuer Company or any Restricted Subsidiary of any Indebtedness under any unsecured deferred promissory note payable to Sprint PCS pursuant to the Issuer in accordance with the deferral of collected revenues provisions of the Consent and Agreement between Sprint PCS and the lenders under the Credit Facilities;
(xi) the incurrence by the Company or any Restricted Subsidiary 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 Indebtedness incurred pursuant to this Indentureclause (xi), not to exceed $50.0 million; provided and
(xii) the incurrence by the Company or any Guarantor of Acquired Debt, but only to the extent that immediately after giving effect to the incurrence of such Indebtedness (A) in the event of any incurrence of Acquired Debt on or after December 31, 2005 only, the Consolidated Debt to Annualized Operating Cash Flow Ratio would decrease as compared to the Consolidated Debt to Annualized Operating Cash Flow Ratio immediately prior to such incurrence or (B) in the event of any incurrence of Acquired Debt prior to December 31, 2005 only, the ratio of Consolidated Debt to Total Invested Capital would decrease as compared to the ratio of Consolidated Debt to Total Invested Capital immediately prior to such incurrence.
(c) For purposes of determining compliance with this Section 4.9, in the event that an item of proposed Indebtedness that meets the criteria of more than one of the categories of Permitted Indebtedness described in clauses (i) through (xii) of paragraph (b) of this Section 4.9, or is being Guaranteed is Subordinated entitled to be incurred pursuant to paragraph (a) of this Section 4.9, the Company shall be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, then in any manner that complies with this Section 4.9 and such item of Indebtedness shall be treated as having been incurred pursuant to only one of such clauses or pursuant to Section 4.9(a) at any given time. Indebtedness outstanding under any Credit Facilities on the related Guarantee Issue Date shall be deemed to have been incurred under clause (ii) of paragraph (b) of this Section 4.9. 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 Section 4.9.
(d) Notwithstanding anything to the contrary contained in this Section 4.9, (i) the Company shall not, and shall not permit any Guarantor to, incur any Indebtedness pursuant to this Section 4.9 if the proceeds thereof are used, directly or indirectly, to refinance any subordinated Indebtedness unless such newly-incurred Indebtedness shall be subordinated in right of payment to the Notes or the applicable Note Guarantee, as the case may be, to at least the same extent as such refinanced subordinated Indebtedness, and (bii) Non-Guarantors the Company shall not permit any Restricted Subsidiary that is not a Guarantor to incur any Indebtedness pursuant to this Section 4.9 if the proceeds thereof are used, directly or indirectly, to refinance any Indebtedness of Indebtedness incurred by other Non-Guarantors in accordance with the provisions of this Indenture; andCompany or any Guarantor.
Appears in 1 contract
Samples: Indenture (Horizon PCS Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively “incur”) any Indebtedness (including Acquired Debt), and shall not permit any of its Restricted Subsidiaries to issue Disqualified Capital Stock or issue any shares of preferred stockPreferred Stock; provided, however, that the Issuer Company and its Restricted Subsidiaries any Guarantor may incur Indebtedness (including Acquired Debt) and ), issue Disqualified Capital Stock or issue Preferred Stock, if the Issuer’s Restricted Subsidiaries may issue shares of preferred stock, if, after giving effect thereto and the application Consolidated Total Leverage Ratio of the proceeds therefrom, either Company and its Subsidiaries (ion a consolidated combined basis) the Fixed Charge Coverage Ratio for the IssuerCompany’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 preferred stock is issued, as the case may be, would have been at least 2.0 (x) with respect to 1.0an incurrence prior to December 31, 2022, no greater than 5.00 to 1.00 and (y) with respect to an incurrence on or after December 31, 2022, no greater than 4.00 to 1.00, in each case, determined on a pro forma basis (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as including a pro forma application of the end of net proceeds therefrom), as if the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or had been incurred, and the application of proceeds therefrom had occurred at the beginning of such preferred stock is issued, as the case may be, would have been less than or equal to 1.75 to 1.0four-quarter period.
(b) Section 4.10(a) shall The first paragraph of this covenant will not prohibit the incurrence of any Indebtedness that meets of the following criteria or the issuance of any preferred stock that meets the following criteria, as applicable (collectively, “Permitted Debt”):
(1i) the incurrence by the Issuer Company or a Guarantor of Indebtedness under an ABL Facility or any Restricted Subsidiary guarantees thereunder and the issuance and creation of Indebtedness pursuant letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by have a principal amount equal to the Issuer or any Restricted Subsidiaryface amount thereof), in an aggregate principal amount at any one time outstanding not to exceed the greater of $1,500 million and 22.5% of Consolidated Tangible Assets at the time of incurrence;
(2) the Existing Indebtedness;
(3) the incurrence by the Issuer of Indebtedness represented by the Initial Notes issued on the Issue Date and replacement Notes in respect thereof, if any (and the incurrence by any Subsidiary Guarantor of any related Note Guarantee);
(4) the incurrence or issuance by the Issuer or any Restricted Subsidiary of the Issuer of Indebtedness (including Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction), Disqualified Stock or preferred stock, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development or improvement of plant, equipment or other property used or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvement, in an aggregate principal amount at any time outstandingamount, together with any Permitted Refinancing Indebtedness refinancing in respect thereof, not to exceed the greater of (x) $25.0 50 million and 1.0(y) 7.5% of Consolidated Tangible Assets at Total Assets; provided, that, in the time event that the Company or a Guarantor incurred Indebtedness pursuant to Section 4.14(a) (the “Referent Incurrence”) on a date that is less than six months earlier than the date of incurrenceany increase in the aggregate commitments available under the ABL Facility, then such increase in the commitments under the ABL Facility shall only be permitted if, after giving effect to such increase in commitments on a pro forma basis as if the full aggregate principal amount of such increase had been incurred pursuant to this Section 4.14(b)(i), the Company and the Guarantors would be able to incur an additional $1 of Indebtedness under Section 4.14(a);
(5ii) the incurrence by the Issuer or Company and the Guarantors of Indebtedness represented by the Notes (including any Restricted Subsidiary of Permitted Refinancing Indebtedness in exchange for, or incurred to extend, renew, refund, refinance, replace, defease or discharge Guarantee thereof) issued on the Closing Date;
(iii) any Indebtedness of the Company and its Subsidiaries in existence on the Closing Date (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause Indebtedness described in clauses (5) or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4i) or (11) of this Section 4.10(bii));
(6iv) the incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposes;
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) 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 (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements endorsement of negotiable instruments for deposit or collection in the ordinary course of business;
(11v) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way Capitalized Lease Obligations) incurred solely to finance the acquisition of merger, amalgamation fixed or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness capital assets in an aggregate principal amount (or accreted valueamount, as applicable) together with any refinancing in respect thereof, not to exceed $2.0 million at any time outstanding, not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16vi) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer Company and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Issuer Company or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee payee is not the Issuer Company or a Subsidiary Guarantor, such Indebtedness must shall 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, ;
(vii) hedging obligations entered into in the case Company’s or any of its Subsidiaries’ ordinary course of business for the Issuer, purpose of hedging currency risks or the Note Guarantee, in the case of a Subsidiary Guarantor; and
interest rate risks (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness to a Person that is but not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, which new incurrence is not permitted by this clause (21for speculative purposes);
(22viii) the issuance by any Restricted Subsidiary to the Issuer or to any other Restricted Subsidiary of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of non-recourse Indebtedness permitted to be incurred by the Issuer Company or any Restricted Subsidiary of its Subsidiaries to finance the Issuer in accordance with the provisions payment of this Indenture; provided that in the event insurance premiums of such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be subordinated in right of payment to the Notes or the Note Guarantee, as the case may be, and (b) Non-Guarantors of Indebtedness incurred by other Non-Guarantors in accordance with the provisions of this Indenture; andPerson;
Appears in 1 contract
Samples: Indenture (BuzzFeed, Inc.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer Company shall not, and 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 with respect to (or, collectively, “incur”) any Indebtedness (including Acquired Debt), ) and the Company shall not permit any of its Restricted Subsidiaries Subsidiary to issue any shares of preferred stock; provided, however, that the Issuer and its Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) and the Issuer’s may permit a Restricted Subsidiaries may Subsidiary to incur Indebtedness or issue shares of preferred stock, stock if, at the time of such incurrence or issuance and after giving effect thereto and the on a Pro Forma Basis (including a pro forma application of the net proceeds therefrom), either (i) the Fixed Charge Coverage Ratio for the Issuer’s most recently ended four full fiscal quarters immediately preceding such incurrence or issuance for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issuedavailable, taken as the case may beone period, would have been at least 2.0 to 1.0, or (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as of the end of the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been less than or equal to 1.75 to 1.0.
(b) Section 4.10(a) . The foregoing limitations shall not prohibit the incurrence of any Indebtedness that meets the following criteria or the issuance of any preferred stock that meets the following criteria, as applicable (collectively, “Permitted Debt”):apply to:
(1) the incurrence by the Issuer Company or any Restricted Subsidiary of Indebtedness pursuant to and letters of credit under Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, 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 the Restricted Subsidiaries thereunder) not to exceed the greater of $1,500 million and 22.5% of Consolidated Tangible Assets at the time of incurrence3,260.0 million;
(2) the Existing Indebtednessissuance of the Note Guarantees;
(3) the incurrence by the Issuer of Indebtedness represented by the Initial Notes issued on the Issue Date and replacement Notes in respect thereof, if any (Company and the incurrence by any Subsidiary Guarantor Restricted Subsidiaries of any related Note Guarantee)the Existing Indebtedness;
(4) the incurrence or issuance by the Issuer or any Restricted Subsidiary of the Issuer of Indebtedness (including Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction), Disqualified Stock or preferred stock, in each case, incurred or issued for Notes on the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development or improvement of plant, equipment or other property used or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvement, in an aggregate principal amount at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrencedate hereof;
(5) the incurrence by the Issuer or any Company and the Restricted Subsidiary Subsidiaries of Permitted Financing Lease Obligations, mortgage financings and/or Indebtedness constituting purchase money obligations, including all Refinancing Indebtedness in exchange forincurred with respect thereto, or incurred up to extend, renew, refund, refinance, replace, defease or discharge an aggregate at any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause (5) or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds one time outstanding of the Initial Notes issued on the Issue Date), greater of (3), i) $250.0 million and (4ii) or (11) 5.0% of this Section 4.10(b)Consolidated Total Assets as of any date of incurrence;
(6) the incurrence by or issuance of Indebtedness or preferred stock between (i) the Issuer or any of its Company and the Restricted Subsidiaries of Hedging Obligations not for speculative purposesand (ii) the Restricted Subsidiaries;
(7) the incurrence by the Issuer or any of its Company and the Restricted Subsidiaries of Indebtedness in respect Hedging Obligations not for purposes of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrencespeculation;
(8) the incurrence by the Issuer Company and the Restricted Subsidiaries in respect of performance bonds, bankers’ acceptances, workers’ compensation claims, surety, bid, appeal or similar bonds, completion guarantees, payment obligations in connection with self-insurance or similar obligations, and bank overdrafts (and letters of credit in respect thereof) in the ordinary course of business;
(9) the incurrence by the Company and the Restricted Subsidiaries of Indebtedness consisting of “earn-out” obligations, Guarantees, indemnities or obligations in respect of purchase price adjustments in connection with the acquisition or disposition of assets, including, without limitation, shares of Capital Stock;
(10) the incurrence by the Company 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 (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of businessfunds, so long as such Indebtedness is extinguished covered within five (5) Business Days;
(911) the incurrence Guarantee by the Company or any Subsidiary Guarantor of Indebtedness arising from agreements of the Issuer Company or a Restricted Subsidiary and the Guarantee by any non-Guarantor Subsidiary of the Issuer providing for indemnification, adjustment Indebtedness of purchase price, holdback, contingency payment obligations or similar obligationsanother non-Guarantor Subsidiary, in each case, to the extent that the Guaranteed Indebtedness was permitted to be incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms another provision of this IndentureSection 4.10; provided that immediately after giving effect to such acquisition, any of if the following Indebtedness being Guaranteed is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal contractually subordinated to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) Notes or the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would Note Guarantees, as applicable, then the Guarantee must be less than or equal subordinated to the Issuer’s actual same extent as the Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisitionGuaranteed;
(12) the incurrence by the Company and the Restricted Subsidiaries of Refinancing Indebtedness issued in exchange for, or the proceeds of which are used to repay redeem, defease, extend, refinance, renew, replace or refund, Indebtedness (other than intercompany Indebtedness) referred to in clauses (2) through (5) above, this clause (12) or clause (13) below or that was otherwise permitted to be incurred pursuant to the Issuer or a Restricted Subsidiary test set forth in the first paragraph of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or lessthis Section 4.10;
(13) the incurrence or issuance by the Issuer Company or a any Restricted Subsidiary of the Issuer 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 pursuant to this clause (13), not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence50.0 million;
(14) Acquired Debt and any other Indebtedness incurred to finance a merger, consolidation or other acquisition; provided that on a Pro Forma Basis, either (A) the incurrence Company’s Fixed Charge Coverage Ratio would be equal to or greater than the Company’s Fixed Charge Coverage Ratio immediately prior to such merger, consolidation or other acquisition or (B) the Company would have been able to incur at least $1.00 of guarantees by additional Indebtedness pursuant to the Issuer or a Restricted Subsidiary first paragraph of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuerthis Section 4.10;
(15) Indebtedness the incurrence net proceeds of which have been deposited in escrow to finance the repayment or redemption of such Indebtedness by pursuant to customary escrow arrangements pending the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligationsrelease thereof;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of businessthat has been discharged;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture Joint Venture agreement as a result of the a failure of the Issuer Company or any a Restricted Subsidiary of the Issuer to make a required capital contribution therein; provided that the only recourse on such Indebtedness is limited to the Company’s or such Restricted Subsidiary’s equity interests in the related Joint Venture;
(18i) obligations Indebtedness representing deferred compensation to employees of the Issuer Company or any of its Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into Subsidiaries incurred in the ordinary course of business business, and (ii) Indebtedness consisting of obligations of the Company or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;any Investment permitted under Section 4.9; and
(19) Indebtedness consisting of Indebtedness issued by the Issuer Company or any Restricted Subsidiary in an aggregate principal amount up to 100% of the Issuer Equity Proceeds received by the Company after the Issue Date from the issue or sale of Equity Interests of the Company or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) to the extent such Equity Proceeds have not been applied pursuant to clause (iii)(b) of the first paragraph of Section 4.9, or clause (2) or clause (9) of the second paragraph of Section 4.9, to make Restricted Payments, and provided, that any such Equity Proceeds shall be excluded for purposes of making Restricted Payments pursuant to any current or former officer, director, employee or consultant of clause (iii)(b) of the Issuer first paragraph of Section 4.9, or clause (2) or clause (9) of the second paragraph of Section 4.9, to the extent the Company or any Restricted Subsidiary of incur Indebtedness in reliance thereon. Notwithstanding the Issuerforegoing, in each case Restricted Subsidiaries that are non-Guarantor Subsidiaries will not be permitted to finance the repurchase, redemption incur Indebtedness or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer issue preferred stock pursuant to the extent described in first paragraph of this Section 4.08(b)(4);
4.10 or clause (2013) Guarantees issued from time above if, after giving effect to time by such incurrence or issuance, the Issuer or aggregate principal amount of Indebtedness of such Restricted Subsidiaries of the Issuer of Indebtedness that are non-Guarantor Subsidiaries (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of excluding intercompany Indebtedness between or among the Issuer Company and any of its the Restricted Subsidiaries; provided) outstanding pursuant to such first paragraph or such clause, howevertogether with the aggregate liquidation preference of preferred stock issued by such Restricted Subsidiaries that are non-Guarantor Subsidiaries (excluding intercompany preferred stock issued between or among the Company and the Restricted Subsidiaries) outstanding pursuant to such provisions, that:
would exceed the greater of (ax) if $1.25 billion and (y) 1.25x Adjusted EBITDA as of any date of incurrence. The Company will not incur, and the Issuer or Company will not permit any Subsidiary Guarantor to incur, any Indebtedness that is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and contractually 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 any other Indebtedness of the Issuer, Company or the Note Guarantee, in the case of a such Subsidiary Guarantor; and
(i) any subsequent issuance or transfer of Equity Interests that results in any Guarantor unless such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, which new incurrence is not permitted by this clause (21);
(22) the issuance by any Restricted Subsidiary to the Issuer or to any other Restricted Subsidiary of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be 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 Company or a Subsidiary 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 4.10, for the avoidance of doubt, 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 (19) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.10, the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.10. Indebtedness under the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will at all times be deemed to have been incurred on such date in reliance on the exception provided by clause (1) above. The accrual of interest or preferred stock dividends, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on preferred stock or Disqualified Stock in the form of additional 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 4.10; provided, in each such case, that the amount thereof is included in the 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, the U.S. Dollar-equivalent principal amount of Indebtedness denominated in a currency other than U.S. Dollars will be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred; provided that if such Indebtedness is incurred to extend, replace, refund, refinance, renew or defease, or that is exchanged for, other Indebtedness denominated in a currency other than U.S. Dollars, and such extension, replacement, refunding, refinancing, renewal, defeasance or exchange 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 extension, replacement, refunding, refinancing, renewal, defeasance or exchange, 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 extended, replaced, refunded, refinanced, renewed, defeased or exchanged. Notwithstanding any other provision of this Section 4.10, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.10 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:
(1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(i) the Fair Market Value of such assets at the date of determination; and
(ii) the amount of the Indebtedness of the other Person. In connection with the incurrence of (i) revolving loan Indebtedness under this Section 4.10 or (ii) any commitment relating to the incurrence of Indebtedness under this Section 4.10 and (in respect of both (i) and (ii)) the granting of any Lien to secure any such Indebtedness, the Company or the Note Guaranteeapplicable Restricted Subsidiary may designate, such incurrence and the granting of any such Lien as having occurred on the case may bedate of first incurrence of such revolving loan Indebtedness or commitment (such date, the “Deemed Date”), and any related subsequent actual incurrence or granting of any such Lien therefor will be deemed for all purposes under this Indenture to have been incurred or granted on such Deemed Date, including, without limitation, for purposes of calculating the Senior Leverage Ratio and usage of any other baskets or ratios under this Indenture (b) Non-Guarantors as applicable). The amount of Indebtedness that may be incurred by other Non-Guarantors in accordance with the provisions pursuant to any provision of this IndentureSection 4.10 or secured pursuant to Section 4.11 (i) shall be deemed to include all amounts necessary to renew, refund, redeem, refinance, replace, restructure, defease or discharge any such Indebtedness incurred and/or secured pursuant to such provisions, including after giving effect to additional Indebtedness in an amount equal to the aggregate amount of fees, premia, underwriting discounts and other costs and expenses incurred in connection with such renewal, refund, redemption, refinancing, replacement, restructuring, defeasance or discharge; and (ii) in any case where such amounts are or may be based on Consolidated Total Assets or Adjusted EBITDA (or any ratio of which Adjusted EBITDA is a component), shall not be deemed to be exceeded, with respect to such incurrence or grant of Lien, due solely to the result of fluctuations in the amount of Consolidated Total Assets or Adjusted EBITDA (and, for the avoidance of doubt, such Indebtedness and such Lien will be permitted to be refinanced or replaced notwithstanding that, after giving effect to such refinancing or replacement, such excess will continue).
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur;” with “incurrence” having a correlative meaning) any Indebtedness (including Acquired Debt), and shall 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 Issuer Company may incur Indebtedness (including Acquired Debt) and its issue Disqualified Stock, and Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) and the Issuer’s Restricted Subsidiaries may issue shares of preferred stock, if, after giving effect thereto and the application of the proceeds therefrom, either if (ia) the Fixed Charge Coverage Ratio for the IssuerCompany’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 preferred stock is issued, as the case may be, would have been at least 2.0 to 1.01.0 and (b) to the extent such Indebtedness (including Acquired Debt) constitutes Senior Debt, or (i) on any date of determination prior to February 15, 2013, the Senior Net Leverage Ratio is no greater than 4.0 to 1.0 and (ii) on any date of determination on or after February 15, 2013, the Indebtedness Senior Net Leverage Ratio is no greater than 3.50 to Consolidated Tangible Net Worth Ratio as 1.0, in each case under clause (a) or (b) above, determined on a pro forma basis (including a pro forma application of the end of net proceeds therefrom), as if the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is had been incurred or such the Disqualified Stock or preferred stock is had been issued, as the case may be, would have been less than or equal to 1.75 to 1.0at the beginning of such four-quarter period.
(b) Notwithstanding the foregoing, Section 4.10(a10.11(a) shall will not prohibit the incurrence of any Indebtedness that meets of the following criteria or (the issuance items of any preferred stock that meets the following criteria, Indebtedness described below in this Section 10.11(b) being referred to collectively as applicable (collectively, “Permitted Debt”):
(1i) the incurrence by the Issuer or Company and any Restricted Subsidiary of Indebtedness pursuant to and letters of credit under Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, in an aggregate principal amount at any one time outstanding under this clause (i) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed the greater of (x) $1,500 220.0 million and 22.5(y) 25% of Adjusted Consolidated Net Tangible Assets at Assets, determined as of the time date of incurrencethe incurrence of such Indebtedness 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 Existing Indebtedness;
(3iii) the incurrence by the Issuer Company of Indebtedness represented by the Initial Notes to be issued on the Issue Date and replacement the Exchange Notes in respect thereof, if any to be issued pursuant to the Registration Rights Agreement;
(and iv) the incurrence by any Subsidiary Guarantor of any related Note Guarantee);
(4) the incurrence or issuance by the Issuer Company or any of its Restricted Subsidiary of the Issuer Subsidiaries of Indebtedness (including represented by Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction)Obligations, Disqualified Stock mortgage financings or preferred stockpurchase money obligations, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development improvement, deployment, refurbishment or improvement modification of plantproperty, plant or equipment or other property furniture, fixtures and equipment, in each case, used in the business of the Company or useful in a Permitted Business which occurs within 365 days any of such purchase, design, construction, lease, installation, development or improvementits Restricted Subsidiaries, in an aggregate principal amount at any time outstanding, together with any including all Permitted Refinancing Indebtedness in respect thereofincurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (iv), not to exceed the greater of (A) $25.0 million and 1.0(B) 3.0% of Adjusted Consolidated Net Tangible Assets at the time of incurrenceAssets;
(5v) the incurrence by the Issuer Company or any of its Restricted Subsidiary Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or incurred the net proceeds of which are used to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) or 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 4.10(a), this clause (510.11(a) or clause clauses (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Dateii), (3iii), (4iv), (v), (x), (xvi) or (11xvii) of this Section 4.10(b10.11(b);
(6vi) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposes;
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) 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 (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer Company and any of its Restricted Subsidiaries; provided, however, that:
that (a) if the Issuer or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and 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 Issuer, or the Note Guarantee, in the case of a Subsidiary Guarantor; and
(iA) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer Company or a Restricted Subsidiary and (iiB) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer Company or a Restricted Subsidiary shall will be deemed, in each case, to constitute a new an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, which new incurrence is that was not permitted by this clause (21vi);
(22vii) the issuance by any of the Company’s Restricted Subsidiary Subsidiaries to the Issuer Company or to any other of its Restricted Subsidiary Subsidiaries of 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 Issuer Company or a Restricted Subsidiary; and
(bB) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer Company or a Restricted Subsidiary shall Subsidiary, will be deemed, in each case, to constitute a new an issuance of such preferred stock by such Restricted Subsidiary, which new issuance is Subsidiary that was not permitted by this clause (22vii);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (aviii) the Issuer 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 Subsidiary Guarantor of the Guarantors of Indebtedness of the Company or a Restricted Subsidiary that was permitted to be incurred by another provision of this covenant; provided that if the Issuer Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(x) Permitted Acquisition Indebtedness;
(xi) the incurrence by the Company or any Restricted Subsidiary of Indebtedness arising from the Issuer 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;
(xii) Indebtedness consisting of the financing of insurance premiums in accordance customary amounts consistent with the provisions operations and business of this Indenturethe Company and its Restricted Subsidiaries;
(xiii) the incurrence by the Company or any Restricted Subsidiary 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 or assumed in connection with the disposition of any business, assets or Capital Stock of a 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 its Restricted Subsidiaries in connection with such disposition;
(xiv) the incurrence by the Company or any Restricted Subsidiary of Indebtedness constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business; provided that, upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within one year following such drawing or incurrence;
(xv) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in the form of Guarantees of Indebtedness of joint ventures; provided that the aggregate principal amount of the Obligations incurred pursuant to such Guarantees shall not exceed the greater of $25.0 million and 3.0% of Adjusted Consolidated Net Tangible Assets, determined as of the date of each incurrence of such Guarantee after giving pro forma effect to the application of proceeds of the Indebtedness being guaranteed;
(xvi) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate amount at any time outstanding pursuant to this clause (xvi), including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (xvi), not to exceed 15% of such Foreign Subsidiaries’ Adjusted Consolidated Net Tangible Assets, determined as of the date of each incurrence, in the event applicable foreign currency; and
(xvii) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in an aggregate principal amount (or accreted value, as applicable) that, when taken together with all other Indebtedness of the Company and its Restricted Subsidiaries outstanding on the date of such incurrence (other than Indebtedness permitted by clauses (i) through (xvi) above or Section 10.11(a)) and any Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (xvii) does not exceed the greater of (x) 2.5% of Adjusted Consolidated Net Tangible Assets determined as of the date of incurrence of such Indebtedness and (y) $20.0 million.
(c) The Company will not incur, and will not permit any Guarantor to incur, any Indebtedness (including Permitted Debt) that is being Guaranteed contractually subordinated in right of payment to any other Indebtedness of the Company or such Guarantor unless such Indebtedness is Subordinated Indebtedness, then the related Guarantee shall be also contractually subordinated in right of payment to the Notes or and the Note applicable Subsidiary Guarantee, on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) For purposes of determining compliance with this Section 10.11, 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 (i) through (xvii) of Section 10.11(b), or is entitled to be incurred pursuant to Section 10.11(a), the Company will be permitted to divide and classify such item of Indebtedness on the date of its incurrence, or later divide and reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 10.11. 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, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Stock in the form of additional shares of the same class of Disqualified Stock will be deemed not to be an incurrence of Indebtedness or an issuance of Disqualified Stock for purposes of this covenant; provided, in each such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges of the Company as accrued.
(e) For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness and issuance of preferred stock, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term Indebtedness, or first committed, in the case of revolving credit Indebtedness; provided that if such Indebtedness is incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the case may beprincipal 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, and (b) Non-Guarantors the maximum amount of Indebtedness that the Company or any Restricted Subsidiary 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 by to refinance other Non-Guarantors Indebtedness, if incurred in accordance with a different currency from the provisions 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 this Indenture; andsuch refinancing.
Appears in 1 contract
Samples: First Supplemental Indenture (Petroleum Development Corp)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and shall 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 Issuer and its Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Issuer’s Restricted Subsidiaries Guarantors may incur Indebtedness (including Acquired Debt) or issue shares of preferred stock, if, after giving effect thereto and the application of the proceeds therefrom, either (i) if the Fixed Charge Coverage Ratio for the IssuerCompany’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 2.0 to 1.0, or determined on a pro forma basis (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as including a pro forma application of the end of net proceeds therefrom), as if the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is had been incurred or such the Disqualified Stock or the preferred stock is had been issued, as the case may be, would have been less than or equal to 1.75 to 1.0at the beginning of such four-quarter period.
(b) Section 4.10(aThe provisions of Section 4.09(a) shall hereof will not prohibit the incurrence of any Indebtedness that meets of the following criteria or the issuance items of any preferred stock that meets the following criteria, as applicable Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or Company and any Restricted Subsidiary Guarantor of additional Indebtedness pursuant to and letters of credit under Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, 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 (as of the date of incurrence of Indebtedness under this clause (1) and after giving pro forma effect to such incurrence and the application of net proceeds therefrom) the greater of (A) $1,500 500.0 million and 22.5(B) 25% of Consolidated Tangible Total Assets at as of the time date of such incurrence;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing IndebtednessIndebtedness and Disqualified Stock existing on the date of this Indenture;
(3) the incurrence by the Issuer Company and the Guarantors of Indebtedness represented by the Initial Notes and the related Note Guarantees to be issued on the Issue Date date of this Indenture (other than any Additional Notes and replacement Notes in respect thereof, if any (and the incurrence by any Subsidiary Guarantor of any related Note GuaranteeGuarantees);
(4) the incurrence or issuance by the Issuer Company or any of its Restricted Subsidiary of the Issuer Subsidiaries of Indebtedness (including represented by Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction(other than Deemed Capitalized Leases), mortgage financings, purchase money obligations or Disqualified Stock or preferred stockStock, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development installation or improvement of plantproperty, plant or equipment used in the business of the Company or other property used or useful in a Permitted Business which occurs within 365 days any of such purchase, design, construction, lease, installation, development or improvementits Restricted Subsidiaries, in an aggregate principal amount at any time outstandingor accreted liquidation preference, together with any including all Permitted Refinancing Indebtedness in respect thereof, not incurred or issued to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5) the incurrence by the Issuer or any Restricted Subsidiary of Permitted Refinancing Indebtedness in exchange for, or incurred to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness or Disqualified Stock incurred or issued pursuant to this clause (4), not to exceed the greater of $100.0 million or 5.0% of Consolidated Total Assets at any time outstanding;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness or the issuance by the Company of Disqualified Stock (including additional Disqualified Stock issued to pay premiums, retirement costs, accrued dividends and fees and expenses in connection therewith) in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease, discharge or extend any Indebtedness or Disqualified Stock (other than intercompany IndebtednessIndebtedness or Disqualified Stock) that was permitted by this Indenture to be incurred under Section 4.10(aSection 4.09(a) hereof or clauses (2), this clause (5) or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date(3), (4), (5), (312), (416), (18) or (11(19) of this Section 4.10(bSection 4.09(b);
(6) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposes;
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) 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 (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer Company and any of its Restricted Subsidiaries; provided, however, that:
(aA) if if:
(1) the Issuer Company or any Subsidiary Guarantor is the obligor on such Indebtedness and Indebtedness; and
(2) the obligee payee is not the Issuer Company or a Subsidiary Guarantor, then 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 IssuerCompany, or the Note Guarantee, in the case of a Subsidiary Guarantor; and
(iB) (1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness incurred under this clause (6) being held by a Person other than the Issuer Company or a Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, which new incurrence is not permitted by this clause (21);
(22) the issuance by any Restricted Subsidiary to the Issuer or to any other Restricted Subsidiary of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted SubsidiaryCompany; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be subordinated in right of payment to the Notes or the Note Guarantee, as the case may be, and (b) Non-Guarantors of Indebtedness incurred by other Non-Guarantors in accordance with the provisions of this Indenture; and
Appears in 1 contract
Samples: Indenture (Firstcash, Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company shall not issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Issuer and its Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Issuer’s Restricted Subsidiaries Guarantors may incur Indebtedness or issue shares of preferred stock, ifin each case, after giving effect thereto and the application of the proceeds therefrom, either (i) if the Fixed Charge Coverage Ratio for the Issuer’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding applicable Financial Covenant Period would have been at least 2.0 to 1 determined on a pro forma basis (including a pro forma application of the date on which such net proceeds therefrom), as if the additional Indebtedness is had been incurred or such the Disqualified Stock or preferred stock is had been issued, as the case may be, would have been at least 2.0 to 1.0, or (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as beginning of the end of the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been less than or equal to 1.75 to 1.0that Financial Covenant Period.
(b) The first paragraph of this Section 4.10(a) 4.09 shall not prohibit the incurrence of any Indebtedness that meets of the following criteria or the issuance items of any preferred stock that meets the following criteria, as applicable Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or Company and any of its Restricted Subsidiary Subsidiaries of additional Indebtedness pursuant to and letters of credit under Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, 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 outstanding face amount thereof that has not been reimbursed) not to exceed $1.3 billion (provided that such amount shall be reduced to the greater extent of $1,500 million any reduction or elimination of any commitment under any Credit Facility resulting from or relating to the formation of any Receivables Subsidiary or the completion of any Qualified Receivables Transaction) less the aggregate amount of all Net Proceeds of Assets 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 and 22.5% of Consolidated Tangible Assets at the time of incurrenceeffect a corresponding commitment reduction thereunder pursuant to Section 4.10 hereof;
(2) the incurrence by the Company and its Restricted Subsidiaries of Existing Indebtedness;
(3) the incurrence by the Issuer Company and the Guarantors of Indebtedness represented by the Initial Notes to be issued on the Issue Date and replacement Notes in respect thereof, if any (date of this Indenture and the incurrence related Subsidiary Guarantees, the Dollar Notes to be issued on the date of the Dollar Indenture and the related subsidiary guarantees, the Exchange Notes and the related Subsidiary Guarantees to be issued as contemplated by any Subsidiary Guarantor of any the Registration Rights Agreement and the Dollar Exchange Notes and the related Note Guarantee)subsidiary guarantees to be issued as contemplated by the Dollar Registration Rights Agreement;
(4) the incurrence or issuance by the Issuer Company or any of its Restricted Subsidiary of the Issuer Subsidiaries of Indebtedness (including represented by Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction)Obligations, Disqualified Stock mortgage financings or preferred stockpurchase money obligations, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development construction or improvement of plantproperty, plant or equipment used in the business of the Company or other property used or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvementthat Restricted Subsidiary, in an aggregate principal amount amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed $25.0 million at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5) the incurrence by the Issuer Company or any of its Restricted Subsidiary Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or incurred the net proceeds of which are used to extend, renew, refund, refinance, replace, defease refinance or discharge any replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under the first paragraph of this Section 4.10(a), this clause (5) 4.09 or clause clauses (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4), (5), (14), (15) or (1117) of this Section 4.10(b4.09(b);
(6) the incurrence by the Issuer 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 the Indebtedness, that Indebtedness (unless pledged as security for Obligations under the Credit Facilities) must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Notes, in the case of the Company, or the Subsidiary Guarantees, in the case of a Guarantor; and
(i) any subsequent issuance or transfer of Equity Interests that results in that Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company (other than as security for Obligations under the Credit Facilities) and (ii) any sale or other transfer (other than as security for Obligations under the Credit Facilities) of that Indebtedness by the Company or a Restricted Subsidiary of the Company 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, as of the date of issuance, transfer or sale, as the case may be, of that Indebtedness by the Company or that Restricted Subsidiary, as the case may be, that is not permitted by this clause (6);
(7) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations entered into the ordinary course of business to hedge or mitigate risks to which the Company or any of its Restricted Subsidiaries is exposed in the conduct of its business or the management of its liabilities and not for speculative purposes;
(78) the guarantee by the Company or any of the Guarantors of Indebtedness of the Company or a Restricted Subsidiary of the Company that was permitted to be incurred by another provision of this Section 4.09;
(9) 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 of Indebtedness or an issuance of Disqualified Stock for purposes of this Section 4.09; provided, in each such case, to the extent relevant to any calculation under this Indenture, that the amount thereof is included in Fixed Charges of the Company as accrued;
(10) 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 $100.0 million at any time outstanding;
(11) 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 that 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 those transactions) and is not guaranteed by the Company or any other Subsidiary of the Company (other than that Receivables Subsidiary);
(12) the incurrence by the Issuer Company and any Restricted Subsidiary of statutory obligations, surety or appeal bonds, performance bonds or other obligations of a like nature incurred in the ordinary course of business of the Company or that Restricted Subsidiary, as the case may be;
(13) Indebtedness incurred by the Company or any of its Restricted Subsidiaries consisting of advances received in the ordinary course of business for cash management purposes from any Unrestricted Subsidiary;
(14) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that issuable upon the drawing conversion or exchange of letters shares of credit for reimbursement obligations, or Disqualified Stock issued in accordance with the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrenceFixed Charge Coverage Ratio test set forth in Section 4.09(a) hereof;
(8) 15) start-up working capital advances from Unilever to the incurrence by the Issuer Company or any of its Restricted Subsidiaries of pursuant to the Sales Agency Agreement;
(16) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft draft, or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business; provided, so long as such however, that the Indebtedness is extinguished within five Business Days;business days of incurrence; and
(917) the incurrence of Indebtedness arising from agreements of by the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer Company or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted valueor, as applicablewith respect to Indebtedness issued at a discount, the original principal amount at the date of incurrence) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (17), not to exceed $10.0 million. For purposes of determining compliance with this Section 4.09:
(1) in the greater event that an item of $150.0 million and 3.0% proposed Indebtedness meets the criteria of Consolidated Tangible Assets more than one of the Issuer categories of Permitted Debt described in clauses (1) through (17) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, the Company shall be permitted to (a) classify that item of Indebtedness on the date of its incurrence in any manner that complies with this Section 4.09 and (b) after the incurrence of any Permitted Indebtedness pursuant to the provisions described in this Section 4.09(b), reclassify such Indebtedness to any other type of Permitted Indebtedness permitted by the provisions described in this Section 4.09(b), provided, that the Indebtedness, at the time of incurrencereclassification, could have been incurred as such other type of Permitted Indebtedness;
(142) Indebtedness under Credit Facilities outstanding on the incurrence of guarantees date on which Notes are first issued and authenticated under this Indenture will be deemed to have been incurred on that date in reliance on the exception provided by the Issuer or a Restricted Subsidiary clause (1) of the Issuer in the ordinary course definition of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;Permitted Debt; and
(153) for purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness by denominated in a foreign currency, the Issuer or a Restricted Subsidiary dollar-equivalent principal amount of that Indebtedness incurred pursuant thereto shall be calculated based on the Issuer relevant currency exchange rate in respect of obligations to pay effect on the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided date that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Issuer or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and subordinated in right of payment to the prior payment in full in cash of all Obligations then due with respect to the Notesincurred, in the case of the Issuerterm Indebtedness, or the Note Guaranteefirst committed, in the case of a Subsidiary Guarantor; and
(i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, which new incurrence is not permitted by this clause (21);
(22) the issuance by any Restricted Subsidiary to the Issuer or to any other Restricted Subsidiary of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions of this Indenturerevolving credit Indebtedness; provided that if that Indebtedness is incurred to refinance other Indebtedness denominated in a foreign currency, and that refinancing would cause the event such applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of that refinancing, the U.S. dollar-denominated restriction will be deemed not to have been exceeded so long as the principal amount of that refinancing Indebtedness does not exceed the principal amount of that Indebtedness being refinanced. The principal amount of any Indebtedness incurred to refinance other Indebtedness, if incurred in a different currency from the Indebtedness being refinanced, will be calculated based on the currency exchange rate applicable to the currencies in which that refinancing Indebtedness is denominated that is being Guaranteed is Subordinated Indebtedness, then in effect on the related Guarantee shall be subordinated in right date of payment to the Notes or the Note Guarantee, as the case may be, and (b) Non-Guarantors of Indebtedness incurred by other Non-Guarantors in accordance with the provisions of this Indenture; andrefinancing.
Appears in 1 contract
Samples: Indenture (Johnson Polymer Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall not, Company will not and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and shall 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 Issuer and its Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Issuer’s Restricted Subsidiaries subsidiary guarantors may incur Indebtedness (including Acquired Debt) or issue shares of preferred stock, ifif the Leverage Ratio, as of the Calculation Date, would have been no greater than (a) 4.25 to 1 in the case of any incurrence or issuance on or before December 31, 2013, (b) 4.00 to 1 in the case of any incurrence or issuance on or after giving effect thereto January 1, 2014 and on or before December 31, 2014 and (c) 3.50 to 1 in the case of any incurrence or issuance on or after January 1, 2015, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), either (i) as if the Fixed Charge Coverage Ratio for the Issuer’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is had been incurred or such the Disqualified Stock or the preferred stock is had been issued, as the case may be, would have been at least 2.0 to 1.0, or (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as of the end Calculation Date. The first paragraph of the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness this covenant will not prohibit, so long as no Default or Event of Default has occurred and is incurred or such preferred stock is issuedcontinuing, as the case may be, would have been less than or equal to 1.75 to 1.0.
(b) Section 4.10(a) shall not prohibit the incurrence of any Indebtedness that meets of the following criteria or the issuance items of any preferred stock that meets the following criteria, as applicable Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or any Restricted Subsidiary of Indebtedness pursuant to Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, in an aggregate principal amount at any one time outstanding not to exceed the greater of $1,500 million and 22.5% of Consolidated Tangible Assets at the time of incurrence;
(2) the Existing Indebtedness;
(3) the incurrence by the Issuer of Indebtedness represented by the Initial Notes issued on the Issue Date and replacement Notes in respect thereof, if any (and the incurrence by any Subsidiary Guarantor of any related Note Guarantee);
(4) the incurrence or issuance by the Issuer or any Restricted Subsidiary of the Issuer of Indebtedness (including Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction), Disqualified Stock or preferred stock, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development or improvement of plant, equipment or other property used or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvement, in an aggregate principal amount at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5) the incurrence by the Issuer or any Restricted Subsidiary of Permitted Refinancing Indebtedness in exchange for, or incurred to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause (5) or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4) or (11) of this Section 4.10(b);
(6) the incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposes;
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) 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 (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Issuer or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and 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 Issuer, or the Note Guarantee, in the case of a Subsidiary Guarantor; and
(i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, which new incurrence is not permitted by this clause (21);
(22) the issuance by any Restricted Subsidiary to the Issuer or to any other Restricted Subsidiary of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be subordinated in right of payment to the Notes or the Note Guarantee, as the case may be, and (b) Non-Guarantors of Indebtedness incurred by other Non-Guarantors in accordance with the provisions of this Indenture; and
Appears in 1 contract
Samples: Recapitalization Agreement (Ventura Capital Privado, S.A. De C.V.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt), ) and that the Company shall not issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Issuer Company and its any Restricted Subsidiaries Subsidiary may incur Indebtedness (including Acquired Debt) and the Issuer’s Restricted Subsidiaries may or issue shares of preferred stock, if, after giving effect thereto and the application of the proceeds therefrom, either (i) stock if the Fixed Charge Coverage Ratio for the Issuer’s Company's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, issued would have been at least 2.0 to 1.0, or determined on a pro forma basis (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as including a pro forma application of the end of net proceeds therefrom), as if the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred had been incurred, or such the preferred stock is had been issued, as the case may be, would have been less than or equal to 1.75 to 1.0.
(b) at the beginning of such four-quarter period. The provisions of the first paragraph of this Section 4.10(a) 4.09 shall not prohibit apply to the incurrence of any Indebtedness that meets of the following criteria or the issuance items of any preferred stock that meets the following criteria, as applicable Indebtedness (collectively, “"Permitted Debt”"):
(1i) the incurrence by the Issuer or any Restricted Subsidiary Company of additional Indebtedness pursuant to under Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt (and the guarantee thereof by the Issuer or any Restricted Subsidiary, Guarantors) in an aggregate principal amount outstanding pursuant to this clause (i) at any one time (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), including all Permitted Refinancing Indebtedness then outstanding incurred to refund, refinance or replace any other Indebtedness incurred pursuant to this clause (i), not to exceed $375.0 million less the greater aggregate amount of $1,500 million and 22.5% all Net Proceeds of Consolidated Tangible Assets at the time of incurrenceAsset Sales applied to repay any such Indebtedness pursuant to Section 4.10;
(2ii) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3iii) the incurrence by the Issuer Company and the Guarantors of $150.0 million in aggregate principal amount of the Notes and the Subsidiary Guarantees thereof;
(iv) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by the Initial Notes issued on the Issue Date and replacement Notes in respect thereof, if any (and the incurrence by any Subsidiary Guarantor of any related Note Guarantee);
(4) the incurrence or issuance by the Issuer or any Restricted Subsidiary of the Issuer of Indebtedness (including Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction)Obligations, Disqualified Stock mortgage financings or preferred stockpurchase money obligations, in each case, case incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development construction or improvement of plantproperty, plant or equipment used in the business of the Company or other property used or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvementRestricted Subsidiary, in an aggregate principal amount amount, including all Permitted Refinancing Indebtedness then outstanding incurred to refund, refinance or replace any other Indebtedness incurred pursuant to this clause (iv), not to exceed $30.0 million at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5v) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness in connection with the acquisition of assets or a new Restricted Subsidiary; provided that such Indebtedness was incurred by the prior owner of such assets or such Restricted Subsidiary prior to such acquisition by the Company or one of its Restricted Subsidiaries and was not incurred in connection with, or in contemplation of, such acquisition by the Company or one of its Restricted Subsidiaries; and provided further that the principal amount (or accreted value, as applicable) of such Indebtedness, together with any other outstanding Indebtedness incurred pursuant to this clause (v), does not exceed $10.0 million;
(vi) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or incurred the net proceeds of which are used to extend, renew, refund, refinance, refinance or replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause (5) or clause (2) (other than the Existing Notes which are being repurchased intercompany Indebtedness or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), Indebtedness incurred pursuant to clause (3), (4i) or (11) of this Section 4.10(babove);
(6vii) the incurrence Indebtedness incurred by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposes;
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in constituting reimbursement obligations with respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, to letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred credit issued in the ordinary course of businessbusiness in respect of workers' compensation claims 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 for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoingsuch Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) 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 (except in the case of daylight overdraftsviii) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer Company or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations price or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests 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 such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer Company or any Restricted Subsidiary of (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms balance sheet shall not be deemed to be reflected on such balance sheet for purposes of this Indenture; provided that immediately after 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 such acquisition, any of the following is true:
(asubsequent changes in value) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance actually received by the Issuer or a Company and its Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments Subsidiaries in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligationsdisposition;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21ix) the incurrence by the Issuer Company or any of its Restricted Subsidiary Subsidiaries of intercompany Indebtedness between or among the Issuer Company and any of its Restricted Subsidiaries; provided, however, that:
that (aA) if the Issuer or any Subsidiary Guarantor Company is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary GuarantorIndebtedness, such Indebtedness must be unsecured and is expressly subordinated in right of payment to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Issuer, or the Note Guarantee, in the case of a Subsidiary Guarantor; and
Notes and (iB)(1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer Company or a one of its Restricted Subsidiary Subsidiaries and (ii2) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer Company or a one of its Restricted Subsidiary Subsidiaries shall be deemed, in each case, to constitute a new an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be;
(x) the incurrence by the Company or any of the Guarantors of Hedging Obligations that are incurred for the purpose of (A) fixing, which new hedging or capping interest rate risk with respect to any floating rate Indebtedness that is permitted by the terms of this Indenture to be outstanding or (B) protecting the Company and its Restricted Subsidiaries against changes in currency exchange rates;
(xi) the guarantee by the Company or any of the Guarantors of Indebtedness of the Company or a Restricted Subsidiary of the Company that was permitted to be incurred by another provision of this Section 4.09;
(xii) the incurrence is by the Company's 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 of the Company that was not permitted by this clause (21xii), and the issuance of preferred stock by Unrestricted Subsidiaries;
(22xiii) obligations in respect of performance and surety bonds and completion guarantees provided by the issuance by Company or any Restricted Subsidiary to Subsidiaries in the Issuer or to any other Restricted Subsidiary ordinary course of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiarybusiness; and
(bxiv) the incurrence by the Company or any sale of 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 then outstanding incurred to refund, refinance or replace any other transfer of any such preferred stock Indebtedness incurred pursuant to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22xiv);
(23) Guarantees (other than Guarantees , not to exceed $50.0 million. For purposes of Designated SPE Debt) by (a) determining compliance with this Section 4.09, in the Issuer or any Subsidiary Guarantor event that an item of Indebtedness permitted meets the criteria of more than one of the categories of Permitted Debt described in clauses (i) through (xiv) above or is entitled to be incurred by pursuant to the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions first paragraph of this Indenture; provided Section 4.09, the Company shall, in its sole discretion, classify, or later reclassify, such item of Indebtedness in any manner that complies with this covenant. Accrual of interest, the accretion of accreted value and the payment of interest in the event such form of additional Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall not be subordinated in right of payment deemed to the Notes or the Note Guarantee, as the case may be, and (b) Non-Guarantors be an incurrence of Indebtedness incurred by other Non-Guarantors in accordance with the provisions for purposes of this Indenture; andSection 4.09.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer Following the Closing Date, the Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt), ) and that the Company shall not permit any of its Restricted Subsidiaries to issue any shares of preferred stockstock (other than to the Company or another Restricted Subsidiary); provided, however, that the Issuer Company and its Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) and the Issuer’s Company's Restricted Subsidiaries may issue shares of preferred stock, if, after giving effect thereto and the application of the proceeds therefrom, either (i) stock if the Fixed Charge Coverage Ratio for the Issuer’s Company's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, issued would have been at least 2.0 to 1.01, or determined on a pro forma basis (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as including a pro forma application of the end net proceeds therefrom), as if the additional Indebtedness had been incurred or the preferred stock had been issued at the beginning of such four-quarter period. The provisions of the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been less than or equal to 1.75 to 1.0.
(b) first paragraph of this Section 4.10(a) 4.09 shall not prohibit apply to the incurrence of any Indebtedness that meets of the following criteria or the issuance of any preferred stock that meets the following criteria, as applicable (collectively, “"Permitted Debt”):");
(1i) the incurrence by the Issuer or any Company and its Restricted Subsidiary Subsidiaries of Indebtedness pursuant to under the Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, Facility; in an aggregate principal amount at any one time outstanding not to exceed the greater of (a) $1,500 100.0 million and 22.5at any time outstanding, less the aggregate amount of all Net Proceeds of Asset Sales applied to repay any such Indebtedness pursuant to clause (a) of the second paragraph of Section 4.10 or (b) the sum of 80% of Consolidated Tangible Assets at the time accounts receivable plus 50% of incurrencethe inventory, in each case of the Company and its Restricted Subsidiaries, net of reserves, as shown on the most recent balance sheet of the Company and its Restricted Subsidiaries ;
(2ii) the incurrence by the Company and the Guarantors of Indebtedness represented by the Notes and the Note Guarantees;
(iii) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3iv) the incurrence by the Issuer of Indebtedness represented by the Initial Notes issued on the Issue Date and replacement Notes in respect thereof, if any (and the incurrence by any Subsidiary Guarantor of any related Note Guarantee);
(4) the incurrence or issuance by the Issuer Company or any of its Restricted Subsidiary of the Issuer of Indebtedness (including Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction), Disqualified Stock or preferred stock, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development or improvement of plant, equipment or other property used or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvement, in an aggregate principal amount at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5) the incurrence by the Issuer or any Restricted Subsidiary Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or incurred to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause (5) or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of which are used to refund, refinance or replace Indebtedness that was permitted to be incurred by the Initial Notes issued on first paragraph, or by clauses (ii) through (viii) of the Issue Date), (3), (4) or (11) second paragraph of this Section 4.10(b)4.09;
(6) the incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposes;
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) 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 (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;
(9v) the incurrence of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer Company and any of its Wholly Owned Restricted Subsidiaries; provided, however, that:
that (a) if the Issuer or any Subsidiary Guarantor Company is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary GuarantorIndebtedness, such Indebtedness must be unsecured and is expressly subordinated in right of payment to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Issuer, or the Note Guarantee, in the case of a Subsidiary Guarantor; and
Notes and (ib) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer Company or a Wholly Owned Restricted Subsidiary Subsidiary, and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer Company or a Wholly Owned Restricted Subsidiary Subsidiary, shall be deemed, in each case, to constitute a new an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, which new incurrence is not permitted by this clause (21);
(22vi) the issuance incurrence by the Company or any of its Restricted Subsidiary to Subsidiaries of Hedging Obligations that are incurred for the Issuer purpose of fixing or hedging interest rate risk with respect to any other Restricted Subsidiary floating rate Indebtedness that is permitted by the terms of shares of preferred stock; provided, however, that:this Indenture to be outstanding;
(avii) the incurrence by the Company or any subsequent issuance or transfer of Equity Interests that results its Restricted Subsidiaries of additional Indebtedness in an aggregate amount not to exceed $15.0 million at any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiarytime; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (aviii) the Issuer guarantee by the Company or any Subsidiary Guarantor of the Guarantors of Indebtedness that was permitted to be incurred by the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions another provision of this Indenture; provided that Section 4.09. For purposes of determining compliance with this Section 4.09, in the event such that an item of Indebtedness that meets the criteria of more than one of the categories of Permitted Debt described in clauses (i) through (viii) above or is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall entitled to be subordinated in right of payment incurred pursuant to the Notes or first paragraph of this Section 4.09, the Note GuaranteeCompany shall, as the case may bein its sole discretion, and (b) Non-Guarantors classify such item of Indebtedness in any manner that complies with this Section 4.09 and such item of Indebtedness will be treated as having been incurred by other Non-Guarantors pursuant to only one of such clauses or pursuant to the first paragraph hereof. Accrual of interest, the accretion of accreted value and the payment of interest in accordance with the provisions form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Indenture; andSection 4.09.
Appears in 1 contract
Samples: Indenture (Holmes Products Corp)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Issuers will not, and shall will not permit any of its their Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt), ) other than Permitted Debt and shall the Issuers will not issue any Disqualified Stock and will not permit any of its their Restricted Subsidiaries to issue any shares of preferred stockstock (other than to an Issuer or another Restricted Subsidiary); provided, however, that the Issuer and its Restricted Subsidiaries Issuers may incur Indebtedness (including Acquired Debt) or issue shares of Disqualified Stock and any of the Issuer’s Issuers' Restricted Subsidiaries may incur Indebtedness or issue shares of preferred stock, if, after giving effect thereto and stock if the application Issuers' Leverage Ratio at the time of incurrence of such Indebtedness or the proceeds therefrom, either (i) the Fixed Charge Coverage Ratio for the Issuer’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which issuance of such additional Indebtedness is incurred Disqualified Stock or such preferred stock is issuedstock, as the case may be, would have been at least 2.0 to 1.0, or (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as of the end of the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been less than or equal to 1.75 to 1.0.
(b) Section 4.10(a) shall not prohibit the incurrence of any Indebtedness that meets the following criteria or the issuance of any preferred stock that meets the following criteria, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or any Restricted Subsidiary of Indebtedness pursuant to Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, in an aggregate principal amount at any one time outstanding not to exceed the greater of $1,500 million and 22.5% of Consolidated Tangible Assets at the time of incurrence;
(2) the Existing Indebtedness;
(3) the incurrence by the Issuer of Indebtedness represented by the Initial Notes issued on the Issue Date and replacement Notes in respect thereof, if any (and the incurrence by any Subsidiary Guarantor of any related Note Guarantee);
(4) the incurrence or issuance by the Issuer or any Restricted Subsidiary of the Issuer of Indebtedness (including Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction), Disqualified Stock or preferred stock, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development or improvement of plant, equipment or other property used or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvement, in an aggregate principal amount at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5) the incurrence by the Issuer or any Restricted Subsidiary of Permitted Refinancing Indebtedness in exchange for, or incurred to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause (5) or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4) or (11) of this Section 4.10(b);
(6) the incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposes;
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) 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 (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by and to the Issuer or a Restricted Subsidiary use of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the proceeds therefrom would have been no greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of than (a) the financing of insurance premiums 6.5 to 1, if such incurrence or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Issuer or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and 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 Issuer, or the Note Guarantee, in the case of a Subsidiary Guarantor; and
(i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, which new incurrence is not permitted by this clause (21);
(22) the issuance by any Restricted Subsidiary to the Issuer or to any other Restricted Subsidiary of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer on or any Subsidiary Guarantor of Indebtedness permitted prior to be incurred by the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is Subordinated IndebtednessDecember 31, then the related Guarantee shall be subordinated in right of payment to the Notes or the Note Guarantee, as the case may be2000, and (b) Non-Guarantors 6.0 to 1, if such incurrence or issuance is after December 31, 2000. The provisions of the first paragraph of this covenant shall not apply to the incurrence of any of the following items of Indebtedness incurred by other Non-Guarantors in accordance with the provisions of this Indenture; and(collectively, "Permitted Debt"):
Appears in 1 contract
Samples: Indenture (Avalon Cable Finance Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt), ) and the Company shall not issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that if no Default or Event of Default shall have occurred and be continuing at the Issuer and its Restricted Subsidiaries time of or as a consequence of such incurrence or issuance, (i) the Company may incur Indebtedness (including Acquired Debt) and the Issuer’s Restricted Subsidiaries may or issue shares of preferred stockDisqualified Stock and (ii) any Subsidiary Guarantor may incur Indebtedness (including Acquired Debt), if, after giving effect thereto and the application of the proceeds therefrom, either (i) in each case if the Fixed Charge Coverage Ratio for the Issuer’s Company's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock Disqualified Stock is issued would have been at least 2.0 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock had been issued, as the case may be, would have been at least 2.0 to 1.0, or (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as beginning of such four-quarter period. The provisions of the end first paragraph of the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been less than or equal to 1.75 to 1.0.
(b) this Section 4.10(a) 4.9 shall not prohibit apply to the incurrence of any Indebtedness that meets of the following criteria or the issuance items of any preferred stock that meets the following criteria, as applicable Indebtedness (collectively, “"Permitted Debt”"):
(1) the incurrence by the Issuer or any Restricted Subsidiary of Indebtedness pursuant to Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, in an aggregate principal amount at any one time outstanding not to exceed the greater of $1,500 million and 22.5% of Consolidated Tangible Assets at the time of incurrence;
(2) the Existing Indebtedness;
(3) the incurrence by the Issuer of Indebtedness represented by the Initial Notes issued on the Issue Date and replacement Notes in respect thereof, if any (and the incurrence by any Subsidiary Guarantor of any related Note Guarantee);
(4) the incurrence or issuance by the Issuer or any Restricted Subsidiary of the Issuer of Indebtedness (including Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction), Disqualified Stock or preferred stock, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development or improvement of plant, equipment or other property used or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvement, in an aggregate principal amount at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5) the incurrence by the Issuer or any Restricted Subsidiary of Permitted Refinancing Indebtedness in exchange for, or incurred to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause (5) or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4) or (11) of this Section 4.10(b);
(6) the incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposes;
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) 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 (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Issuer or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and 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 Issuer, or the Note Guarantee, in the case of a Subsidiary Guarantor; and
(i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, which new incurrence is not permitted by this clause (21);
(22) the issuance by any Restricted Subsidiary to the Issuer or to any other Restricted Subsidiary of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be subordinated in right of payment to the Notes or the Note Guarantee, as the case may be, and (b) Non-Guarantors of Indebtedness incurred by other Non-Guarantors in accordance with the provisions of this Indenture; and
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer Company shall not, and 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 with respect to (or, collectively, “incur”) any Indebtedness (including Acquired Debt), ) and the Company shall not permit any of its Restricted Subsidiaries Subsidiary to issue any shares of preferred stock; provided, however, that the Issuer and its Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) and may permit a Restricted Subsidiary to incur Indebtedness or issue preferred stock if at the Issuer’s Restricted Subsidiaries may issue shares time of preferred stock, if, such incurrence or issuance and after giving effect thereto and the (including a pro forma application of the net proceeds therefrom), either (i) the Fixed Charge Coverage Leverage Ratio for the Issuer’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been at least 2.0 be less than 6.5 to 1.0, or (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as of the end of the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been less than or equal to 1.75 to 1.0.
(b) Section 4.10(a) . The foregoing limitations shall not prohibit the incurrence of any Indebtedness that meets the following criteria or the issuance of any preferred stock that meets the following criteria, as applicable (collectively, “Permitted Debt”):apply to:
(1) the incurrence by the Issuer Company or any Restricted Subsidiary of Indebtedness pursuant to and letters of credit under Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, 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 the Restricted Subsidiaries thereunder) not to exceed the greater of $1,500 million and 22.5% of Consolidated Tangible Assets at the time of incurrence3,260.0 million;
(2) the Existing Indebtednessissuance of the Note Guarantees on the date hereof;
(3) the incurrence by the Issuer of Indebtedness represented by the Initial Notes issued on the Issue Date and replacement Notes in respect thereof, if any (Company and the incurrence by any Subsidiary Guarantor Restricted Subsidiaries of any related Note Guarantee)the Existing Indebtedness;
(4) the incurrence or issuance by the Issuer or any Restricted Subsidiary of the Issuer of Indebtedness (including Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction), Disqualified Stock or preferred stock, in each case, incurred or issued for Notes on the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development or improvement of plant, equipment or other property used or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvement, in an aggregate principal amount at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrencedate hereof;
(5) the incurrence by the Issuer or any Company and the Restricted Subsidiary Subsidiaries of Permitted Capital Lease Obligations, mortgage financings and/or additional Indebtedness constituting purchase money obligations, including all Refinancing Indebtedness in exchange forincurred with respect thereto, or incurred up to extend, renew, refund, refinance, replace, defease or discharge an aggregate at any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause (5) or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds one time outstanding of the Initial Notes issued on the Issue Date), greater of (3), i) $250.0 million and (4ii) or (11) 5.0% of this Section 4.10(b)Consolidated Total Assets as of any date of incurrence;
(6) the incurrence by or issuance of Indebtedness or preferred stock between (i) the Issuer or any of its Company and the Restricted Subsidiaries of Hedging Obligations not for speculative purposesand (ii) the Restricted Subsidiaries;
(7) the incurrence by the Issuer or any of its Company and the Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred Hedging Obligations in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) the incurrence by the Issuer Company and the Restricted Subsidiaries in respect of performance bonds, bankers’ acceptances, workers’ compensation claims, surety, bid, appeal or similar bonds, completion guarantees, payment obligations in connection with self-insurance or similar obligations, and bank overdrafts (and letters of credit in respect thereof) in the ordinary course of business;
(9) the incurrence by the Company and the Restricted Subsidiaries of Indebtedness consisting of “earn-out” obligations, Guarantees, indemnities or obligations in respect of purchase price adjustments in connection with the acquisition or disposition of assets, including, without limitation, shares of Capital Stock;
(10) the incurrence by the Company 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 (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of businessfunds, so long as such Indebtedness is extinguished covered within five (5) Business Days;
(911) the incurrence Guarantee by the Company or any Subsidiary Guarantor of Indebtedness arising from agreements of the Issuer Company or a Restricted Subsidiary and the Guarantee by any non-Guarantor Subsidiary of the Issuer providing for indemnification, adjustment Indebtedness of purchase price, holdback, contingency payment obligations or similar obligationsanother non-Guarantor Subsidiary, in each case, to the extent that the Guaranteed Indebtedness was permitted to be incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms another provision of this IndentureSection 4.10; provided that immediately after giving effect to such acquisition, any of if the following Indebtedness being Guaranteed is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal contractually subordinated to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) Notes or the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would Note Guarantees, as applicable, then the Guarantee must be less than or equal subordinated to the Issuer’s actual same extent as the Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisitionGuaranteed;
(12) the incurrence by the Company and the Restricted Subsidiaries of Refinancing Indebtedness issued in exchange for, or the proceeds of which are used to repay, redeem, defease, extend, refinance, renew, replace or refund, Indebtedness (other than intercompany Indebtedness) referred to in clauses (2) through (5) above, this clause (12) or clause (13) below or that was otherwise permitted to be incurred pursuant to the Issuer or a Restricted Subsidiary test set forth in the first paragraph of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accountsthis Section 4.10; provided that such Indebtedness remains outstanding for ten Business Days or less;and
(13) the incurrence or issuance by the Issuer Company or a any Restricted Subsidiary of the Issuer 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 pursuant to this clause (13), not to exceed $50.0 million. Notwithstanding the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer foregoing, Restricted Subsidiaries that are non-Guarantor Subsidiaries will not be permitted to incur Indebtedness or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist issue preferred stock pursuant to the terms first paragraph of a joint venture agreement as a result of this Section 4.10 or clause (13) above if, after giving effect to such incurrence or issuance, the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting aggregate principal amount of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or such Restricted Subsidiaries of the Issuer of Indebtedness that are non-Guarantor Subsidiaries (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of excluding intercompany Indebtedness between or among the Issuer Company and any of its the Restricted Subsidiaries; provided) outstanding pursuant to such first paragraph or such clause, howevertogether with the aggregate liquidation preference of preferred stock issued by such Restricted Subsidiaries that are non-Guarantor Subsidiaries (excluding intercompany preferred stock issued between or among the Company and the Restricted Subsidiaries) outstanding pursuant to such provisions, that:
would exceed the greater of (ax) if $1.25 billion and (y) 1.25x Adjusted EBITDA as of any date of incurrence. The Company will not incur, and the Issuer or Company will not permit any Subsidiary Guarantor to incur, any Indebtedness that is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and contractually 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 any other Indebtedness of the Issuer, Company or the Note Guarantee, in the case of a such Subsidiary Guarantor; and
(i) any subsequent issuance or transfer of Equity Interests that results in any Guarantor unless such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, which new incurrence is not permitted by this clause (21);
(22) the issuance by any Restricted Subsidiary to the Issuer or to any other Restricted Subsidiary of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be 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 Company or a Subsidiary 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 4.10, for the Note Guaranteeavoidance of doubt, 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 (13) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.10, the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.10. Indebtedness under the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will at all times be deemed to have been incurred on such date in reliance on the exception provided by clause (1) above. The accrual of interest or preferred stock dividends, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on preferred stock or Disqualified Stock in the form of additional 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 4.10; provided, in each such case, that the amount thereof is included in the 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, the U.S. Dollar-equivalent principal amount of Indebtedness denominated in a currency other than U.S. Dollars will be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred; provided that if such Indebtedness is incurred to extend, replace, refund, refinance, renew or defease, or that is exchanged for, other Indebtedness denominated in a currency other than U.S. Dollars, and such extension, replacement, refunding, refinancing, renewal, defeasance or exchange 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 extension, replacement, refunding, refinancing, renewal, defeasance or exchange, such U.S. Dollar-denominated restriction shall be deemed not to have been exceeded so long as the case may beprincipal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being extended, and (b) Non-Guarantors replaced, refunded, refinanced, renewed, defeased or exchanged. Notwithstanding any other provision of this Section 4.10, the maximum amount of Indebtedness incurred by that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.10 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:
(1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(2) the principal amount of the Indebtedness, in the case of any other Non-Guarantors in accordance with the provisions of this IndentureIndebtedness; and
(3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(i) the Fair Market Value of such assets at the date of determination; and
(ii) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Samples: Senior Indenture (Iron Mountain Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) of the Indenture is hereby superseded by the following with respect of the Notes. The Issuer Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt), and the Company shall not issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Issuer Company and its Restricted Subsidiaries any Guarantor may incur Indebtedness (including Acquired Debt) ), and the Issuer’s Restricted Subsidiaries Company may issue shares of preferred stockDisqualified Stock, if, after giving effect thereto and the application of the proceeds therefrom, either (i) if the Fixed Charge Coverage Ratio for the Issuer’s Company's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock Disqualified Stock is issued would have been at least 2.00 to 1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock had been issued, as the case may be, would have been at least 2.0 to 1.0, or (iithe beginning of such four-quarter period. The first paragraph of this Section 1.01(15)(c) the Indebtedness to Consolidated Tangible Net Worth Ratio as of the end of the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been less than or equal to 1.75 to 1.0.
(b) Section 4.10(a) shall will not prohibit the incurrence of any Indebtedness that meets of the following criteria or the issuance items of any preferred stock that meets the following criteria, as applicable Indebtedness (collectively, “"Permitted Debt”"):
(1) the incurrence by the Issuer or any Restricted Subsidiary of Indebtedness pursuant to Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, in an aggregate principal amount at any one time outstanding not to exceed the greater of $1,500 million and 22.5% of Consolidated Tangible Assets at the time of incurrence;
(2) the Existing Indebtedness;
(3) the incurrence by the Issuer of Indebtedness represented by the Initial Notes issued on the Issue Date and replacement Notes in respect thereof, if any (and the incurrence by any Subsidiary Guarantor of any related Note Guarantee);
(4) the incurrence or issuance by the Issuer or any Restricted Subsidiary of the Issuer of Indebtedness (including Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction), Disqualified Stock or preferred stock, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development or improvement of plant, equipment or other property used or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvement, in an aggregate principal amount at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5) the incurrence by the Issuer or any Restricted Subsidiary of Permitted Refinancing Indebtedness in exchange for, or incurred to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause (5) or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4) or (11) of this Section 4.10(b);
(6) the incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposes;
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) 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 (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Issuer or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and 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 Issuer, or the Note Guarantee, in the case of a Subsidiary Guarantor; and
(i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, which new incurrence is not permitted by this clause (21);
(22) the issuance by any Restricted Subsidiary to the Issuer or to any other Restricted Subsidiary of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be subordinated in right of payment to the Notes or the Note Guarantee, as the case may be, and (b) Non-Guarantors of Indebtedness incurred by other Non-Guarantors in accordance with the provisions of this Indenture; and
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and shall 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 Issuer and its Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Issuer’s Restricted Subsidiaries Guarantors may incur Indebtedness (including Acquired Debt) or issue shares of preferred stock, if, after giving effect thereto and the application of the proceeds therefrom, either (i) if the Fixed Charge Coverage Ratio for the IssuerCompany’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 2.0 to 1.01, or determined on a pro forma basis (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as including a pro forma application of the end of net proceeds therefrom), as if the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is had been incurred or such the Disqualified Stock or the preferred stock is had been issued, as the case may be, would have been less than or equal to 1.75 to 1.0.at the beginning of such four-quarter period;
(b) The provisions of Section 4.10(a4.09(a) shall hereof will not prohibit the incurrence of any Indebtedness that meets of the following criteria or the issuance items of any preferred stock that meets the following criteria, as applicable Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or Company and any Restricted Subsidiary Guarantor of Indebtedness pursuant to and letters of credit under Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, 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 $100.0 million, provided that not more than $25.0 million of $1,500 million and 22.5% of Consolidated Tangible Assets such Indebtedness at the any one time of incurrenceoutstanding under this clause (1) shall be term Indebtedness;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing IndebtednessIndebtedness and the Subordinated Notes;
(3) the incurrence by the Issuer Company and the Guarantors of Indebtedness represented by the Initial Notes and the related Note Guarantees to be issued on the Issue Date and replacement Notes in respect thereof, if any (date of this Indenture and the incurrence by any Subsidiary Guarantor of any Exchange Notes and the related Note Guarantee)Guarantees to be issued pursuant to the Registration Rights Agreement applicable to the Notes;
(4) the incurrence or issuance by the Issuer Company or any of its Restricted Subsidiary of the Issuer Subsidiaries of Indebtedness (including represented by Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction)Obligations, Disqualified Stock mortgage financings or preferred stockpurchase money obligations, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development installation or improvement of plantproperty, plant or equipment used in the business of the Company or other property used or useful in a Permitted Business which occurs within 365 days any of such purchase, design, construction, lease, installation, development or improvementits Restricted Subsidiaries, in an aggregate principal amount amount, 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 $10.0 million at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(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 Issuer Company or any of its Restricted Subsidiary Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or incurred the net proceeds of which are used to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause (5a) above or clause clauses (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4), (5), (6) or (1113) of this Section 4.10(b4.09(b);
(67) the incurrence by the Issuer 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 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 (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 shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Wholly-Owned 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 Wholly-Owned 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 (8);
(9) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposesin the ordinary course of business;
(710) the guarantee by the Company or any of the Guarantors of Indebtedness of the Company or a Restricted Subsidiary of the Company that was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(11) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, and surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred bonds in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) 12) the incurrence by the Issuer 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 in the ordinary course of businessfunds, so long as such Indebtedness is extinguished covered within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;and
(13) the incurrence or issuance by the Issuer Company or a Restricted Subsidiary the Guarantors of the Issuer of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 million 35.0 million. The Company will not incur, and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations will not permit any Guarantor to suppliersincur, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE including Permitted Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Issuer or any Subsidiary Guarantor that is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and contractually 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 any other Indebtedness of the Issuer, Company or the Note Guarantee, in the case of a Subsidiary Guarantor; and
(i) any subsequent issuance or transfer of Equity Interests that results in any such Guarantor unless such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, which new incurrence is not permitted by this clause (21);
(22) the issuance by any Restricted Subsidiary to the Issuer or to any other Restricted Subsidiary of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be 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 Company solely by virtue of being unsecured or by virtue of holders of secured Indebtedness having entered into inter-creditor agreements giving one or more of such holders priority over the Note Guaranteeother holders in the collateral held by them or by 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 Sections 4.09(b)(1) through (13) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified 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 of any such accrual, accretion or payment is included in Fixed Charges of the Company as 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. The amount of any Indebtedness outstanding as of any date will be:
(1) the accreted value of the Indebtedness, in the case may beof any Indebtedness issued with the original issue discount;
(2) the principal amount of the Indebtedness, and in the case of any other Indebtedness; and
(b3) Non-Guarantors in respect of Indebtedness incurred of another Person secured by other Non-Guarantors in accordance with a Lien on the provisions assets of this Indenturethe specified Person, the lesser of:
(A) the Fair Market Value of such assets at the date of determination; and
(B) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt), ) and the Company shall not issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Issuer and its Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) and the Issuer’s Restricted Subsidiaries may or issue shares of preferred stock, ifDisqualified Stock if the Company's Leverage Ratio at the time of the incurrence of such indebtedness, after giving pro-forma effect thereto and to the application use of the proceeds therefrom, either is less than 7.0 to 1. Notwithstanding the foregoing, the Indenture will not prohibit any of the following (i) the Fixed Charge Coverage Ratio for the Issuer’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issuedcollectively, as the case may be, would have been at least 2.0 to 1.0, or "Permitted Indebtedness"): (iia) the Indebtedness to Consolidated Tangible Net Worth Ratio as of evidenced by the end of the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been less than or equal to 1.75 to 1.0.
Notes; (b) Section 4.10(a) shall not prohibit the incurrence of any Indebtedness that meets the following criteria or the issuance of any preferred stock that meets the following criteria, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or any Restricted Subsidiary Company of Indebtedness pursuant to Credit Facilities or Project LoansAgreements so long as the aggregate principal amount of all Indebtedness outstanding under all Credit Agreements does not, including at any Guarantee one time, exceed $190.0 million, less the aggregate amount of all proceeds from all Asset Sales that have been applied since the date hereof to permanently reduce the outstanding amount of such Indebtedness or any Guarantee of Designated SPE Debt by pursuant to the Issuer or any Restricted Subsidiary, in an aggregate principal amount at any one time outstanding not to exceed the greater of $1,500 million and 22.5% of Consolidated Tangible Assets at the time of incurrence;
provisions described under Section 4.10; (2c) the Existing Indebtedness;
(3) the incurrence by the Issuer of all Indebtedness represented by the Initial Notes issued on the Issue Date and replacement Notes in respect thereof, if any (and the incurrence by any Subsidiary Guarantor of any related Note Guarantee);
(4) the incurrence or issuance by the Issuer or any Restricted Subsidiary of the Issuer of Indebtedness (including Capital Lease Obligations Company and Indebtedness incurred in connection with a sale/leaseback transaction), Disqualified Stock or preferred stock, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development or improvement of plant, equipment or other property used or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvement, in an aggregate principal amount at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5) the incurrence by the Issuer or any Restricted Subsidiary of Permitted Refinancing Indebtedness in exchange for, or incurred to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause (5) or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4) or (11) of this Section 4.10(b);
(6) the incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposes;
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) 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 (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, so long existence as such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary date of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(ad) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer Company and any of its Wholly Owned Restricted Subsidiaries; provided, however, that:
that (ai) if the Issuer or any Subsidiary Guarantor Company is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary GuarantorIndebtedness, such Indebtedness must be unsecured and subordinated in right of payment is expressly subordinate to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Issuer, or the Note Guarantee, in the case of a Subsidiary Guarantor; and
Notes and (iii)(A) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer Company or a Wholly Owned Restricted Subsidiary and (iiB) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer Company or a Wholly Owned Restricted Subsidiary shall be deemed, in each case, to constitute a new an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be; (e) the incurrence by the Company or 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, lease or cost of construction or improvement of property, plant or equipment used in a Permitted Business in an aggregate principal amount not to exceed $15.0 million at any time outstanding; (f) the incurrence by the Company or its Restricted Subsidiaries of Permitted Refinancing Debt in exchange for, or the net proceeds of which new incurrence is not are used to refund, refinance or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this clause the Indenture to be incurred; (21);
(22g) the issuance incurrence by any the Company or its Restricted Subsidiary to Subsidiaries of Hedging Obligations that are incurred for the Issuer purpose of fixing or hedging interest rate risk with respect to any other Restricted Subsidiary floating or variable rate Indebtedness or for the purpose of shares protecting against fluctuations in interest rates or the value of preferred stockforeign currencies purchased or received, in each case in respect of Indebtedness that is permitted by the terms of the Indenture to be outstanding; provided, however, that:
(a) any subsequent issuance that in the case of Hedging Obligations that are incurred for the purpose of fixing or transfer of Equity Interests that results in any such preferred stock being held by a Person other than hedging interest rate risks with respect to Indebtedness, the Issuer or a Restricted Subsidiary; and
(b) any sale or other transfer notional principal amount of any such preferred stock Hedging Obligation does not exceed the principal amount of the Indebtedness to which such Hedging Obligation relates and in the case of Hedging Obligations incurred for the purpose of protecting against fluctuations in interest rates or the value of foreign currencies purchased or received, such Hedging Obligations do not increase the Indebtedness of the Company and its Restricted Subsidiaries outstanding other than as a Person that is not either the Issuer result of fluctuations in foreign currency exchange rates or a Restricted Subsidiary shall be deemedby reason of fees, indemnities and compensation payable thereunder; (h) Indebtedness incurred solely in each caserespect of performance, surety and similar bonds or completion guarantees, to constitute a new issuance the extent that such incurrence does not result in the incurrence of any obligation for the payment of borrowed money to others; (i) Indebtedness arising out of standby letters of credit covering workers compensation, performance or similar obligations in an aggregate amount not to exceed $500,000 at any time outstanding; (j) any guarantee of the Company of Indebtedness or other obligations of any of its Restricted Subsidiaries so long as the incurrence of such preferred stock Indebtedness incurred by such Restricted SubsidiarySubsidiary is permitted under the terms of the Indenture; (k) the incurrence by the Company of additional Indebtedness in an aggregate principal amount (or accreted value, which new as applicable) at any time outstanding not to exceed $10.0 million; (l) the issuance is not of Series A Preferred Stock issued as payment in kind dividends on the Series A Preferred Stock outstanding on the Issue Date or issued subsequent to the Issue Date as dividends permitted by pursuant to this clause (22l);
, to the extent such dividends are made pursuant to the terms of the Certificate of Designation for such Series A Preferred Stock as in effect on the Issue Date, on any Preferred Stock issued in exchange for the Series A Preferred Stock, or any dividends on such Preferred Stock to the extent such dividends are made pursuant to the terms of the Certificate of Designation of such Preferred Stock; and (23m) Guarantees (the incurrence by the Company of Indebtedness in respect of Exchange Debentures issued as payment in kind interest on Exchange Debentures issued on the exchange of Exchangeable Preferred Stock, to the extent such interest payments are made pursuant to the terms of the Exchange Debenture Indenture. The Company will not permit any Unrestricted Subsidiary to incur any Indebtedness other than Guarantees of Designated SPE Non-Recourse Debt) by (a) the Issuer or ; provided, however, if any Subsidiary Guarantor such Indebtedness ceases to be Non-Recourse Debt, such event shall be deemed to constitute an incurrence of Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be subordinated in right of payment to the Notes or the Note Guarantee, as the case may be, and (b) Non-Guarantors of Indebtedness incurred by other Non-Guarantors in accordance with the provisions of this Indenture; andCompany.
Appears in 1 contract
Samples: Indenture (Cumulus Media Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and shall 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 Issuer and its Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and any of the Issuer’s Restricted Subsidiaries Guarantors may incur Indebtedness (including Acquired Debt) or issue shares of preferred stock, ifif the Leverage Ratio, after giving pro forma effect thereto to such incurrence or issuance as of such date and to the application use of proceeds therefrom as if the same had occurred at the beginning of the proceeds therefrom, either (i) the Fixed Charge Coverage Ratio for the IssuerCompany’s most recently ended four full fiscal quarters quarter period for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may beavailable, would have been at least 2.0 no greater than 2.75 to 1.0, or (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as of the end of the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been less than or equal to 1.75 to 1.01.
(b) The provisions of Section 4.10(a4.09(a) shall hereof will not prohibit the incurrence of any Indebtedness that meets of the following criteria or the issuance items of any preferred stock that meets the following criteria, as applicable Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or Company and any Restricted Subsidiary Guarantor of additional Indebtedness pursuant to and letters of credit under Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, in an aggregate principal amount at any one time outstanding under this clause (1) of Section 4.09(b) (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 $1,500 million and 22.5% of Consolidated Tangible Assets at the time of incurrence650.0 million;;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuer Company and the Guarantors of Indebtedness represented by the Initial Notes and the related Note Guarantees to be issued on the Issue Date and replacement Notes in respect thereof, if any (date of this Indenture and the incurrence by any Subsidiary Guarantor of any Exchange Notes and the related Note Guarantee)Guarantees to be issued pursuant to the Registration Rights Agreement;
(4) the incurrence or issuance by the Issuer Company or any of its Restricted Subsidiary of the Issuer Subsidiaries of Indebtedness (including represented by Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction)Obligations, Disqualified Stock mortgage financings, construction financings or preferred stockpurchase money obligations, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development installation or improvement of plantproperty, plant or equipment used in the business of the Company or other property any of its Restricted Subsidiaries or used by the Company or useful in a Permitted Business which occurs within 365 days any of such purchase, design, construction, lease, installation, development or improvementits Restricted Subsidiaries for the purpose of developing and constructing solar energy systems, in an aggregate principal amount amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4) of Section 4.09(b), not to exceed $100.0 million at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5) the incurrence by the Issuer Company or any of its Restricted Subsidiary Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or incurred the net proceeds of which are used to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause (54.09(a) hereof or clause clauses (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4), (5) or (1116) of this Section 4.10(b4.09(b);
(6) the incurrence by the Issuer 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) (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 of the Company and (2) 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 shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the 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 not for speculative purposesin the ordinary course of business;
(79) the guarantee by the Company or any of the Guarantors of Indebtedness of the Company or a Restricted Subsidiary of the Company (other than a Project Subsidiary) 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 guarantee by any Project Subsidiary of Indebtedness of any other Project Subsidiary;
(11) Permitted Project Undertakings of the Company or any of its Restricted Subsidiaries;
(12) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, and surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred bonds in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) 13) the incurrence by the Issuer 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 in the ordinary course of businessfunds, so long as such Indebtedness is extinguished covered within five Business Days;
(914) the incurrence of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of Non-Recourse Debt by any business, assets or Equity Interests of the Issuer or any such Restricted Project Subsidiary;
(1015) the incurrence by Foreign Subsidiaries of Indebtedness resulting from endorsements in an aggregate principal amount at any time outstanding pursuant to this clause (15), including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (15), not to exceed $50.0 million (or the equivalent thereof, measured at the time of negotiable instruments for collection each incurrence, in the ordinary course of business;applicable foreign currency); and
(1116) Acquired Debt the incurrence by the Company or Indebtedness or preferred stock any of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of 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 pursuant to this clause (16), not to exceed the greater of $150.0 million 100.0 million. The Company will not incur, and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations will not permit any Guarantor to suppliersincur, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE including Permitted Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Issuer or any Subsidiary Guarantor that is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and contractually 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 any other Indebtedness of the Issuer, Company or the Note Guarantee, in the case of a Subsidiary Guarantor; and
(i) any subsequent issuance or transfer of Equity Interests that results in any such Guarantor unless such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, which new incurrence is not permitted by this clause (21);
(22) the issuance by any Restricted Subsidiary to the Issuer or to any other Restricted Subsidiary of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be 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 Company or the Note Guaranteesuch Guarantor, as applicable, 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 (16) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest or preferred stock dividends, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles and the payment of dividends on preferred stock or Disqualified Stock in the form of additional 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. 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 this Section 4.09 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:
(1) the accreted value of the Indebtedness, in the case may beof any Indebtedness issued with original issue discount;
(2) the principal amount of the Indebtedness, and in the case of any other Indebtedness; and
(b3) Non-Guarantors in respect of Indebtedness incurred of another Person secured by other Non-Guarantors in accordance with a Lien on the provisions assets of this Indenturethe specified Person, the lesser of:
(A) the Fair Market Value of such assets at the date of determination; and
(B) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and shall 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 Issuer and its Restricted Subsidiaries Company or any Guarantor may incur Indebtedness (including Acquired Debt) and or issue Disqualified Stock or preferred stock if the IssuerCompany’s Restricted Subsidiaries may issue shares Leverage Ratio at the time of preferred stock, if, after giving effect thereto and incurrence of such Indebtedness or the application issuance of the proceeds therefrom, either (i) the Fixed Charge Coverage Ratio for the Issuer’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred Disqualified Stock or such preferred stock is issuedstock, as the case may be, would have been at least 2.0 after giving pro forma effect to 1.0, such incurrence or (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio issuance as of such date and to the end use of proceeds therefrom, as if the same had occurred at the beginning of the Issuer’s most recently ended four fiscal quarter period of the Company for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may beavailable, would have been less no greater than or equal to 1.75 7.0 to 1.0.
(b) . The provisions of the first paragraph of this Section 4.10(a) shall 4.09 will not prohibit the incurrence of any Indebtedness that meets of the following criteria or the issuance items of any preferred stock that meets the following criteria, as applicable Indebtedness (collectively, “Permitted Debt”):
(1i) the incurrence by the Issuer Company or any Restricted Subsidiary of Indebtedness pursuant to and letters of credit under one or more Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, in an aggregate principal amount at any one time outstanding under this clause (i) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Subsidiaries thereunder) not to exceed (a)(i) prior to the greater closing of a Qualifying IPO, $1,500 50.0 million and 22.5% (ii) from and after the closing of Consolidated Tangible Assets at a Qualifying IPO, $100.0 million, less (b) the time aggregate amount of incurrenceall Net Proceeds of Asset Sales applied by the Company or any of its Restricted Subsidiaries after the date of this Indenture to repay any term Indebtedness under a Credit Facility or to repay any revolving credit Indebtedness under a Credit Facility and effect a corresponding commitment reduction thereunder, in each case for both such term Indebtedness and such revolving credit Indebtedness pursuant to Section 4.10;
(2ii) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3iii) the incurrence by the Issuer Company and the Guarantors of Indebtedness represented by the Initial Notes and the related Subsidiary Guarantees to be issued on the Issue Date and replacement Notes in respect thereof, if any date of this Indenture;
(and iv) the incurrence by any Subsidiary Guarantor of any related Note Guarantee);
(4) the incurrence or issuance by the Issuer Company or any of its Restricted Subsidiary of the Issuer Subsidiaries of Indebtedness (including represented by Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction)Obligations, Disqualified Stock mortgage financings or preferred stockpurchase money obligations, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development construction or improvement of plantproperty, plant or equipment used in the business of the Company or other property used such Restricted Subsidiary (whether through the direct purchase of assets or useful in through the acquisition of at least a Permitted Business which occurs within 365 days majority of the Voting Stock of any Person owning such purchase, design, construction, lease, installation, development or improvementassets), in an aggregate principal amount at any time outstandingamount, together with any including all Permitted Refinancing Indebtedness in respect thereofincurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (iv), not to exceed at any time outstanding the greater of (a) $25.0 10.0 million and 1.0or (b) 2.0% of Consolidated Tangible Assets at the time of incurrenceTotal Assets;
(5v) the incurrence by the Issuer Company or any of its Restricted Subsidiary Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or incurred the net proceeds of which are used to extend, renew, refund, refinance, refinance or replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under the first paragraph of this Section 4.10(a), this clause 4.09 or any of clauses (5) or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Dateii), (3iii), (4iv), (v), (viii), (ix), (xi) or (11xiv) of this Section 4.10(b)paragraph;
(6vi) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations intercompany Indebtedness 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, such Indebtedness must be (i) unsecured and (ii) if the obligee is neither the Company nor a Guarantor, expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes (in the case of the Company) or the related Subsidiary Guarantee (in the case of a Guarantor), and (b) any subsequent issuance; event or transfer of Equity Interests that results in any such Indebtedness or preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company and any sale or other transfer of any such Indebtedness or preferred stock to a Person that is not for speculative purposeseither 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 (vi);
(7vii) Indebtedness under Hedging Obligations entered into for bona fide hedging purposes of the incurrence Company or any Restricted Subsidiary not for the purpose of speculation;
(viii) guarantees provided pursuant to Section 4.17 and the guarantee by the Issuer Company or any Restricted Subsidiary of Indebtedness of the Company or a Restricted Subsidiary of the Company that was permitted to be incurred by another provision of this Section 4.09;
(ix) Indebtedness incurred by the Company or any of its Restricted Subsidiaries of Indebtedness in constituting reimbursement obligations with respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, to letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred credit issued in the ordinary course of business, including, without limitation, letters of credit in respect to workers’ compensation claims 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 for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoingsuch Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) the incurrence x) Obligations in respect of performance and surety bonds and completion guarantees provided by the Issuer Company or any of its Restricted Subsidiaries in the ordinary course of business;
(xi) Acquisition Debt of the Company or any Restricted Subsidiary if (w) such Acquisition Debt is incurred within 365 days after the date on which the related definitive acquisition agreement was entered into by the Company or such Restricted Subsidiary, (x) the aggregate principal amount of such Acquisition Debt is no greater than the aggregate principal amount of Acquisition Debt set forth in a notice from the Company to the Trustee (an “Incurrence Notice”) within 30 days after the date on which the related definitive acquisition agreement was entered into by the Company or such Restricted Subsidiary, which notice shall be executed on the Company’s behalf by an executive officer of the Company in such capacity and shall describe in reasonable detail the acquisition that such Acquisition Debt will be incurred to finance, (y) after giving pro forma effect to the acquisition described in such Incurrence Notice, the Company or such Restricted Subsidiary could have incurred such Acquisition Debt under this Indenture, including compliance with the first paragraph of this Section 4.09, as of the date upon which the Company delivers such Incurrence Notice to the Trustee and (z) such Acquisition Debt is utilized solely to finance the acquisition described in such Incurrence Notice and any other pending acquisitions previously described in one or more Incurrence Notices and which satisfy the foregoing provisions (including to repay or refinance indebtedness or other obligations incurred in connection with such acquisition and to pay related fees and expenses); provided, however, that any Incurrence Notice given hereunder may be withdrawn or the amount of Acquisition Debt referred to therein may be reduced at any time prior to the incurrence of such Acquisition Debt;
(xii) the incurrence by the Company’s 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 will be deemed to constitute an incurrence of Indebtedness by a Restricted Subsidiary of the Company that was not permitted by this clause (xii);
(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 inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, so long as business and such Indebtedness is extinguished within five Business DaysDays after notice thereof;
(9xiv) the incurrence by the Company of Indebtedness arising in an aggregate principal amount not greater than two times the aggregate amount of cash contributions (other than from agreements the issuance of Disqualified Stock of the Issuer or a Restricted Subsidiary Company) made to the common equity capital of the Issuer providing Company after the date of this Indenture (whether through the issuance or sale of Capital Stock or through capital contributions from Parent or Holdings), provided, that (a) such Indebtedness is incurred within 180 days after the making of such cash contribution and is so designated as contribution indebtedness pursuant to an Officer’s Certificate on the incurrence date thereof, and (b) any equity contribution that forms the basis for indemnification, adjustment an incurrence of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition Indebtedness under this paragraph (xiv) will be disregarded for purposes of any business, assets or all calculations called for by Section 4.07 and will not be considered to be an Equity Interests Offering for purposes of the Issuer or any such Restricted SubsidiarySection 3.07;
(10xv) the incurrence by the Company or any of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of 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 Indebtedness incurred pursuant to this clause (xv), not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence15.0 million;
(14xvi) the incurrence of guarantees by the Issuer or a Restricted Subsidiary agreements of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer Company or any Restricted Subsidiary providing for indemnification, adjustment of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on similar customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangementsobligations, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer incurred or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business assumed in connection with the acquisition or disposition of real property, to entitle, develop any business or construct infrastructure thereupon;assets permitted by this Indenture; and
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21xvii) the incurrence by the Issuer Company of Indebtedness under the LBI Media Intercompany Note; provided that if Parent or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Issuer or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and 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 Issuer, or the Note Guarantee, in the case of a Subsidiary Guarantor; and
(i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new incurrence of such Indebtedness by the Issuer or such Restricted SubsidiaryHoldings, as the case may be, which new incurrence is not permitted by this irrevocably forgives or cancels all or any portion of such LBI Media Intercompany Note, the amount thereof so forgiven or cancelled shall at such time be treated as a capital contribution pursuant to clause (21c)(iii) of Section 4.07(a);
(22) . Notwithstanding the issuance by provisions of this Section 4.09, neither the Company nor any Restricted Subsidiary will be permitted to incur any Indebtedness (including any Permitted Debt) any of the proceeds of which will be used to repay, redeem, repurchase or refinance any of the Discount Notes earlier than one year prior to the Issuer Stated Maturity thereof (whether through any direct or indirect payment, including any dividend, distribution or loan to Holdings) unless such Indebtedness is (i) unsecured, (ii) pari passu or junior in right of payment to the Notes, and (iii) otherwise permitted to be incurred pursuant to the provisions of this Section 4.09. 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 (i) through (xvii) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.09, the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, in any manner that complies with this Section 4.09. Indebtedness under the Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (i) of the definition of Permitted Debt (but may later be reclassified in accordance with the following sentence). In addition, the Company may, at any time, change the classification of an item of Indebtedness, Disqualified Stock or preferred stock, or any portion thereof, to any other Restricted Subsidiary clause of shares Permitted Debt or to the first paragraph of preferred stock; providedthis Section 4.09, however, that:
(a) any subsequent issuance or transfer of Equity Interests provided that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer Company or a Restricted Subsidiary shall would be deemedpermitted to incur the item of Indebtedness, Disqualified Stock or preferred stock, or portion thereof, under such other clause or the first paragraph of this Section 4.09, as the case may be, at the time of reclassification. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Stock or preferred stock in the form of additional shares of the same class of Disqualified Stock or preferred stock will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock or preferred stock for purposes of this Section 4.09; provided, in each such case, that the amount of any such accrual, accretion or payment shall be included in Consolidated Interest Expense of the Company to constitute a new issuance the extent (and only to the extent) required by the definition of such preferred stock by such Restricted Subsidiarythe term “Consolidated Interest Expense.” The Company will not incur, which new issuance is and will not permitted by this clause permit any Guarantor to incur, any Indebtedness (22);
(23) Guarantees (other than Guarantees of Designated SPE including Permitted Debt) by (a) the Issuer or that is contractually subordinated in right of payment to any Subsidiary Guarantor of other Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions of this Indenture; provided that in the event Company or such Guarantor unless such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be also contractually subordinated in right of payment to the Notes and the applicable Subsidiary Guarantee at least to the same extent; 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 the Note Guarantee, as the case may be, and (b) Non-Guarantors by virtue of Indebtedness incurred by other Non-Guarantors in accordance with the provisions of this Indenture; andbeing secured on a junior priority basis.
Appears in 1 contract
Samples: Indenture (Lbi Media Holdings Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt), and shall 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, howeverexcept as set forth in Section 4.09(b).
(b) The provisions of Section 4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness (collectively, that "Permitted Debt"):
(1) the Issuer incurrence by XxxxXxx and any of its Subsidiaries of Indebtedness 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 MobiFon and its Restricted Subsidiaries may incur thereunder), not to exceed the lesser of:
(A) $360.0 million, less the aggregate amount of all Net Proceeds of Asset Sales applied by MobiFon or any of its Subsidiaries since the date of this Indenture to repay any term Indebtedness under a Credit Facility or to repay any revolving credit Indebtedness under a Credit Facility and effect a corresponding commitment reduction thereunder pursuant to Section 4.10; and
(including Acquired Debt) and the Issuer’s Restricted Subsidiaries may issue shares of preferred stock, if, after giving effect thereto and the application of the proceeds therefrom, either (iB) the Fixed Charge Coverage Ratio product of two times XxxxXxx's EBITDA for the Issuer’s XxxxXxx'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 preferred stock is issuedincurred, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as the case may be, would have been at least 2.0 to 1.0, or (ii) if the Indebtedness to Consolidated Tangible Net Worth Ratio as of had been incurred at the end of the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been less than or equal to 1.75 to 1.0.
(b) Section 4.10(a) shall not prohibit the incurrence of any Indebtedness that meets the following criteria or the issuance of any preferred stock that meets the following criteria, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or any Restricted Subsidiary of Indebtedness pursuant to Credit Facilities or Project Loans, including any Guarantee beginning of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, in an aggregate principal amount at any one time outstanding not to exceed the greater of $1,500 million and 22.5% of Consolidated Tangible Assets at the time of incurrencefour-quarter period;
(2) the Existing Indebtednessincurrence by the Company of Indebtedness represented by the Notes to be issued on the date of this Indenture and represented by the Exchange Notes to be issued pursuant to the Registration Rights Agreement;
(3) the incurrence by the Issuer Company of Qualified Intercompany Indebtedness represented by under the Initial Notes issued on the Issue Date and replacement Notes in respect thereof, if any (and the incurrence by any Subsidiary Guarantor of any related Parent Note Guarantee);
(4) the incurrence or issuance by the Issuer or any Restricted Subsidiary of the Issuer of Indebtedness (including Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction), Disqualified Stock or preferred stock, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development or improvement of plant, equipment or other property used or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvement, in an aggregate principal amount at any time outstanding, together with any after the Permitted Refinancing Indebtedness in respect thereofPayment to Parent (which shall occur no later than June 30, 2003), not to exceed $457.1 million;
(4) the greater incurrence by the Company of $25.0 million and 1.0% Qualified Intercompany Indebtedness to a Person of Consolidated Tangible Assets at which the time Company is a Subsidiary the net proceeds of incurrencewhich are used by the Company to repurchase Notes pursuant Section 3.07(a);
(5) the incurrence by the Issuer Company of Qualified Intercompany Indebtedness to a Person of which the Company is a Subsidiary in exchange for Equity Interests in MobiFon in an aggregate principal amount that, as of the date of incurrence, does not exceed the Fair Market Value of such Equity Interests of MobiFon on such date;
(6) the incurrence by MobiFon or any Restricted of its Subsidiaries of Indebtedness represented by Capital Lease Obligations or Attributable Debt, or incurred to finance the cost (including the cost of design, development, construction, improvement, installation or integration and all import duties) of telecommunications network assets, equipment or inventory acquired by the Company or any Subsidiary in the ordinary course of business, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (6), not to exceed $15.0 million at any time outstanding;
(7) the incurrence by the Company or any of its Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or incurred the net proceeds of which are used to extend, renew, refund, refinance, replace, defease refinance or discharge any replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(aclauses (1), this clause (5) or clause (2) and (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4) or (116) of this Section 4.10(b4.09(b);
(68) any Indebtedness of MobiFon to the Government of Romania or any governmental authority arising in connection with deferred payment arrangements in respect of (a) the incurrence acquisition of the UMTS License, (b) GSM spectrum fees or other GSM-related compensation or (c) any other obligations necessary to prevent the loss or secure the renewal or reinstatement of a license or franchise held by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposes;
(7) the incurrence by the Issuer or from any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) 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 (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Daysgovernmental agency;
(9) the incurrence of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer by MobiFon or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer MobiFon and any of its Restricted SubsidiariesSubsidiaries or Indebtedness incurred by XxxxXxx to the Company; provided, however, that:
(a) if the Issuer or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and 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 Issuer, or the Note Guarantee, in the case of a Subsidiary Guarantor; and
(iA) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer Company or a Restricted Subsidiary and of the Company; and
(iiB) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer Company or a Restricted Subsidiary shall of the Company; will be deemed, in each case, to constitute a new an incurrence of such Indebtedness by the Issuer XxxxXxx or such Restricted Subsidiary, as the case may be, which new incurrence is that was not permitted by this clause (219);
(2210) the issuance by any Restricted Subsidiary MobiFon to the Issuer Company or any of MobiFon's Subsidiaries to MobiFon or any of its other Restricted Subsidiary Subsidiaries of 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 Issuer Company or a Restricted SubsidiarySubsidiary of the Company; and
(bB) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer Company or a Restricted Subsidiary shall of the Company; will be deemed, in each case, to constitute a new an issuance of such preferred stock by such Restricted Subsidiary, which new issuance is Subsidiary that was not permitted by this clause (2210);
(2311) Guarantees the incurrence by XxxxXxx or any of the Subsidiaries of Indebtedness in respect of workers' compensation claims, self-insurance obligations, bankers' acceptances, performance and surety bonds in the ordinary course of business; and
(12) the incurrence by the Company or any of its Subsidiaries of Indebtedness arising from the honoring by a bank or other than Guarantees financial institution of Designated SPE a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five business days. The Company will not incur any Indebtedness (including Permitted Debt) by (a) the Issuer or that is contractually subordinated in right of payment to any Subsidiary Guarantor of other Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions of this Indenture; provided that in the event Company unless such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be 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 Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. The Company will not incur any Indebtedness (including Permitted Debt) to any Affiliate of the Note Guarantee, as the case may be, and (b) Non-Guarantors of Company unless such Indebtedness incurred by other Non-Guarantors in accordance with the provisions of this Indenture; andis Qualified Intercompany Indebtedness.
Appears in 1 contract
Samples: Indenture (Clearwave N V)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, incur, with respect to any Indebtedness (including Acquired Debt), and shall not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Issuer and its Restricted Subsidiaries the Subsidiary Guarantors may incur Indebtedness (including Acquired Debt) and the Issuer’s Restricted Subsidiaries may or issue shares of preferred stock, if, after giving effect thereto and the application of the proceeds therefrom, either (i) the Fixed Charge Coverage Ratio for the Issuer’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been at least 2.0 to 1.0, or (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as of the end of the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been less than or equal to 1.75 2.25 to 1.0.
(b) Section 4.10(a4.09(a) shall not prohibit the incurrence of any Indebtedness that meets the following criteria or the issuance of any preferred stock that meets the following criteria, as applicable criteria (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or any Restricted Subsidiary of Indebtedness pursuant to Credit Facilities or Project LoansFacilities, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, in an aggregate principal amount at any one time outstanding not to exceed the greater of $1,500 850.0 million and 22.575% of the Consolidated Tangible Assets Net Worth of the Issuer at the time of incurrence;
(2) the incurrence by the Issuer and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuer and the Subsidiary Guarantors of Indebtedness represented by the Initial Notes issued on the Issue Date and Date, replacement Notes notes in respect thereof, if any (any, and the incurrence by any Subsidiary Guarantor of any related Note Guarantee)Guarantees;
(4) the incurrence or issuance by the Issuer or any Restricted Subsidiary of the Issuer of Indebtedness (including Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction), Disqualified Stock or preferred stock, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development or improvement of plant, equipment or other property used or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvement, in an aggregate principal amount at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5) the incurrence by the Issuer or any Restricted Subsidiary of Permitted Refinancing Indebtedness in exchange for, or incurred the net proceeds of which are used to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause (54.09(a) or clause clauses (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4), (5), (11) or (1128) of this Section 4.10(b4.09(b);
(6) the incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposes;
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) 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 (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:either
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a4.09(a);; or
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 50.0 million and 3.02.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) Indebtedness incurred in connection with a sale/leaseback of any Model Home Unit;
(16) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(1617) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of a PAPA;
(18) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(1719) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(1820) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(1921) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer (or a direct or indirect parent thereof) or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, purchase or redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer or any direct or indirect parent company of the Issuer to the extent described in Section 4.08(b)(44.07(b)(4);
(2022) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 50.0 million and 2.52.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;; and
(2123) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Issuer or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and 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 Issuer, 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 Issuer or a Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary Subsidiary, shall be deemed, in each case, to constitute a new incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, which new incurrence is not permitted by this clause (2123);
(2224) the issuance by any Restricted Subsidiary to the Issuer or to any other Restricted Subsidiary of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary Subsidiary; shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (2224);
(2325) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be subordinated in right of payment to the Notes or the Note Guarantee, as the case may be, and (b) Non-Guarantors of Indebtedness incurred by other Non-Guarantors in accordance with the provisions of this Indenture;
(26) incurrence of Indebtedness by Mortgage Loan Subsidiaries under Warehouse Facilities; provided that the amount of Indebtedness (excluding funding drafts issued thereunder) under each Warehouse Facility outstanding at any time may not exceed 98% of the value of the mortgages pledged to secure Indebtedness under such Warehouse Facility at the time of incurrence;
(27) Designated SPE Debt, and
(28) the incurrence by the Issuer or its Restricted Subsidiaries of Affiliate Indebtedness in an aggregate principal amount at any one time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed $300.0 million.
(c) For purposes of determining compliance with, and the outstanding principal amount of any particular Indebtedness incurred pursuant to and in compliance with, this Section 4.09:
(1) in the event that Indebtedness meets the criteria of more than one of the types of Permitted Debt described in Section 4.09(b)(1) through (28) or can be incurred pursuant to Section 4.09(a), the Issuer, in its sole discretion, shall classify such item of Indebtedness on the date of incurrence and may later classify such item of Indebtedness in any manner that complies with Section 4.09(a) or Section 4.09(b);
(2) Indebtedness under the Credit Agreements and Guarantees of the Existing Project Loans outstanding on the Issue Date shall be deemed to have been incurred pursuant to Section 4.09(b)(1) and, notwithstanding clause (1) of this Section 4.09(c), may not be reclassified.
(d) The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on preferred stock in the form of additional shares of the same class of preferred stock shall not be deemed to be an incurrence of Indebtedness or an issuance of preferred stock for purposes of this Section 4.09; provided, in each such case, that the amount thereof is included in Consolidated Interest Incurred of the Issuer as accrued (other than the reclassification of preferred stock as Indebtedness due to a change in accounting principles). For purposes of Section 4.09(b)(23) and (24), the existence of a Permitted Lien on Equity Interests, Indebtedness or preferred stock shall not be considered a transfer until the Equity Interests, Indebtedness or preferred stock securing such Permitted Lien has been foreclosed upon.
(e) If at any time an Unrestricted Subsidiary becomes a Restricted Subsidiary of the Issuer, any Indebtedness of such Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of the Issuer as of such date (and, if such Indebtedness is not permitted to be incurred as of such date under this Section 4.09, the Issuer shall be in Default of this Section 4.09).
(f) For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term Indebtedness, or first committed, in the case of revolving credit Indebtedness; provided that if such Indebtedness is incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing 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 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 the exchange rate of currencies. The principal amount of any Indebtedness incurred to refinance other Indebtedness, if incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such refinancing is denominated that is in effect on the date of such refinancing.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer Company and Bastet/Mission shall not, and shall not permit any of its the Restricted Subsidiaries to, directly 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 and Bastet/Mission shall not issue any Disqualified Stock and shall not permit any of its the Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Issuer and its Company or any Restricted Subsidiaries Subsidiary may incur Indebtedness (including Acquired Debt) and the Issuer’s Restricted Subsidiaries may or issue shares of Disqualified Stock or preferred stock, if, after giving effect thereto and stock if the application Company's Leverage Ratio at the time of incurrence of such Indebtedness or the proceeds therefrom, either (i) the Fixed Charge Coverage Ratio for the Issuer’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which issuance of such additional Indebtedness is incurred Disqualified Stock or such preferred stock is issuedstock, as the case may be, would have been at least 2.0 after giving pro forma effect to 1.0, such incurrence or (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio issuance as of such date and to the end use of the Issuer’s proceeds therefrom as if the same had occurred at the beginning of the most recently ended four full fiscal quarter period of the Company for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may beavailable, would have been less no greater than (i) 7.5 to 1, if such incurrence or equal issuance is on or prior to 1.75 May 15, 2003, and (ii) 7.0 to 1.0.
(b) 1, if such incurrence or issuance is May 15, 2003. The provisions of the first paragraph of this Section 4.10(a) 4.09 shall not prohibit the incurrence of any Indebtedness that meets of the following criteria or the issuance items of any preferred stock that meets the following criteria, as applicable Indebtedness (collectively, “"Permitted Debt”"):
(1i) the incurrence by the Issuer Company or any Restricted Subsidiary of Indebtedness pursuant to Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, in an aggregate principal amount at any one time outstanding not to exceed the greater of $1,500 million and 22.5% of Consolidated Tangible Assets at the time of incurrence;
(2) the Existing Indebtedness;
(3) the incurrence by the Issuer of Indebtedness represented by the Initial Notes issued on the Issue Date and replacement Notes in respect thereof, if any (and the incurrence by any Subsidiary Guarantor of any related Note Guarantee);
(4) the incurrence or issuance by the Issuer or any Restricted Subsidiary of the Issuer of Indebtedness (including Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction), Disqualified Stock or preferred stock, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development or improvement of plant, equipment or other property used or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvement, in an aggregate principal amount at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5) the incurrence by the Issuer or any Restricted Subsidiary of Permitted Refinancing Indebtedness in exchange for, or incurred to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause (5) or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4) or (11) of this Section 4.10(b);
(6) the incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposes;
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in under the ordinary course of business; provided, however, that upon the drawing of Credit Agreements (with letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect being deemed to have a principal amount equal to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) maximum potential liability of the incurrence by Company and the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from thereunder) and related Guarantees under 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 in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this IndentureCredit Agreements; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets all Indebtedness of the Issuer at Company and the time Restricted Subsidiaries then classified as having been incurred pursuant to this clause (i) 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 $225.0 million less the aggregate amount applied by the Company and the Restricted Subsidiaries to permanently reduce the availability of incurrenceIndebtedness under the Credit Agreements pursuant to Section 4.10;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21ii) the incurrence by the Issuer Company and the Restricted Subsidiaries of Existing Indebtedness;
(iii) the incurrence by the Company of Indebtedness represented by the Notes in accordance with the terms of this Indenture;
(iv) the incurrence by the Company, the Guarantor or any of the Restricted Subsidiary Subsidiaries of Permitted Refinancing Indebtedness;
(v) the incurrence by the Company or any of the Restricted Subsidiaries of intercompany Indebtedness between or among the Issuer Company and any of its the Restricted Subsidiaries; provided, however, that:
that (a) if the Issuer or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and 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 Issuer, or the Note Guarantee, in the case of a Subsidiary Guarantor; and
(ix) any subsequent event or issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer Company or a Restricted Subsidiary and (iiy) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer Company or a the Restricted Subsidiary Subsidiaries shall be deemed, in each case, to constitute a new an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, which new incurrence is that was not permitted by this clause (21v);
(22vi) the issuance incurrence by the Company or any of the Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business 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;
(vii) the Guarantee by the Company of Indebtedness of any of the Restricted Subsidiaries so long as the incurrence of such Indebtedness by such Restricted Subsidiary is permitted to be incurred by another provision of this covenant;
(viii) the Guarantee by any Restricted Subsidiary of Indebtedness of the Company;
(ix) Indebtedness consisting of customary indemnification, adjustments of purchase price or similar obligations, in each case, incurred or assumed in connection with the acquisition of any business or assets;
(x) Indebtedness incurred by the Company or any of the Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the Issuer ordinary course of business, including without limitation to letters of credit in respect to workers' compensation claims or self- insurance, or other Indebtedness with respect to any other Restricted Subsidiary of shares of preferred stockreimbursement type obligations regarding workers' compensation claims; provided, however, that: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;
(axi) Indebtedness of the Company and the Restricted Subsidiaries represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case incurred for the purpose of financing all or any subsequent issuance part of the purchase price or transfer cost of Equity Interests that results construction or improvement of property, plant or equipment whether through the direct purchase of assets or at least a majority of the Voting Stock of any person owning such assets, in an aggregate principal amount not to exceed $5.0 million at any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; andtime outstanding;
(bxii) Obligations in respect of performance and surety bonds and completion Guarantees provided by the Company or any sale or other transfer of any such preferred stock to a Person that is not either the Issuer Restricted Subsidiaries in the ordinary course of business;
(xiii) Acquisition Debt of the Company or a Restricted Subsidiary shall be deemedif (w) such Acquisition Debt is incurred within 270 days after the date on which the related definitive acquisition agreement or LMA, in each caseas the case may be, to constitute a new issuance was entered into by the Company or such Restricted Subsidiary, (x) the aggregate principal amount of such preferred stock Acquisition Debt is no greater than the aggregate principal amount of Acquisition Debt set forth in a notice from the Company to the Trustee (an "Incurrence Notice") within ten days after the date on which the related definitive acquisition agreement or LMA, as the case may be, was entered into by the Company 49 or such Restricted Subsidiary, which new issuance is not permitted notice shall be executed on the Company's behalf by this clause (22);
(23) Guarantees (other than Guarantees the chief financial officer of Designated SPE Debt) by (a) the Issuer Company in such capacity and shall describe in reasonable detail the acquisition or any Subsidiary Guarantor of Indebtedness permitted to LMA, as the case may be, which such Acquisition Debt shall be incurred by to finance, (y) after giving pro forma effect to the Issuer acquisition or any LMA, as the case may be, described in such Incurrence Notice, the Company or such Restricted Subsidiary could have incurred such Acquisition Debt under this Indenture as of the Issuer in accordance with date upon which the provisions of this Indenture; provided that in the event Company delivers such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be subordinated in right of payment Incurrence Notice to the Notes Trustee and (z) such Acquisition Debt is utilized solely to finance the acquisition or LMA, as the Note Guaranteecase may be, described in such Incurrence Notice (including to repay or refinance indebtedness or other obligations incurred in connection with such acquisition or LMA, as the case may be, and to pay related fees and expenses);
(bxiv) Non-Guarantors Guarantees by the Company or any Restricted Subsidiary of Indebtedness of officers of the Company in an aggregate principal amount not to exceed $3.0 million at any time outstanding;
(xv) the incurrence by the Company or any of the Restricted Subsidiaries of additional Indebtedness, including Attributable Debt incurred by other Non-Guarantors in accordance with after the provisions date of this Indenture, 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 (xv), not to exceed $10.0 million; and
(xvi) the incurrence by the Company of additional notes in payment of Liquidated Damages as required under the Registration Rights Agreement. 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 (i) through (xvi) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.09, the Company shall be permitted to classify such item of Indebtedness on the date of its incurrence in any manner that complies with this Section 4.09. In addition, the Company may, at any time, change the classification of an item of Indebtedness, or any portion thereof, to any other clause or to the first paragraph of this Section 4.09, provided that the Company or a Restricted Subsidiary would be permitted to incur the item of Indebtedness, or portion of the item of Indebtedness, under the other clause or the first paragraph of this Section 4.09, as the case may be, at the time of reclassification. Accrual of interest, accretion or amortization of original issue discount and the accretion of accreted value shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.09. Indebtedness under Credit Agreements outstanding on the date on which Notes are first issued and authenticated under this Indenture shall be deemed to have been incurred on such date in reliance on the exception provided by clause (i) of the definition of Permitted Debt.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly 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 shall not issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Issuer and its Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) and the Issuer’s Restricted Subsidiaries may or issue shares of preferred stock, ifDisqualified Stock if the Company's Debt to Cash Flow Ratio at the time of incurrence of such Indebtedness or the issuance of such Disqualified Stock, after giving pro forma effect thereto to such incurrence or issuance as of such date and to the application use of proceeds therefrom as if the same had occurred at the beginning of the proceeds therefrom, either (i) the Fixed Charge Coverage Ratio for the Issuer’s most recently ended four full fiscal quarters quarter period of the Company for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may beavailable, would have been at least 2.0 no greater than (a) 7.0 to 1.01, if such incurrence or issuance is on or prior to April 15, 2005 and (iib) the Indebtedness 6.5 to Consolidated Tangible Net Worth Ratio as of the end of the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which 1, if such additional Indebtedness incurrence or issuance is incurred or such preferred stock is issuedafter April 15, as the case may be, would have been less than or equal to 1.75 to 1.0.2005;
(b) The provisions of Section 4.10(a4.09(a) shall will not prohibit the incurrence of any Indebtedness that meets of the following criteria or the issuance items of any preferred stock that meets the following criteria, as applicable Indebtedness (collectively, “"Permitted Debt”"):
(1) the incurrence by the Issuer or Company and any of its Restricted Subsidiary Subsidiaries of additional Indebtedness pursuant to and letters of credit under Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, in an aggregate principal amount at any one time outstanding under this clause (1)(with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed $200.0 million less the greater aggregate amount of $1,500 million 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 and 22.5% of Consolidated Tangible Assets at the time of incurrenceeffect a corresponding commitment reduction thereunder pursuant to Section 4.10;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuer Company and the Guarantors of Indebtedness represented by the Initial Notes and the related Subsidiary Guarantees to be issued on the Issue Date and replacement Notes in respect thereof, if any (date of this Indenture and the incurrence by any Exchange Notes and the related Subsidiary Guarantor of any related Note Guarantee)Guarantees to be issued pursuant to the Registration Rights Agreement;
(4) the incurrence or issuance by the Issuer Company or any of its Restricted Subsidiary of the Issuer Subsidiaries of Indebtedness (including represented by Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction)Obligations, Disqualified Stock mortgage financings or preferred stockpurchase money obligations, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development construction or improvement of plantproperty, plant or equipment used in the business of the Company or other property used or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvementRestricted Subsidiary, in an aggregate principal amount amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed $10.0 million at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5) the incurrence by the Issuer Company or any of its Restricted Subsidiary Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or incurred the net proceeds of which are used to extend, renew, refund, refinance, replace, defease refinance or discharge any replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause (54.09(a) hereof or clause clauses (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4), (5) or (1110) of this Section 4.10(b4.09(b);
(6) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposes;
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) 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 (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer Company and any of its Restricted Subsidiaries; provided, however, that:
(aA) if the Issuer Company or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee under such Indebtedness is not neither the Issuer or Company nor a Subsidiary Guarantor, 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 IssuerCompany, 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 Issuer 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 Issuer Company or a Restricted Subsidiary of the Company; shall be deemed, in each case, to constitute a new an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, which new incurrence is that was not permitted by this clause (216);
(227) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred for the purpose of fixing or hedging interest rate risk with respect to any floating rate Indebtedness that is permitted by the terms of this Indenture to be outstanding;
(8) the guarantee by the Company or any of the Guarantors of Indebtedness of the Company or a Restricted Subsidiary of the Company that was permitted to be incurred by another provision of this covenant;
(9) 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 of Indebtedness or an issuance of Disqualified Stock for purposes of this Section 4.09;
(10) Indebtedness incurred by the Company or any Restricted Subsidiary constituting reimbursement obligations with respect to letters of credit issued in the Issuer 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 any other Restricted Subsidiary of shares of preferred stockreimbursement type obligations regarding workers' compensation claims; provided, however, that: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;
(a11) any subsequent issuance Indebtedness consisting of customary indemnification, adjustments of purchase price or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemedsimilar obligations, in each case, to constitute a new issuance incurred or assumed in connection with the acquisition of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22)any business or assets;
(2312) Guarantees (other than Guarantees Obligations in respect of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of Indebtedness permitted to be incurred performance and surety bonds and completion guarantees provided by the Issuer Company or any Restricted Subsidiary in the ordinary course of business; and
(13) the Issuer incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in accordance 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 Indebtedness incurred pursuant to this clause (13), not to exceed $10.0 million. For purposes of determining compliance with the provisions of this Indenture; provided that 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 (13) above, or is entitled to be incurred pursuant to Section 4.09(a), the Company will be permitted to classify such item of Indebtedness that is being Guaranteed is Subordinated on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, then in any manner that complies with this Section 4.09. Accrual of interest, accretion or amortization of original issue discount and the related Guarantee shall accretion of accreted value will not be subordinated in right deemed to be an incurrence of payment to Indebtedness for purposes of this Section 4.09. Indebtedness under Credit Facilities outstanding on the date on which the Notes or are first issued and authenticated under this Indenture will be deemed to have been incurred on such date in reliance on the Note Guarantee, as exception provided by clause (1) of the case may be, and (b) Non-Guarantors definition of Indebtedness incurred by other Non-Guarantors in accordance with the provisions of this Indenture; andPermitted Debt.
Appears in 1 contract
Samples: Indenture (Block Communications Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and shall 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 Issuer and its Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Issuer’s Restricted Subsidiaries Guarantors may incur Indebtedness (including Acquired Debt) or issue shares of preferred stock, if, after giving effect thereto and the application of the proceeds therefrom, either (i) if the Fixed Charge Coverage Ratio for the IssuerCompany’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 2.0 2.25 to 1.0, or determined on a pro forma basis (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as including a pro forma application of the end of net proceeds therefrom), as if the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is had been incurred or such the Disqualified Stock or the preferred stock is had been issued, as the case may be, would have been less than or equal to 1.75 to 1.0at the beginning of such four-quarter period.
(b) Section 4.10(a4.06(a) shall of this First Supplemental Indenture will not prohibit the incurrence of any Indebtedness that meets of the following criteria or the issuance items of any preferred stock that meets the following criteria, as applicable Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or Company and any Restricted Subsidiary Guarantor of additional Indebtedness pursuant to and letters of credit under Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, 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 $1,500 (x) US$50.0 million and 22.5(y) 7.5% of Consolidated Tangible Assets at the time of incurrenceAssets;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuer Company and the Guarantors of Indebtedness represented by the Initial Notes and the related Note Guarantees to be issued on the Issue Date and replacement Notes in respect thereof, if any (and the incurrence by any Subsidiary Guarantor date of any related Note Guarantee)this First Supplemental Indenture;
(4) the incurrence or issuance by the Issuer Company or any of its Restricted Subsidiary of the Issuer Subsidiaries of Indebtedness (including represented by Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction)Obligations, Disqualified Stock mortgage financings or preferred stockpurchase money obligations, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development installation or improvement of plantproperty, plant or equipment used in the business of the Company or other property used or useful in a Permitted Business which occurs within 365 days any of such purchase, design, construction, lease, installation, development or improvementits Restricted Subsidiaries, in an aggregate principal amount amount, 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, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 (x) US$120.0 million and 1.0(y) 18.5% of Consolidated Tangible Assets at the time of incurrenceAssets;
(5) the incurrence by the Issuer Company or any of its Restricted Subsidiary Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or incurred the net proceeds of which are used to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this First Supplemental Indenture to be incurred under Section 4.10(a), 4.06(a) of this clause (5) First Supplemental Indenture or clause clauses (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4), (5) or (1113) of this Section 4.10(b4.06(b);
(6) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposes;
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) 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 (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer Company and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Issuer Company or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee payee is not the Issuer Company or a Subsidiary Guarantor, 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 IssuerCompany, 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 Issuer 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 Issuer Company or a Restricted Subsidiary shall of the Company, will be deemed, in each case, to constitute a new an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, which new incurrence is that was not permitted by this clause (216);
(227) the issuance by any of the Company’s Restricted Subsidiary Subsidiaries to the Issuer Company or to any other of its Restricted Subsidiary Subsidiaries of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer Company or a Restricted SubsidiarySubsidiary of the Company; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer Company or a Restricted Subsidiary shall of the Company, will be deemed, in each case, to constitute a new an issuance of such preferred stock by such Restricted Subsidiary, which new issuance is Subsidiary that was not permitted by this clause (227);
(23) Guarantees 8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations or Treasury Management Arrangements in the ordinary course of business;
(other than Guarantees of Designated SPE Debt) by (a9) the Issuer guarantee by the Company or any Subsidiary Guarantor of 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 the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions another provision of this IndentureSection 4.06; provided that in if the event such Indebtedness that being guaranteed is being Guaranteed is Subordinated Indebtednesssubordinated 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 Guarantee shall 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 4.06(a) of this First Supplemental Indenture or (ii) the Company would have had a Fixed Charge Coverage Ratio greater than the actual Fixed Charge Coverage Ratio for the Company pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.06(a) of this First Supplemental Indenture;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness (A) in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, performance and surety bonds in the ordinary course of business, and (B) in respect of performance bonds, bank guarantees or similar obligations for or in connection with pledges, deposits or payments made or given in relation to such performance bonds, bank guarantees or similar instruments in the ordinary course of business in connection with or to secure statutory, regulatory or similar obligations, including obligations under mining, health, safety, 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;
(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; and
(13) 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, including all Permitted Refinancing 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) US$50.0 million and (y) 7.5% of Consolidated Tangible 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 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 Company solely by virtue of being unsecured or by virtue of being secured on a junior priority basis.
(d) For purposes of determining compliance with this Section 4.06, in the Note Guaranteeevent that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (13) of Section 4.06(b) of this First Supplemental Indenture, or is entitled to be incurred pursuant to Section 4.06(a) of this First Supplemental Indenture, the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with Section 4.06. Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this First Supplemental Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of Section 4.06(b) of this First Supplemental Indenture. The accrual of interest or preferred stock dividends, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on preferred stock or Disqualified Stock in the form of additional 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 4.06; provided, in each such case, that the amount thereof is included in Fixed Charges 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 4.06, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.06 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.
(e) The amount of any Indebtedness outstanding as of any date will be:
(1) the accreted value of the Indebtedness, in the case may beof any Indebtedness issued with original issue discount;
(2) the principal amount of the Indebtedness, and in the case of any other Indebtedness; and
(3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(a) the Fair Market Value of such assets at the date of determination; and
(b) Non-Guarantors the amount of the Indebtedness incurred by of the other Non-Guarantors in accordance with the provisions of this Indenture; andPerson.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Issuers will not, and shall will not permit any of its Restricted Subsidiaries Subsidiary to, directly 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 shall that the Issuers will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries Subsidiary to issue any shares of preferred stock; provided, however, that the Issuer and its Restricted Subsidiaries Issuers or any Guarantor may incur Indebtedness (including Acquired Debt) and the Issuer’s Restricted Subsidiaries may (1) or issue shares of Disqualified Stock or preferred stock, if, after giving effect thereto and stock if Nexstar’s Leverage Ratio at the application time of incurrence of such Indebtedness or the proceeds therefrom, either (i) the Fixed Charge Coverage Ratio for the Issuer’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which issuance of such additional Indebtedness is incurred Disqualified Stock or such preferred stock is issuedstock, as the case may be, would have been at least 2.0 after giving pro forma effect to 1.0, such incurrence or (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio issuance as of such date and to the end use of the Issuer’s proceeds therefrom as if the same had occurred at the beginning of the most recently ended four full fiscal quarter period of Nexstar for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may beavailable, would have been less no greater than or equal 7.0 to 1.75 1 and (2) if, in the case of any incurrence of secured Indebtedness, the Secured Leverage Ratio at the time of incurrence of such secured Indebtedness, after giving pro forma effect to 1.0such incurrence as of such date and to the use of the proceeds therefrom as if the same had occurred at the beginning of the most recently ended four full fiscal quarter period of Nexstar for which internal financial statements are available, would have been no greater than 5.5 to 1.
(b) Clause (a) of this Section 4.10(a) shall 4.09 will not prohibit the incurrence of any Indebtedness that meets of the following criteria or the issuance items of any preferred stock that meets the following criteria, as applicable Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer Issuers or any the Restricted Subsidiary Subsidiaries of Indebtedness pursuant to under Credit Facilities or Project Loans, including any Guarantee (with letters of such Indebtedness or any Guarantee credit being deemed to have a principal amount equal to the maximum potential liability of Designated SPE Debt by the Issuer or any Issuers and the Restricted Subsidiary, in an Subsidiaries thereunder) and related Guarantees under Credit Facilities; provided that the aggregate principal amount at any one time outstanding of all Indebtedness of the Issuers and the Restricted Subsidiaries then classified as having been incurred pursuant to this clause (1) after giving effect to such incurrence, does not exceed an amount equal to exceed $200.0 million less the greater aggregate amount applied by the Issuers and the Restricted Subsidiaries to permanently reduce the availability of $1,500 million and 22.5% of Consolidated Tangible Assets at the time of incurrenceIndebtedness under Credit Facilities pursuant to Section 4.10;
(2) the incurrence by the Issuers and the Restricted Subsidiaries of Existing Indebtedness;
(3) the incurrence by the Issuer Issuers and the Guarantors of Indebtedness represented by the Initial Notes issued on (other than Additional Notes) and the Issue Date and replacement Exchange Notes in respect thereof, if any (thereof and the incurrence by any Subsidiary Guarantor of any related Note Guarantee)Guarantees in accordance with the terms of this Indenture;
(4) the incurrence or issuance by the Issuer or any Restricted Subsidiary of the Issuer of Indebtedness (including Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction), Disqualified Stock or preferred stock, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development or improvement of plant, equipment or other property used or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvement, in an aggregate principal amount at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5) the incurrence by the Issuer or any Restricted Subsidiary of Permitted Refinancing Indebtedness in exchange for, or incurred the net cash proceeds of which are used to extend, renew, refund, refinance, replace, defease refinance or discharge any replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause (5a) of this Section 4.09 or clause clauses (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4), (13) or (1114) of this Section 4.10(bclause (b);
(65) the incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposes;
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) 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 (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer Issuers and any of its Restricted SubsidiariesSubsidiary; provided, however, that:
that (a) if the Issuer or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and 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 Issuer, or the Note Guarantee, in the case of a Subsidiary Guarantor; and
(i) any subsequent event or issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the an Issuer or a Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the an Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new an incurrence of such Indebtedness by the such Issuer or such Restricted Subsidiary, as the case may be, which new incurrence is that was not permitted by this clause (21)5) and (b) if such Indebtedness is owed by an Issuer or a Guarantor to a Restricted Subsidiary that is not a Guarantor, such Indebtedness shall be subordinated to the prior payment in full of the Notes;
(226) the issuance incurrence by any Restricted Subsidiary to the Issuer or to any other Restricted Subsidiary of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of Indebtedness permitted to be incurred by the an Issuer or any Restricted Subsidiary of Hedging Obligations that are incurred for the Issuer in accordance purpose of fixing or hedging currency, commodity or interest rate risk (including with the provisions of this Indenture; provided that in the event such respect to any floating rate Indebtedness that is being Guaranteed permitted by the terms of this Indenture to be outstanding and not for speculative purposes;
(7) the Guarantee by an Issuer of Indebtedness of any Restricted Subsidiary so long as the incurrence of such Indebtedness by such Restricted Subsidiary is Subordinated permitted to be incurred by another provision of this covenant;
(8) the Guarantee by any Restricted Subsidiary of Indebtedness of an Issuer or any Guarantor;
(9) Indebtedness consisting of customary indemnification, adjustments of purchase price or similar obligations, in each case, incurred or assumed in connection with the acquisition of any business or assets;
(10) Indebtedness incurred by an Issuer or any Restricted Subsidiary constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including without limitation to letters of credit in respect to workers’ compensation claims 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, then such obligations are reimbursed within 30 days following such drawing or incurrence;
(11) Indebtedness of an Issuer or a Restricted Subsidiary represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of an Issuer or such Restricted Subsidiary, whether through the direct purchase of assets or at least a majority of the Voting Stock of any person owning such assets, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (11), not to exceed $10.0 million at any time outstanding;
(12) Obligations in respect of performance and surety bonds and completion guarantees provided by an Issuer or any Restricted Subsidiary in the ordinary course of business;
(13) Acquisition Debt of an Issuer or a Restricted Subsidiary if (w) such Acquisition Debt is incurred within 270 days after the date on which the related Guarantee definitive acquisition agreement or LMA, as the case may be, was entered into by such Issuer or such Restricted Subsidiary, (x) the aggregate principal amount of such Acquisition Debt is no greater than the aggregate principal amount of Acquisition Debt set forth in a notice from such Issuer to the Trustee (an “Incurrence Notice”) within ten days after the date on which the related definitive acquisition agreement or LMA, as the case may be, was entered into by such Issuer or such Restricted Subsidiary, which notice shall be subordinated executed on such Issuer’s behalf by the chief financial officer of such Issuer in right of payment such capacity and shall describe in reasonable detail the acquisition or LMA, as the case may be, which such Acquisition Debt will be incurred to finance, (y) after giving pro forma effect to the Notes acquisition or LMA, as the Note Guaranteecase may be, described in such Incurrence Notice, such Issuer or such Restricted Subsidiary could have incurred such Acquisition Debt under this Indenture as of the date upon which such Issuer delivers such Incurrence Notice to the Trustee and (z) such Acquisition Debt is utilized solely to finance the acquisition or LMA, as the case may be, described in such Incurrence Notice (including to repay or refinance Indebtedness or other obligations incurred in connection with such acquisition or LMA, as the case may be, and to pay related fees and expenses);
(14) Indebtedness of the Issuers or any Guarantor incurred pursuant to any refinancing, replacement, redemption, substitution or repurchase of outstanding Holdco Notes or 7% Senior Subordinated Notes, including, in the case of the Holdco Notes, Indebtedness incurred to pay a dividend or make a distribution or loan to Parent to fund such refinancing, replacement, redemption, substitution or repurchase, in an aggregate principal amount (or if issued with original issue discount, an aggregate issue price) not in excess of the aggregate principal amount of the Holdco Notes or the 7% Senior Subordinated Notes so refinanced, replaced, redeemed or repurchased, plus the lesser of (a) the stated amount of any premium, interest or other payment required to be paid in connection with such refinancing, replacement, redemption, substitution or repurchase pursuant to the terms of the Holdco Notes or the 7% Senior Subordinated Notes, as applicable, or (b) Non-Guarantors the amount of premium, interest or other payment actually paid at such time to refinance, replace, redeem or repurchase the Holdco Notes or the 7% Senior Subordinated Notes plus, in either case, the amount of expenses of the Issuer incurred in connection with such refinancing, replacement, redemption or repurchase, provided that such Indebtedness (w) does not mature and is not subject to mandatory redemption at the option of the holder thereof (other than pursuant to change of control provisions or asset sale offers) prior to the 91st day after the Stated Maturity of the Notes, (x) does not have restrictive covenants or other terms that are more stringent in any material respect than the covenants set forth in this Indenture after giving effect to any amendment to this Indenture and the Notes made in compliance with this Indenture, (y) is not directly or indirectly guaranteed by any entity that does not also guarantee the Notes, and (z) provides that the Notes issued under this Indenture have priority with respect to Net Cash Proceeds from Asset Sales;
(15) the incurrence by an Issuer or any Restricted Subsidiary of additional Indebtedness, in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed $20.0 million;
(16) the incurrence by an Issuer or any of its Restricted Subsidiaries of Indebtedness arising from customary cash management services or 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;
(17) unsecured Indebtedness of an Issuer owing to any then existing or former director, officer or employee of such Issuer or any of its direct or indirect parent entities or Restricted Subsidiaries or their respective assigns, estates, heirs or their current or former spouses for the repurchase, redemption or other acquisition or retirement for value of any Equity Interest held by them that would have otherwise been permitted pursuant to Section 4.07(B)(5); and
(18) Indebtedness of an Issuer or any Restricted Subsidiary to the extent the proceeds of such Indebtedness are deposited and used to defease the Notes pursuant to Article 8 hereof or satisfy and discharge this Indenture pursuant to Article 13 hereof. 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 (18) above of clause (b) of this Section 4.09, or is entitled to be incurred pursuant to clause (a) of this Section 4.09, the Issuers will be permitted, in their sole discretion, to classify such item of Indebtedness on the date of its incurrence in any manner that complies with this covenant. In addition, the Issuers may, at any time, change the classification of an item of Indebtedness, or any portion thereof, to any other clause or to clause (a) of this Section 4.09; provided that the Issuers or a Restricted Subsidiary would be permitted to incur the item of Indebtedness, or portion of the item of Indebtedness, under the other clause or clause (a) of this Section 4.09, as the case may be, at the time of reclassification. Notwithstanding the foregoing, Indebtedness under the Credit Agreements outstanding on the Issue Date will be deemed to have been incurred on such date in reliance on the exception provided by clause (1) above. Accrual of interest or dividends, the accretion of accreted value, the accretion or amortization of original issue discount and the payment of interest or dividends in the form of additional Indebtedness, Disqualified Stock or Preferred Stock, as the case may be, of the same class will not be deemed to be an incurrence of Indebtedness, Disqualified Stock or Preferred Stock. For purposes of determining compliance with, and the outstanding principal amount of any particular Indebtedness incurred pursuant to and in compliance with, this Section 4.09, any other Non-Guarantors obligation of the obligor on such Indebtedness (or of any other Person who could have incurred such Indebtedness under this Section 4.09) arising under any Guarantee, Lien, letter of credit, bankers’ acceptance or other similar instrument or obligation supporting such Indebtedness shall be disregarded to the extent that such Guarantee, Lien, letter of credit, bankers’ acceptance or other similar instrument or obligation secures the principal amount of such Indebtedness. The Issuers will not incur any Indebtedness that is subordinate in accordance with right of payment to any other Indebtedness of the provisions Issuers unless it is subordinate in right of payment to the Notes at least to the same extent. The Issuers will not permit any Guarantor to incur any Indebtedness that is subordinate in right of payment to any other Indebtedness of such Guarantor unless it is subordinate in right of payment to such Guarantor’s Note Guarantee at least to the same extent. For purposes of this Indenture; and, no Indebtedness will be deemed to be subordinated in right of payment to any other Indebtedness of an Issuer or any Guarantor, as applicable, 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 Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "INCUR") any Indebtedness (including Acquired Debt), and shall 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 Issuer and its Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Issuer’s Restricted Subsidiaries Guarantors may incur Indebtedness (including Acquired Debt) or issue shares of preferred stock, ifif the Leverage Ratio, as of the Calculation Date, would have been no greater than (i) 4.25 to 1 in the case of any incurrence or issuance on or before December 31, 2007, (ii) 4.00 to 1 in the case of any incurrence or issuance on or after giving effect thereto January 1, 2008 and on or before December 31, 2009 and (iii) 3.50 to 1 in the case of any incurrence or issuance on or after January 1, 2010, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), either (i) as if the Fixed Charge Coverage Ratio for the Issuer’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is had been incurred or such the Disqualified Stock or the preferred stock is had been issued, as the case may be, would have been at least 2.0 to 1.0, or (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as of the end of the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been less than or equal to 1.75 to 1.0Calculation Date.
(b) The provisions of Section 4.10(a4.09(a) shall hereof will not prohibit prohibit, so long as no Default or Event of Default has occurred and is continuing, the incurrence of any Indebtedness that meets of the following criteria or the issuance items of any preferred stock that meets the following criteria, as applicable Indebtedness (collectively, “Permitted Debt”"PERMITTED DEBT"):
(1i) the incurrence by the Issuer or any Company and its Restricted Subsidiary Subsidiaries of Indebtedness pursuant to Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, in an aggregate principal amount at any one time outstanding not to exceed the greater of $1,500 million and 22.5% of Consolidated Tangible Assets at the time of incurrence;
(2) the Existing Indebtedness;
(3ii) the incurrence by the Issuer Company and the Guarantors of Indebtedness represented by the Initial Notes (other than Additional Notes) and the related Note Guarantees to be issued on the Issue Date and replacement Notes in respect thereof, if any date of this Indenture (and including the incurrence by any Subsidiary Guarantor of any related Note GuaranteeAdditional Notes);
(4iii) the incurrence or issuance by the Issuer Company or any of its Restricted Subsidiary of the Issuer Subsidiaries of Indebtedness (including represented by Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction)Obligations, Disqualified Stock financings or preferred stockpurchase money obligations, in each case, incurred or issued for the purpose of financing all or any part of the purchase price (whether in an asset acquisition or acquisition of Equity Interests) or cost of design, construction, lease, installation, development installation or improvement of plantproperty, plant or equipment or other property used or useful in a the Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development the Company or improvementany of its Restricted Subsidiaries, in an aggregate principal amount amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (iii), not to exceed $10.0 million at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5iv) the incurrence by the Issuer Company or any of its Restricted Subsidiary Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or incurred the net proceeds of which are used to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), the first paragraph of this clause covenant or clauses (5) or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Datei), (3), (4ii) or (11iii) of this Section 4.10(b4.09(b);
(6v) the incurrence by the Issuer Company or any of its Wholly-Owned 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, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and
(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 Wholly-Owned Restricted Subsidiary of the Company and (2) 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, not permitted by this clause (v);
(vi) the issuance by any of the Company's Wholly-Owned Restricted Subsidiaries to the Company or to any of its Wholly-Owned Restricted Subsidiaries that is a Guarantor of shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Wholly-Owned Restricted Subsidiary of the Company that is a Guarantor;
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Wholly-Owned Restricted Subsidiary of the Company that is a Guarantor, and
(C) will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary not permitted by this clause (vi);
(vii) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations for the purpose of managing the Company's (or any Restricted Subsidiary's) exposure to fluctuations in interest rates with respect to Indebtedness permitted to be Incurred by the Company pursuant to this Indenture or protecting the Company (or its Restricted Subsidiaries) against currency fluctuations in the ordinary course of business and not for speculative purposes;
(7viii) the guarantee by the Company or any of the Guarantors of Indebtedness of the Company or a Restricted Subsidiary of the Company that was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(ix) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness in constituting reimbursement obligations with respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, to letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred credit issued in the ordinary course of business; provided, however, that upon the drawing business in respect of letters of credit for reimbursement obligationsworkers' compensation claims or self-insurance, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such reimbursement type obligations are reimbursed within 30 days following such drawing or incurrenceregarding workers' compensation claims;
(8) x) the incurrence by the Issuer Company or any Restricted Subsidiary of its Indebtedness consisting of performance and other similar bonds and reimbursement obligations Incurred by the Company or any Restricted Subsidiaries Subsidiary securing the performance of contractual, franchise, concession or license obligations of the Company or a Restricted Subsidiary;
(xi) Attributable Debt with Respect to a Sale and Leaseback Transaction to the extent such Sale and Leaseback Transaction complies with the provisions under Section 4.20;
(xii) 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 in the ordinary course of businessbusiness provided, so long as however, that such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16xiii) Indebtedness of the Issuer Company, to the extent the net proceeds thereof in their entirety are (i) used solely to purchase Notes tendered in a Change of Control Offer or any Restricted Subsidiary of (ii) concurrently deposited to defease the Issuer Notes as described under Article 12;
(xiv) Indebtedness consisting of (ai) the financing of insurance premiums or (bii) take-or-take or pay obligations contained in supply arrangementsagreements, in each case in the ordinary course of business;; and
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21xv) the incurrence by the Issuer Company or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiaries; providedSubsidiaries of additional Indebtedness in an aggregate principal amount at any time outstanding, howeverincluding all Permitted Refinancing Indebtedness incurred to renew, that:
refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (axv), but excluding the indebtedness permitted by clauses (i) if the Issuer or through (xiv), not to exceed $10.0 million. The Company will not incur, and will not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and contractually 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 any other Indebtedness of the Issuer, Company or the Note Guarantee, in the case of a Subsidiary Guarantor; and
(i) any subsequent issuance or transfer of Equity Interests that results in any such Guarantor unless such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, which new incurrence is not permitted by this clause (21);
(22) the issuance by any Restricted Subsidiary to the Issuer or to any other Restricted Subsidiary of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be also contractually subordinated in right of payment to the Notes or and the applicable Note Guarantee, as the case may be, and (b) Non-Guarantors of Indebtedness incurred by other Non-Guarantors in accordance with the provisions of this Indenture; andGuarantee on substantially identical terms.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer Company shall not, and 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 with respect to (or, collectively, “incur”) any Indebtedness (including Acquired Debt), ) and the Company shall not permit any of its Restricted Subsidiaries Subsidiary to issue any shares of preferred stock; provided, however, that the Issuer and its Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) and the Issuer’s may permit a Restricted Subsidiaries may Subsidiary to incur Indebtedness or issue shares of preferred stock, stock if, at the time of such incurrence or issuance and after giving effect thereto and the on a Pro Forma Basis (including a pro forma application of the net proceeds therefrom), either (i) the Fixed Charge Coverage Ratio for the Issuer’s most recently ended four full fiscal quarters immediately preceding such incurrence or issuance for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issuedavailable, taken as the case may beone period, would have been at least 2.0 to 1.0, or (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as of the end of the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been less than or equal to 1.75 to 1.0.
(b) Section 4.10(a) . The foregoing limitations shall not prohibit the incurrence of any Indebtedness that meets the following criteria or the issuance of any preferred stock that meets the following criteria, as applicable (collectively, “Permitted Debt”):apply to:
(1) the incurrence by the Issuer Company or any Restricted Subsidiary of Indebtedness pursuant to and letters of credit under Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, 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 the Restricted Subsidiaries thereunder) not to exceed the greater of $1,500 million and 22.5% of Consolidated Tangible Assets at the time of incurrence3,260.0 million;
(2) the Existing Indebtednessissuance of the Note Guarantees on the date hereof;
(3) the incurrence by the Issuer of Indebtedness represented by the Initial Notes issued on the Issue Date and replacement Notes in respect thereof, if any (Company and the incurrence by any Subsidiary Guarantor Restricted Subsidiaries of any related Note Guarantee)the Existing Indebtedness;
(4) the incurrence or issuance by the Issuer or any Restricted Subsidiary of the Issuer of Indebtedness (including Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction), Disqualified Stock or preferred stock, in each case, incurred or issued for Notes on the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development or improvement of plant, equipment or other property used or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvement, in an aggregate principal amount at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrencedate hereof;
(5) the incurrence by the Issuer or any Company and the Restricted Subsidiary Subsidiaries of Permitted Capital Lease Obligations, mortgage financings and/or Indebtedness constituting purchase money obligations, including all Refinancing Indebtedness in exchange forincurred with respect thereto, or incurred up to extend, renew, refund, refinance, replace, defease or discharge an aggregate at any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause (5) or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds one time outstanding of the Initial Notes issued on the Issue Date), greater of (3), i) $250.0 million and (4ii) or (11) 5.0% of this Section 4.10(b)Consolidated Total Assets as of any date of incurrence;
(6) the incurrence by or issuance of Indebtedness or preferred stock between (i) the Issuer or any of its Company and the Restricted Subsidiaries of Hedging Obligations not for speculative purposesand (ii) the Restricted Subsidiaries;
(7) the incurrence by the Issuer or any of its Company and the Restricted Subsidiaries of Indebtedness in respect Hedging Obligations not for purposes of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrencespeculation;
(8) the incurrence by the Issuer Company and the Restricted Subsidiaries in respect of performance bonds, bankers’ acceptances, workers’ compensation claims, surety, bid, appeal or similar bonds, completion guarantees, payment obligations in connection with self-insurance or similar obligations, and bank overdrafts (and letters of credit in respect thereof) in the ordinary course of business;
(9) the incurrence by the Company and the Restricted Subsidiaries of Indebtedness consisting of “earn-out” obligations, Guarantees, indemnities or obligations in respect of purchase price adjustments in connection with the acquisition or disposition of assets, including, without limitation, shares of Capital Stock;
(10) the incurrence by the Company 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 (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of businessfunds, so long as such Indebtedness is extinguished covered within five (5) Business Days;
(911) the incurrence Guarantee by the Company or any Subsidiary Guarantor of Indebtedness arising from agreements of the Issuer Company or a Restricted Subsidiary and the Guarantee by any non-Guarantor Subsidiary of the Issuer providing for indemnification, adjustment Indebtedness of purchase price, holdback, contingency payment obligations or similar obligationsanother non-Guarantor Subsidiary, in each case, to the extent that the Guaranteed Indebtedness was permitted to be incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms another provision of this IndentureSection 4.10; provided that immediately after giving effect to such acquisition, any of if the following Indebtedness being Guaranteed is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal contractually subordinated to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) Notes or the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would Note Guarantees, as applicable, then the Guarantee must be less than or equal subordinated to the Issuer’s actual same extent as the Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisitionGuaranteed;
(12) the incurrence by the Company and the Restricted Subsidiaries of Refinancing Indebtedness issued in exchange for, or the proceeds of which are used to repay redeem, defease, extend, refinance, renew, replace or refund, Indebtedness (other than intercompany Indebtedness) referred to in clauses (2) through (5) above, this clause (12) or clause (13) below or that was otherwise permitted to be incurred pursuant to the Issuer or a Restricted Subsidiary test set forth in the first paragraph of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or lessthis Section 4.10;
(13) the incurrence or issuance by the Issuer Company or a any Restricted Subsidiary of the Issuer 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 pursuant to this clause (13), not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence50.0 million;
(14) Acquired Debt and any other Indebtedness incurred to finance a merger, consolidation or other acquisition; provided that on a Pro Forma Basis, either (A) the incurrence Company’s Fixed Charge Coverage Ratio would be equal to or greater than the Company’s Fixed Charge Coverage Ratio immediately prior to such merger, consolidation or other acquisition or (B) the Company would have been able to incur at least $1.00 of guarantees by additional Indebtedness pursuant to the Issuer or a Restricted Subsidiary first paragraph of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuerthis Section 4.10;
(15) Indebtedness the incurrence net proceeds of which have been deposited in escrow to finance the repayment or redemption of such Indebtedness by pursuant to customary escrow arrangements pending the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligationsrelease thereof;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of businessthat has been discharged;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture Joint Venture agreement as a result of the a failure of the Issuer Company or any a Restricted Subsidiary of the Issuer to make a required capital contribution therein; provided that the only recourse on such Indebtedness is limited to the Company’s or such Restricted Subsidiary’s equity interests in the related Joint Venture;
(18i) obligations Indebtedness representing deferred compensation to employees of the Issuer Company or any of its Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into Subsidiaries incurred in the ordinary course of business business, and (ii) Indebtedness consisting of obligations of the Company or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;any Investment permitted under Section 4.9; and
(19) Indebtedness consisting of Indebtedness issued by the Issuer Company or any Restricted Subsidiary in an aggregate principal amount up to 100% of the Issuer Equity Proceeds received by the Company after the Issue Date from the issue or sale of Equity Interests of the Company or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) to the extent such Equity Proceeds have not been applied pursuant to clause (iii)(b) of the first paragraph of Section 4.9, or clause (2) or clause (9) of the second paragraph of Section 4.9, to make Restricted Payments, and provided, that any such Equity Proceeds shall be excluded for purposes of making Restricted Payments pursuant to any current or former officer, director, employee or consultant of clause (iii)(b) of the Issuer first paragraph of Section 4.9, or clause (2) or clause (9) of the second paragraph of Section 4.9, to the extent the Company or any Restricted Subsidiary of incur Indebtedness in reliance thereon. Notwithstanding the Issuerforegoing, in each case Restricted Subsidiaries that are non-Guarantor Subsidiaries will not be permitted to finance the repurchase, redemption incur Indebtedness or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer issue preferred stock pursuant to the extent described in first paragraph of this Section 4.08(b)(4);
4.10 or clause (2013) Guarantees issued from time above if, after giving effect to time by such incurrence or issuance, the Issuer or aggregate principal amount of Indebtedness of such Restricted Subsidiaries of the Issuer of Indebtedness that are non-Guarantor Subsidiaries (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of excluding intercompany Indebtedness between or among the Issuer Company and any of its the Restricted Subsidiaries; provided) outstanding pursuant to such first paragraph or such clause, howevertogether with the aggregate liquidation preference of preferred stock issued by such Restricted Subsidiaries that are non-Guarantor Subsidiaries (excluding intercompany preferred stock issued between or among the Company and the Restricted Subsidiaries) outstanding pursuant to such provisions, that:
would exceed the greater of (ax) if $1.25 billion and (y) 1.25x Adjusted EBITDA as of any date of incurrence. The Company will not incur, and the Issuer or Company will not permit any Subsidiary Guarantor to incur, any Indebtedness that is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and contractually 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 any other Indebtedness of the Issuer, Company or the Note Guarantee, in the case of a such Subsidiary Guarantor; and
(i) any subsequent issuance or transfer of Equity Interests that results in any Guarantor unless such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, which new incurrence is not permitted by this clause (21);
(22) the issuance by any Restricted Subsidiary to the Issuer or to any other Restricted Subsidiary of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be 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 Company or a Subsidiary 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 4.10, for the avoidance of doubt, 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 (19) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.10, the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.10. Indebtedness under the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will at all times be deemed to have been incurred on such date in reliance on the exception provided by clause (1) above. The accrual of interest or preferred stock dividends, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on preferred stock or Disqualified Stock in the form of additional 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 4.10; provided, in each such case, that the amount thereof is included in the 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, the U.S. Dollar-equivalent principal amount of Indebtedness denominated in a currency other than U.S. Dollars will be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred; provided that if such Indebtedness is incurred to extend, replace, refund, refinance, renew or defease, or that is exchanged for, other Indebtedness denominated in a currency other than U.S. Dollars, and such extension, replacement, refunding, refinancing, renewal, defeasance or exchange 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 extension, replacement, refunding, refinancing, renewal, defeasance or exchange, 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 extended, replaced, refunded, refinanced, renewed, defeased or exchanged. Notwithstanding any other provision of this Section 4.10, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.10 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:
(1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(i) the Fair Market Value of such assets at the date of determination; and
(ii) the amount of the Indebtedness of the other Person. In connection with the incurrence of (i) revolving loan Indebtedness under this Section 4.10 or (ii) any commitment relating to the incurrence of Indebtedness under this Section 4.10 and (in respect of both (i) and (ii)) the granting of any Lien to secure any such Indebtedness, the Company or the Note Guaranteeapplicable Restricted Subsidiary may designate, such incurrence and the granting of any such Lien as having occurred on the case may bedate of first incurrence of such revolving loan Indebtedness or commitment (such date, the “Deemed Date”), and any related subsequent actual incurrence or granting of any such Lien therefor will be deemed for all purposes under this Indenture to have been incurred or granted on such Deemed Date, including, without limitation, for purposes of calculating the Senior Leverage Ratio and usage of any other baskets or ratios under this Indenture (b) Non-Guarantors as applicable). The amount of Indebtedness that may be incurred by other Non-Guarantors in accordance with the provisions pursuant to any provision of this IndentureSection 4.10 or secured pursuant to Section 4.11 (i) shall be deemed to include all amounts necessary to renew, refund, redeem, refinance, replace, restructure, defease or discharge any such Indebtedness incurred and/or secured pursuant to such provisions, including after giving effect to additional Indebtedness in an amount equal to the aggregate amount of fees, premia, underwriting discounts and other costs and expenses incurred in connection with such renewal, refund, redemption, refinancing, replacement, restructuring, defeasance or discharge; and (ii) in any case where such amounts are or may be based on Consolidated Total Assets or Adjusted EBITDA (or any ratio of which Adjusted EBITDA is a component), shall not be deemed to be exceeded, with respect to such incurrence or grant of Lien, due solely to the result of fluctuations in the amount of Consolidated Total Assets or Adjusted EBITDA (and, for the avoidance of doubt, such Indebtedness and such Lien will be permitted to be refinanced or replaced notwithstanding that, after giving effect to such refinancing or replacement, such excess will continue).
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), neither the Company nor any Restricted Subsidiary will issue any Disqualified Stock and shall the Company will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Issuer Company and its any Restricted Subsidiaries Subsidiary may incur Indebtedness (including Acquired Debt) and the Issuer’s Restricted Subsidiaries may or issue shares of preferred stockDisqualified Stock, if, after giving effect thereto and the application of the proceeds therefrom, either (i) if the Fixed Charge Coverage Ratio for the IssuerCompany’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 preferred stock Disqualified Stock is 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 additional Indebtedness had been incurred or the Disqualified Stock had been issued, as the case may be, would have been at least 2.0 to 1.0, or (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as beginning of the end of the Issuer’s most recently ended fiscal such four-quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been less than or equal to 1.75 to 1.0period.
(b) The provisions of Section 4.10(a4.09(a) shall hereof will not prohibit the incurrence of any Indebtedness that meets of the following criteria or the issuance items of any preferred stock that meets the following criteria, as applicable Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer Company or any Restricted Subsidiary of additional Indebtedness pursuant (including letters of credit) under one or more Credit Facilities, provided that, after giving effect to Credit Facilities or Project Loansany such incurrence, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, in an aggregate principal amount at any one time 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 Subsidiaries thereunder) and then outstanding does not exceed an amount equal to exceed the greater greatest of (a) $1,500 500.0 million (provided, however, that no more than $150.0 million aggregate principal amount may be incurred and 22.5% of Consolidated Tangible Assets outstanding under this clause by Restricted Subsidiaries that are not Subsidiary Guarantors), (b) the Borrowing Base in effect at the time of such incurrence (provided, however, that no more than $150.0 million aggregate principal amount may be incurred and outstanding under this clause by Restricted Subsidiaries that are not Subsidiary Guarantors), and (c)(i) prior to the date that the requisite EPL Entities become Subsidiary Guarantors in accordance with Section 4.17, 12.5% of Modified ACNTA on the date of incurrence;, or (ii) thereafter, 15.0% of Modified ACNTA on the date of incurrence
(2) the incurrence by the Company or any of its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuer Company and the Subsidiary Guarantors of Indebtedness represented by the Initial Notes and the related Guarantees to be issued on the Issue Date and replacement Notes in respect thereof, if any (and the incurrence by any Subsidiary Guarantor of any related Note Guarantee)Date;
(4) the incurrence or issuance by the Issuer Company or any of its Restricted Subsidiary of the Issuer Subsidiaries of Indebtedness (including represented by Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction)Obligations, Disqualified Stock mortgage financings or preferred stockpurchase money obligations, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development installation or improvement of plantproperty, plant or equipment used in the business of the Company or other property used or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvementRestricted Subsidiary, in an aggregate principal amount amount, 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 $35.0 million at any time outstanding, together with any Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5) the incurrence by the Issuer Company or any of its Restricted Subsidiary Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or incurred the net proceeds of which are used to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a4.09(a) hereof or clauses (2), (3) or (12) of this Section 4.09(b) or this clause (5) or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4) or (11) of this Section 4.10(b);
(6) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Hedging intercompany Indebtedness, Disqualified Stock or preferred stock between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company is the obligor on such Indebtedness and a Subsidiary Guarantor is not the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Notes, or if a Subsidiary Guarantor is the obligor on such Indebtedness and neither the Company nor another Subsidiary Guarantor is the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Guarantee of such Subsidiary Guarantor; and
(B) any (i) subsequent issuance or transfer of Equity Interests that results in any such Indebtedness, Disqualified Stock or preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company, and (ii) sale or other transfer of any such Indebtedness, Disqualified Stock or preferred stock to a Person that is not for speculative purposeseither the Company or a Restricted Subsidiary of the Company will be deemed, in each case, to constitute an incurrence of such 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 incurrence by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations;
(8) the guarantee by the Company or any of the Subsidiary Guarantors of Indebtedness of the Company or any Subsidiary Guarantor that was permitted to be incurred by another provision of this Section 4.09;
(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 incurrence by the Company’s 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 will be deemed to constitute an incurrence of Indebtedness by a Restricted Subsidiary of the Company that is not permitted by this clause (10);
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bondsbid, performance, completion surety and compliance guarantees or other similar obligations incurred 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 and any of its Restricted Subsidiaries with respect to letters of credit supporting such obligations (in each case other than 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 upon at the drawing time such Restricted Subsidiary is acquired by the Company, the Company would have been able to incur $1.00 of letters of credit for reimbursement obligations, or additional Indebtedness pursuant to Section 4.09(a) after giving effect to the incurrence of other reimbursement-type Indebtedness with respect such Indebtedness, Disqualified Stock or preferred stock pursuant to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrencethis clause (12);
(8) 13) the incurrence by the Issuer 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 in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer Company or a any of its Restricted Subsidiary of the Issuer Subsidiaries providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations price or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests Capital Stock of a Subsidiary, provided that the Issuer or any 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 SubsidiarySubsidiaries in connection with such disposition;
(1014) the incurrence by the Company or any of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;50.0 million; and
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described the proceeds thereof are used to finance insurance premiums. Notwithstanding anything to the contrary in this Section 4.08(b)(4);
(20) Guarantees issued from time to time by 4.09, the Issuer or Company and its Restricted Subsidiaries of the Issuer of will not incur any Indebtedness (other than Designated SPE Debtany DIP Financing (as defined in and as permitted by the Intercreditor Agreement)) incurred secured by any joint venture in which a Priority Lien unless the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries principal amount of such joint ventures), in an amount not to exceed at Indebtedness (other than any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21DIP Financing) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Issuer or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and subordinated pari passu in right of payment to with the prior payment in full in cash principal amount of all Obligations then due other Indebtedness secured by a Priority Lien. For purposes of determining compliance with respect to the Notesthis Section 4.09, in the case event that an item of Indebtedness (including Acquired Debt) meets the criteria of more than one of the Issuercategories of Permitted Debt described in clauses (1) through (15) of this Section 4.09, or is entitled to be incurred pursuant to Section 4.09(a), the Note Guarantee, Company will be permitted to classify (or later classify or reclassify in the case whole or in part in its sole discretion) such item of a Subsidiary Guarantor; and
(i) any subsequent issuance or transfer of Equity Interests that results Indebtedness in any such manner that complies with this covenant; provided that any Indebtedness being held by under the Credit Agreement on the Issue Date after giving effect to the use of proceeds of the Notes shall be considered incurred under clause (1) of the definition of “Permitted Debt” of this Section 4.09 and may not be later reclassifed. The amount of Indebtedness issued at a Person other price that is less than the Issuer or a Restricted Subsidiary and (ii) any sale or other transfer principal amount thereof will be equal to the amount of the liability in respect thereof determined in accordance with GAAP. Indebtedness of any Person existing at the time such Indebtedness to a Person that is not either the Issuer or becomes a Restricted Subsidiary shall be deemeddeemed to have been incurred by the Company and the Restricted Subsidiary at the time such Person becomes a Restricted Subsidiary. 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 covenant; provided, in each such case, to constitute a new incurrence of such Indebtedness by that the Issuer or such Restricted Subsidiary, as the case may be, which new incurrence amount thereof is not permitted by this clause (21);
(22) the issuance by any Restricted Subsidiary to the Issuer or to any other Restricted Subsidiary of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results included in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary Fixed Charges of the Issuer in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be subordinated in right of payment to the Notes or the Note Guarantee, Company as the case may be, and (b) Non-Guarantors of Indebtedness incurred by other Non-Guarantors in accordance with the provisions of this Indenture; andaccrued.
Appears in 1 contract
Samples: Indenture (Energy XXI LTD)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Parent will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt); the Parent will not, and shall will not permit any of its Restricted Subsidiaries to, issue any Disqualified Stock; and the Parent will not permit any of its Restricted Subsidiaries to issue any shares of other preferred stocksecurities; providedunless, however, that the Issuer and its Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) and the Issuer’s Restricted Subsidiaries may issue shares of preferred stock, if, after giving effect thereto and the application of the proceeds therefrom, either (i) the Fixed Charge Coverage Ratio for the IssuerParent’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 other preferred stock is securities are issued, as the case may be, Parent’s Fixed Charge Coverage Ratio would have been at least 2.0 to 1.0, or determined on a pro forma basis (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as including a pro forma application of the end of net proceeds therefrom), as if the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is had been incurred or such Disqualified Stock or other preferred stock is securities had been issued, as the case may be, would have been less than or equal to 1.75 to 1.0at the beginning of such four-quarter period.
(b) Section 4.10(a4.09(a) shall will not prohibit the incurrence of any Indebtedness that meets of the following criteria or the issuance items of any preferred stock that meets the following criteria, as applicable Indebtedness (collectively, “Permitted Debt”):) or the issuance of any preferred securities described in Section 4.09(b)(10) below:
(1) the incurrence by the Issuer Parent or any of its Restricted Subsidiary Subsidiaries of additional Indebtedness pursuant under one or more Credit Facilities, provided that, after giving effect to Credit Facilities or Project Loansany such incurrence (including the application of the proceeds therefrom), including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, in an aggregate principal amount at any one time of all Indebtedness incurred under this Section 4.09(b)(1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Parent and its Subsidiaries thereunder) and then outstanding does not to exceed the greater of (i) $1,500 680.0 million or (ii) the sum of (x) $300.0 million and 22.5(y) 30.0% of the Parent’s Consolidated Net Tangible Assets at the time of incurrenceAssets;
(2) the incurrence by the Parent or its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuer Issuers and any Guarantor of Indebtedness represented by (a) the Initial Notes issued on the Issue Date and replacement Notes in respect thereof, if any (and the incurrence by any Subsidiary Guarantor of any related Note Guarantee)Guarantees and (b) the Exchange Notes and the related Note Guarantees issued pursuant to any Registration Rights Agreement;
(4) the incurrence or issuance by the Issuer Parent or any of its Restricted Subsidiary of the Issuer Subsidiaries of Indebtedness (including represented by Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction)Obligations, Disqualified Stock mortgage financings or preferred stockpurchase money obligations, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development construction or improvement of plantproperty, plant or equipment used in the business of the Parent or other property used or useful in a Permitted Business which occurs within 365 days any of such purchaseits Restricted Subsidiaries, design, construction, lease, installation, development or improvement, in an aggregate principal amount at any time outstanding, together with any including all Permitted Refinancing Indebtedness in respect thereof, not to exceed the greater of $25.0 million and 1.0% of Consolidated Tangible Assets at the time of incurrence;
(5) the incurrence by the Issuer or any Restricted Subsidiary of Permitted Refinancing Indebtedness in exchange for, or incurred to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this Section 4.09(b) (4), provided that after giving effect to such incurrence (including the application of the proceeds therefrom) the aggregate principal amount of all Indebtedness incurred pursuant to this Section 4.09(b)(4) and then outstanding does not exceed the greater of (i) $40.0 million and (ii) 3.0% of the Parent’s Consolidated Net Tangible Assets;
(5) the incurrence by the Parent 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 Indebtedness of the Parent or any of its Restricted Subsidiaries (other than intercompany Indebtedness) ), in each case, that was permitted by this Indenture to be incurred under Section 4.10(a), this clause (54.09(a) or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue DateSection 4.09(b)(2), (3), (4) or (1116) of or this Section 4.10(b4.09(b) (5);
(6) the incurrence by the Issuer Parent or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposes;
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) 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 (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer Parent and any of its Restricted Subsidiaries, including between or among its Restricted Subsidiaries; provided, however, that:
(a) if the Issuer or any Subsidiary Guarantor Parent is the obligor on such Indebtedness and the obligee is not the an Issuer or a Subsidiary GuarantorGuarantor is not the obligee, 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 Issuer, or the Parent’s Note Guarantee, or if a Subsidiary Guarantor or an Issuer is the obligor on such Indebtedness and neither the Parent nor another Subsidiary Guarantor or an Issuer is the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Note Guarantee of such Subsidiary Guarantor or the Notes, as the case may be, except, in any case, in respect of intercompany Indebtedness incurred in the case ordinary course of a Subsidiary Guarantorbusiness in connection with the cash management operations of the Parent and its Restricted Subsidiaries; 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 Issuer Parent or a Restricted Subsidiary of the Parent and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either neither the Issuer or Parent nor a Restricted Subsidiary shall of the Parent will be deemed, in each case, to constitute a new an incurrence of such Indebtedness by the Issuer Parent or such Restricted Subsidiary, as the case may be, which new incurrence is that was not permitted by this clause (21Section 4.09(b)(6);
(227) the incurrence by the Parent or any of its Restricted Subsidiaries of obligations under Hedging Contracts;
(8) the guarantee by the Parent or any of its Restricted Subsidiaries of Indebtedness of the Parent 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 Parent or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, bank guarantees, warehouse receipt or similar facilities, property, casualty or liability insurance, take-or-pay obligations in supply arrangements, self-insurance obligations or completion, bid, performance, surety, customs, appeals and advance payment bonds, standby letters of credit or surety and similar obligations issued for the account of the Parent and any of its Restricted Subsidiaries in the ordinary course of business or in connection with the enforcement of rights or claims of the Parent or any of its Restricted Subsidiaries or in connection with judgments that do not result in a Default or an Event of Default, including guarantees or obligations of the Parent 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 Parent’s Restricted Subsidiary Subsidiaries to the Issuer Parent or to any other of its Restricted Subsidiary Subsidiaries of shares of any preferred stocksecurities; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock securities being held by a Person other than the Issuer Parent or a Restricted SubsidiarySubsidiary of the Parent; and
(b) any sale or other transfer of any such preferred stock securities to a Person that is not either the Issuer Parent or a Restricted Subsidiary of the Parent shall be deemed, in each case, to constitute a new issuance an issuance, sale or other transfer (as of the date of such issuance, sale or other transfer) of such preferred stock securities by such Restricted Subsidiary, which new issuance is Subsidiary that was not permitted by this clause (22Section 4.09(b)(10);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a11) the Issuer incurrence by the Parent or any of its Restricted Subsidiaries of liability in respect of the Indebtedness of any Unrestricted Subsidiary Guarantor of the Parent or any Joint Venture but only to the extent that such liability is the result of the Parent’s or any such Restricted Subsidiary’s guarantee of such Indebtedness or of the Parent or any such Restricted Subsidiary being a general partner of such Unrestricted Subsidiary or Joint Venture and provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this Section 4.09(b)(11) and then outstanding does not exceed the greater of (i) $65.0 million and (ii) 5.0% of the Parent’s Consolidated Net Tangible Assets;
(12) the incurrence by the Parent or any of its Restricted Subsidiaries of (i) Indebtedness representing deferred compensation to directors, officers, members of management or employees of the Parent or any of its Restricted Subsidiaries and incurred in the ordinary course of business and (ii) Indebtedness consisting of promissory notes issued by the Parent or any of its Restricted Subsidiaries to any current or former employee, director or consultant of the Parent (or any direct or indirect parent of the Parent) or any of its Restricted Subsidiaries (or permitted transferees, assigns, spouses or former spouses, estates or heirs of such employee, director or consultant), to finance the purchase or redemption of Equity Interests of the Parent (or any direct or indirect parent of the Parent) that is permitted by Section 4.07;
(13) the incurrence by the Parent or any of its Restricted Subsidiaries of Indebtedness permitted arising in connection with endorsement of instruments for deposit in the ordinary course of business;
(14) the incurrence by the Parent or any of its Restricted Subsidiaries of any obligation, or guarantee of any obligation, to reimburse or indemnify a Person extending credit to customers of the Parent or any of its Restricted Subsidiaries incurred in the ordinary course of business or consistent with past practice for all or any portion of the amounts payable by such customers to the Persons extending such credit;
(15) the incurrence by the Parent or any of its Restricted Subsidiaries of Indebtedness to a customer to finance the acquisition of any equipment necessary for the Company or such Restricted Subsidiary to perform services for such customer in the ordinary course of business;
(16) the incurrence by the Parent or any of its Restricted Subsidiaries of Permitted Acquisition Indebtedness; and
(17) the incurrence by the Parent or any of its Restricted Subsidiaries of additional Indebtedness in aggregate principal amount at any time then outstanding, including any Permitted Refinancing Indebtedness incurred to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this Section 4.09(b)(17), does not exceed the greater of (i) $65.0 million or (ii) 5.0% of the Parent’s Consolidated Net Tangible Assets. For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness (including Acquired Debt), Disqualified Stock or other preferred securities meets the criteria of more than one of the categories of Permitted Debt described in Section 4.09(b)(1) through (17) above, or is entitled to be incurred by or issued pursuant to Section 4.09(a), the Issuer Company will be permitted to classify (or later classify or reclassify in whole or in part in its sole discretion) such item in any Restricted Subsidiary manner that complies with this covenant. Any Indebtedness under the Credit Agreement outstanding on the Issue Date shall be considered incurred under Section 4.09(b)(1) and may not later be classified or reclassified as incurred pursuant to Section 4.09(a). 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 accrual, accumulation or payment of dividends on Disqualified Stock or other preferred securities in the form of additional shares or units of the Issuer in accordance with same class of Disqualified Stock or other preferred securities, as the provisions case may be, will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock or other preferred securities for purposes of this Indenture; provided that in the event such Section 4.09. For purposes of this Section 4.09, (i) unsecured Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall 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 (ii) Indebtedness of any Person will not be deemed to be subordinated in right of payment to Indebtedness of a Restricted Subsidiary of such Person merely because it is structurally subordinated thereto. Further, the Notes accounting reclassification of any obligation of the Parent 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 Note Guaranteeincurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term Indebtedness, or first committed, in the case of revolving credit Indebtedness; provided that if such Indebtedness is incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar-dominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-dominated restriction shall be deemed not to have been exceeded so long as the case may beprincipal 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, and (b) Non-Guarantors the maximum amount of Indebtedness that the Parent and 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 the exchange rate of currencies. The principal amount of any Permitted Refinancing Indebtedness, if incurred by other Non-Guarantors in accordance with a different currency from the provisions 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 this Indenture; andsuch refinancing.
Appears in 1 contract
Samples: Indenture (Exterran Corp)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt), and the Company shall not issue any Disqualified Stock 61 70 and shall not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Issuer and its Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Issuer’s Restricted Subsidiaries Guarantors may incur Indebtedness or issue shares of preferred stock, if, after giving effect thereto and the application of the proceeds therefrom, either (i) if the Fixed Charge Coverage Ratio for the Issuer’s Company's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or preferred stock is issued would have been at least 2.0 to 1, if such additional Indebtedness is incurred or such Disqualified Stock or preferred stock is issued on or prior to October 15, 2002, or 2.25 to 1, if such additional Indebtedness is incurred or such Disqualified Stock or preferred stock is issued thereafter, 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 had been issued, as the case may be, would have been at least 2.0 to 1.0, or (ii) the Indebtedness to Consolidated Tangible Net Worth Ratio as beginning of the end such four-quarter period; The first paragraph of the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been less than or equal to 1.75 to 1.0.
(b) this Section 4.10(a) 4.09 shall not prohibit the incurrence any of any Indebtedness that meets the following criteria or the issuance of any preferred stock that meets the following criteria, as applicable (collectively, “"Permitted Debt”"):
(1i) the incurrence by the Issuer or Company and any Restricted Subsidiary Guarantor of additional Indebtedness pursuant to and letters of credit under Credit Facilities or Project Loans, including any Guarantee of such Indebtedness or any Guarantee of Designated SPE Debt by the Issuer or any Restricted Subsidiary, in an aggregate principal amount at any one time outstanding under this clause (i) (with letters of credit being deemed to have a principal amount equal to the face amount thereof) not to exceed $330.0 million plus the greater of (x) $1,500 125.0 million and 22.5(y) the amount equal to 85% of Consolidated Tangible Assets the net book value of receivables and 65% of the net book value of inventory of the Company and its Restricted Subsidiaries on a consolidated basis at the time such Indebtedness is incurred, as determined in accordance with GAAP, less the aggregate amount of incurrenceall scheduled repayments and mandatory prepayments, of the principal amount of any term Indebtedness under a Credit Facility (other than repayments that are concurrently reborrowed) that have actually been made since the date of this Indenture and less the aggregate amount of all Net Proceeds of Asset Sales that have actually been applied by the Company or any of its Restricted Subsidiaries since the date of this Indenture to repay revolving credit Indebtedness to the extent that the corresponding revolving credit commitments have been permanently reduced under a Credit Facility pursuant to Section 4.10 hereof (provided that such amount shall be reduced to the extent of any reduction or elimination of any commitment under any Credit Facility resulting from or relating to the consummation of any Qualified Receivables Transaction; provided that such reduction shall apply only for so long as such Qualified Receivables Transaction is in effect);
(2ii) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3iii) the incurrence by the Issuer Company and the Guarantors of Indebtedness represented by the Initial Notes and the related Subsidiary Guarantees to be issued on the Issue Date date of this Indenture and replacement the Exchange Notes in respect thereof, if any and the related Subsidiary Guarantees to be issued pursuant to the Registration Rights Agreement; 62 71 (and iv) the incurrence by any Subsidiary Guarantor of any related Note Guarantee);
(4) the incurrence or issuance by the Issuer Company or any of its Restricted Subsidiary of the Issuer Subsidiaries of Indebtedness (including represented by Capital Lease Obligations and Indebtedness incurred in connection with a sale/leaseback transaction)Obligations, Disqualified Stock mortgage financings or preferred stockpurchase money obligations, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation, development construction or improvement of plantproperty, plant or equipment used in the business of the Company or other property used or useful in a Permitted Business which occurs within 365 days of such purchase, design, construction, lease, installation, development or improvementRestricted Subsidiary, in an aggregate principal amount at any time outstandingamount, together with any including all Permitted Refinancing Indebtedness in respect thereofincurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (iv), not to exceed the greater of $25.0 million and 1.03% of Consolidated Tangible Total Assets at the time of incurrence;
(5) the incurrence by the Issuer or any Restricted Subsidiary of Permitted Refinancing Indebtedness in exchange for, or incurred to extend, renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.10(a), this clause (5) or clause (2) (other than the Existing Notes which are being repurchased or redeemed with the net proceeds of the Initial Notes issued on the Issue Date), (3), (4) or (11) of this Section 4.10(b);
(6) the incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposes;
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided, however, that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;
(8) 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 (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;
(9) the incurrence of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary of the Issuer providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Equity Interests of the Issuer or any such Restricted Subsidiary;
(10) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;
(11) Acquired Debt or Indebtedness or preferred stock of the Issuer or its Restricted Subsidiaries incurred to provide all or a portion of the funds utilized to acquire Persons that are acquired by the Issuer or any Restricted Subsidiary of the Issuer (including by way of merger, amalgamation or consolidation) in accordance with the terms of this Indenture; provided that immediately after giving effect to such acquisition, any of the following is true:
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to Section 4.10(a);
(b) the Issuer’s Fixed Charge Coverage Ratio after giving pro forma effect to such acquisition would be greater than or equal to the Issuer’s actual Fixed Charge Coverage Ratio immediately prior to such acquisition; or
(c) the Issuer’s Indebtedness to Consolidated Tangible Net Worth Ratio after giving pro forma effect to such acquisition would be less than or equal to the Issuer’s actual Indebtedness to Consolidated Tangible Net Worth Ratio immediately prior to such acquisition;
(12) Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;
(13) the incurrence or issuance by the Issuer or a Restricted Subsidiary of the Issuer of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed the greater of $150.0 million and 3.0% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(14) the incurrence of guarantees by the Issuer or a Restricted Subsidiary of the Issuer in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary of the Issuer;
(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligation) in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(17) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary of the Issuer to make a required capital contribution therein;
(18) obligations of the Issuer or any Restricted Subsidiary of the Issuer under an agreement with any governmental authority or adjoining (or common masterplan) landowner, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;
(19) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary of the Issuer to any current or former officer, director, employee or consultant of the Issuer or any Restricted Subsidiary of the Issuer, in each case to finance the repurchase, redemption or other acquisition or retirement for value of any Management Warrants or other Equity Interests of the Issuer to the extent described in Section 4.08(b)(4);
(20) Guarantees issued from time to time by the Issuer or Restricted Subsidiaries of the Issuer of Indebtedness (other than Designated SPE Debt) incurred by any joint venture in which the Issuer or its Restricted Subsidiaries has an equity Investment (or incurred by any Subsidiaries of such joint ventures), in an amount not to exceed at any time outstanding the greater of $100.0 million and 2.5% of Consolidated Tangible Assets of the Issuer at the time of incurrence;
(21) the incurrence by the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Issuer or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee is not the Issuer or a Subsidiary Guarantor, such Indebtedness must be unsecured and 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 Issuer, or the Note Guarantee, in the case of a Subsidiary Guarantor; and
(i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, which new incurrence is not permitted by this clause (21);
(22) the issuance by any Restricted Subsidiary to the Issuer or to any other Restricted Subsidiary of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary shall be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary, which new issuance is not permitted by this clause (22);
(23) Guarantees (other than Guarantees of Designated SPE Debt) by (a) the Issuer or any Subsidiary Guarantor of Indebtedness permitted to be incurred by the Issuer or any Restricted Subsidiary of the Issuer in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is Subordinated Indebtedness, then the related Guarantee shall be subordinated in right of payment to the Notes or the Note Guarantee, as the case may be, and (b) Non-Guarantors of Indebtedness incurred by other Non-Guarantors in accordance with the provisions of this Indenture; and
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