Limitation on Indebtedness and Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) and the Company will not permit any of its Restricted Subsidiaries to issue Preferred Stock; provided, however, that the Company may Incur Indebtedness and any of the Subsidiary Guarantors may Incur Indebtedness and issue Preferred Stock if on the date of such Incurrence or issuance: (1) the Consolidated Coverage Ratio for the Company and its Restricted Subsidiaries is at least 2.25 to 1.00, determined on a pro forma basis (including a pro forma application of proceeds); and (2) no Default would occur as a consequence of, and no Event of Default would be continuing following, Incurring the Indebtedness or the application of its proceeds. (b) Section 4.09(a) will not prohibit the Incurrence of the following Indebtedness: (1) Indebtedness under one or more Credit Facilities of the Company or any Restricted Subsidiary Incurred pursuant to this clause (1) in an aggregate amount not to exceed the greater of (i) $335.0 million or (ii) the sum of $225.0 million and 30.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of the Incurrence of such Indebtedness after giving effect to the application of the proceeds therefrom; (2) Guarantees Incurred by the Company or any Subsidiary Guarantor of Indebtedness of the Company or any Subsidiary Guarantor Incurred in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is a Subordinated Obligation or a Guarantor Subordinated Obligation, then the related Guarantee shall be subordinated in right of payment to the Notes or the Subsidiary Guarantee to at least the same extent as the Indebtedness being Guaranteed, as the case may be; (3) Indebtedness of the Company owing to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owing to and held by the Company or any Restricted Subsidiary; provided, however, that (a)(i) if the Company is the obligor on such Indebtedness and the obligee is not a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes and (ii) if a Subsidiary Guarantor is the obligor of such Indebtedness and the obligee is neither the Company nor a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations of such Subsidiary Guarantor with respect to its Subsidiary Guarantee and (b)(i) any subsequent issuance or transfer of Capital Stock or any other event which 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 other than 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 Subsidiary, as the case may be, that was not permitted by this clause;
Appears in 3 contracts
Samples: Supplemental Indenture (Goodrich Petroleum Corp), Indenture (Goodrich Petroleum Corp), Indenture (Goodrich Petroleum Corp)
Limitation on Indebtedness and Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) and the Company will not permit any of its Restricted Subsidiaries to issue Preferred Stock; provided, however, that the Company may Incur Indebtedness and any of the Subsidiary Guarantors may Incur Indebtedness and issue Preferred Stock if on the date of such Incurrence or issuancethereof:
(1) the Consolidated Coverage Ratio for the Company and its Restricted Subsidiaries is at least 2.25 to 1.00, determined on a pro forma basis (including a pro forma application of proceeds); and
(2) no Default would occur as a consequence of, and no Event of Default would be continuing following, Incurring the Indebtedness or the application its application. The first paragraph of its proceeds.
(b) this Section 4.09(a) 1111 will not prohibit the Incurrence of the following Indebtedness:
(1) Indebtedness under one or more Credit Facilities of (a) the Company or any Restricted Subsidiary Guarantor Incurred pursuant to this clause (1) in an aggregate amount not to exceed the greater of (i) $335.0 1,000.0 million or (ii) the sum of $225.0 500.0 million and 30.025.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of the Incurrence of such Indebtedness after giving effect to the application of the proceeds therefrom;
(2) Guarantees Incurred by the Company or any Subsidiary Guarantor of Indebtedness of the Company or any Subsidiary Guarantor Incurred in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is a Subordinated Obligation or a Guarantor Subordinated Obligation, then the related Guarantee shall be subordinated in right of payment to the Notes or the Subsidiary Guarantee to at least the same extent as the Indebtedness being Guaranteed, as the case may be;
(3) Indebtedness of the Company owing to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owing to and held by the Company or any Restricted Subsidiary; provided, however, that (a)(i) if the Company is the obligor on such Indebtedness and the obligee is not a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes therefrom and (ii) if a Subsidiary Guarantor is the obligor of such Indebtedness and the obligee is neither the Company nor a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations of such Subsidiary Guarantor with respect to its Subsidiary Guarantee and (b)(ib) any subsequent issuance or transfer of Capital Stock or any other event which results Foreign Subsidiary Incurred pursuant to this clause (1) 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 an aggregate amount not to a Person other than the Company or a Restricted Subsidiary of the Company shall be deemedexceed $50.0 million, in each case, to constitute an Incurrence of such Indebtedness by the Company or such Subsidiary, as the case may be, that was not permitted by this clauseoutstanding at any one time;
Appears in 3 contracts
Samples: Sixth Supplemental Indenture (Concho Resources Inc), Third Supplemental Indenture (Concho Resources Inc), First Supplemental Indenture (Concho Resources Inc)
Limitation on Indebtedness and Preferred Stock. (a) The Company Issuer will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) ), and the Company Issuer will not permit any of its Restricted Subsidiaries to issue Preferred Stock; provided, however, that the Company Issuer may Incur Indebtedness and the Issuer and any of the Subsidiary Guarantors Guarantor may Incur Indebtedness and issue Preferred Stock if on the date of such Incurrence or issuancethereof:
(1) the Consolidated Coverage Ratio for the Company Issuer and its Restricted Subsidiaries is at least 2.25 to 1.00, determined on a pro forma basis (including a pro forma application of proceeds); and
(2) no Default would occur as a consequence of, and no Event of Default would be continuing following, Incurring the Indebtedness or the application of its proceedsapplication.
(b) Section 4.09(a3.2(a) will not prohibit the Incurrence of the following Indebtedness:
(1) Indebtedness under one or more Credit Facilities of Incurred by (a) the Company Issuer or any Restricted Subsidiary Incurred pursuant to this clause (1Section 3.2(b)(1) in an aggregate amount not to exceed the greater of (i) $335.0 million 4.0 billion or (ii) the sum of $225.0 400.0 million and 30.0% of the CompanyIssuer’s Adjusted Consolidated Net Tangible Assets determined as of the date of the Incurrence of such Indebtedness after giving effect to the application of the proceeds therefrom, in each case outstanding at any one time;
(2) Guarantees Incurred by the Company or any Subsidiary Guarantor guarantees of Indebtedness of the Company or any Subsidiary Guarantor Incurred in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed guaranteed is a Subordinated Obligation or a Guarantor Subordinated Obligation, then the related Guarantee guarantee shall be subordinated in right of payment to the Notes or the Subsidiary Guarantee to at least the same extent as the Indebtedness being Guaranteedguaranteed, as the case may be;
(3) Indebtedness of the Company Issuer owing to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owing to and held by the Company Issuer or any other Restricted Subsidiary; provided, however, that (a)(i) if the Company Issuer is the obligor on such Indebtedness and the obligee is not a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes and (ii) if a Subsidiary Guarantor is the obligor of such Indebtedness and the obligee is neither the Company Issuer nor a another Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations of such Subsidiary Guarantor with respect to its Subsidiary Guarantee and (b)(i) any subsequent issuance or transfer of Capital Stock or any other event which results in any such Indebtedness being held by a Person other than the Company Issuer or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person other than the Company Issuer or a Restricted Subsidiary of the Company shall be deemed, in each case, to constitute an Incurrence of such Indebtedness by the Company Issuer or such Restricted Subsidiary, as the case may be, that was not permitted by this clauseSection 3.2(b)(3);
(4) Indebtedness represented by (a) the Notes issued on the Issue Date and all Guarantees, (b) any Indebtedness (other than the Indebtedness described in Section 3.2(b)(1), (2) and 4(a)) outstanding on the Issue Date and (c) any Refinancing Indebtedness Incurred in respect of any Indebtedness described in this Section 3.2(b)(4) or Section 3.2(b)(5), (7) or (10) or Incurred pursuant to Section 3.2(a);
(5) Permitted Acquisition Indebtedness;
(6) Indebtedness Incurred in respect of (a) self-insurance obligations, bid, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Issuer or a Restricted Subsidiary in the ordinary course of business and any guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and (b) obligations represented by letters of credit for the account of the Issuer or a Restricted Subsidiary in order to provide security for workers’ compensation claims (in the case of clauses (a) and (b) other than for an obligation for money borrowed);
(7) Indebtedness of the Issuer or any Restricted Subsidiary represented by Finance Lease Obligations (whether or not incurred pursuant to Sale/Leaseback Transactions) or other Indebtedness Incurred in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property, in each case Incurred for the purpose of financing, refinancing, renewing, defeasing or refunding all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Issuer or its Restricted Subsidiaries; provided that the aggregate principal amount Incurred by the Issuer or any Restricted Subsidiary pursuant to this Section 3.2(b)(7) outstanding at any time shall not exceed 2.0% of the Issuer’s Adjusted Consolidated Net Tangible Assets; and provided further that the principal amount of any Indebtedness permitted under this Section 3.2(b)(7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement or development so financed;
(8) Preferred Stock (other than Disqualified Stock) of any Restricted Subsidiary;
(9) Cash Management Obligations of the Issuer or any Restricted Subsidiary; and
(10) in addition to the items referred to in Sections 3.2(b)(1) through (9) above, Indebtedness of the Issuer and its Restricted Subsidiaries in an aggregate outstanding principal amount which, when taken together with the principal amount of all other Indebtedness Incurred pursuant to this Section 3.2(b)(10) and then outstanding, will not exceed the greater of $250.0 million or 2.5% of the Issuer’s Adjusted Consolidated Net Tangible Assets, determined as of the date of Incurrence of such Indebtedness after giving effect to such Incurrence and the application of the proceeds therefrom.
(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 3.2:
(1) in the event an item of that Indebtedness meets the criteria of more than one of the types of Indebtedness described in Section 3.2(a) and (b), the Issuer, in its sole discretion, will classify such item of Indebtedness on the date of Incurrence and, subject to Section 3.2(c)(2) below may later classify, reclassify or redivide all or a portion of such item of Indebtedness, in any manner that complies with this Section 3.2;
(2) all Indebtedness outstanding on the date of this Indenture under the Senior Secured Credit Agreement shall be deemed Incurred on the Issue Date under Section 3.2(b)(1);
(3) guarantees of, or obligations in respect of letters of credit supporting, Indebtedness which is otherwise included in the determination of a particular amount of Indebtedness shall not be included;
(4) if obligations in respect of letters of credit are Incurred pursuant to a Credit Facility and are being treated as Incurred pursuant to Section 3.2(b)(1) and the letters of credit relate to other Indebtedness, then such other Indebtedness shall not be included;
(5) the principal amount of any Disqualified Stock of the Issuer, or Preferred Stock of a Restricted Subsidiary, 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;
(6) Indebtedness permitted by this Section 3.2 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 3.2 permitting such Indebtedness; and
(7) the amount of Indebtedness issued at a price that is less than the principal amount thereof will be equal to the amount of the liability in respect thereof determined in accordance with GAAP. Accrual of interest, accrual of dividends, the amortization of debt discount or the accretion of accreted value, the payment of interest in the form of additional Indebtedness, the payment of dividends in the form of additional Preferred Stock or Disqualified Stock and unrealized losses or charges in respect of Hedging Obligations (including those resulting from the application of FASB ASC Topic No. 815, Derivatives and Hedging) will not be deemed to be an Incurrence of Indebtedness for purposes of this Section 3.2. The Issuer will not permit any of its Unrestricted Subsidiaries to Incur any Indebtedness (including to issue any Disqualified Stock) other than Non-Recourse Debt. If at any time an Unrestricted Subsidiary becomes a Restricted Subsidiary, any Indebtedness of such Subsidiary shall be deemed to be Incurred by a Restricted Subsidiary as of such date (and, if such Indebtedness is not permitted to be Incurred as of such date under this Section 3.2, the Issuer shall be in Default of this Section 3.2). For purposes of determining compliance with any U.S. dollar-denominated restriction on the Incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was Incurred, in the case of term Indebtedness, or first committed, in the case of revolving credit Indebtedness; provided that if such Indebtedness is Incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such Refinancing Indebtedness does not exceed the principal amount of such Indebtedness being refinanced. Notwithstanding any other provision of this Section 3.2, the maximum amount of Indebtedness that any Person may Incur pursuant to this Section 3.2 shall not be deemed to be exceeded solely as a result of fluctuations in the exchange rates of currencies. The principal amount of any Indebtedness Incurred to refinance other Indebtedness, if Incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such Refinancing Indebtedness is denominated that is in effect on the date of such refinancing. This Indenture shall not treat (1) unsecured Indebtedness as subordinated or junior to secured Indebtedness merely because it is unsecured or (2) senior Indebtedness as subordinated or junior to any other senior Indebtedness merely because it has a junior priority with respect to the same collateral.
Appears in 3 contracts
Samples: Indenture (ANTERO RESOURCES Corp), Indenture (ANTERO RESOURCES Corp), Indenture (ANTERO RESOURCES Corp)
Limitation on Indebtedness and Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) and the Company will not permit any of its Restricted Subsidiaries to issue Preferred Stock; provided, however, that the Company may Incur Indebtedness and any of the Subsidiary Guarantors may Incur Indebtedness and issue Preferred Stock if on the date of such Incurrence or issuancethereof:
(1) the Consolidated Coverage Ratio for the Company and its Restricted Subsidiaries is at least 2.25 to 1.00, determined on a pro forma basis (including a pro forma application of proceeds); and
(2) no Default would occur as a consequence of, and no Event of Default would be continuing following, Incurring the Indebtedness or the application of its proceedsapplication.
(b) Section 4.09(a) will not prohibit Notwithstanding the Incurrence foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all of the following Indebtednessfollowing:
(1) Indebtedness under one or more Credit Facilities of (a) the Company or any Restricted Subsidiary Incurred pursuant to this clause (1Section 4.07(b)(1) in an aggregate amount not to exceed the greater of (i) $335.0 million 1.0 billion or (ii) the sum of $225.0 500.0 million and 30.025.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of the Incurrence of such Indebtedness after giving effect to the application of the proceeds therefrom;
(2) Guarantees Incurred by the Company or any Subsidiary Guarantor of Indebtedness of the Company or any Subsidiary Guarantor Incurred in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is a Subordinated Obligation or a Guarantor Subordinated Obligation, then the related Guarantee shall be subordinated in right of payment to the Notes or the Subsidiary Guarantee to at least the same extent as the Indebtedness being Guaranteed, as the case may be;
(3) Indebtedness of the Company owing to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owing to and held by the Company or any Restricted Subsidiary; provided, however, that (a)(i) if the Company is the obligor on such Indebtedness and the obligee is not a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes and (ii) if a Subsidiary Guarantor is the obligor of such Indebtedness and the obligee is neither the Company nor a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations of such Subsidiary Guarantor with respect to its Subsidiary Guarantee and (b)(i) any subsequent issuance or transfer of Capital Stock or any other event which 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 other than 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 Subsidiary, as the case may be, that was not permitted by this clause;
Appears in 3 contracts
Samples: Indenture (SM Energy Co), Indenture (SM Energy Co), Indenture (SM Energy Co)
Limitation on Indebtedness and Preferred Stock. (a) The Company Issuer will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) ), and the Company Issuer will not permit any of its Restricted Subsidiaries to issue Preferred Stock; provided, however, that the Company Issuer may Incur Indebtedness and the Issuer and any of the Subsidiary Guarantors may Incur Indebtedness and issue Preferred Stock if on the date of such Incurrence or issuancethereof:
(1) the Consolidated Coverage Ratio for the Company Issuer and its Restricted Subsidiaries is at least 2.25 to 1.00, determined on a pro forma basis (including a pro forma application of proceeds); and
(2) no Default would occur as a consequence of, and no Event of Default would be continuing following, Incurring the Indebtedness or the application of its proceedsapplication.
(b) Section 4.09(a3.2(a) will not prohibit the Incurrence of the following Indebtedness:
(1) Indebtedness under one or more Credit Facilities of (a) the Company Issuer or any Restricted Subsidiary Guarantor Incurred pursuant to this clause (1Section 3.2(b)(1) in an aggregate amount not to exceed the greater of (i) $335.0 million 3.1 billion or (ii) the sum of $225.0 400.0 million and 30.0% of the CompanyIssuer’s Adjusted Consolidated Net Tangible Assets determined as of the date of the Incurrence of such Indebtedness after giving effect to the application of the proceeds therefromtherefrom and (b) any Foreign Subsidiary Incurred pursuant to this Section 3.2(b)(1) in an aggregate amount not to exceed $50.0 million, in each case outstanding at any one time;
(2) Guarantees Incurred by the Company or any Subsidiary Guarantor guarantees of Indebtedness of the Company or any Subsidiary Guarantor Incurred in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed guaranteed is a Subordinated Obligation or a Guarantor Subordinated Obligation, then the related Guarantee guarantee shall be subordinated in right of payment to the Notes Securities or the Subsidiary Guarantee to at least the same extent as the Indebtedness being Guaranteedguaranteed, as the case may be;
(3) Indebtedness of the Company Issuer owing to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owing to and held by the Company Issuer or any other Restricted Subsidiary; provided, however, that (a)(i) if the Company Issuer is the obligor on such Indebtedness and the obligee is not a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes Securities and (ii) if a Subsidiary Guarantor is the obligor of such Indebtedness and the obligee is neither the Company Issuer nor a another Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations of such Subsidiary Guarantor with respect to its Subsidiary Guarantee and (b)(i) any subsequent issuance or transfer of Capital Stock or any other event which results in any such Indebtedness being held by a Person other than the Company Issuer or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person other than the Company Issuer or a Restricted Subsidiary of the Company shall be deemed, in each case, to constitute an Incurrence of such Indebtedness by the Company Issuer or such Restricted Subsidiary, as the case may be, that was not permitted by this clauseSection 3.2(b)(3);
(4) Indebtedness represented by (a) the Securities issued on the Issue Date and all Guarantees, (b) any Indebtedness (other than the Indebtedness described in Section 3.2(b)(1), (2) and 4(a)) outstanding on the Issue Date, (c) any Exchange Securities and related guarantees issued pursuant to a Registration Rights Agreement and (d) any Refinancing Indebtedness Incurred in respect of any Indebtedness described in this Section 3.2(b)(4) or Section 3.2(b)(5) or (7) or Incurred pursuant to Section 3.2(a);
(5) Permitted Acquisition Indebtedness;
(6) Indebtedness Incurred in respect of (a) self-insurance obligations, bid, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Issuer or a Restricted Subsidiary in the ordinary course of business and any guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and (b) obligations represented by letters of credit for the account of the Issuer or a Restricted Subsidiary in order to provide security for workers’ compensation claims (in the case of clauses (a) and (b) other than for an obligation for money borrowed);
(7) Indebtedness of the Issuer or any Restricted Subsidiary represented by Capitalized Lease Obligations (whether or not incurred pursuant to Sale/Leaseback Transactions) or other Indebtedness Incurred in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property, in each case Incurred for the purpose of financing, refinancing, renewing, defeasing or refunding all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Issuer or its Restricted Subsidiaries; provided that the aggregate principal amount Incurred by the Issuer or any Restricted Subsidiary pursuant to this Section 3.2(b)(7) outstanding at any time shall not exceed 2.0% of the Issuer’s Adjusted Consolidated Net Tangible Assets; and provided further that the principal amount of any Indebtedness permitted under this Section 3.2(b)(7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement or development so financed;
(8) Preferred Stock (other than Disqualified Stock) of any Restricted Subsidiary;
(9) Cash Management Obligations of the Issuer or any Subsidiary Guarantor in an aggregate amount not to exceed $50.0 million outstanding at any one time; and
(10) in addition to the items referred to in Sections 3.2(b)(1) through (9) above, Indebtedness of the Issuer and its Restricted Subsidiaries in an aggregate outstanding principal amount which, when taken together with the principal amount of all other Indebtedness Incurred pursuant to this Section 3.2(b)(10) and then outstanding, will not exceed the greater of $250.0 million or 2.5% of the Issuer’s Adjusted Consolidated Net Tangible Assets, determined as of the date of Incurrence of such Indebtedness after giving effect to such Incurrence and the application of the proceeds therefrom.
(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 3.2:
(1) in the event an item of that Indebtedness meets the criteria of more than one of the types of Indebtedness described in Section 3.2(a) and (b), the Issuer, in its sole discretion, will classify such item of Indebtedness on the date of Incurrence and, subject to Section 3.2(c)(2) below may later classify, reclassify or redivide all or a portion of such item of Indebtedness, in any manner that complies with this Section 3.2;
(2) all Indebtedness outstanding on the date of this Indenture under the Senior Secured Credit Agreements shall be deemed Incurred on the Issue Date under Section 3.2(b)(1);
(3) guarantees of, or obligations in respect of letters of credit supporting, Indebtedness which is otherwise included in the determination of a particular amount of Indebtedness shall not be included;
(4) if obligations in respect of letters of credit are Incurred pursuant to a Credit Facility and are being treated as Incurred pursuant to Section 3.2(b)(1) and the letters of credit relate to other Indebtedness, then such other Indebtedness shall not be included;
(5) the principal amount of any Disqualified Stock of the Issuer or a Restricted Subsidiary, or Preferred Stock of a Restricted Subsidiary that is not a Subsidiary 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;
(6) Indebtedness permitted by this Section 3.2 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 3.2 permitting such Indebtedness; and
(7) the amount of Indebtedness issued at a price that is less than the principal amount thereof will be equal to the amount of the liability in respect thereof determined in accordance with GAAP. Accrual of interest, accrual of dividends, the amortization of debt discount or the accretion of accreted value, the payment of interest in the form of additional Indebtedness, the payment of dividends in the form of additional shares of Preferred Stock or Disqualified Stock and unrealized losses or charges in respect of Hedging Obligations (including those resulting from the application of FASB ASC Topic No. 815, Derivatives and Hedging) will not be deemed to be an Incurrence of Indebtedness for purposes of this Section 3.2. The Issuer will not permit any of its Unrestricted Subsidiaries to Incur any Indebtedness (including to issue any shares of Disqualified Stock) other than Non-Recourse Debt. If at any time an Unrestricted Subsidiary becomes a Restricted Subsidiary, any Indebtedness of such Subsidiary shall be deemed to be Incurred by a Restricted Subsidiary as of such date (and, if such Indebtedness is not permitted to be Incurred as of such date under this Section 3.2, the Issuer shall be in Default of this Section 3.2). For purposes of determining compliance with any U.S. dollar-denominated restriction on the Incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was Incurred, in the case of term Indebtedness, or first committed, in the case of revolving credit Indebtedness; provided that if such Indebtedness is Incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being refinanced. Notwithstanding any other provision of this Section 3.2, the maximum amount of Indebtedness that any Person may Incur pursuant to this Section 3.2 shall not be deemed to be exceeded solely as a result of fluctuations in the exchange rates of currencies. The principal amount of any Indebtedness Incurred to refinance other Indebtedness, if Incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such Refinancing Indebtedness is denominated that is in effect on the date of such refinancing. This Indenture shall not treat (1) unsecured Indebtedness as subordinated or junior to secured Indebtedness merely because it is unsecured or (2) senior Indebtedness as subordinated or junior to any other senior Indebtedness merely because it has a junior priority with respect to the same collateral.
Appears in 2 contracts
Samples: Indenture (ANTERO RESOURCES Corp), Indenture (ANTERO RESOURCES Corp)
Limitation on Indebtedness and Preferred Stock. (a) The Company Parent Guarantor will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) and the Company Parent Guarantor will not permit any of its Restricted Subsidiaries to issue Preferred Stock; provided, however, that the Company Parent Guarantor may Incur Indebtedness and any of the Subsidiary Guarantors may Incur Indebtedness and issue Preferred Stock if on the date of such Incurrence or issuancethereof:
(1) the Consolidated Coverage Ratio for the Company Parent Guarantor and its Restricted Subsidiaries is at least 2.25 to 1.00, determined on a pro forma basis (including a pro forma application of proceeds); and
(2) no Default would occur as a consequence of, and no Event of Default would be continuing following, Incurring the Indebtedness or the application of its proceedsapplication.
(b) Section 4.09(a3.2(a) will not prohibit the Incurrence of the following Indebtedness:
(1) Indebtedness under one or more Credit Facilities of (a) the Company Parent Guarantor, the Issuer or any Restricted Subsidiary Guarantor Incurred pursuant to this clause (1Section 3.2(b)(1) in an aggregate amount not to exceed the greater of (i) $335.0 500.0 million or (ii) the sum of $225.0 250.0 million and 30.0% of the CompanyParent Guarantor’s Adjusted Consolidated Net Tangible Assets determined as of the date of the Incurrence of such Indebtedness after giving effect to the application of the proceeds therefromtherefrom and (b) any Foreign Subsidiary Incurred pursuant to this Section 3.2(b)(1) in an aggregate amount not to exceed $30.0 million, in each case outstanding at any one time;
(2) Guarantees Incurred by the Company or any Subsidiary Guarantor guarantees of Indebtedness of the Company or any Subsidiary Guarantor Incurred in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed guaranteed is a Subordinated Obligation or a Guarantor Subordinated Obligation, then the related Guarantee guarantee shall be subordinated in right of payment to the Notes Securities or the Subsidiary Guarantee to at least the same extent as the Indebtedness being Guaranteedguaranteed, as the case may be;
(3) Indebtedness of the Company Parent Guarantor owing to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owing to and held by the Company Parent Guarantor or any Restricted Subsidiary; provided, however, that (a)(i) if the Company Parent Guarantor is the obligor on such Indebtedness and the obligee is not a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes Securities and (ii) if a Subsidiary Guarantor is the obligor of such Indebtedness and the obligee is neither the Company Parent Guarantor nor a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations of such Subsidiary Guarantor with respect to its Subsidiary Guarantee and (b)(i) any subsequent issuance or transfer of Capital Stock or any other event which results in any such Indebtedness being held by a Person other than the Company Parent Guarantor or a Restricted Subsidiary of the Company Parent Guarantor and (ii) any sale or other transfer of any such Indebtedness to a Person other than the Company Parent Guarantor or a Restricted Subsidiary of the Company Parent Guarantor shall be deemed, in each case, to constitute an Incurrence of such Indebtedness by the Company Parent Guarantor or such Subsidiary, as the case may be, that was not permitted by this clauseSection 3.2(b)(3);
(4) Indebtedness represented by (a) the Securities issued on the Issue Date and all Guarantees, (b) any Indebtedness (other than the Indebtedness described in Section 3.2(b)(1), (2) and 4(a)) outstanding on the Issue Date, (c) any Exchange Securities and related guarantees issued pursuant to a Registration Rights Agreement and (d) any Refinancing Indebtedness Incurred in respect of any Indebtedness described in this Section 3.2(b)(4) or Section 3.2(b)(5) or (7) or Incurred pursuant to Section 3.2(a);
(5) Permitted Acquisition Indebtedness;
(6) Indebtedness Incurred in respect of (a) self-insurance obligations, bid, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Parent Guarantor or a Restricted Subsidiary in the ordinary course of business and any guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and (b) obligations represented by letters of credit for the account of the Parent Guarantor or a Restricted Subsidiary in order to provide security for workers’ compensation claims (in the case of clauses (a) and (b) other than for an obligation for money borrowed);
(7) Indebtedness of the Parent Guarantor or any Restricted Subsidiary represented by Capitalized Lease Obligations (whether or not incurred pursuant to Sale/Leaseback Transactions) or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property, in each case Incurred for the purpose of financing, refinancing, renewing, defeasing or refunding all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Parent Guarantor or its Restricted Subsidiaries; provided that the aggregate principal amount incurred by the Parent Guarantor or any Restricted Subsidiary pursuant to this Section 3.2(b)(7) outstanding at any time shall not exceed the greater of (x) $15.0 million and (y) 1.5% of the Parent Guarantor’s Adjusted Consolidated Net Tangible Assets; and provided further that the principal amount of any Indebtedness permitted under this Section 3.2(b)(7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed;
(8) Preferred Stock (other than Disqualified Stock) of any Restricted Subsidiary;
(9) Cash Management Obligations of the Issuer or any Guarantor in an aggregate amount not to exceed $7.5 million outstanding at any one time; and
(10) in addition to the items referred to in Sections 3.2(b)(1) through (9) above, Indebtedness of the Parent Guarantor and its Restricted Subsidiaries in an aggregate outstanding principal amount which, when taken together with the principal amount of all other Indebtedness Incurred pursuant to this Section 3.2(b)(10) and then outstanding, will not exceed the greater of $35.0 million or 2.5% of the Parent Guarantor’s Adjusted Consolidated Net Tangible Assets, determined as of the date of Incurrence of such Indebtedness after giving effect to such Incurrence and the application of the proceeds therefrom.
(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 3.2:
(1) in the event an item of that Indebtedness meets the criteria of more than one of the types of Indebtedness described in Section 3.2(a) and (b), the Parent Guarantor, in its sole discretion, will classify such item of Indebtedness on the date of Incurrence and, subject to Section 3.2(c)(2) below may later classify, reclassify or redivide all or a portion of such item of Indebtedness, in any manner that complies with this Section 3.2;
(2) all Indebtedness outstanding on the date of this Indenture under the Senior Secured Credit Agreement shall be deemed Incurred on the Issue Date under Section 3.2(b)(1);
(3) guarantees of, or obligations in respect of letters of credit supporting, Indebtedness which is otherwise included in the determination of a particular amount of Indebtedness shall not be included;
(4) if obligations in respect of letters of credit are Incurred pursuant to a Credit Facility and are being treated as Incurred pursuant to Section 3.2(b)(1) and the letters of credit relate to other Indebtedness, then such other Indebtedness shall not be included;
(5) the principal amount of any Disqualified Stock of the Parent Guarantor or a Restricted Subsidiary, or Preferred Stock of a Restricted Subsidiary that is not a Subsidiary 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;
(6) Indebtedness permitted by this Section 3.2 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 3.2 permitting such Indebtedness; and
(7) the amount of Indebtedness issued at a price that is less than the principal amount thereof will be equal to the amount of the liability in respect thereof determined in accordance with GAAP. Accrual of interest, accrual of dividends, the amortization of debt discount or the accretion of accreted value, the payment of interest in the form of additional Indebtedness, the payment of dividends in the form of additional shares of Preferred Stock or Disqualified Stock and unrealized losses or charges in respect of Hedging Obligations (including those resulting from the application of ASC Topic No. 815, Derivatives and Hedging) will not be deemed to be an Incurrence of Indebtedness for purposes of this Section 3.2. The Parent Guarantor will not permit any of its Unrestricted Subsidiaries to Incur any Indebtedness, or issue any shares of Disqualified Stock, other than Non-Recourse Debt. If at any time an Unrestricted Subsidiary becomes a Restricted Subsidiary, any Indebtedness of such Subsidiary shall be deemed to be Incurred by a Restricted Subsidiary as of such date (and, if such Indebtedness is not permitted to be Incurred as of such date under this Section 3.2, the Parent Guarantor shall be in Default of this Section 3.2). For purposes of determining compliance with any U.S. dollar-denominated restriction on the Incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was Incurred, in the case of term Indebtedness, or first committed, in the case of revolving credit Indebtedness; provided that if such Indebtedness is Incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being refinanced. Notwithstanding any other provision of this Section 3.2, the maximum amount of Indebtedness that the Parent Guarantor may Incur pursuant to this Section 3.2 shall not be deemed to be exceeded solely as a result of fluctuations in the exchange rates of currencies. The principal amount of any Indebtedness Incurred to refinance other Indebtedness, if Incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such Refinancing Indebtedness is denominated that is in effect on the date of such refinancing. This Indenture shall not treat (1) unsecured Indebtedness as subordinated or junior to secured Indebtedness merely because it is unsecured or (2) senior Indebtedness as subordinated or junior to any other senior Indebtedness merely because it has a junior priority with respect to the same collateral.
Appears in 2 contracts
Samples: Indenture (Antero Resources LLC), Indenture (Antero Resources Finance Corp)
Limitation on Indebtedness and Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries toto create, incur, issue, assume, Guarantee or otherwise become directly or indirectlyindirectly liable, Incur contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Indebtedness) Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or Preferred Stock; provided, however, that the Company may Incur incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and any of the Subsidiary Guarantors Company’s Restricted Subsidiaries may Incur incur Indebtedness and (including Acquired Debt) or issue Disqualified Stock or Preferred Stock Stock, if on the date of such Incurrence or issuance:
(1) the Consolidated Fixed Charge Coverage Ratio for the Company and its Restricted Subsidiaries Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock is issued, as the case may be, would have been at least 2.25 2.0 to 1.001.0, determined on a pro forma basis (including a pro forma application of proceedsthe net proceeds therefrom); and
(2) no Default would occur , as a consequence of, and no Event of Default would be continuing following, Incurring if the additional Indebtedness had been incurred or the application Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of its proceedssuch four-quarter period.
(b) Section 4.09(a) will not prohibit the Incurrence incurrence of any of the following Indebtedness:items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Company and any Restricted Subsidiary of additional Indebtedness and letters of credit under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this Section 4.09(b)(1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company or any Restricted and the Subsidiary Incurred pursuant to this clause (1Guarantors thereunder) in an aggregate amount not to exceed the greater greatest of (i) $335.0 million or 2,000.0 million, (ii) the sum Borrowing Base in effect under the Credit Agreement at the time of $225.0 million incurrence, and 30.0(iii) 35% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of the Incurrence of such Indebtedness after giving effect to the application of the proceeds therefromincurrence;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Note Guarantees Incurred to be issued on the Issue Date;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Finance Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this Section 4.09(b)(4), not to exceed the greater of (i) $150.0 million and (ii) 1.5% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was incurred under Section 4.09(a) or Section 4.09(b)(2), (3), (4), (5), (14) or (15);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Subsidiary Guarantor of Indebtedness of the Company or any Subsidiary Guarantor Incurred in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is a Subordinated Obligation or a Guarantor Subordinated Obligation, then the related Guarantee shall be subordinated in right of payment to the Notes or the Subsidiary Guarantee to at least the same extent as the Indebtedness being Guaranteed, as the case may be;
(3) Indebtedness of the Company owing to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owing to and held by the Company or any Restricted Subsidiary; provided, however, that (a)(i) if the Company is the obligor on such Indebtedness and the obligee payee is not the Company or a Subsidiary Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all obligations Obligations then due with respect to the Notes and (ii) if a Subsidiary Guarantor is Notes, in the obligor case of such Indebtedness and the obligee is neither Company, or the Company nor Note Guarantee, in the case of a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations of such Subsidiary Guarantor with respect to its Subsidiary Guarantee and ; and
(b)(iB) (i) any subsequent issuance or transfer of Capital Stock or any other event which Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and Company; and
(ii) any sale or other transfer of any such Indebtedness to a Person other than that is not either the Company or a Restricted Subsidiary of the Company shall be deemed, in each case, to constitute an Incurrence incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clauseSection 4.09(b)(6);
Appears in 2 contracts
Samples: Indenture (Permian Resources Corp), Indenture (Permian Resources Corp)
Limitation on Indebtedness and Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur incur any Indebtedness (including Acquired Indebtedness) Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stock; provided, however, that the Company may Incur incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and any of the Restricted Subsidiary Guarantors may Incur incur Indebtedness and (including Acquired Debt) or issue Preferred Stock Stock, if on the date of such Incurrence or issuance:
(1) the Consolidated Fixed Charge Coverage Ratio for the Company and its Restricted Subsidiaries Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock is issued, as the case may be, would have been at least 2.25 2.0 to 1.001.0, determined on a pro forma basis (including a pro forma application of proceedsthe net proceeds therefrom); and, as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period. The first paragraph of this covenant will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Company and the Restricted Subsidiaries, of Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed the greatest of (a) $800.0 million, (b) the Borrowing Base in effect under the Credit Agreement at such time, and (c) 30.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence;
(2) no Default would occur as a consequence of, the incurrence by the Company and no Event its Restricted Subsidiaries of Default would the Existing Indebtedness;
(3) the incurrence by the Company and the Guarantors of Indebtedness represented by the Notes to be continuing following, Incurring issued on the Indebtedness date of this Indenture and the related Note Guarantees;
(4) the incurrence by the Company or the application any of its proceeds.
(b) Section 4.09(a) will not prohibit Restricted Subsidiaries of Indebtedness represented by Finance Lease Obligations, mortgage financings or purchase | money obligations, in each case, incurred for the Incurrence purpose of financing all or any part of the following Indebtedness:
(1) Indebtedness under one purchase price or more Credit Facilities cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiary Incurred Subsidiaries, in an aggregate principal amount outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (1) in an aggregate amount 4), not to exceed the greater of (i) $335.0 100.0 million or and (ii) the sum of $225.0 million and 30.03.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of the Incurrence of such Indebtedness after giving effect to the application of the proceeds therefromincurrence or issuance;
(25) Guarantees Incurred the incurrence by the Company or any Subsidiary Guarantor of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any Subsidiary Guarantor Incurred of its Restricted Subsidiaries or any Disqualified Stock of the Company or any Preferred Stock of a Restricted Subsidiary, in accordance with each case that was permitted by this Indenture to be incurred under the provisions first paragraph of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is a Subordinated Obligation covenant or a Guarantor Subordinated Obligationclause (2), then the related Guarantee shall be subordinated in right (3), (4), (5), (14), (15), or (16) of payment to the Notes or the Subsidiary Guarantee to at least the same extent as the Indebtedness being Guaranteed, as the case may bethis paragraph;
(36) Indebtedness of the Company owing to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owing to and held incurrence by the Company or any of its Restricted SubsidiarySubsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that that:
(a)(ia) if the Company or a Guarantor is the obligor on such Indebtedness and the obligee 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 Obligations then due with respect to the Notes and Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and
(iib) if a Subsidiary Guarantor is the obligor of such Indebtedness and the obligee is neither the Company nor a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations of such Subsidiary Guarantor with respect to its Subsidiary Guarantee and (b)(ii) any subsequent issuance or transfer of Capital Stock or any other event which 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 other than that is not either the Company or a Restricted Subsidiary of the Company shall Company, will be deemed, in each case, to constitute an Incurrence incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clauseclause (6);
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(b) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations in the ordinary course and not for speculative purposes; |
(9) the Guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this covenant; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes in right of payment, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business or consistent with industry practice or past practice and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business or consistent with industry practice or past practice;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of in kind obligations relating to net oil, natural gas liquid or natural gas balancing positions arising in the ordinary course of business;
(13) any obligation arising from agreements of the Company or any Restricted Subsidiary of the Company providing for indemnification, adjustment of purchase price, earn outs, or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture;
(14) any Permitted Acquisition Indebtedness;
(15) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness, the issuance by the Company of any Disqualified Stock or the issuance by any Restricted Subsidiary of Preferred Stock in an aggregate principal amount (or accreted value, as applicable) or liquidation preference at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock or Preferred Stock issued pursuant to this clause (15), not to exceed, at any one time outstanding, the greater of (i) $125.0 million and (ii) 4.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (15) shall cease to be deemed incurred or outstanding for purposes of this clause (15) but shall be deemed incurred or issued for purposes of the first paragraph of this covenant from and after the first date on which the Company, or such Restricted Subsidiary, as the case may be, could have incurred such Indebtedness, Disqualified Stock or Preferred Stock, as applicable, under the first paragraph of this covenant without reliance upon this clause (15)); and
(16) Indebtedness of Restricted Subsidiaries that are not Guarantors and Indebtedness incurred on behalf of, or representing guarantees of Indebtedness of, joint ventures of the Company and any Restricted Subsidiary; provided, however, that the aggregate principal amount of Indebtedness incurred under this clause (16), when | aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (16), together with any Permitted Refinancing Indebtedness in respect thereof incurred pursuant to clause (5) above, does not exceed the greater of (x) $125.0 million and (y) 4.0% of the Company’s Adjusted Consolidated Net Tangible Assets at the time of incurrence (it being understood that any Indebtedness incurred pursuant to this clause (16) shall cease to be deemed incurred or outstanding for purposes of this clause (16) but shall be deemed incurred for purposes of the first paragraph of this covenant from and after the first date on which such Restricted Subsidiary could have incurred such Indebtedness under the first paragraph of this covenant without reliance upon this clause (16). For purposes of determining compliance with this “Incurrence of Indebtedness and Issuance of Preferred Stock” covenant, in the event that an item of Indebtedness, Disqualified Stock or Preferred Stock 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 or issued pursuant to the first paragraph of this covenant, the Company will be permitted to divide, classify and reclassify such item of Indebtedness, Disqualified Stock or Preferred Stock on the date of its incurrence or issuance, or later redivide or reclassify all or a portion of such item of Indebtedness, Disqualified Stock or Preferred Stock, in any manner that complies with this covenant. At the time of incurrence or issuance, the Company will be entitled to divide and classify an item of Indebtedness, Disqualified Stock or Preferred Stock in more than one of the types of Indebtedness, Disqualified Stock or Preferred Stock described in the first paragraph above and in the definition of “Permitted Debt” without giving pro forma effect to the Indebtedness, Disqualified Stock or Preferred Stock incurred or issued pursuant to one or more categories of Permitted Debt when calculating the amount of Indebtedness, Disqualified Stock or Preferred Stock that may be incurred pursuant to the first paragraph above. Indebtedness under the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of “Permitted Debt.” The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributions, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this covenant. 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;
(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 1 contract
Samples: Indenture (Earthstone Energy Inc)
Limitation on Indebtedness and Preferred Stock. of ------------------------------------------------- Restricted Subsidiaries. -----------------------
(ai) The Company will not, and will not permit Indebtedness Incurred pursuant to the Revolving Credit Facility or any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) and the Company will not permit any of its Restricted Subsidiaries to issue Preferred Stockother revolving credit arrangement; provided, however, that that, after giving pro forma effect to such Incurrence and the Company may Incur Indebtedness and any application of the Subsidiary Guarantors may Incur Indebtedness and issue Preferred Stock if on proceeds therefrom, the date aggregate amount of such Incurrence or issuance:
Indebtedness outstanding at such time, together with the aggregate amount of all Indebtedness then outstanding and issued pursuant to clause (1b)(i) of Section 4.13 above, shall not exceed the greater of (x) $25 million and (y) the Consolidated Coverage Ratio for sum of (A) 50% of the gross book value of the inventory of the Company and its Restricted Subsidiaries is at least 2.25 to 1.00, determined on a pro forma basis and (including a pro forma application of proceeds); and
(2B) no Default would occur as a consequence of, and no Event of Default would be continuing following, Incurring the Indebtedness or the application of its proceeds.
(b) Section 4.09(a) will not prohibit the Incurrence 85% of the following Indebtedness:
(1) Indebtedness under one or more Credit Facilities gross book value of the accounts receivable of the Company or any and its Restricted Subsidiary Incurred pursuant to this clause (1) in an aggregate amount not to exceed the greater of (i) $335.0 million or Subsidiaries; (ii) the sum of $225.0 million and 30.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of the Incurrence of such Indebtedness after giving effect to the application of the proceeds therefrom;
(2) Guarantees Incurred by the Company or any Subsidiary Guarantor of Indebtedness of the Company or any Subsidiary Guarantor Incurred in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is a Subordinated Obligation or a Guarantor Subordinated Obligation, then the related Guarantee shall be subordinated in right of payment to the Notes or the Subsidiary Guarantee to at least the same extent as the Indebtedness being Guaranteed, as the case may be;
(3) Indebtedness of the Company owing to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owing Preferred Stock issued to and held by the Company or any Restricted a Wholly Owned or Foreign Subsidiary; provided, however, that (a)(i) if the Company is the obligor on such Indebtedness and the obligee is not a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes and (ii) if a Subsidiary Guarantor is the obligor of such Indebtedness and the obligee is neither the Company nor a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations of such Subsidiary Guarantor with respect to its Subsidiary Guarantee and (b)(iA) any subsequent issuance or transfer of any Capital Stock or any other event which that results in any such Subsidiary ceasing to be a Wholly Owned or Foreign Subsidiary or (B) any subsequent transfer of such Indebtedness being held by a Person or Preferred Stock (other than to the Company or a Restricted Subsidiary of the Company and (iiWholly Owned or Foreign Subsidiary) any sale or other transfer of any such Indebtedness to a Person other than the Company or a Restricted Subsidiary of the Company shall be deemed, in each case, to constitute an the issuance of such Indebtedness or Preferred Stock by the issuer thereof; (iii) Acquired Indebtedness of such Restricted Subsidiary; provided that after giving effect to the Incurrence of such Indebtedness by Acquired Indebtedness, the Company could incur $1.00 of Indebtedness pursuant to clause (a) under Section 4.13; (iv) Indebtedness or Preferred Stock (other than any described in clause (i), (ii) or (iii)) outstanding on the Issue Date; (v) Refinancing Indebtedness Incurred in respect of Indebtedness or Preferred Stock referred to in clause (iii), (iv) or (x) or this clause (v); provided, however, that to the extent such Refinancing Indebtedness Refinances Acquired Indebtedness or Preferred Stock of a Restricted Subsidiary that is not a Wholly Owned Subsidiary, as such Refinancing Indebtedness shall be Incurred only by such Restricted Subsidiary; (vi) Obligations of a Restricted Subsidiary pursuant to (A) interest rate swap or similar agreements designed to protect such Restricted Subsidiary against fluctuations in interest rates in respect of the case may beIndebtedness of such Restricted Subsidiary to the extent the notional principal amount of such obligation does not exceed the aggregate principal amount of the Indebtedness to which such interest rate contracts relate and (B) foreign exchange or commodity hedge, that was exchange or similar agreements designed to protect such Restricted Subsidiary against fluctuations in foreign currency exchange rates or commodity prices in respect of foreign exchange or commodity exposures Incurred by such Restricted Subsidiary in the ordinary course of its business; (vii) Indebtedness consisting of the Subsidiary Guarantees; (viii) Indebtedness of any Restricted Subsidiary consisting of Obligations in respect of purchase price adjustments in connection with the acquisition or disposition of assets by any Restricted 52 Subsidiary permitted under this Indenture; (ix) Capital Lease Obligations, Purchase Money Indebtedness and Acquired Indebtedness in an aggregate principal amount not exceeding, together with the principal amount of Indebtedness Incurred pursuant to clause (viii) of Section 4.13, $15 million at any one given time outstanding; and (x) Indebtedness and Preferred Stock in an aggregate principal amount which, together with any other Indebtedness or Preferred Stock of Restricted Subsidiaries then outstanding (other than Indebtedness or Preferred Stock permitted by clauses (i) through (ix) of this clause;Section) does not exceed $10 million (less the amount of any Indebtedness then outstanding and Incurred pursuant to clause (b)(ix) of Section 4.13).
Appears in 1 contract
Limitation on Indebtedness and Preferred Stock. (a) The Company Holdings will not, and will not permit any of its the Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) and the Company Holdings will not permit any of its the Restricted Subsidiaries to issue Preferred Stock; provided, however, that the Company Holdings may Incur Indebtedness and the Company and any of the Subsidiary Guarantors may Incur Indebtedness and issue Preferred Stock if on the date of such Incurrence or issuancethereof:
(1) the Consolidated Coverage Ratio for Holdings and the Company and its Restricted Subsidiaries is at least 2.25 to 1.00, determined on a pro forma basis (including a pro forma application of proceeds); and
(2) no Default will have occurred or be continuing or would occur as a consequence of, and no Event of Default would be continuing following, Incurring the Indebtedness or the application of its proceedstransactions relating to such Incurrence.
(b) Section 4.09(a) hereof will not prohibit the Incurrence of the following IndebtednessIndebtedness or issuance of the following Preferred Stock, as the case may be:
(1) Indebtedness under of the Company Incurred pursuant to one or more Credit Facilities of the Company or any Restricted Subsidiary Incurred pursuant to this clause (1) in an aggregate amount not to exceed the greater of (ia) $335.0 735.0 million less the aggregate amount of all permanent principal repayments since the Issue Date under a Credit Facility made under Section 4.07(a)(iii)(A) hereof, or (iib) the sum of $225.0 million and 30.040.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of the Incurrence of such Indebtedness after giving effect to the application of the proceeds therefrom, in each case outstanding at any one time;
(2) Guarantees Incurred by the Company or any Subsidiary Guarantor Guarantors of Indebtedness of the Company or any Subsidiary Guarantor a Guarantor, as the case may be, Incurred in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is a Subordinated Obligation or a Guarantor Subordinated Obligation, then the related Guarantee shall be subordinated in right of payment to the Notes or the Subsidiary Guarantee to at least the same extent as the Indebtedness being Guaranteed, as the case may be;
(3) Indebtedness of the Company Holdings owing to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owing to and held by the Company Holdings or any Restricted Subsidiary; provided, however, that (a)(i) if the Company is the obligor on such Indebtedness and the obligee is not a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes and (ii) if a Subsidiary Guarantor is the obligor of such Indebtedness and the obligee is neither the Company nor a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations of such Subsidiary Guarantor with respect to its Subsidiary Guarantee and (b)(ii) any subsequent issuance or transfer of Capital Stock or any other event which results in any such Indebtedness being held by a Person other than the Company Holdings or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person other than the Company Holdings or a Restricted Subsidiary of the Company shall be deemed, in each case, to constitute an Incurrence of such Indebtedness by the Company Holdings or such Restricted Subsidiary, as the case may be;
(4) Indebtedness represented by (a) the Notes issued on the Issue Date, and the related Exchange Notes issued in a registered exchange offer (or shelf registration) pursuant to the Registration Rights Agreement, and all Guarantees, (b) any Indebtedness (other than the Indebtedness described in clauses (1), (2) and (4)(a) of clause (b) of this Section 4.09) outstanding on the Issue Date and (c) any Refinancing Indebtedness Incurred in respect of any Indebtedness described in this clause (4) or clause (5) or Incurred pursuant to Section 4.09(a) hereof;
(5) Indebtedness of a Person that becomes a Restricted Subsidiary or is acquired by Holdings or a Restricted Subsidiary or merged into Holdings or a Restricted Subsidiary in accordance with this Indenture and outstanding on the date on which such Person became a Restricted Subsidiary or was acquired by or was merged into Holdings or such Restricted Subsidiary (other than Indebtedness Incurred (a) to provide all or any portion of the funds utilized to consummate the transaction or series of related transactions pursuant to which such Person became a Restricted Subsidiary or was otherwise acquired by or was merged into Holdings or a Restricted Subsidiary or (b) otherwise in connection with, or in contemplation of, such acquisition); provided, however, that at the time such Person becomes a Restricted Subsidiary or is acquired by or was merged into Holdings or a Restricted Subsidiary, Holdings would have been able to Incur $1.00 of additional Indebtedness pursuant to Section 4.09(a) hereof after giving effect to the Incurrence of such Indebtedness pursuant to this clause (5);
(6) the Incurrence by Holdings or any Restricted Subsidiary of Indebtedness represented by Capitalized 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 improvements or carrying costs of property used in the business of Holdings or such Restricted Subsidiary, and Refinancing Indebtedness Incurred to Refinance any Indebtedness Incurred pursuant to this clause (6) in an aggregate outstanding principal amount which, when taken together with the principal amount of all other Indebtedness Incurred pursuant to this clause (6) and then outstanding, will not exceed $40.0 million at any time outstanding;
(7) the Incurrence by Holdings, the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, payment obligations in connection with health or other types of social security benefits, unemployment or other insurance or self-insurance obligations, reclamation, statutory obligations, bankers’ acceptances and bid, performance, surety and appeal bonds or other similar obligations incurred in the ordinary course of business, including guarantees and obligations respecting standby letters of credit supporting such obligations, to the extent not drawn (in each case other than an obligation for money borrowed);
(8) Capital Stock (other than Disqualified Stock) of Holdings, the Company or any of the Subsidiary Guarantors;
(9) Indebtedness owed to Parent not to exceed $50.0 million in the aggregate, provided that all such Indebtedness shall be unsecured and subordinated to the Notes; and
(10) in addition to the items referred to in clauses (1) through (9) above, Indebtedness of Holdings, the Company and its Subsidiary Guarantors in an aggregate outstanding principal amount which, when taken together with the principal amount of all other Indebtedness Incurred pursuant to this clause (10) and then outstanding, will not exceed the greater of (a) $50.0 million and (b) 4.0% of Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence, at any time outstanding.
(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 an item of that Indebtedness meets the criteria of more than one of the types of Indebtedness described in clauses (a) and (b) of this Section 4.09, the Issuers, in their sole discretion, will classify such item of Indebtedness on the date of Incurrence and, subject to clause (ii) below may later reclassify such item of Indebtedness and only be required to include the amount and type of such Indebtedness in one of such clauses;
(2) all Indebtedness outstanding on the date of this Indenture under the Senior Secured Credit Agreement shall be deemed Incurred on the Issue Date under Section 4.09(b)(1);
(3) Guarantees of, or obligations in respect of letters of credit supporting, Indebtedness which is otherwise included in the determination of a particular amount of Indebtedness shall not be included;
(4) if obligations in respect of letters of credit are Incurred pursuant to a Credit Facility and are being treated as Incurred pursuant to Section 4.09(b)(1) and the letters of credit relate to other Indebtedness, then such other Indebtedness shall not be included;
(5) the principal amount of any Disqualified Stock of Holdings or a Restricted Subsidiary, or Preferred Stock of a Restricted Subsidiary that is not an Issuer or a Subsidiary 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;
(6) Indebtedness permitted by this clause;Section 4.09 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.09 permitting such Indebtedness; and
(7) the amount of Indebtedness issued at a price that is less than the principal amount thereof will be equal to the amount of the liability in respect thereof determined in accordance with GAAP.
(d) Accrual of interest, accrual of dividends, the amortization of debt discount or the accretion of accreted value, the payment of interest in the form of additional Indebtedness, the payment of dividends in the form of additional shares of Preferred Stock or Disqualified Stock and unrealized losses or charges in respect of Hedging Obligations (including those resulting from the application of SFAS 133) will not be deemed to be an Incurrence of Indebtedness for purposes of this Section 4.09. The amount of any Indebtedness outstanding as of any date shall be (i) the accreted value thereof in the case of any Indebtedness issued with original issue discount and (ii) the principal amount or liquidation preference thereof, together with any interest thereon that is more than 30 days past due, in the case of any other Indebtedness.
(e) If at any time an Unrestricted Subsidiary becomes a Restricted Subsidiary, any Indebtedness of such Subsidiary shall be deemed to be Incurred by a Restricted Subsidiary as of such date (and, if such Indebtedness is not permitted to be Incurred as of such date under this Section 4.09, the Issuers 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 Indebtedness does not exceed the principal amount of such Indebtedness being refinanced. Notwithstanding any other provision of this Section 4.09, the maximum amount of Indebtedness that the Issuers 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 Indebtedness is denominated that is in effect on the date of such refinancing.
(g) This Indenture will not treat (1) unsecured Indebtedness as subordinated or junior to secured Indebtedness merely because it is unsecured or (2) senior Indebtedness 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
Limitation on Indebtedness and Preferred Stock. (a) The Company will shall not, and will shall not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) ), and the Company will shall not permit any of its Restricted Subsidiaries Subsidiary to issue Preferred Stock; provided, however, provided that the Company may Incur Indebtedness (including Acquired Indebtedness), and any of the Restricted Subsidiary Guarantors may Incur Indebtedness (including Acquired Indebtedness) and issue Preferred Stock if if, on the date of such Incurrence Incurrence, and after giving pro forma effect thereto, (i) no Default or issuance:
Event of Default shall have occurred and be continuing or would occur and (1ii) the Consolidated Cash Flow Coverage Ratio for the Company and its Restricted Subsidiaries most recently ended four full fiscal quarters for which financial information is at least 2.25 available to 1.00, holders immediately preceding the date on which such additional Indebtedness is Incurred would have exceeded 2.0 to 1.0 determined on a pro forma basis (including a pro forma application of proceedsthe net proceeds therefrom); and
(2) no Default would occur , as a consequence ofif the additional Indebtedness had been incurred, and no Event of Default would be continuing following, Incurring the Indebtedness or the application of its proceedsthe proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) Section 4.09(a10.13(a) will shall not prohibit the Incurrence of the following Indebtednessapply to:
(1i) Indebtedness under one or more Credit Facilities of the Company or any Restricted Subsidiary Incurred pursuant to this clause (1) in an aggregate amount a Credit Facility not to exceed in outstanding principal amount the greater of (i1) $335.0 million or 1.75 billion at any time outstanding and (ii2) the sum of $225.0 million and 30.0(x) 80% of the Company’s Adjusted Consolidated Net Tangible Assets determined as consolidated book value of the date net accounts receivable of the Incurrence of such Indebtedness after giving effect to the application Company and its Restricted Subsidiaries and (y) 50% of the proceeds therefromconsolidated book value of the inventory of the Company and its Restricted Subsidiaries, in each case determined on a pro forma basis in accordance with GAAP;
(2) Guarantees Incurred by the Company or any Subsidiary Guarantor of Indebtedness of the Company or any Subsidiary Guarantor Incurred in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is a Subordinated Obligation or a Guarantor Subordinated Obligation, then the related Guarantee shall be subordinated in right of payment to the Notes or the Subsidiary Guarantee to at least the same extent as the Indebtedness being Guaranteed, as the case may be;
(3ii) Indebtedness of the Company owing owed to and held by any a Restricted Subsidiary or Indebtedness or Preferred Stock of a Restricted Subsidiary owing issued to and held by the Company or any a Restricted Subsidiary; provided, however, that (a)(i) if the Company is the obligor on such Indebtedness and the obligee is not a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes and (ii) if a Subsidiary Guarantor is the obligor of such Indebtedness and the obligee is neither the Company nor a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations of such Subsidiary Guarantor with respect to its Subsidiary Guarantee and (b)(iA) any subsequent issuance or transfer of any Capital Stock or any other event which that results in any such Subsidiary ceasing to be a Restricted Subsidiary, or (B) any subsequent transfer of such Indebtedness being held by a Person or Preferred Stock (other than to the Company or a Restricted Subsidiary) shall be deemed, in each case, to constitute the Incurrence of such Indebtedness or Preferred Stock by the issuer thereof;
(iii) the Notes (other than Additional Notes);
(iv) Acquired Indebtedness of any Restricted Subsidiary or any Indebtedness incurred to finance acquisitions; provided, however, that after giving effect to such Incurrence and merger, consolidation or acquisition, if more than $100.0 million of Acquired Indebtedness of any Restricted Subsidiary or Indebtedness Incurred to finance acquisitions is at any time outstanding under this clause (iv), either: (A) the Company could incur $1.00 of Indebtedness pursuant to paragraph (a) above or (B) the Consolidated Cash Flow Coverage Ratio of the Company would be greater than immediately prior to such merger, consolidation or acquisition of assets giving rise to the Incurrence of such Indebtedness;
(v) Indebtedness or, in the case of a Restricted Subsidiary, Preferred Stock (other than Indebtedness or, in the case of a Restricted Subsidiary, Preferred Stock described in clause (i), (ii), or (iii) above) outstanding on the Issue Date (including the Existing Notes and the Guarantees in respect of the Existing Notes);
(vi) any Refinancing Indebtedness in respect of Indebtedness or, in the case of a Restricted Subsidiary, Preferred Stock Incurred pursuant to paragraph (a) or referred to in clause (iii), (iv) or (v) or this clause (vi) of this paragraph (b); provided, however, no Refinancing Indebtedness shall be permitted to be incurred pursuant to this clause (vi) in respect of Existing Notes (or the Guarantees in respect thereof);
(vii) Obligations of the Company or a Restricted Subsidiary pursuant to (A) Interest Rate Protection Agreements in respect of Indebtedness of the Company or the Restricted Subsidiary that is permitted by the terms of this Indenture to be outstanding to the extent the notional principal amount of such obligation does not exceed the aggregate principal amount of the Indebtedness to which such Interest Rate Protection Agreements relate, (B) Currency Agreement Obligations in respect of foreign exchange exposures of the Company or such Restricted Subsidiary and (C) commodity agreements of the Company or such Restricted Subsidiary to the extent designed to protect the Company or such Restricted Subsidiary from fluctuations in the prices of raw materials used in its business;
(viii) Indebtedness of the Company or any Restricted Subsidiary consisting of Obligations in respect of indemnification, purchase price adjustments, earnouts or similar obligations Incurred or assumed, in each case, in connection with the acquisition or disposition of assets by the Company or any Restricted Subsidiary permitted under this Indenture;
(ix) Capital Lease Obligations, mortgage financings, Purchase Money Indebtedness and Acquired Indebtedness in an aggregate principal amount at any one time outstanding that does not exceed the greater of (i) $200.0 million and (ii) 5.0% of Consolidated Tangible Assets at the time of Incurrence;
(x) performance bonds, appeal and surety bonds, completion guarantees insurance obligations or bonds and other similar bonds or obligations incurred by the Company or a Restricted Subsidiary in the ordinary course of business consistent with past practice;
(xi) Floor Plan Guarantees;
(xii) Indebtedness resulting from endorsement of negotiable instruments for collection in the ordinary course of business;
(xiii) Indebtedness arising under indemnity agreements to title insurers to cause such title insurers to issue to one or more collateral agents under Credit Facilities mortgagee title insurance policies;
(xiv) Indebtedness and Preferred Stock in an aggregate principal amount or liquidation preference which, together with all other Indebtedness and Preferred Stock of the Company and its Restricted Subsidiaries then outstanding and incurred pursuant to this clause (xiv) does not exceed the greater of (x) $200.0 million and (y) 5.0% of Consolidated Tangible Assets;
(xv) Indebtedness of a Foreign Subsidiary of the Company (A) in an amount not to exceed at any one time outstanding and together with any other Indebtedness Incurred under this clause (xv) the greater of (x) $150.0 million and (y) 4.0% of Consolidated Tangible Assets of Foreign Subsidiaries or (B) Incurred to finance working capital or for other operational purposes of such Foreign Subsidiary, including capital expenditures and acquisitions;
(xvi) Indebtedness Incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is not with recourse to the Company or any Restricted Subsidiary other than a Receivables Subsidiary (except for Standard Securitization Undertakings);
(xvii) Indebtedness consisting of (A) financing of insurance premiums or (B) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(xviii) the Guarantee by the Company or any Restricted Subsidiary of Indebtedness of the Company or any other Restricted Subsidiary that was permitted to be Incurred by another provision of this Section 10.13; provided, however, that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee thereof Incurred pursuant to this Section 10.13(b)(xviii) shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness being Guaranteed;
(xix) Indebtedness Incurred by the Company or any Restricted Subsidiary (x) in respect of any bankers’ acceptance, bank guarantees, discounted xxxx of exchange or the discounting or factoring of receivables, warehouse receipt or similar facilities, and reinvestment obligations related thereto, entered into in the ordinary course of business and (y) constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including letters of credit in respect of workers’ compensation claims, leases, litigation and appeals thereof, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims, environmental and other permits or licenses from governmental authorities and other letters of credit in connection with transactions in the ordinary course of business; provided, however, that upon the drawing of such letters of credit, such obligations are reimbursed within 30 days following such drawing;
(xx) Indebtedness Incurred by an Equipment Subsidiary in a Qualified Equipment Financing that is not with recourse to the Company or any Restricted Subsidiary other than an Equipment Subsidiary (except for Standard Securitization Undertakings);
(xxi) Indebtedness arising from (i) Bank Products and (ii) any sale the honoring by a bank or other transfer financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business; provided that in the case of this clause (ii) such Indebtedness is extinguished within ten Business Days of its Incurrence;
(xxii) guarantees (a) Incurred in the ordinary course of business in respect of obligations of (or to) suppliers, customers, franchisees, lessors and licensees that, in each case, are non-Affiliates or (b) otherwise constituting Investments permitted under this Indenture;
(xxiii) Indebtedness issued by the Company or any of its Restricted Subsidiaries to current or former employees, directors, managers and consultants thereof, their respective estates, spouses or former spouses, in each case to finance the purchase or redemption of Capital Stock of the Company or any direct or indirect parent company of the Company to the extent described in Section 10.10(b)(iii); provided, however, such Indebtedness incurred pursuant to this clause (xxiii) is subordinated in right of payment to the Company’s Obligations with respect to this Indenture;
(xxiv) Indebtedness owed on a short-term basis of no longer than 30 days to banks and other financial institutions Incurred in the ordinary course of business of the Company and its Restricted Subsidiaries with such banks or financial institutions that arises in connection with ordinary banking arrangements to manage cash balances of the Company and its Restricted Subsidiaries;
(xxv) customer deposits and advance payments received in the ordinary course of business from customers for goods purchased in the ordinary course of business; and
(xxvi) Cash Management Services Incurred not for speculative purposes.
(c) Except to the extent that such Indebtedness is permitted to be Incurred pursuant to Section 10.13(a), the Company shall not Incur any Indebtedness if the proceeds thereof are used, directly or indirectly, to repay, prepay, redeem, defease, retire, refund or refinance any Subordinated Obligations unless such Indebtedness shall be subordinated to the Notes to at least the same extent as such Subordinated Obligations.
(d) For purposes of determining compliance with this Section 10.13, in the event that an item of Indebtedness meets the criteria of more than one of the types of permitted Indebtedness set forth in Section 10.13(b)(i) through (b)(xxvi) or is entitled to be Incurred pursuant to Section 10.13(a), the Company, in its sole discretion, will be entitled to classify or reclassify, or later divide, classify or reclassify, such item of Indebtedness or Preferred Stock (or any portion thereof) in any manner that complies with this Section 10.13; provided, however, that all Indebtedness under the Credit Agreement outstanding on the Issue Date shall be deemed to have been Incurred pursuant to Section 10.13(b)(i) and the Company shall not be permitted to reclassify all or any portion of such Indebtedness under the Credit Agreement outstanding on the Issue Date. The Company shall be required to include the amount and type of any Indebtedness or Preferred Stock (or any portion thereof) in one or more of clauses (i) through (xxvi) of Section 10.13(b). At the time of Incurrence, the Company will be entitled to divide and classify an item of Indebtedness in more than one of the types of Indebtedness described in Section 10.13(a) and (b) without giving pro forma effect to the Incurrence on the same date of any Indebtedness pursuant to Section 10.13(b) when calculating the amount of Indebtedness that may be Incurred pursuant to Section 10.13(a). To the extent any item of Indebtedness that is Guaranteed or secured by a Lien is reclassified, each of the Incurrence of the Indebtedness upon reclassification, the Incurrence of the Guarantee of such Indebtedness upon reclassification and the Incurrence of the Lien upon reclassification must be permitted under this Indenture in order for the Company to make such reclassification.
(e) For purposes of determining amounts of Indebtedness under Section 10.13, Indebtedness resulting from security interests granted with respect to Indebtedness otherwise included in the determination of Indebtedness, and Guarantees (and security interests with respect thereof) of, or obligations with respect to letters of credit supporting, Indebtedness otherwise included in the determination of Indebtedness shall not be included in the determination of Indebtedness.
(f) Indebtedness of any Person which is outstanding at the time such Person becomes a Person Restricted Subsidiary of the Company (including upon designation of any subsidiary or other than person as a Restricted Subsidiary) or is merged with or into or consolidated with the Company or a Restricted Subsidiary of the Company shall be deemeddeemed to have been Incurred at the time such Person becomes such a Restricted Subsidiary of the Company or merged with or into or consolidated with the Company or a Restricted Subsidiary of the Company, in each caseas applicable.
(g) For purposes of determining compliance with this Section 10.13, the Incurrence of Indebtedness with respect to constitute keepwell or other comfort letter arrangements or agreements given by the Company for the benefit of Unrestricted Subsidiaries shall be deemed to be an Incurrence of Indebtedness at such time as the amount of the obligation of the Company thereunder is quantifiable.
(h) The accrual of interest, the accretion of accreted value and the payment of interest 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 10.13.
(i) 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 will be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness by was incurred, in the Company case of term debt, or first committed or incurred (whichever yields the lowest U.S. dollar-equivalent), in the case of revolving credit debt; provided that if such SubsidiaryIndebtedness is incurred to extend, replace, refund, refinance, renew or defease other Indebtedness denominated in a foreign currency, and such extension, replacement, refunding, refinancing, renewal or defeasance 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 or defeasance, 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, replaced, refunded, refinanced, renewed or defeased. The principal amount of any Indebtedness incurred to extend, replace, refund, refinance, renew or defease other Indebtedness, if incurred in a different currency from the Indebtedness being extended, replaced, refunded, refinanced, renewed or defeased, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Indebtedness is denominated that was not permitted by this clause;is in effect on the date of such extension, replacement, refunding, refinancing, renewal or defeasance.
Appears in 1 contract
Samples: Indenture (Terex Corp)
Limitation on Indebtedness and Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) and the Company will not permit any of its Restricted Subsidiaries to issue Preferred Stock; provided, however, that the Company may Incur Indebtedness and any of the Subsidiary Guarantors may Incur Indebtedness and issue Preferred Stock if on the date of such Incurrence or issuance:
(1) the Consolidated Coverage Ratio for the Company and its Restricted Subsidiaries is at least 2.25 to 1.00, determined on a pro forma basis (including a pro forma application of proceeds); and
(2) no Default would occur as a consequence of, and no Event of Default would be continuing following, Incurring the Indebtedness or the application of its proceeds.
(b) Section 4.09(a7.22(a) will not prohibit the Incurrence of the following Indebtedness:
(1) Indebtedness under one or more Credit Facilities of the Company or any Restricted Subsidiary Incurred pursuant to this clause (1) in an aggregate amount not to exceed the greater of (i) $335.0 million or (ii) the sum of $225.0 million and 30.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of the Incurrence of such Indebtedness after giving effect to the application of the proceeds therefromconstituting a Permitted Reserve Based Facility;
(2) Guarantees Incurred by the Company or any Subsidiary Guarantor of Indebtedness of the Company or any Subsidiary Guarantor Incurred in accordance with the provisions of this IndentureIndenture (including any increase in principal amount as a result of a PIK Payment and any PIK Interest Notes in respect thereof); provided provided, however that in the event such Indebtedness that is being Guaranteed is a Subordinated Obligation or a Guarantor Subordinated Obligation, then the related Guarantee shall be subordinated in right of payment to the Notes or the Subsidiary Guarantee to at least the same extent as the Indebtedness being Guaranteed, as the case may be;
(3) Indebtedness of the Company owing to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owing to and held by the Company or any Restricted Subsidiary; provided, however, however that (a)(i) if the Company is the obligor on such Indebtedness and the obligee is not a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes and (ii) if a Subsidiary Guarantor is the obligor of such Indebtedness and the obligee is neither the Company nor a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations of such Subsidiary Guarantor with respect to its Subsidiary Guarantee and (b)(i) any subsequent issuance or transfer of Capital Stock or any other event which 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 other than 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 Subsidiary, as the case may be, that was not permitted by this clause;
(4) Indebtedness represented by (a) the Initial Notes and any Additional Notes (together with any PIK Payments in respect thereof) and all Subsidiary Guarantees (subject to the limitation specified in Section 2.02(e)), (b) any Indebtedness (other than the Indebtedness described in clauses (1), (2), (3), (6) or (7)) outstanding on the Issue Date and (c) any Refinancing Indebtedness Incurred in respect of any Indebtedness described in this clause (4) or clause (5) or (7) or Incurred pursuant to Section 7.22(a);
(5) Permitted Acquisition Indebtedness;
(6) Indebtedness in respect of (a) self-insurance obligations, bid, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and (b) obligations represented by letters of credit for the account of the Company or a Restricted Subsidiary in order to provide security for workers’ compensation claims (in the case of clauses (a) and (b) other than for an obligation for money borrowed);
(7) Indebtedness represented by Capitalized Lease Obligations of the Company or any of its Restricted Subsidiaries (whether or not Incurred pursuant to sale and leaseback transactions), mortgage financings or purchase money obligations, Incurred in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property, in each case Incurred for the purpose of financing, refinancing, renewing, defeasing or refunding all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or such Restricted Subsidiary; provided, however that after giving effect to any such Incurrence, the aggregate principal amount of all Indebtedness Incurred pursuant to this clause (7), together with any Refinancing Indebtedness Incurred pursuant to clause (4) in respect of such Indebtedness, and then outstanding does not exceed the greater of $5.0 million or 1.0% of the Company’s Adjusted Consolidated Net Tangible Assets, determined as of the date of Incurrence of such Indebtedness after giving effect to such Incurrence and the application of the proceeds therefrom; and
(8) Cash Management Obligations Incurred in the ordinary course of business; and
(9) in addition to the items referred to in clauses (1) through (8) above, Indebtedness of the Company and the Subsidiary Guarantors in an aggregate outstanding principal amount which, when taken together with the principal amount of all other Indebtedness Incurred pursuant to this clause (9) and then outstanding, will not exceed the greater of $15.0 million or 2.0% of the Company’s Adjusted Consolidated Net Tangible Assets, determined as of the date of Incurrence of such Indebtedness after giving effect to such Incurrence and the application of the proceeds therefrom.
(c) For purposes of determining compliance with, and the outstanding principal amount of any particular Indebtedness Incurred pursuant to and in compliance with, this covenant:
(1) in the event an item of that Indebtedness meets the criteria of more than one of the types of Indebtedness described in Section 7.22(a)-(b), the Company, in its sole discretion, will, in each case, subject to clause (2) below, classify such item of Indebtedness on the date of Incurrence in any manner that complies with this covenant;
(2) all Indebtedness outstanding on the date of this Indenture under the First Lien Credit Agreement, after giving effect to the initial offering and sale of Notes and the use of proceeds therefrom shall be deemed Incurred on the Issue Date under clause (1) of Section 7.22(b) and may not later be reclassified;
(3) Guarantees Incurred by the Company or any Subsidiary Guarantor of, or obligations Incurred by the Company or any Subsidiary Guarantor in respect of letters of credit supporting, Indebtedness which is otherwise included in the determination of a particular amount of Indebtedness shall not be included;
(4) if obligations in respect of letters of credit are Incurred pursuant to a Credit Facility and are being treated as Incurred pursuant to clause (1) of Section 7.22(b) and the letters of credit relate to other Indebtedness, then such other Indebtedness shall not be included to the extent of the underlying letter of credit;
(5) the principal amount of any Disqualified Stock of the Company or a Restricted Subsidiary, or Preferred Stock of a Restricted Subsidiary, 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;
(6) Indebtedness permitted by this Section 7.22 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 7.22 permitting such Indebtedness; and
(7) the amount of Indebtedness issued at a price that is less than the principal amount thereof will be equal to the amount of the liability in respect thereof determined in accordance with GAAP.
(d) Accrual of interest, accrual of dividends, the amortization of debt discount or the accretion of accreted value, the payment of interest in the form of additional Indebtedness, the payment of dividends in the form of additional shares of Preferred Stock or Disqualified Stock and unrealized losses or charges in respect of Hedging Obligations will not be deemed to be an Incurrence of Indebtedness for purposes of this Section 7.22.
(e) The Company will not permit any of its Unrestricted Subsidiaries to Incur any Indebtedness, or issue any shares of Disqualified Stock, other than Non-Recourse Debt. If at any time an Unrestricted Subsidiary becomes a Restricted Subsidiary, any Indebtedness of such Subsidiary shall be deemed to be Incurred by a Restricted Subsidiary as of such date and, if such Indebtedness is not permitted to be Incurred as of such date under this Section 7.22, the Company shall be in Default of this Section 7.22.
(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, however that if such Indebtedness is Incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being refinanced. Notwithstanding any other provision of this covenant, the maximum amount of Indebtedness that the Company may Incur pursuant to this covenant shall not be deemed to be exceeded solely as a result of fluctuations in the exchange rates of currencies. The principal amount of any Indebtedness Incurred to refinance other Indebtedness, if Incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such Refinancing Indebtedness is denominated that is in effect on the date of such refinancing.
(g) Nothing contained in this Indenture is intended to treat (1) unsecured Indebtedness as subordinated or junior to secured Indebtedness merely because it is unsecured or (2) senior Indebtedness 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: Indenture (Goodrich Petroleum Corp)
Limitation on Indebtedness and Preferred Stock. (ai) The Company will notCreate, and will not permit any of its Restricted Subsidiaries toincur, issue, assume, Guarantee or otherwise become directly or indirectlyindirectly liable, Incur contingently or otherwise, with respect to (collectively, "INCUR") any Indebtedness (including Acquired Indebtedness) and Debt), or issue any Disqualified Stock or, in the Company will not permit case of any Subsidiary of its Restricted Subsidiaries to the Borrower, issue Preferred Stockany shares of preferred stock; provided, however, that the Company Borrower may Incur incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and any of the Subsidiary Guarantors may Incur incur Indebtedness and (including Acquired Debt) or issue Preferred Disqualified Stock if on the date of such Incurrence or issuance:
(1) the Consolidated Fixed Charge Coverage Ratio for the Company and its Restricted Subsidiaries Borrower's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 2.25 2.0 to 1.001, determined on a pro forma basis (including a pro forma application of proceedsthe net proceeds therefrom); and
(2) no Default would occur , as a consequence ofif the additional Indebtedness had been incurred or Disqualified Stock had been issued, and no Event as the case may be, at the beginning of Default would be continuing following, Incurring the Indebtedness or the application of its proceedssuch four-quarter period.
(bii) Section 4.09(a8.02(a) will not prohibit the Incurrence incurrence of any of the following Indebtedness:items of Indebtedness (collectively, "PERMITTED DEBT"):
(1A) the incurrence by the Borrower of additional Indebtedness and letters of credit under one or more Credit Facilities (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company Borrower thereunder) in an aggregate amount up to $50,000,000 at any time outstanding;
(B) the incurrence by the Borrower of Indebtedness pursuant to any Loan Document, the aggregate principal amount of which is evidenced by the G&R Series L Mortgage Bond, and the incurrence by any Subsidiary Guarantor of a Subsidiary Guarantee of such Indebtedness pursuant to Section 8.02(o);
(C) the incurrence by the Borrower and its Subsidiaries of the Existing Indebtedness;
(D) the incurrence by the Borrower of $100,000,000 aggregate principal amount of Indebtedness represented by the 6-1/4% General and Refunding Mortgage Notes, Series H, due 2012 issued under the General and Refunding Mortgage Indenture (and the related exchange notes to be issued pursuant to the registration rights agreement) and the incurrence by any Subsidiary Guarantor of a Subsidiary Guarantee of such Indebtedness (including, without limitation, the related exchange notes to be issued pursuant to the registration rights agreement entered into in connection therewith);
(E) the incurrence by the Borrower or any Restricted of the Subsidiary Incurred Guarantors of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of the Borrower or such Subsidiary Guarantor, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (1) in an aggregate amount E), not to exceed the greater of (i) $335.0 million or (ii) the sum of $225.0 million and 30.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of the Incurrence of such Indebtedness after giving effect to the application of the proceeds therefrom20,000,000 at any time outstanding;
(2F) Guarantees Incurred the incurrence by the Company Borrower or any Subsidiary Guarantor of its Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of the Company which are used to refund, refinance or any Subsidiary Guarantor Incurred in accordance with the provisions replace Indebtedness (other than intercompany Indebtedness) that was incurred under Section 8.02(a)(i) or clauses (C), (D) (E) or (L) of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is a Subordinated Obligation or a Guarantor Subordinated Obligation, then the related Guarantee shall be subordinated in right of payment to the Notes or the Subsidiary Guarantee to at least the same extent as the Indebtedness being Guaranteed, as the case may beSection 8.02(a)(ii);
(3G) Indebtedness of the Company owing to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owing to and held incurrence by the Company Borrower or any Restricted Subsidiaryof its Subsidiaries of intercompany Indebtedness between or among the Borrower or any of its Subsidiaries; provided, however, that that:
(a)(i1) if the Company Borrower is the obligor on such Indebtedness and the obligee is not a Subsidiary GuarantorIndebtedness, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes Loans and other Obligations;
(ii2) if a Subsidiary Guarantor is the obligor of on such Indebtedness and the obligee is neither the Company nor a Subsidiary GuarantorIndebtedness, such Indebtedness must be is expressly subordinated to the prior payment in full in cash of all obligations of such Subsidiary Guarantor with respect to its Guarantor's Subsidiary Guarantee and (b)(i) any subsequent issuance or transfer of Capital Stock or any other event which 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 other than 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 Subsidiary, as the case may be, that was not permitted by this clauseGuarantee;
Appears in 1 contract
Limitation on Indebtedness and Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) and the Company will not permit any of its Restricted Subsidiaries to issue Preferred Stock; provided, however, that the Company may Incur Indebtedness and any of the Subsidiary Guarantors may Incur Indebtedness and issue Preferred Stock if on the date of such Incurrence or issuance:
(1) the Consolidated Coverage Ratio for the Company and its Restricted Subsidiaries is at least 2.25 to 1.00, determined on a pro forma basis (including a pro forma application of proceeds); and
(2) no Default would occur as a consequence of, and no Event of Default would be continuing following, Incurring the Indebtedness or the application of its proceeds.
(b) Section 4.09(a4.07(a) will not prohibit the Incurrence of the following Indebtedness:
(1) Indebtedness under one or more Credit Facilities of the Company or any Restricted Subsidiary Incurred pursuant to this clause (1) in an aggregate amount not to exceed the greater of (i) $335.0 million or (ii) the sum of $225.0 million and 30.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of the Incurrence of such Indebtedness after giving effect to the application of the proceeds therefrom;
(2) Guarantees Incurred by the Company or any Subsidiary Guarantor of Indebtedness of the Company or any Subsidiary Guarantor Incurred in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is a Subordinated Obligation or a Guarantor Subordinated Obligation, then the related Guarantee shall be subordinated in right of payment to the Notes or the Subsidiary Guarantee to at least the same extent as the Indebtedness being Guaranteed, as the case may be;
(3) Indebtedness of the Company owing to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owing to and held by the Company or any Restricted Subsidiary; provided, however, that (a)(i) if the Company is the obligor on such Indebtedness and the obligee is not a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes and (ii) if a Subsidiary Guarantor is the obligor of such Indebtedness and the obligee is neither the Company nor a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations of such Subsidiary Guarantor with respect to its Subsidiary Guarantee and (b)(i) any subsequent issuance or transfer of Capital Stock or any other event which 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 other than 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 Subsidiary, as the case may be, that was not permitted by this clause;
Appears in 1 contract
Samples: Indenture (Goodrich Petroleum Corp)
Limitation on Indebtedness and Preferred Stock. (a) (i) The Company will notnot Incur, and will not permit any of its Restricted Subsidiaries toSubsidiary to Incur, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue Disqualified Stock and (ii) the Company will not permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of Preferred Stock; provided, however, that the Company and any Subsidiary Guarantor may Incur Indebtedness and any of the Subsidiary Guarantors may Incur Indebtedness and (including Acquired Indebtedness) or issue Preferred Disqualified Stock if on the date thereof (and after giving effect to the application of such Incurrence or issuance:
(1proceeds therefrom) the Consolidated Coverage Ratio for would be greater than 2.50:1 if such Incurrence shall occur prior to December 31, 1999 or greater than 2.75:1 if such Incurrence shall occur thereafter.
(b) Notwithstanding the foregoing paragraph (a), the Company and its Restricted Subsidiaries is at least 2.25 to 1.00, determined on a pro forma basis (including a pro forma application of proceeds); and
(2) no Default would occur as a consequence of, and no Event of Default would be continuing following, Incurring the Indebtedness or the application of its proceeds.
(b) Section 4.09(a) will not prohibit the Incurrence of may Incur the following Indebtedness:
(1i) Indebtedness under one or more Credit Facilities of the Company or any Restricted Subsidiary Incurred pursuant to this clause (1including any Guarantees thereof) under the New Credit Facility and any Refinancing Indebtedness with respect thereto in an aggregate principal amount outstanding at any time not to exceed $160 million, less the greater aggregate amount of (i) $335.0 million or (ii) all proceeds from all Asset Dispositions that have been applied since the sum of $225.0 million and 30.0% of Issue Date to permanently reduce the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of the Incurrence outstanding amount of such Indebtedness after giving effect pursuant to Section 4.6 and less the application aggregate amount of all mandatory repayments of principal of term loans thereunder that have been made since the proceeds therefromIssue Date (other than repayments that are immediately re-borrowed);
(2) Guarantees Incurred by the Company or any Subsidiary Guarantor of Indebtedness of the Company or any Subsidiary Guarantor Incurred in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is a Subordinated Obligation or a Guarantor Subordinated Obligation, then the related Guarantee shall be subordinated in right of payment to the Notes or the Subsidiary Guarantee to at least the same extent as the Indebtedness being Guaranteed, as the case may be;
(3ii) Indebtedness of the Company owing to and held by any Restricted Wholly Owned Subsidiary or Indebtedness of a Restricted Subsidiary owing to and held by the Company or any Restricted Wholly Owned Subsidiary; provided, however, that (a)(ia) if any such Indebtedness is made pursuant to an intercompany note and (other than any such Indebtedness of the Company to RIC or of RIC to the Company) is the obligor on such Indebtedness and the obligee is not a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations with respect to Securities or the Notes applicable Subsidiary Guaranty, as the case may be, and (ii) if a Subsidiary Guarantor is the obligor of such Indebtedness and the obligee is neither the Company nor a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations of such Subsidiary Guarantor with respect to its Subsidiary Guarantee and (b)(ib) any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Indebtedness being held by Wholly Owned Subsidiary ceasing to be a Person other than the Company Wholly Owned Subsidiary or a Restricted Subsidiary of the Company and (ii) any sale or other subsequent transfer of any such Indebtedness (except to a Person other than the Company or a Restricted Subsidiary of the Company shall Wholly Owned Subsidiary) will be deemed, in each case, to constitute an the Incurrence of such Indebtedness by the issuer thereof;
(iii) Indebtedness represented by the Securities (including Subsidiary Guarantees), any Indebtedness of the Company or any Restricted Subsidiary (other than the Indebtedness described in clauses (i)-(ii) above) outstanding on the Issue Date and any Refinancing Indebtedness Incurred in respect of any Indebtedness described in this clause (iii);
(A) Indebtedness of a Restricted Subsidiary outstanding on or prior to the date on which such Restricted Subsidiary was acquired by the Company or a Restricted Subsidiary (other than Indebtedness Incurred in connection with, or in contemplation of, 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 a Restricted Subsidiary); provided, however, that at the time such Restricted Subsidiary is acquired by the Company or a Restricted Subsidiary, the Company would have been able to Incur $1.00 of additional Indebtedness pursuant to paragraph (a) above after giving effect to the Incurrence of such Indebtedness pursuant to this clause (iv) and such transaction or series of related transactions and (B) Refinancing Indebtedness Incurred by a Restricted Subsidiary in respect of Indebtedness Incurred by such Restricted Subsidiary pursuant to this clause (iv);
(v) Indebtedness (A) represented by letters of credit (and reimbursement obligations with respect thereto) to secure the purchase price of inventory and/or equipment in the ordinary course of business or to secure Indebtedness (including Capitalized Lease Obligations) otherwise permitted to be incurred under the Indenture, (B) in respect of performance bonds (and letters of credit in respect thereof), bankers' acceptances, letters of credit for workers' compensation claims, and surety or appeal bonds (and letters of credit in respect thereof) provided by the Company or any Restricted Subsidiary in the ordinary course of its business and which do not secure other Indebtedness and (C) under Currency Agreements, Interest Rate Agreements and Commodity Agreements Incurred which, at the time of Incurrence, is in the ordinary course of business; provided that such agreements are entered into for bona fide hedging purposes, are not for speculation or trading purposes and are designed to protect against fluctuations in interest rates, currency exchange rates or commodity prices, as the case may be, that was not and, in the case of Interest Rate Agreements, any such Interest Rate Agreement has a notional amount corresponding to the Indebtedness being hedged thereby;
(vi) Indebtedness represented by Guarantees by the Company of Indebtedness otherwise permitted to be Incurred pursuant to this covenant and Indebtedness represented by Guarantees by a Restricted Subsidiary of Indebtedness of the Company or of another Restricted Subsidiary otherwise permitted to be Incurred pursuant to this Section 4.3;
(vii) obligations with respect to customary provisions regarding post-closing purchase price adjustments and indemnification in agreements for the purchase or sale of a business or assets otherwise permitted by this clausethe Indenture;
Appears in 1 contract
Samples: Indenture (Friendly Ice Cream Corp)
Limitation on Indebtedness and Preferred Stock. (a) The Company ARP will not, and will not permit any of its the Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) and the Company ARP will not permit any of its the Restricted Subsidiaries to issue Preferred Stock; provided, however, that ARP, the Company may Incur Indebtedness and any of the Subsidiary Guarantors may Incur Indebtedness and issue Preferred Stock if on the date of such Incurrence or issuancethereof:
(1) the Consolidated Coverage Ratio for ARP and the Company and its Restricted Subsidiaries is at least 2.25 to 1.00, determined on a pro forma basis (including a pro forma application of proceeds); and
(2) no Default will have occurred or be continuing or would occur as a consequence of, and no Event of Default would be continuing following, Incurring the Indebtedness or the application of its proceedstransactions relating to such Incurrence.
(b) Section 4.09(a) hereof will not prohibit the Incurrence of the following IndebtednessIndebtedness or issuance of the following Preferred Stock, as the case may be:
(1) Indebtedness under of ARP Incurred pursuant to one or more Credit Facilities of the Company or any Restricted Subsidiary Incurred pursuant to this clause (1) in an aggregate amount not to exceed the greater of (ia) $335.0 500.0 million less the aggregate amount of all permanent principal repayments since the Issue Date under a Credit Facility made under Section 4.07(a)(iii)(A) hereof, or (iib) the sum of (x) $225.0 350.0 million and 30.0less the aggregate amount of all permanent principal repayments since the Issue Date under a Credit Facility that are made pursuant to Section 4.07(a)(iii)(A) plus (y) 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of the Incurrence of such Indebtedness after giving effect to the application of the proceeds therefrom, in each case outstanding at any one time;
(2) Guarantees Incurred by ARP, the Company or any Subsidiary Guarantor Guarantors of Indebtedness of ARP, the Company or any a Subsidiary Guarantor Guarantor, as the case may be, Incurred in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is a Subordinated Obligation or a Guarantor Subordinated Obligation, then the related Guarantee shall be subordinated in right of payment to the Notes or the Subsidiary Guarantee to at least the same extent as the Indebtedness being Guaranteed, as the case may be;
(3) Indebtedness of the Company ARP owing to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owing to and held by the Company ARP or any Restricted Subsidiary; provided, however, that (a)(i) if the Company is the obligor on such Indebtedness and the obligee is not a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes and (ii) if a Subsidiary Guarantor is the obligor of such Indebtedness and the obligee is neither the Company nor a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations of such Subsidiary Guarantor with respect to its Subsidiary Guarantee and (b)(ii) any subsequent issuance or transfer of Capital Stock or any other event which results in any such Indebtedness being held by a Person other than the Company ARP or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person other than the Company ARP or a Restricted Subsidiary of the Company shall be deemed, in each case, to constitute an Incurrence of such Indebtedness by the Company ARP or such Restricted Subsidiary, as the case may be;
(4) Indebtedness represented by (a) the Notes issued on the Issue Date, and the related Exchange Notes issued in a registered exchange offer (or shelf registration) for the Notes pursuant to the Registration Rights Agreement, (b) any Indebtedness (other than the Indebtedness described in clauses (1) and (2) of clause (b) of this Section 4.09) outstanding on the Issue Date and (c) any Refinancing Indebtedness Incurred in respect of any Indebtedness described in this clause (4) or clause (5) or Incurred pursuant to Section 4.09(a) hereof;
(5) Indebtedness of a Person that becomes a Restricted Subsidiary or is acquired by ARP or a Restricted Subsidiary or merged into ARP or a Restricted Subsidiary in accordance with this Indenture and outstanding on the date on which such Person became a Restricted Subsidiary or was acquired by or was merged into ARP or such Restricted Subsidiary (other than Indebtedness Incurred (a) to provide all or any portion of the funds utilized to consummate the transaction or series of related transactions pursuant to which such Person became a Restricted Subsidiary or was otherwise acquired by or was merged into ARP or a Restricted Subsidiary or (b) otherwise in connection with, or in contemplation of, such acquisition); provided, however, that at the time such Person becomes a Restricted Subsidiary or is acquired by or was merged into ARP or a Restricted Subsidiary, ARP would have been able to Incur $1.00 of additional Indebtedness pursuant to Section 4.09(a) hereof after giving effect to the Incurrence of such Indebtedness pursuant to this clause (5);
(6) the Incurrence by ARP or any Restricted Subsidiary of Indebtedness represented by Capitalized 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 improvements or carrying costs of property used in the business of ARP or such Restricted Subsidiary, and Refinancing Indebtedness Incurred to Refinance any Indebtedness Incurred pursuant to this clause (6) in an aggregate outstanding principal amount which, when taken together with the principal amount of all other Indebtedness Incurred pursuant to this clause (6) and then outstanding, will not at any time outstanding exceed the greater of (a) $25.0 million and (b) 3.0% of Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence;;
(7) the Incurrence by ARP or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, payment obligations in connection with health or other types of social security benefits, unemployment or other insurance or self-insurance obligations, reclamation, statutory obligations, bankers’ acceptances and bid, performance, surety and appeal bonds or other similar obligations incurred in the ordinary course of business, including guarantees and obligations respecting standby letters of credit supporting such obligations, to the extent not drawn (in each case other than an obligation for money borrowed);
(8) Capital Stock (other than Disqualified Stock) of ARP, the Company or any of the Subsidiary Guarantors;
(9) the Incurrence by ARP 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 ARP’s or any such Restricted Subsidiary’s being a general partner or member of, or owner of an Equity Interest in, such Unrestricted Subsidiary or Joint Venture and not as guarantor of such Indebtedness and provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (9) and then outstanding does not exceed $25.0 million;
(10) Indebtedness owed to Parent not to exceed $50.0 million in the aggregate, provided that all such Indebtedness shall be unsecured and subordinated to the Notes;
(11) the Incurrence by ARP or any of its Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees issued or provided for the account of ARP and any of its Restricted Subsidiaries in the ordinary course of business, including guarantees and obligations of ARP 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);
(12) the issuance by any of the Restricted Subsidiaries to ARP or to any of its Restricted Subsidiaries of any Preferred Stock; provided that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than ARP or a Restricted Subsidiary; and
(b) any sale or other transfer of any such Preferred Stock to a Person that is neither ARP nor a 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 clauseclause (12); and
(13) in addition to the items referred to in clauses (1) through (12) above, Indebtedness of ARP, the Company and its Subsidiary Guarantors in an aggregate outstanding principal amount which, when taken together with the principal amount of all other Indebtedness Incurred pursuant to this clause (13) and then outstanding, will not exceed the greater of (a) $50.0 million and (b) 5.0% of Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence.
(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 an item of that Indebtedness meets the criteria of more than one of the types of Indebtedness described in clauses (a) and (b) of this Section 4.09, the Issuers, in their sole discretion, will classify such item of Indebtedness on the date of Incurrence and, subject to clause (ii) below may later reclassify such item of Indebtedness and only be required to include the amount and type of such Indebtedness in one of such clauses;
(2) all Indebtedness outstanding on the date of this Indenture under the Senior Secured Credit Agreement shall be deemed Incurred on the Issue Date under Section 4.09(b)(1);
(3) Guarantees of, or obligations in respect of letters of credit supporting, Indebtedness which is otherwise included in the determination of a particular amount of Indebtedness shall not be included;
(4) if obligations in respect of letters of credit are Incurred pursuant to a Credit Facility and the letters of credit relate to other Indebtedness, then such other Indebtedness shall not be included;
(5) the principal amount of any Disqualified Stock of ARP or a Restricted Subsidiary, or Preferred Stock of a Restricted Subsidiary that is not an Issuer or a Subsidiary 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;
(6) Indebtedness permitted by this Section 4.09 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.09 permitting such Indebtedness; and
(7) the amount of Indebtedness issued at a price that is less than the principal amount thereof will be equal to the amount of the liability in respect thereof determined in accordance with GAAP.
(d) Accrual of interest, accrual of dividends, the amortization of debt discount or the accretion of accreted value, the payment of interest in the form of additional Indebtedness, the payment of dividends in the form of additional shares of Preferred Stock or Disqualified Stock and unrealized losses or charges in respect of Hedging Obligations (including those resulting from the application of ASC 815) will not be deemed to be an Incurrence of Indebtedness for purposes of this Section 4.09. The amount of any Indebtedness outstanding as of any date shall be (i) the accreted value thereof in the case of any Indebtedness issued with original issue discount and (ii) the principal amount or liquidation preference thereof, together with any interest thereon that is more than 30 days past due, in the case of any other Indebtedness.
(e) If at any time an Unrestricted Subsidiary becomes a Restricted Subsidiary, any Indebtedness of such Subsidiary shall be deemed to be Incurred by a Restricted Subsidiary as of such date (and, if such Indebtedness is not permitted to be Incurred as of such date under this Section 4.09, the Issuers 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 Indebtedness does not exceed the principal amount of such Indebtedness being refinanced. Notwithstanding any other provision of this Section 4.09, the maximum amount of Indebtedness that the Issuers 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 Indebtedness is denominated that is in effect on the date of such refinancing.
(g) This Indenture will not treat (1) unsecured Indebtedness as subordinated or junior to secured Indebtedness merely because it is unsecured or (2) senior Indebtedness 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
Limitation on Indebtedness and Preferred Stock. (a) The Company will notCreate, and will not permit any of its Restricted Subsidiaries toincur, issue, assume, Guarantee or otherwise become directly or indirectlyindirectly liable, Incur contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Indebtedness) and Debt), or issue any Disqualified Stock or, in the Company will not permit case of any Subsidiary of its Restricted Subsidiaries to the Borrower, issue Preferred Stockany shares of preferred stock; provided, however, that the Company Borrower may Incur incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and any of the Subsidiary Guarantors may Incur incur Indebtedness and (including Acquired Debt) or issue Preferred Disqualified Stock if on the date of such Incurrence or issuance:
(1) the Consolidated Fixed Charge Coverage Ratio for the Company and its Restricted Subsidiaries Borrower's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 2.25 2.0 to 1.001, determined on a pro forma basis (including a pro forma application of proceedsthe net proceeds therefrom); and
(2) no Default would occur , as a consequence ofif the additional Indebtedness had been incurred or Disqualified Stock had been issued, and no Event as the case may be, at the beginning of Default would be continuing following, Incurring the Indebtedness or the application of its proceedssuch four-quarter period.
Section 6.1 (b) Section 4.09(aa) will not prohibit the Incurrence incurrence of any of the following Indebtedness:items of Indebtedness (collectively, "Permitted Debt"):
(1i) the incurrence by the Borrower of additional Indebtedness and letters of credit under one or more Credit Facilities (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company Borrower thereunder) in an aggregate amount up to $50,000,000 at any time outstanding;
(ii) the incurrence by the Borrower of Indebtedness pursuant to any Loan Document, the aggregate principal amount of which is evidenced by the G&R Series K Mortgage Bond, and the incurrence by any Subsidiary Guarantor of a Subsidiary Guarantee of such Indebtedness pursuant to Section 6.15;
(iii) the incurrence by the Borrower and its Subsidiaries of the Existing Indebtedness;
(iv) the incurrence by the Borrower of $100,000,000 aggregate principal amount of Indebtedness represented by the 6-1/4% General and Refunding Mortgage Notes, Series H, due 2012 issued under the General and Refunding Mortgage Indenture (and the related exchange notes to be issued pursuant to the registration rights agreement) and the incurrence by any Subsidiary Guarantor of a Subsidiary Guarantee of such Indebtedness (including, without limitation, the related exchange notes to be issued pursuant to the registration rights agreement entered into in connection therewith);
(v) the incurrence by the Borrower or any Restricted of the Subsidiary Incurred Guarantors of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of the Borrower or such Subsidiary Guarantor, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (1) in an aggregate amount v), not to exceed the greater of (i) $335.0 million or (ii) the sum of $225.0 million and 30.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of the Incurrence of such Indebtedness after giving effect to the application of the proceeds therefrom20,000,000 at any time outstanding;
(2vi) Guarantees Incurred the incurrence by the Company Borrower or any Subsidiary Guarantor of its Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of the Company which are used to refund, refinance or any Subsidiary Guarantor Incurred in accordance with the provisions replace Indebtedness (other than intercompany Indebtedness) that was incurred under Section 6.1(a) or clauses (iii), (iv) (vi) or (xii) of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is a Subordinated Obligation or a Guarantor Subordinated Obligation, then the related Guarantee shall be subordinated in right of payment to the Notes or the Subsidiary Guarantee to at least the same extent as the Indebtedness being Guaranteed, as the case may beSection 6.1(b);
(3vii) Indebtedness of the Company owing to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owing to and held incurrence by the Company Borrower or any Restricted Subsidiaryof its Subsidiaries of intercompany Indebtedness between or among the Borrower or any of its Subsidiaries; provided, however, that that:
(a)(iA) if the Company Borrower is the obligor on such Indebtedness and the obligee is not a Subsidiary GuarantorIndebtedness, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes Loans and other Obligations;
(iiB) if a Subsidiary Guarantor is the obligor of on such Indebtedness and the obligee is neither the Company nor a Subsidiary GuarantorIndebtedness, such Indebtedness must be is expressly subordinated to the prior payment in full in cash of all obligations of such Subsidiary Guarantor with respect to its Guarantor's Subsidiary Guarantee and (b)(i) any subsequent issuance or transfer of Capital Stock or any other event which 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 other than 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 Subsidiary, as the case may be, that was not permitted by this clauseGuarantee;
Appears in 1 contract
Samples: Credit Agreement (Nevada Power Co)
Limitation on Indebtedness and Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries toto create, incur, issue, assume, Guarantee or otherwise become directly or indirectlyindirectly liable, Incur contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Indebtedness) Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or Preferred Stock; provided, however, that the Company may Incur incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and any of the Subsidiary Guarantors may Incur incur Indebtedness and (including Acquired Debt) or issue Disqualified Stock or Preferred Stock Stock, if on the date of such Incurrence or issuance:
(1) the Consolidated Fixed Charge Coverage Ratio for the Company and its Restricted Subsidiaries Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock is issued, as the case may be, would have been at least 2.25 to 1.001.0, determined on a pro forma basis (including a pro forma application of proceedsthe net proceeds therefrom); and
(2) no Default would occur , as a consequence of, and no Event of Default would be continuing following, Incurring if the additional Indebtedness had been incurred or the application Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of its proceedssuch four-quarter period.
(b) Section 4.09(a) hereof will not prohibit the Incurrence incurrence of any of the following Indebtedness:items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Company and any Subsidiary Guarantor of additional Indebtedness and letters of credit under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this Section 4.09(b)(1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and the Subsidiary Guarantors thereunder) not to exceed the greatest of (i) $700.0 million, (ii) the Borrowing Base in effect under the Credit Agreement at the time of incurrence and (iii) (A) 20% of the Company’s Modified ACNTA determined as of the date of such incurrence plus (B) $140.0 million;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Note Guarantees issued on the Issue Date and any other Parity Lien Obligations (including Additional Notes) or Junior Lien Obligations (including Permitted Refinancing Indebtedness incurred to Refinance the foregoing) at any one time outstanding under this clause (3) not to exceed $250.0 million;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiary Incurred Subsidiaries, in an aggregate principal amount outstanding, including all Permitted Refinancing Indebtedness incurred to Refinance any Indebtedness incurred pursuant to this clause (1) in an aggregate amount Section 4.09(b)(4), not to exceed the greater of (i) $335.0 40.0 million or and (ii) the sum of $225.0 million and 30.01.5% of the Company’s Adjusted Consolidated Net Tangible Assets Modified ACNTA determined as of the date of the Incurrence of such Indebtedness after giving effect to the application of the proceeds therefromincurrence;
(25) Guarantees Incurred 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 Refinance any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was incurred under Section 4.09(a) or Section 4.09(b)(2), (3), (4), (5) or (14) hereof;
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Subsidiary Guarantor of Indebtedness of the Company or any Subsidiary Guarantor Incurred in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is a Subordinated Obligation or a Guarantor Subordinated Obligation, then the related Guarantee shall be subordinated in right of payment to the Notes or the Subsidiary Guarantee to at least the same extent as the Indebtedness being Guaranteed, as the case may be;
(3) Indebtedness of the Company owing to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owing to and held by the Company or any Restricted Subsidiary; provided, however, that (a)(i) if the Company is the obligor on such Indebtedness and the obligee payee is not the Company or a Subsidiary Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all obligations Obligations then due with respect to the Notes and (ii) if a Subsidiary Guarantor is Notes, in the obligor case of such Indebtedness and the obligee is neither Company, or the Company nor Note Guarantee, in the case of a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations of such Subsidiary Guarantor with respect to its Subsidiary Guarantee and ; and
(b)(iB) (i) any subsequent issuance or transfer of Capital Stock or any other event which Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and Company; and
(ii) any sale or other transfer of any such Indebtedness to a Person other than that is not either the Company or a Restricted Subsidiary of the Company shall be deemed, in each case, to constitute an Incurrence incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clauseSection 4.09(b)(6);
Appears in 1 contract
Limitation on Indebtedness and Preferred Stock. (a) The Company will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (Indebtedness, including Acquired Indebtedness, or permit any Restricted Subsidiary to Incur Preferred Stock, except that the Company and the Subsidiary Guarantors may Incur Indebtedness, including Acquired Indebtedness, and any Restricted Subsidiaries that are not Subsidiary Guarantors may incur Permitted Subsidiary Indebtedness, if, at the time of and immediately after giving pro forma effect to the Incurrence thereof and the application of the proceeds therefrom, (i) no Default or Event of Default has occurred and is continuing and (ii) the Consolidated Fixed Charge Coverage Ratio of the Company would not be less than 2.5 to 1.0. Notwithstanding the foregoing, the Company will not permit any of its Restricted Subsidiaries Subsidiary to issue Preferred Stock; provided, however, that Incur any Disqualified Capital Stock (other than Disqualified Capital Stock held by the Company may Incur Indebtedness and any of the or a Subsidiary Guarantors may Incur Indebtedness and issue Preferred Stock if on the date of such Incurrence or issuance:
(1) the Consolidated Coverage Ratio for the Company and its Restricted Subsidiaries Guarantor, so long as it is at least 2.25 to 1.00, determined on a pro forma basis (including a pro forma application of proceedsso held); and
(2) no Default would occur as a consequence of, and no Event of Default would be continuing following, Incurring the Indebtedness or the application of its proceeds...
(b) Section 4.09(aNotwithstanding clause (a) will not prohibit above, the Incurrence Company and, to the extent provided below, any of its Restricted Subsidiaries, as applicable, may Incur each and all of the following Indebtedness (“Permitted Indebtedness:”):
(1) Indebtedness under one or more Credit Facilities of the Company or any Restricted Subsidiary Incurred pursuant to this clause (1) in an aggregate amount not to exceed the greater of (i) $335.0 million or Indebtedness in respect of the Notes (excluding Additional Notes) and each Subsidiary Guarantee;
(ii) the sum of $225.0 million and 30.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of the Incurrence of such Indebtedness after giving effect to the application of the proceeds therefrom;
(2) Guarantees Incurred by the Company or any Subsidiary Guarantor of the Indebtedness of the Company or any Restricted Subsidiary Guarantor Incurred in accordance with the provisions of permitted under this Indenture; provided provided, that in the event if any such Indebtedness that Guarantee is being Guaranteed is a of Subordinated Obligation or a Guarantor Subordinated ObligationIndebtedness, then the related Guarantee shall be subordinated in right of payment to the Notes or the Subsidiary Guarantee of such Subsidiary Guarantor will be senior to at least the same extent as the Indebtedness being Guaranteed, as the case may besuch Subsidiary Guarantor’s Guarantee of such Subordinated Indebtedness;
(3iii) other Indebtedness of the Company owing to and held its Restricted Subsidiaries outstanding on the Issue Date other than Indebtedness otherwise specified under any of the other clauses of this definition of Permitted Indebtedness, provided that such Indebtedness of Restricted Subsidiaries shall be included in the calculation of Permitted Subsidiary Indebtedness;
(iv) Hedging Obligations entered into by the Company and its Restricted Subsidiaries in the ordinary course of business and not for speculative purposes;
(v) intercompany Indebtedness or Preferred Stock between the Company and any Restricted Subsidiary or Indebtedness of a between any Restricted Subsidiary owing to and held by Subsidiaries; provided that: (A) if the Company or any Restricted Subsidiary; provided, however, that (a)(i) if the Company Subsidiary Guarantor is the obligor on such Indebtedness and the obligee is not a Subsidiary GuarantorIndebtedness, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations with respect to under the Notes and this Indenture, in the case of the Company, or such Subsidiary Guarantor’s Subsidiary Guarantee, in the case of any such Subsidiary Guarantor, provided further, however, that in connection with the on-lending to LDK Solar USA, Inc. of the loan from a commercial bank to the Company for the acquisition of Capital Stock of Solar Power Inc., such Indebtedness of LDK Solar USA, Inc. comprising the shareholder loan owed to the Company as a result of such on-lending shall not be so subordinated; (iiB) in the event that at any time any such Indebtedness ceases to be held by the Company or a Restricted Subsidiary, such Indebtedness will be deemed to be Incurred and not permitted by this clause (v) at the time such event occurs, and (C) if a Subsidiary Guarantor is the obligor of such Indebtedness and the obligee is neither owed to the Company nor a or any Subsidiary Guarantor, such Indebtedness must be expressly subordinated to evidenced by an unsubordinated promissory note or similar instrument under applicable law;
(vi) Indebtedness of the prior payment Company or any of its Restricted Subsidiaries arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (including daylight overdrafts paid in full by the close of business on the day such overdraft was Incurred) drawn against insufficient funds in cash the ordinary course of all business; provided, that such Indebtedness is extinguished within five business days of Incurrence;
(vii) Indebtedness of the Company or any of its Restricted Subsidiaries constituting payment or reimbursement obligations of such Subsidiary Guarantor with respect to its Subsidiary Guarantee and workers’ compensation claims, self-insurance obligations or similar requirements in the ordinary course of business;
(b)(iviii) any subsequent issuance or transfer of Capital Stock Refinancing Indebtedness in respect of: (A) Indebtedness (other than Indebtedness owed to the Company or any other event which results in any Subsidiary of the Company) Incurred pursuant to clause (a) above (it being understood that no Indebtedness outstanding on the Issue Date is Incurred pursuant to such clause (a) above), or (B) Indebtedness being held by a Person other than Incurred pursuant to clause (i), (ii) or (iii) above (excluding Indebtedness outstanding on the Issue Date deemed to be incurred under clause (xi) below or Indebtedness owed to the Company or a Subsidiary of the Company);
(ix) Capitalized Lease Obligations and Purchase Money Indebtedness of the Company or any Restricted Subsidiary; provided, however, that on the date of the Incurrence of any Indebtedness permitted by this clause (ix) and after giving effect thereto, the aggregate principal amount outstanding of all such Indebtedness permitted by this clause (ix) (together with Refinancings thereof) does not exceed an amount equal to 10% of Total Assets;
(x) Indebtedness 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 obligation of the Company or any Restricted Subsidiary pursuant to such agreements, in each case Incurred in connection with the disposition of any business, assets or Restricted Subsidiary of the Company and (ii) Company, other than Guarantees of Indebtedness Incurred by any sale Person acquiring all or other transfer any portion of any such business, assets or Restricted Subsidiary for the purpose of financing such acquisition; provided that the maximum aggregate liability in respect of such Indebtedness to a Person other than shall at no time exceed the gross proceeds actually received from the sale of such business, assets or Restricted Subsidiary;
(xi) Indebtedness of the Company or a any Restricted Subsidiary with a maturity of one year or less used by the Company or any Restricted Subsidiary for working capital purposes; provided that the aggregate amount of Indebtedness permitted by this clause (xi) at any time outstanding does not exceed US$75 million (or the Dollar Equivalent thereof);
(xii) Indebtedness of the Company shall be deemedor any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit or trade guarantees issued in the ordinary course of business to the extent that such letters of credit or trade guarantees are not drawn upon or, in each caseif drawn upon, to constitute an Incurrence of the extent such Indebtedness drawing is reimbursed no later than the 30 days following receipt by the Company or such SubsidiaryRestricted Subsidiary of a demand for reimbursement;
(xiii) the Company may upon receipt of payment therefor cause to be issued 240,000,000 series A redeemable convertible preferred shares of LDK Silicon & Chemical in accordance with the Polysilicon Subscription Agreement or, as in the case event that the issuance and sale of such preferred shares to the Polysilicon Investors are not consummated, may because to be issued upon receipt of payment therefor, up to 240,000,000 Series A redeemable convertible preferred shares of LDK Silicon & Chemical on terms that are no more adverse to the Company than those provided in Polysilicon Subscription Agreement;
(xiv) Guarantees by any Restricted Subsidiary of Indebtedness of another Restricted Subsidiary that was permitted to be Incurred under clause (iv), (ix) or (xi) above;
(xv) Indebtedness of the Company or any Restricted Subsidiary constituting an obligation to pay the deferred purchase price of Capital Stock in a Restricted Subsidiary or a Person that will become a Restricted Subsidiary upon the full payment of all such deferred purchase price pursuant to a Staged Acquisition Agreement, to the extent that such deferred purchase price is paid within 12 months after the date the Company or such Restricted Subsidiary enters into such Staged Acquisition Agreement; and
(xvi) Indebtedness of the Company or any Restricted Subsidiary in an aggregate principal amount which does not to exceed US$10 million (or the Dollar Equivalent thereof) at any one time outstanding.
(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 3.8, the amount of Indebtedness issued at a price that is less than the principal amount thereof will be equal to the amount of the liability in respect thereof determined in accordance with U.S. GAAP. The accrual of interest, the accretion or amortization of original issue discount, the payment of regularly scheduled interest in the form of additional Indebtedness of the same instrument or the payment of regularly scheduled dividends on Disqualified Capital Stock in the form of additional Disqualified Capital Stock or Preferred Stock with the same terms will not be deemed to be an Incurrence of Indebtedness for purposes of this Section 3.8; provided, that was not permitted by this clause;any such outstanding additional Indebtedness or Disqualified Capital Stock paid in respect of Indebtedness Incurred pursuant to any provision of Section 3.8(b) will be counted as Indebtedness outstanding thereunder for purposes of any future Incurrence under such provision.
(d) For purposes of determining compliance with Section 3.8, in the event an item of Indebtedness meets the criteria of more than one of the types of Indebtedness described above, including under clause (a) above, the Company in its sole discretion, will classify, and from time to time may reclassify, such item of Indebtedness.
Appears in 1 contract
Samples: Indenture (LDK Solar Co., Ltd.)
Limitation on Indebtedness and Preferred Stock. (a) The Company Parent Guarantor will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including any Acquired Indebtedness) , any Disqualified Stock, and in the Company will not permit case of any of its Restricted Subsidiaries to issue Subsidiary, any Preferred Stock); provided, however, that the Company may Incur Indebtedness Parent Guarantor, the Issuer and any of the Subsidiary Guarantors may Incur Indebtedness and issue Preferred Stock if on the date of such Incurrence or issuancethereof:
(1) the Consolidated Coverage Ratio for the Company Parent Guarantor and its Restricted Subsidiaries is at least 2.25 to 1.00, determined on a pro forma basis (including a pro forma application of proceeds); and
(2) no Default would occur as a consequence of, and no Event of Default would be continuing following, Incurring the Indebtedness or the application of its proceedsapplication.
(b) Section 4.09(a3.2(a) will not prohibit the Incurrence of the following Indebtedness:
(1) Indebtedness under one or more Credit Facilities of the Company Parent Guarantor, the Issuer or any Restricted Subsidiary Guarantor Incurred pursuant to this clause (1Section 3.2(b)(1) in an aggregate amount not to exceed the greater of (i) $335.0 425.0 million or (ii) the sum of $225.0 220.0 million and 30.0% of the CompanyParent Guarantor’s Adjusted Consolidated Net Tangible Assets determined as of the date of the Incurrence of such Indebtedness after giving effect to the application of the proceeds therefrom;
(2) Guarantees Incurred by the Company or any Subsidiary Guarantor guarantees of Indebtedness of the Company or any Subsidiary Guarantor Incurred in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed guaranteed is a Subordinated Obligation or a Guarantor Subordinated Obligation, then the related Guarantee guarantee shall be subordinated in right of payment to the Notes Securities or the Subsidiary Guarantee related Guarantee, as applicable, to at least the same extent as the Indebtedness being Guaranteedguaranteed, as the case may be;
(3) Indebtedness of the Company Parent Guarantor owing to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owing to and held by the Company Parent Guarantor or any Restricted Subsidiary; provided, however, that (a)(i) if the Company Issuer is the obligor on such Indebtedness and the obligee is not a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes Securities and (ii) if a Subsidiary Guarantor is the obligor of such Indebtedness and the obligee is neither the Company Issuer nor a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations of such Subsidiary Guarantor with respect to its Subsidiary Guarantee and (b)(i) any subsequent issuance or transfer of Capital Stock or any other event which results in any such Indebtedness being held by a Person other than the Company Parent Guarantor or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person other than the Company Parent Guarantor or a Restricted Subsidiary of the Company shall be deemed, in each case, to constitute an Incurrence of such Indebtedness by the Company Parent Guarantor or such Restricted Subsidiary, as the case may be, that was not permitted by this clauseSection 3.2(b)(3);
(4) Indebtedness represented by (a) the Securities issued on the Issue Date and all Guarantees, (b) any Indebtedness (other than the Indebtedness described in Section 3.2(b)(1), (2) and 4(a)) outstanding on the Issue Date, (c) any Exchange Securities and related guarantees issued pursuant to a Registration Rights Agreement and (d) any Refinancing Indebtedness Incurred in respect of any Indebtedness described in this Section 3.2(b)(4) or Section 3.2(b)(5) or (7) or Incurred pursuant to Section 3.2(a);
(5) Permitted Acquisition Indebtedness;
(6) Indebtedness Incurred in respect of (a) self-insurance obligations, bid, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Parent Guarantor or a Restricted Subsidiary in the ordinary course of business and any guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and (b) obligations represented by letters of credit for the account of the Parent Guarantor or a Restricted Subsidiary in order to provide security for workers’ compensation claims (in the case of clauses (a) and (b) other than for an obligation for money borrowed);
(7) Indebtedness of the Parent Guarantor or any Restricted Subsidiary represented by Capitalized Lease Obligations (whether or not Incurred pursuant to Sale/Leaseback Transactions) or other Indebtedness Incurred in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property, in each case Incurred for the purpose of financing, refinancing, renewing, defeasing or refunding all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Parent Guarantor or its Restricted Subsidiaries; provided that, after giving effect to such Incurrence, the aggregate principal amount Incurred by the Parent Guarantor or any Restricted Subsidiary pursuant to this Section 3.2(b)(7), together with any Refinancing Indebtedness Incurred pursuant to Section 3.2(b)(4) in respect of such Indebtedness, and then outstanding does not exceed the greater of (x) $15.0 million and (y) 1.5% of the Parent Guarantor’s Adjusted Consolidated Net Tangible Assets; and provided further that the principal amount of any Indebtedness permitted under this Section 3.2(b)(7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement or development so financed; and
(8) in addition to the items referred to in Sections 3.2(b)(1) through (7) above, Indebtedness of the Parent Guarantor and its Restricted Subsidiaries in an aggregate outstanding principal amount which, when taken together with the principal amount of all other Indebtedness Incurred pursuant to this Section 3.2(b)(8) and then outstanding, will not exceed the greater of $25.0 million or 2.5% of the Parent Guarantor’s Adjusted Consolidated Net Tangible Assets, determined as of the date of Incurrence of such Indebtedness after giving effect to such Incurrence and the application of the proceeds therefrom.
(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 3.2:
(1) in the event an item of that Indebtedness meets the criteria of more than one of the types of Indebtedness described in Section 3.2(a) and (b), the Parent Guarantor, in its sole discretion, will classify such item of Indebtedness on the date of Incurrence and, subject to Section 3.2(c)(2) below may later classify, reclassify or redivide all or a portion of such item of Indebtedness, in any manner that complies with this Section 3.2;
(2) all Indebtedness outstanding on the date of this Indenture under the Senior Secured Credit Agreement shall be deemed Incurred on the Issue Date under Section 3.2(b)(1);
(3) guarantees of, or obligations in respect of letters of credit supporting, Indebtedness which is otherwise included in the determination of a particular amount of Indebtedness shall not be included;
(4) if obligations in respect of letters of credit are Incurred pursuant to a Credit Facility and are being treated as Incurred pursuant to Section 3.2(b)(1) and the letters of credit relate to other Indebtedness, then such other Indebtedness shall not be included;
(5) the principal amount of any Disqualified Stock of the Parent Guarantor, or Preferred Stock of the Issuer or any Subsidiary 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;
(6) Indebtedness permitted by this Section 3.2 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 3.2 permitting such Indebtedness; and
(7) the amount of Indebtedness issued at a price that is less than the principal amount thereof will be equal to the amount of the liability in respect thereof determined in accordance with GAAP. Accrual of interest, accrual of dividends, the amortization of debt discount or the accretion of accreted value, the payment of interest in the form of additional Indebtedness, the payment of dividends in the form of additional shares of Preferred Stock or Disqualified Stock and unrealized losses or charges in respect of Hedging Obligations (including those resulting from the application of FASB Accounting Standards Codification (“ASC”) Topic No. 815, Derivatives and Hedging) will not be deemed to be an Incurrence of Indebtedness for purposes of this Section 3.2. The Parent Guarantor will not permit any of its Unrestricted Subsidiaries to Incur any Indebtedness (including the issue of any Disqualified Stock), other than Non-Recourse Debt. If at any time an Unrestricted Subsidiary becomes a Restricted Subsidiary, any Indebtedness of such Subsidiary shall be deemed to be Incurred by a Restricted Subsidiary as of such date (and, if such Indebtedness is not permitted to be Incurred as of such date under this Section 3.2, the Parent Guarantor shall be in Default of this Section 3.2). For purposes of determining compliance with any U.S. (or Canadian) dollar-denominated restriction on the Incurrence of Indebtedness, the U.S. (or Canadian, as applicable) dollar-equivalent principal amount of Indebtedness denominated in a different 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 different currency, and such refinancing would cause the applicable U.S. (or Canadian, as applicable) 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. (or Canadian, as applicable) dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being refinanced. Notwithstanding any other provision of this Section 3.2, the maximum amount of Indebtedness that any Person may Incur pursuant to this Section 3.2 shall not be deemed to be exceeded solely as a result of fluctuations in the exchange rates of currencies. The principal amount of any Indebtedness Incurred to refinance other Indebtedness, if Incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such Refinancing Indebtedness is denominated that is in effect on the date of such refinancing. This Indenture shall not treat (1) unsecured Indebtedness as subordinated or junior to secured Indebtedness merely because it is unsecured or (2) senior Indebtedness 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: Indenture (Lone Pine Resources Inc.)
Limitation on Indebtedness and Preferred Stock. (a) The Company Parent Guarantor will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) and the Company Parent Guarantor will not permit any of its Restricted Subsidiaries to issue Preferred Stock; provided, however, that the Company Parent Guarantor may Incur Indebtedness and the Issuer and any of the Subsidiary Guarantors may Incur Indebtedness and issue Preferred Stock if on the date of such Incurrence or issuancethereof:
(1) the Consolidated Coverage Ratio for the Company Parent Guarantor and its Restricted Subsidiaries is at least 2.25 to 1.00, determined on a pro forma basis (including a pro forma application of proceeds); and
(2) no Default would occur as a consequence of, and no Event of Default would be continuing following, Incurring the Indebtedness or the application of its proceedsapplication.
(b) Section 4.09(a3.2(a) will not prohibit the Incurrence of the following Indebtedness:
(1) Indebtedness under one or more Credit Facilities of (a) the Company Parent Guarantor, the Issuer or any Restricted Subsidiary Guarantor Incurred pursuant to this clause (1Section 3.2(b)(1) in an aggregate amount not to exceed the greater of (i) $335.0 1,250.0 million or (ii) the sum of $225.0 400.0 million and 30.0% of the CompanyParent Guarantor’s Adjusted Consolidated Net Tangible Assets determined as of the date of the Incurrence of such Indebtedness after giving effect to the application of the proceeds therefrom;
(2) Guarantees Incurred by the Company or any Subsidiary Guarantor of Indebtedness of the Company or any Subsidiary Guarantor Incurred in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is a Subordinated Obligation or a Guarantor Subordinated Obligation, then the related Guarantee shall be subordinated in right of payment to the Notes or the Subsidiary Guarantee to at least the same extent as the Indebtedness being Guaranteed, as the case may be;
(3) Indebtedness of the Company owing to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owing to and held by the Company or any Restricted Subsidiary; provided, however, that (a)(i) if the Company is the obligor on such Indebtedness and the obligee is not a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes therefrom and (ii) if a Subsidiary Guarantor is the obligor of such Indebtedness and the obligee is neither the Company nor a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations of such Subsidiary Guarantor with respect to its Subsidiary Guarantee and (b)(ib) any subsequent issuance or transfer of Capital Stock or any other event which results Foreign Subsidiary Incurred pursuant to this Section 3.2(b)(1) 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 an aggregate amount not to a Person other than the Company or a Restricted Subsidiary of the Company shall be deemedexceed $30.0 million, in each case, to constitute an Incurrence of such Indebtedness by the Company or such Subsidiary, as the case may be, that was not permitted by this clauseoutstanding at any one time;
Appears in 1 contract
Samples: Indenture (Antero Resources LLC)
Limitation on Indebtedness and Preferred Stock. (a) The Company Parent Guarantor will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) ), and the Company Parent Guarantor will not permit any of its Restricted Subsidiaries to issue Preferred Stock; provided, however, that the Company may Incur Indebtedness and any of the Subsidiary Guarantors may Incur Indebtedness and issue Preferred Stock if on the date of such Incurrence or issuance:
(1) the Consolidated Coverage Ratio for the Company and its Restricted Subsidiaries is at least 2.25 to 1.00, determined on a pro forma basis (including a pro forma application of proceeds); and
(2) no Default would occur as a consequence of, and no Event of Default would be continuing following, Incurring the Indebtedness or the application of its proceeds.
(b) Section 4.09(a3.2(a) will not prohibit the Incurrence of the following Indebtedness:
(1) Indebtedness under one (i) the Term Loan Credit Agreement in an aggregate amount not to exceed $975,000,000 together with any payment-in-kind interest Incurred in respect thereof and Refinancing Indebtedness in respect thereof; provided that such amount shall decrease on a dollar-for-dollar basis for any payments or more prepayments, including in connection with any sales of assets and excluding only payments with the proceeds of permitted Refinancing Indebtedness; (ii) the Revolving Credit Facilities of the Company or any Restricted Subsidiary Incurred pursuant to this clause (1) Facility in an aggregate amount not to exceed the greater of (ia) the Borrowing Base then in effect minus the principal amount outstanding under the Term Loan Credit Agreement at such time (but in no event to exceed $425,000,000) and (b) $335.0 million 325,000,000 and Refinancing Indebtedness in respect thereof; (iii) Senior Notes in an aggregate amount not to exceed $420,035,000 and Refinancing Indebtedness in respect thereof; and (iv) the Notes, the Guarantees and other obligations under this Indenture in an aggregate amount not to exceed (a) $545,000,000, plus (b) the aggregate principal amount of any Additional Notes issued in exchange for 2022 Notes in accordance with Section 3.3(b)(13), together with any payment-in-kind interest Incurred in respect thereof, any increase in the aggregate principal amount of the Notes in connection with PIK Payments and PIK Notes, and Refinancing Indebtedness in respect of any Indebtedness Incurred pursuant to this Section 3.2(b)(1)(iv); provided that in no event shall the Parent Guarantor (and the Parent Guarantor shall not permit any Restricted Subsidiary to) enter into, cause or permit to exist or become effective any amendment, restatement, supplement, modification or refinancing (or successive amendments, restatements, supplements, modifications or refinancings) of any Senior Secured Credit Agreement (or any Refinancing Indebtedness in respect thereof) (for the avoidance of doubt excluding any amendments, supplements, modifications or refinancings entered into on or prior to the Issuance Date) that increases (1) the interest rate or yield, including by increasing the “applicable margin” or similar component of the interest rate (including to provide for additional compounded or PIK Interest), through original issue discount or by modifying the method of computing interest, or (ii2) a letter of credit, commitment, facility, utilization, makewhole or similar fee (but excluding any customary consent, amendment, arrangement or similar fees) so that the sum of $225.0 million combined interest rate and 30.0fees are increased by more than 2.50% of the Company’s Adjusted Consolidated Net Tangible Assets determined per annum with respect to such Senior Secured Credit Facility as in effect as of the date hereof, in each instance in the aggregate at any level of the Incurrence pricing, but excluding increases from (A) increases in an underlying reference rate not caused by a modification or refinancing of such Indebtedness after giving effect Senior Secured Credit Agreement, (B) accrual of interest at the “default rate” defined in such Senior Secured Credit Agreement at the date hereof or, for a refinancing, a rate that corresponds to the default rate, or (C) application of a pricing grid set forth in such Senior Secured Credit Agreement at the date hereof; provided further, that the Parent Guarantor will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, (1) Incur Indebtedness otherwise permitted to be Incurred under Section 3.2(b)(1)(ii) in an amount in excess of $50,000,000 for purposes of funding any purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of any Subordinated Obligations, or (2) use the proceeds therefrom;of Indebtedness Incurred in reliance on Section 3.2(b)(1)(ii) in an amount in excess of $50,000,000 for purposes of funding any purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of any Subordinated Obligations.
(2) Guarantees Incurred by the Company or any Subsidiary Guarantor guarantees of Indebtedness of the Company or any Subsidiary Guarantor Incurred in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed guaranteed is a Subordinated Obligation or a Guarantor Subordinated Obligation, then the related Guarantee guarantee shall be subordinated in right of payment to the Notes or the Subsidiary Guarantee to at least the same extent as the Indebtedness being Guaranteedguaranteed, as the case may be;
(3) Indebtedness of the Company Parent Guarantor owing to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owing to and held by the Company Parent Guarantor or any other Restricted Subsidiary; provided, however, that (a)(ii)(a) if the Company Issuer is the obligor on such Indebtedness and the obligee is not a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes and (iib) if a Subsidiary Guarantor is the obligor of such Indebtedness and the obligee is neither the Company Issuer nor a Subsidiary another Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations of such Subsidiary Guarantor with respect to its Subsidiary Guarantee Guarantee, and (b)(iii)(a) any subsequent issuance or transfer of Capital Stock or any other event which results in any such Indebtedness being held by a Person other than the Company Parent Guarantor or a Restricted Subsidiary of the Company and (iib) any sale or other transfer of any such Indebtedness to a Person other than the Company Parent Guarantor or a Restricted Subsidiary of the Company Parent Guarantor shall be deemed, in each case, to constitute an Incurrence of such Indebtedness by the Company Parent Guarantor or such Restricted Subsidiary, as the case may be, that was not permitted by this clauseSection 3.2(b)(3);
(4) Indebtedness represented by (i) any Indebtedness (other than the Indebtedness of the type described in Section 3.2(b)(1), (2) and (4)) outstanding on the Issue Date and (ii) any Refinancing Indebtedness Incurred in respect of any Indebtedness of the type described in Section 3.2(b)(1), this Section 3.2(b)(4) or Section 3.2(b)(5) or (7);
(5) (i) Permitted Acquisition Indebtedness and (ii) Indebtedness of the Parent Guarantor or any of its Restricted Subsidiaries incurred or issued to finance or assumed in connection with an acquisition or Investment in an aggregate principal amount, together with all other outstanding Indebtedness, Disqualified Stock or Preferred Stock issued under this clause (ii) of Section 3.2(b)(5) and any outstanding Indebtedness under Section 3.2(b)(4) incurred to refinance Indebtedness initially incurred in reliance on this clause (ii) of Section 3.2(b)(5), not to exceed $25 million as of the date of Incurrence of such Indebtedness, after giving effect to such Incurrence and the application of the proceeds therefrom;
(6) Indebtedness Incurred in respect of (i) self-insurance obligations, bid, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Parent Guarantor or a Restricted Subsidiary in the ordinary course of business and any guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and (ii) obligations represented by letters of credit for the account of the Parent Guarantor or a Restricted Subsidiary in order to provide security for workers’ compensation claims (in the case of clauses (i) and (ii) other than for an obligation for money borrowed);
(7) Indebtedness of the Parent Guarantor or any Restricted Subsidiary represented by Capitalized Lease Obligations (whether or not incurred pursuant to Sale/Leaseback Transactions) or other Indebtedness Incurred in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property, in each case Incurred for the purpose of financing, refinancing, renewing, defeasing or refunding all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Parent Guarantor or its Restricted Subsidiaries; provided that the outstanding Indebtedness Incurred by the Parent Guarantor or any Restricted Subsidiary pursuant to this Section 3.2(b)(7), and any outstanding Indebtedness under Section 3.2(b)(4) incurred to refinance Indebtedness initially incurred in reliance on this Section 3.2(b)(7), shall not exceed $25 million; and provided further that the principal amount of any Indebtedness permitted under this Section 3.2(b)(7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement or development so financed;
(8) Preferred Stock (other than Disqualified Stock) of the Issuer and any Subsidiary Guarantor that is either issued in exchange for outstanding Indebtedness of the Issuer or a Restricted Subsidiary or the proceeds of which is reinvested in the Issuer or a Restricted Subsidiary;
(9) Cash Management Obligations of the Issuer or any Guarantor in an aggregate amount not to exceed $15 million as of the date of Incurrence of such Indebtedness, after giving effect to such Incurrence and the application of proceeds therefrom; and
(10) Permitted Third Lien Indebtedness in an aggregate principal amount not to exceed $240.0 million and any Refinancing Indebtedness in respect thereof plus any increase to such principal amount resulting from interest that is paid-in-kind on such Indebtedness.
(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 3.2:
(1) in the event an item of that Indebtedness meets the criteria of more than one of the types of Indebtedness described in Section 3.2(b), the Parent Guarantor, in its sole discretion, will classify such item of Indebtedness on the date of Incurrence and, subject to Section 3.2(c)(2) below, may later classify, reclassify or redivide all or a portion of such item of Indebtedness, in any manner that complies with this Section 3.2;
(2) all Indebtedness outstanding on the date of this Indenture or subsequently Incurred under the Senior Secured Credit Agreements, the Senior Notes and the Notes shall be deemed Incurred on the Issue Date or the date of such Incurrence, respectively, under Section 3.2(b)(1);
(3) guarantees of, or obligations in respect of letters of credit supporting, Indebtedness which is otherwise included in the determination of a particular amount of Indebtedness shall not be included;
(4) if obligations in respect of letters of credit are Incurred pursuant to a Credit Facility and are being treated as Incurred pursuant to Section 3.2(b)(1) and the letters of credit relate to other Indebtedness, then such other Indebtedness shall not be included;
(5) the principal amount of any Disqualified Stock of the Parent Guarantor or a Restricted Subsidiary, or Preferred Stock of a Restricted Subsidiary, 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;
(6) Indebtedness permitted by this Section 3.2 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 3.2 permitting such Indebtedness; and
(7) the amount of Indebtedness issued at a price that is less than the principal amount thereof will be equal to the amount of the liability in respect thereof determined in accordance with GAAP. Accrual of interest, accrual of dividends, the amortization of debt discount or the accretion of accreted value, the payment of interest in the form of additional Indebtedness, the payment of dividends in the form of additional Preferred Stock or Disqualified Stock and unrealized losses or charges in respect of Hedging Obligations (including those resulting from the application of FASB ASC Topic No. 815, Derivatives and Hedging) will not be deemed to be an Incurrence of Indebtedness for purposes of this Section 3.2. The Parent Guarantor will not permit any of its Foreign Subsidiaries, Subsidiaries that are not Subsidiary Guarantors or Unrestricted Subsidiaries to Incur any Indebtedness (including to issue any Disqualified Stock) other than Non-Recourse Debt. If at any time an Unrestricted Subsidiary becomes a Restricted Subsidiary, any Indebtedness of such Subsidiary shall be deemed to be Incurred by a Restricted Subsidiary as of such date (and, if such Indebtedness is not permitted to be Incurred as of such date under this Section 3.2, the Parent Guarantor shall be in Default of this Section 3.2). For purposes of determining compliance with any U.S. dollar-denominated restriction on the Incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was Incurred, in the case of term Indebtedness, or first committed, in the case of revolving credit Indebtedness; provided that if such Indebtedness is Incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being refinanced. Notwithstanding any other provision of this Section 3.2, the maximum amount of Indebtedness that any Person may Incur pursuant to this Section 3.2 shall not be deemed to be exceeded solely as a result of fluctuations in the exchange rates of currencies. The principal amount of any Indebtedness Incurred to refinance other Indebtedness, if Incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such Refinancing Indebtedness is denominated that is in effect on the date of such refinancing. This Indenture shall not treat (1) unsecured Indebtedness as subordinated or junior to secured Indebtedness merely because it is unsecured or (2) senior Indebtedness 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: Indenture (Ultra Petroleum Corp)
Limitation on Indebtedness and Preferred Stock. (a) The Company will shall not, and will shall not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur incur, assume, Guarantee or otherwise become liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Indebtedness) , and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stock; provided, however, that the Company may Incur Indebtedness and any of the Subsidiary Guarantors may Incur Indebtedness and issue Preferred Stock if on the date of such Incurrence or issuance:
(1) the Consolidated Coverage Ratio for the Company and its Restricted Subsidiaries is at least 2.25 to 1.00, determined on a pro forma basis (including a pro forma application of proceeds); and
(2) no Default would occur as a consequence of, and no Event of Default would be continuing following, Incurring the Indebtedness or the application of its proceeds.
(b) Section 4.09(a) will not prohibit the Incurrence of the following Indebtedness:
(1) Indebtedness under one or more Credit Facilities of the Company or any Restricted Subsidiary Incurred pursuant to this clause (1) in an aggregate amount not to exceed the greater of (i) $335.0 million or (ii) the sum of $225.0 million and 30.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of the Incurrence of such Indebtedness after giving effect to the application of the proceeds therefrom;
(2) Guarantees Incurred by the Company or any Subsidiary Guarantor of Indebtedness of the Company or any Subsidiary Guarantor Incurred in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is a Subordinated Obligation or a Guarantor Subordinated Obligation, then the related Guarantee shall be subordinated in right of payment to the Notes or the Subsidiary Guarantee to at least the same extent as the Indebtedness being Guaranteed, as the case may be;
(3) Indebtedness of the Company owing to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owing to and held by the Company or any Restricted Subsidiary; provided, however, that (a)(i) if the Company is the obligor on such Indebtedness and the obligee is not a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes and (ii) if a Subsidiary Guarantor is the obligor of such Indebtedness and the obligee is neither the Company nor a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations of such Subsidiary Guarantor with respect to its Subsidiary Guarantee and (b)(i) any subsequent issuance or transfer of Capital Stock or any other event which results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company may incur Indebtedness, the Company may issue Disqualified Stock and any Restricted Subsidiary of the Company may issue Preferred Stock if, on the date of such incurrence and after giving effect thereto, the Consolidated Coverage Ratio equals or exceeds 2.0 to 1.0. The limitation described in the preceding paragraph shall not prohibit the incurrence of the following Indebtedness by the Company or any of its Restricted Subsidiaries or the issuance of Disqualified Stock by the Company or Preferred Stock by any Restricted Subsidiary of the Company (“Permitted Debt”):
(1) Indebtedness of the Company or any of its Restricted Subsidiaries (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) not exceeding the greater of (a) $900.0 million less the aggregate principal amount of Indebtedness incurred and outstanding pursuant to this clause (a) that has been permanently repaid (with a corresponding commitment reduction, in the case of revolving credit Indebtedness) out of the Net Available Cash from Asset Dispositions by the Company or any Restricted Subsidiary thereof pursuant to Section 3.5 hereof and (iib) the sum of $400.0 million plus 25.0% of the Company’s Consolidated Net Tangible Assets as of the date of such incurrence;
(2) Indebtedness owed to and Preferred Stock issued to and, in each case, held by the Company or any sale of its Restricted Subsidiaries; provided that any subsequent issuance or other transfer of any Capital Stock which results in any such Indebtedness Restricted Subsidiary ceasing to a Person other than the Company or be a Restricted Subsidiary of the Company or any subsequent transfer of such Indebtedness or Preferred Stock (other than to the Company or another Restricted Subsidiary of the Company) shall be deemed, in each case, to constitute an Incurrence the incurrence of such Indebtedness or the issuance of such Preferred Stock not permitted by this clause (2);
(a) the Securities issued on the Issue Date and the Subsidiary Guarantees related thereto, and (b) any other Parity Lien Debt in an aggregate amount (together with any Parity Lien Debt incurred pursuant to clause (5) of this paragraph in respect thereof to refinance the foregoing) at any one time outstanding, that, on the date of such incurrence and after giving effect thereto and the application of the proceeds therefrom, would result in a Secured Leverage Ratio of no greater than 3.0 to 1.0;
(4) Indebtedness (a) outstanding on the Issue Date and (b) incurred or assumed by the Company or the Subsidiary Guarantors in connection with the Separation (other than Indebtedness described in clauses (1), (2) and (3) of this paragraph);
(5) Refinancing Indebtedness in respect of Indebtedness incurred by the Company or any of its Restricted Subsidiaries in exchange for, or the net proceeds of which are used to Refinance any Indebtedness (other than intercompany Indebtedness), Disqualified Stock or Preferred Stock, as applicable, that was permitted by this Indenture to be incurred or issued pursuant to the first paragraph of this Section 3.2 or pursuant to clauses (3), (4), (6), (13) and (14) of this paragraph and this clause (5);
(6) Indebtedness represented by mortgage financings, purchase money obligations or other Indebtedness, in each case incurred for the purpose of financing all or any part of the price or cost of design, construction, installation, development, repair or improvement of plant, property or equipment used in the business of the Company or any of its Restricted Subsidiaries and Capital Lease Obligations, and Refinancing Indebtedness of any of the foregoing, in an aggregate principal amount, when taken together with the outstanding amount of all other Indebtedness incurred pursuant to this clause (6), including any Refinancing Indebtedness incurred in respect thereof, not to exceed at any time outstanding under this clause (6) the greater of (a) $100.0 million and (b) 5.0% of the Company’s Consolidated Net Tangible Assets at the time of any incurrences under this clause (6);
(7) Guarantees by the Company or a Restricted Subsidiary of the Company of any Indebtedness of the Company or any Restricted Subsidiary of the Company that is permitted to be incurred by another provision of this Section 3.2 and could have been incurred (in compliance with this Section 3.2) by the Person so Guaranteeing such Indebtedness; provided, however, that if the Indebtedness being Guaranteed is subordinated to or pari passu with the Securities, then the Subsidiary Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness Guaranteed;
(8) (a) Bank Product Obligations and (b) Indebtedness under Hedging Contracts, Interest Rate Agreements and Currency Agreements entered into for the purpose of limiting risks that arise in the ordinary course of business and not for speculation;
(9) Indebtedness in respect of self-insurance obligations, bid, plugging, abandonment, mine reclamation, appeal, reimbursement, performance, surety and similar obligations provided by or for the account of the Company or any Restricted Subsidiary of the Company in the ordinary course of business, and any Guarantees and letters of credit functioning as or supporting any of the foregoing in the ordinary course of business;
(10) Permitted Marketing Obligations;
(11) Indebtedness of a Receivables Subsidiary incurred in a Qualified Receivables Transaction not to exceed at any time outstanding under this clause (11) $125.0 million;
(12) liability in respect of the Indebtedness of any Unrestricted Subsidiary of the Company or any Joint Venture but only to the extent that such liability is the result of (a) the Company’s or any such Restricted Subsidiary’s being a general partner of such Unrestricted Subsidiary or Joint Venture and not as Guarantor of such Indebtedness, provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (12) and then outstanding does not exceed $25.0 million, or (b) the pledge of (or a Guarantee limited in recourse solely to) Equity Interests in such Unrestricted Subsidiary or Joint Venture held by the Company or such SubsidiaryRestricted Subsidiary to secure such Indebtedness and solely to the extent such Indebtedness constitutes Non-Recourse Debt;
(13) Permitted Acquisition Indebtedness; and
(14) Indebtedness of the Company or any Restricted Subsidiary of the Company or the issuance of any Disqualified Stock by the Company or Preferred Stock by any Restricted Subsidiary in an aggregate amount not exceeding, at any one time outstanding, including any Refinancing Indebtedness incurred in respect thereof, the greater of (i) $100.0 million and (ii) 5.0% of the Company’s Consolidated Net Tangible Assets at the time of any incurrence under this clause (14). In the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (1) through (14) of the preceding paragraph or is entitled to be incurred pursuant to the first paragraph of this Section 3.2, the Company shall, in its sole discretion, divide, classify or reclassify (or later divide, classify, redivide or reclassify) such item of Indebtedness in any manner that complies with this Section 3.2 (including splitting into multiple exceptions) and will only be required to include the amount and type of such Indebtedness in one of such clauses of the preceding paragraph or pursuant to the first paragraph of this Section 3.2; provided that Indebtedness of the Company and any of its Restricted Subsidiaries outstanding under the Credit Agreement as of the Separation Date shall initially be deemed to have been incurred pursuant to clause (1) of the preceding paragraph and may not be reclassified. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributions, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 3.2; provided that the amount thereof shall be included in the calculation Consolidated Interest Expense of the Company as accrued to the extent required by the definition of such term. For purposes of determining compliance with clause (1) of the second paragraph of this Section 3.2, the Company may elect, pursuant to an Officers’ Certificate delivered to the Trustee, to treat all or any portion of the commitment under any Indebtedness (and any refinancing with respect thereto) (any such commitment, a “Designated Commitment”) as being incurred at such time, in which case any subsequent incurrence of Indebtedness under such commitment or refinancing, as the case may be, shall not be deemed, for purposes of this calculation, to be an incurrence at such subsequent time. For the avoidance of doubt, once such election is made, Indebtedness in the full amount of any Designated Commitment shall be deemed outstanding for purposes of testing compliance with clause (1) of the second paragraph of this Section 3.2. Notwithstanding anything to the contrary contained herein, the aggregate principal amount of Indebtedness that was is permitted to be incurred by the Company’s Restricted Subsidiaries that are not permitted by Subsidiary Guarantors pursuant to the first paragraph of this clause;Section 3.2 and clause (14) of the second paragraph of this Section 3.2 shall not exceed at any time outstanding $50.0 million in the aggregate.
Appears in 1 contract
Samples: Indenture (CONSOL Mining Corp)
Limitation on Indebtedness and Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) and the Company will not permit any of its Restricted Subsidiaries to issue Preferred Stock; provided, however, that the Company may Incur Indebtedness and any of the Subsidiary Guarantors may Incur Indebtedness and issue Preferred Stock if on the date of such Incurrence or issuance:
(1) the Consolidated Coverage Ratio for the Company and its Restricted Subsidiaries is at least 2.25 to 1.00, determined on a pro forma basis (including a pro forma application of proceeds); and
(2) no Default would occur as a consequence of, and no Event of Default would be continuing following, Incurring the Indebtedness or the application of its proceeds.
(b) Section 4.09(a7.22(a) will not prohibit the Incurrence of the following Indebtedness:
(1) Indebtedness under one or more Credit Facilities of the Company or any Restricted Subsidiary Incurred pursuant to this clause (1) in an aggregate amount not to exceed the greater of (i) $335.0 million or (ii) the sum of $225.0 million and 30.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of the Incurrence of such Indebtedness after giving effect to the application of the proceeds therefromconstituting a Permitted Reserve Based Facility;
(2) Guarantees Incurred by the Company or any Subsidiary Guarantor of Indebtedness of the Company or any Subsidiary Guarantor Incurred in accordance with the provisions of this IndentureIndenture (including any increase in principal amount as a result of a PIK Payment and any PIK Interest Notes in respect thereof); provided provided, however that in the event such Indebtedness that is being Guaranteed is a Subordinated Obligation or a Guarantor Subordinated Obligation, then the related Guarantee shall be subordinated in right of payment to the Notes or the Subsidiary Guarantee to at least the same extent as the Indebtedness being Guaranteed, as the case may be;
(3) Indebtedness of the Company owing to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owing to and held by the Company or any Restricted Subsidiary; provided, however, however that (a)(i) if the Company is the obligor on such Indebtedness and the obligee is not a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes and (ii) if a Subsidiary Guarantor is the obligor of such Indebtedness and the obligee is neither the Company nor a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations of such Subsidiary Guarantor with respect to its Subsidiary Guarantee and (b)(i) any subsequent issuance or transfer of Capital Stock or any other event which 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 other than 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 Subsidiary, as the case may be, that was not permitted by this clause;
(4) Indebtedness represented by (a) the Notes issued on the Issue Date (together with any PIK Payments in respect thereof) and all Subsidiary Guarantees, (b) any Indebtedness (other than the Indebtedness described in clauses (1), (2), (3), (6) or
Appears in 1 contract
Samples: Indenture (Goodrich Petroleum Corp)
Limitation on Indebtedness and Preferred Stock. (a) The Company Parent Guarantor will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) ), and the Company Parent Guarantor will not permit any of its Restricted Subsidiaries to issue Preferred Stock; provided, however, that the Company may Incur Indebtedness and any of the Subsidiary Guarantors may Incur Indebtedness and issue Preferred Stock if on the date of such Incurrence or issuance:
(1) the Consolidated Coverage Ratio for the Company and its Restricted Subsidiaries is at least 2.25 to 1.00, determined on a pro forma basis (including a pro forma application of proceeds); and
(2) no Default would occur as a consequence of, and no Event of Default would be continuing following, Incurring the Indebtedness or the application of its proceeds.
(b) Section 4.09(a3.2(a) will not prohibit the Incurrence of the following Indebtedness:
(1) Indebtedness under one (i) the Term Loan Credit Agreement in an aggregate amount not to exceed $975,00,000 and Refinancing Indebtedness in respect thereof; provided that such amount shall decrease on a dollar-for-dollar basis for any payments or more prepayments, including in connection with any sales of assets and excluding only payments with the proceeds of permitted Refinancing Indebtedness; (ii) the Revolving Credit Facilities of the Company or any Restricted Subsidiary Incurred pursuant to this clause (1) Facility in an aggregate amount not to exceed the greater of (iA) the Borrowing Base then in effect minus the principal amount outstanding under the Term Loan Credit Agreement at such time (but in no event to exceed $425,000,000) and (B) $335.0 million 325,000,000 and Refinancing Indebtedness in respect thereof; (iii) Senior Notes in an aggregate amount not to exceed $[ ] and Refinancing Indebtedness in respect thereof; and (iv) the Notes, the Guarantees and other obligations under this Indenture in an aggregate amount not to exceed $[ ], plus any increase in the aggregate principal amount of the Notes in connection with PIK Payments and PIK Notes and Refinancing Indebtedness in respect thereof; provided that in no event shall the Parent Guarantor (and the Parent Guarantor shall not permit any Restricted Subsidiary to) enter into, cause or permit to exist or become effective any amendment, restatement, supplement, modification or refinancing (or successive amendments, restatements, supplements, modifications or refinancings) of any Senior Secured Credit Agreement that increases (1) the interest rate or yield, including by increasing the “applicable margin” or similar component of the interest rate (including to provide for additional compounded or PIK Interest), through original issue discount or by modifying the method of computing interest, or (ii2) a letter of credit, commitment, facility, utilization, makewhole or similar fee (but excluding any customary consent, amendment, arrangement or similar fees) so that the sum of $225.0 million combined interest rate and 30.0fees are increased by more than 1.25% of the Company’s Adjusted Consolidated Net Tangible Assets determined per annum with respect to such Senior Secured Credit Facility as in effect as of the date hereof, in each instance in the aggregate at any level of the Incurrence pricing, but excluding increases from (A) increases in an underlying reference rate not caused by a modification or refinancing of such Indebtedness after giving effect Senior Secured Credit Agreement, (B) accrual of interest at the “default rate” defined in such Senior Secured Credit Agreement at the date hereof or, for a refinancing, a rate that corresponds to the default rate, or (C) application of a pricing grid set forth in such Senior Secured Credit Agreement at the proceeds therefromdate hereof;
(2) Guarantees Incurred by the Company or any Subsidiary Guarantor guarantees of Indebtedness of the Company or any Subsidiary Guarantor Incurred in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed guaranteed is a Subordinated Obligation or a Guarantor Subordinated Obligation, then the related Guarantee guarantee shall be subordinated in right of payment to the Notes or the Subsidiary Guarantee to at least the same extent as the Indebtedness being Guaranteedguaranteed, as the case may be;
(3) Indebtedness of the Company Parent Guarantor owing to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owing to and held by the Company Parent Guarantor or any other Restricted Subsidiary; provided, however, that (a)(ii)(a) if the Company Issuer is the obligor on such Indebtedness and the obligee is not a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes and (iib) if a Subsidiary Guarantor is the obligor of such Indebtedness and the obligee is neither the Company Issuer nor a Subsidiary another Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations of such Subsidiary Guarantor with respect to its Subsidiary Guarantee Guarantee, and (b)(iii)(a) any subsequent issuance or transfer of Capital Stock or any other event which results in any such Indebtedness being held by a Person other than the Company Parent Guarantor or a Restricted Subsidiary of the Company and (iib) any sale or other transfer of any such Indebtedness to a Person other than the Company Parent Guarantor or a Restricted Subsidiary of the Company Parent Guarantor shall be deemed, in each case, to constitute an Incurrence of such Indebtedness by the Company Parent Guarantor or such Restricted Subsidiary, as the case may be, that was not permitted by this clauseSection 3.2(b)(3);
(4) Indebtedness represented by (i) any Indebtedness (other than the Indebtedness of the type described in Section 3.2(b)(1), (2) and (4)) outstanding on the Issue Date and (ii) any Refinancing Indebtedness Incurred in respect of any Indebtedness of the type described in Section 3.2(b)(1), this Section 3.2(b)(4) or Section 3.2(b)(5) or (7);
(5) (i) Permitted Acquisition Indebtedness and (ii) Indebtedness of the Parent Guarantor or any of its Restricted Subsidiaries incurred or issued to finance or assumed in connection with an acquisition or Investment in an aggregate principal amount, together with all other outstanding Indebtedness, Disqualified Stock or Preferred Stock issued under this clause (ii) of Section 3.2(b)(5) and any outstanding Indebtedness under Section 3.2(b)(4) incurred to refinance Indebtedness initially incurred in reliance on this clause (ii) of Section 3.2(b)(5), not to exceed $25 million as of the date of Incurrence of such Indebtedness, after giving effect to such Incurrence and the application of the proceeds therefrom;
(6) Indebtedness Incurred in respect of (i) self-insurance obligations, bid, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Parent Guarantor or a Restricted Subsidiary in the ordinary course of business and any guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and (ii) obligations represented by letters of credit for the account of the Parent Guarantor or a Restricted Subsidiary in order to provide security for workers’ compensation claims (in the case of clauses (i) and (ii) other than for an obligation for money borrowed);
(7) Indebtedness of the Parent Guarantor or any Restricted Subsidiary represented by Capitalized Lease Obligations (whether or not incurred pursuant to Sale/Leaseback Transactions) or other Indebtedness Incurred in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property, in each case Incurred for the purpose of financing, refinancing, renewing, defeasing or refunding all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Parent Guarantor or its Restricted Subsidiaries; provided that the outstanding Indebtedness Incurred by the Parent Guarantor or any Restricted Subsidiary pursuant to this Section 3.2(b)(7), and any outstanding Indebtedness under Section 3.2(b)(4) incurred to refinance Indebtedness initially incurred in reliance on this Section 3.2(b)(7), shall not exceed $25 million; and provided further that the principal amount of any Indebtedness permitted under this Section 3.2(b)(7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement or development so financed;
(8) Preferred Stock (other than Disqualified Stock) of the Issuer and any Subsidiary Guarantor that is either issued in exchange for outstanding Indebtedness of the Issuer or a Restricted Subsidiary or the proceeds of which is reinvested in the Issuer or a Restricted Subsidiary;
(9) Cash Management Obligations of the Issuer or any Guarantor in an aggregate amount not to exceed $15 million as of the date of Incurrence of such Indebtedness, after giving effect to such Incurrence and the application of proceeds therefrom; and
(10) Permitted Third Lien Indebtedness in an aggregate principal amount not to exceed $240.0 million and any Refinancing Indebtedness in respect thereof plus any increase to such principal amount resulting from interest that is paid-in-kind on such Indebtedness.
(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 3.2:
(1) in the event an item of that Indebtedness meets the criteria of more than one of the types of Indebtedness described in Section 3.2(b), the Parent Guarantor, in its sole discretion, will classify such item of Indebtedness on the date of Incurrence and, subject to Section 3.2(c)(2) below, may later classify, reclassify or redivide all or a portion of such item of Indebtedness, in any manner that complies with this Section 3.2;
(2) all Indebtedness outstanding on the date of this Indenture or subsequently Incurred under the Senior Secured Credit Agreements, the Senior Notes and the Notes shall be deemed Incurred on the Issue Date or the date of such Incurrence, respectively, under Section 3.2(b)(1);
(3) guarantees of, or obligations in respect of letters of credit supporting, Indebtedness which is otherwise included in the determination of a particular amount of Indebtedness shall not be included;
(4) if obligations in respect of letters of credit are Incurred pursuant to a Credit Facility and are being treated as Incurred pursuant to Section 3.2(b)(1) and the letters of credit relate to other Indebtedness, then such other Indebtedness shall not be included;
(5) the principal amount of any Disqualified Stock of the Parent Guarantor or a Restricted Subsidiary, or Preferred Stock of a Restricted Subsidiary, 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;
(6) Indebtedness permitted by this Section 3.2 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 3.2 permitting such Indebtedness; and
(7) the amount of Indebtedness issued at a price that is less than the principal amount thereof will be equal to the amount of the liability in respect thereof determined in accordance with GAAP. Accrual of interest, accrual of dividends, the amortization of debt discount or the accretion of accreted value, the payment of interest in the form of additional Indebtedness, the payment of dividends in the form of additional Preferred Stock or Disqualified Stock and unrealized losses or charges in respect of Hedging Obligations (including those resulting from the application of FASB ASC Topic No. 815, Derivatives and Hedging) will not be deemed to be an Incurrence of Indebtedness for purposes of this Section 3.2. The Parent Guarantor will not permit any of its Foreign Subsidiaries, Subsidiaries that are not Subsidiary Guarantors or Unrestricted Subsidiaries to Incur any Indebtedness (including to issue any Disqualified Stock) other than Non-Recourse Debt. If at any time an Unrestricted Subsidiary becomes a Restricted Subsidiary, any Indebtedness of such Subsidiary shall be deemed to be Incurred by a Restricted Subsidiary as of such date (and, if such Indebtedness is not permitted to be Incurred as of such date under this Section 3.2, the Parent Guarantor shall be in Default of this Section 3.2). For purposes of determining compliance with any U.S. dollar-denominated restriction on the Incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was Incurred, in the case of term Indebtedness, or first committed, in the case of revolving credit Indebtedness; provided that if such Indebtedness is Incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being refinanced. Notwithstanding any other provision of this Section 3.2, the maximum amount of Indebtedness that any Person may Incur pursuant to this Section 3.2 shall not be deemed to be exceeded solely as a result of fluctuations in the exchange rates of currencies. The principal amount of any Indebtedness Incurred to refinance other Indebtedness, if Incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such Refinancing Indebtedness is denominated that is in effect on the date of such refinancing. This Indenture shall not treat (1) unsecured Indebtedness as subordinated or junior to secured Indebtedness merely because it is unsecured or (2) senior Indebtedness 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
Limitation on Indebtedness and Preferred Stock. (a) The Company will shall not, and will shall not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur incur, assume, Guarantee or otherwise become liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Indebtedness) , and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stock; provided, however, that the Company may Incur Indebtedness and any of the Subsidiary Guarantors may Incur Indebtedness and issue Preferred Stock if on the date of such Incurrence or issuance:
(1) the Consolidated Coverage Ratio for the Company and its Restricted Subsidiaries is at least 2.25 to 1.00, determined on a pro forma basis (including a pro forma application of proceeds); and
(2) no Default would occur as a consequence of, and no Event of Default would be continuing following, Incurring the Indebtedness or the application of its proceeds.
(b) Section 4.09(a) will not prohibit the Incurrence of the following Indebtedness:
(1) Indebtedness under one or more Credit Facilities of the Company or any Restricted Subsidiary Incurred pursuant to this clause (1) in an aggregate amount not to exceed the greater of (i) $335.0 million or (ii) the sum of $225.0 million and 30.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of the Incurrence of such Indebtedness after giving effect to the application of the proceeds therefrom;
(2) Guarantees Incurred by the Company or any Subsidiary Guarantor of Indebtedness of the Company or any Subsidiary Guarantor Incurred in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is a Subordinated Obligation or a Guarantor Subordinated Obligation, then the related Guarantee shall be subordinated in right of payment to the Notes or the Subsidiary Guarantee to at least the same extent as the Indebtedness being Guaranteed, as the case may be;
(3) Indebtedness of the Company owing to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owing to and held by the Company or any Restricted Subsidiary; provided, however, that (a)(i) if the Company is the obligor on such Indebtedness and the obligee is not a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes and (ii) if a Subsidiary Guarantor is the obligor of such Indebtedness and the obligee is neither the Company nor a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations of such Subsidiary Guarantor with respect to its Subsidiary Guarantee and (b)(i) any subsequent issuance or transfer of Capital Stock or any other event which results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company may incur Indebtedness, the Company may issue Disqualified Stock and any Restricted Subsidiary of the Company may issue Preferred Stock if, on the date of such incurrence and after giving effect thereto, the Consolidated Coverage Ratio equals or exceeds 2.0 to 1.0. The limitation described in the preceding paragraph shall not prohibit the incurrence of the following Indebtedness by the Company or any of its Restricted Subsidiaries or the issuance of Disqualified Stock by the Company or Preferred Stock by any Restricted Subsidiary of the Company (“Permitted Debt”):
(1) Indebtedness of the Company or any of its Restricted Subsidiaries (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) not exceeding the greater of (a) $2.5 billion and (iib) the sum of $1.0 billion plus 30.0% of the Company’s ACNTA as of the date of such incurrence;
(2) Indebtedness owed to and Preferred Stock issued to and, in each case, held by the Company or any sale of its Restricted Subsidiaries; provided that any subsequent issuance or other transfer of any Capital Stock which results in any such Indebtedness Restricted Subsidiary ceasing to a Person other than the Company or be a Restricted Subsidiary of the Company or any subsequent transfer of such Indebtedness or Preferred Stock (other than to the Company or another Restricted Subsidiary of the Company) shall be deemed, in each case, to constitute an Incurrence the incurrence of such Indebtedness or the issuance of such Preferred Stock not permitted by this clause (2);
(3) the Securities (other than any Additional Securities) and the Subsidiary Guarantees related thereto;
(4) Indebtedness outstanding on the Issue Date (other than Indebtedness described in clauses (1), (2) and (3) of this paragraph);
(5) Refinancing Indebtedness in respect of Indebtedness incurred by the Company or any of its Restricted Subsidiaries in exchange for, or the net proceeds of which are used to Refinance any Indebtedness (other than intercompany Indebtedness), Disqualified Stock or Preferred Stock, as applicable, that was permitted by this Indenture to be incurred or issued pursuant to the first paragraph of this covenant or pursuant to clauses (3) and (4) of this paragraph and this clause (5);
(6) Indebtedness represented by Capital Lease Obligations, mortgage financings, purchase money obligations or other Indebtedness, in each case incurred for the purpose of financing all or any part of the price or cost of design, construction, installation, development, repair or improvement of plant, property or equipment used in the business of the Company or any of its Restricted Subsidiaries, and Refinancing Indebtedness thereof, in an aggregate principal amount, when taken together with the outstanding amount of all other Indebtedness or Refinancing Indebtedness incurred pursuant to this clause (6), not to exceed at any time outstanding under this clause (6) the greater of (a) $250.0 million and (b) 5.0% of the Company’s ACNTA at the time of any incurrences under this clause (6);
(7) Guarantees by the Company or a Restricted Subsidiary of the Company of any Indebtedness of the Company or any Restricted Subsidiary of the Company that is permitted to be incurred by another provision of this covenant and could have been incurred (in compliance with this covenant) by the Person so Guaranteeing such Indebtedness; provided, however, that if the Indebtedness being Guaranteed is subordinated to or pari passu with the Securities, then the Subsidiary Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness Guaranteed;
(8) Indebtedness under Hedging Contracts, Interest Rate Agreements and Currency Agreements entered into in the ordinary course of business for the purpose of limiting risks that arise in the ordinary course of business and not for speculation;
(9) Indebtedness in respect of self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar obligations and completion guarantees provided by or for the account of the Company or any Restricted Subsidiary of the Company in the ordinary course of business, and any Guarantees and letters of credit functioning as or supporting any of the foregoing in the ordinary course of business;
(10) Permitted Marketing Obligations;
(11) in-kind obligations relating to oil or natural gas balancing positions arising in the ordinary course of business;
(12) Indebtedness of a Receivables Subsidiary incurred in a Qualified Receivables Transaction;
(13) liability in respect of the Indebtedness of any Unrestricted Subsidiary of the Company or any Joint Venture but only to the extent that such liability is the result of (a) the Company’s or any such Restricted Subsidiary’s being a general partner of such Unrestricted Subsidiary or Joint Venture and not as Guarantor of such Indebtedness, provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (13) and then outstanding does not exceed $25.0 million, or (b) the pledge of (or a Guarantee limited in recourse solely to) Equity Interests in such Unrestricted Subsidiary or Joint Venture held by the Company or such SubsidiaryRestricted Subsidiary to secure such Indebtedness and solely to the extent such Indebtedness constitutes Non-Recourse Debt;
(14) Permitted Acquisition Indebtedness; and
(15) Indebtedness of the Company or any Restricted Subsidiary of the Company or the issuance of any Disqualified Stock by the Company or Preferred Stock by any Restricted Subsidiary in an aggregate amount not exceeding, at any one time outstanding, including any Refinancing Indebtedness thereof, the greater of (i) $500.0 million and (ii) 10.0% of the Company’s ACNTA at the time of any incurrence under this clause (15). In the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (1) through (15) of the preceding paragraph or is entitled to be incurred pursuant to the first paragraph of this covenant, the Company shall, in its sole discretion, divide, classify or reclassify (or later divide, classify, redivide or reclassify) such item of Indebtedness in any manner that complies with this covenant (including splitting into multiple exceptions) and will only be required to include the amount and type of such Indebtedness in one of such clauses of the preceding paragraph or pursuant to the first paragraph of this covenant; provided that Indebtedness of the Company and any of its Restricted Subsidiaries outstanding under the Credit Agreement as of the case may beIssue Date shall initially be deemed to have been incurred pursuant to clause (1) of the preceding paragraph. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributions, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this covenant; provided that was not permitted the amount thereof shall be included in the calculation Consolidated Interest Expense of the Company as accrued to the extent required by this clause;the definition of such term.
Appears in 1 contract
Samples: Indenture (CNX Resources Corp)
Limitation on Indebtedness and Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries toto create, incur, issue, assume, Guarantee or otherwise become directly or indirectlyindirectly liable, Incur contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Indebtedness) Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or Preferred Stock; provided, however, that the Company may Incur incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and any of the Subsidiary Guarantors may Incur incur Indebtedness and (including Acquired Debt) or issue Disqualified Stock or Preferred Stock Stock, if on the date of such Incurrence or issuance:
(1) the Consolidated Fixed Charge Coverage Ratio for the Company and its Restricted Subsidiaries Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock is issued, as the case may be, would have been at least 2.25 to 1.001.0, determined on a pro forma basis (including a pro forma application of proceedsthe net proceeds therefrom); and
(2) no Default would occur , as a consequence of, and no Event of Default would be continuing following, Incurring if the additional Indebtedness had been incurred or the application Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of its proceedssuch four-quarter period.
(b) Section 4.09(a) hereof will not prohibit the Incurrence incurrence of any of the following Indebtedness:items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Company and any Subsidiary Guarantor of additional Indebtedness and letters of credit under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this Section 4.09(b)(1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company or any Restricted and the Subsidiary Incurred pursuant to this clause (1Guarantors thereunder) in an aggregate amount not to exceed the greater greatest of (i) $335.0 million or 1,000.0 million, (ii) the sum Borrowing Base in effect under the Credit Agreement at the time of $225.0 million incurrence, and 30.0(iii) (A) 35% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of the Incurrence of such Indebtedness after giving effect to the application of the proceeds therefromincurrence plus (B) $250.0 million;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Note Guarantees Incurred to be issued on the Issue Date;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this Section 4.09(b)(4), not to exceed the greater of (i) $40.0 million and (ii) 1.5% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was incurred under Section 4.09(a) or Section 4.09(b)(2), (3), (4), (5) or (14) hereof;
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Subsidiary Guarantor of Indebtedness of the Company or any Subsidiary Guarantor Incurred in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is a Subordinated Obligation or a Guarantor Subordinated Obligation, then the related Guarantee shall be subordinated in right of payment to the Notes or the Subsidiary Guarantee to at least the same extent as the Indebtedness being Guaranteed, as the case may be;
(3) Indebtedness of the Company owing to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owing to and held by the Company or any Restricted Subsidiary; provided, however, that (a)(i) if the Company is the obligor on such Indebtedness and the obligee payee is not the Company or a Subsidiary Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all obligations Obligations then due with respect to the Notes and (ii) if a Subsidiary Guarantor is Notes, in the obligor case of such Indebtedness and the obligee is neither Company, or the Company nor Note Guarantee, in the case of a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations of such Subsidiary Guarantor with respect to its Subsidiary Guarantee and ; and
(b)(iB) (i) any subsequent issuance or transfer of Capital Stock or any other event which 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 other than 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 Subsidiary, as the case may be, that was not permitted by this clause;Company; and
Appears in 1 contract
Limitation on Indebtedness and Preferred Stock. (a) The Company Parent Guarantor will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) ), and the Company Parent Guarantor will not permit any of its Restricted Subsidiaries to issue Preferred Stock; provided, however, that the Company Parent Guarantor may Incur Indebtedness and the Issuer and any of the Subsidiary Guarantors may Incur Indebtedness and issue Preferred Stock if on the date of such Incurrence or issuancethereof:
(1) the Consolidated Coverage Ratio for the Company Parent Guarantor and its Restricted Subsidiaries is at least 2.25 2.00 to 1.00, determined on a pro forma basis (including a pro forma application of proceeds); and
(2) no Default would occur as a consequence of, and no Default or Event of Default would be continuing following, Incurring the Incurrence of the Indebtedness or the application of its proceedsapplication.
(b) Section 4.09(a3.2(a) will not prohibit the Incurrence of the following Indebtedness:
(1) Indebtedness under one or more Credit Facilities of (i) the Company Issuer or any Restricted Subsidiary Guarantor Incurred pursuant to this clause (1Section 3.2(b)(1) in an aggregate amount not to exceed the greater greatest of (ix) $335.0 million or 1.25 billion, (iiy) the sum of $225.0 400.0 million and 30.0% of the CompanyParent Guarantor’s Adjusted Consolidated Net Tangible Assets determined as of the date of the Incurrence of such Indebtedness after giving effect to the application of the proceeds therefrom and (z) the Borrowing Base then in effect, and (ii) Indebtedness Incurred by any Foreign Subsidiary pursuant to this Section 3.2(b)(1)(ii) in an aggregate amount not to exceed $50.0 million as of the date of Incurrence of such Indebtedness, after giving effect to such Incurrence and the application of the proceeds therefrom;
(2) Guarantees Incurred by the Company or any Subsidiary Guarantor guarantees of Indebtedness of the Company or any Subsidiary Guarantor Incurred in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed guaranteed is a Subordinated Obligation or a Guarantor Subordinated Obligation, then the related Guarantee guarantee shall be subordinated in right of payment to the Notes Securities or the Subsidiary Guarantee to at least the same extent as the Indebtedness being Guaranteedguaranteed, as the case may be;
(3) Indebtedness of the Company Parent Guarantor owing to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owing to and held by the Company Parent Guarantor or any other Restricted Subsidiary; provided, however, that (a)(ii)(a) if the Company Issuer is the obligor on such Indebtedness and the obligee is not a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes Securities and (iib) if a Subsidiary Guarantor is the obligor of such Indebtedness and the obligee is neither the Company Issuer nor a Subsidiary another Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations of such Subsidiary Guarantor with respect to its Subsidiary Guarantee and (b)(iii)(a) any subsequent issuance or transfer of Capital Stock or any other event which results in any such Indebtedness being held by a Person other than the Company Parent Guarantor or a Restricted Subsidiary of the Company and (iib) any sale or other transfer of any such Indebtedness to a Person other than the Company Parent Guarantor or a Restricted Subsidiary of the Company Parent Guarantor shall be deemed, in each case, to constitute an Incurrence of such Indebtedness by the Company Parent Guarantor or such Restricted Subsidiary, as the case may be, that was not permitted by this clauseSection 3.2(b)(3);
(4) Indebtedness represented by (i) the Securities issued on the Issue Date and all Guarantees, (ii) any Indebtedness (other than the Indebtedness described in Section 3.2(b)(1), (2) and 4(i)) outstanding on the Issue Date and (iii) any Refinancing Indebtedness Incurred in respect of any Indebtedness described in this Section 3.2(b)(4) or Section 3.2(b)(5) or (7) or Incurred pursuant to Section 3.2(a);
(5) (i) Permitted Acquisition Indebtedness and (ii) Indebtedness of the Parent Guarantor or any of its Restricted Subsidiaries incurred or issued to finance or assumed in connection with an acquisition or Investment in an aggregate principal amount, together with all other outstanding Indebtedness, Disqualified Stock or Preferred Stock issued under this clause (ii) of Section 3.2(b)(5) and any outstanding Indebtedness under Section 3.2(b)(4) incurred to refinance Indebtedness initially incurred in reliance on this clause (ii) of Section 3.2(b)(5), not to exceed $100.0 million as of the date of Incurrence of such Indebtedness, after giving effect to such Incurrence and the application of the proceeds therefrom;
(6) Indebtedness Incurred in respect of (i) self-insurance obligations, bid, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Parent Guarantor or a Restricted Subsidiary in the ordinary course of business and any guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and (ii) obligations represented by letters of credit for the account of the Parent Guarantor or a Restricted Subsidiary in order to provide security for workers’ compensation claims (in the case of clauses (i) and (ii) other than for an obligation for money borrowed);
(7) Indebtedness of the Parent Guarantor or any Restricted Subsidiary represented by Capitalized Lease Obligations (whether or not incurred pursuant to Sale/Leaseback Transactions) or other Indebtedness Incurred in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property, in each case Incurred for the purpose of financing, refinancing, renewing, defeasing or refunding all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Parent Guarantor or its Restricted Subsidiaries; provided that the outstanding Indebtedness Incurred by the Parent Guarantor or any Restricted Subsidiary pursuant to this Section 3.2(b)(7), and any outstanding Indebtedness under Section 3.2(b)(4) incurred to refinance Indebtedness initially incurred in reliance on this Section 3.2(b)(7), shall not exceed the greater of (x) $100.0 million and (y) 2.5% of the Parent Guarantor’s Adjusted Consolidated Net Tangible Assets as of the date of Incurrence of such Indebtedness, after giving effect to such Incurrence and the application of the proceeds therefrom; and provided further that the principal amount of any Indebtedness permitted under this Section 3.2(b)(7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement or development so financed;
(8) Preferred Stock (other than Disqualified Stock) of the Issuer and any Subsidiary Guarantor;
(9) Cash Management Obligations of the Issuer or any Guarantor in an aggregate amount not to exceed $50.0 million as of the date of Incurrence of such Indebtedness, after giving effect to such Incurrence and the application of the proceeds therefrom;
(10) Indebtedness issued in satisfaction of any Claims derived from or based upon makewhole, applicable premium, redemption premium, or other similar payment provisions under the OpCo Notes MNPA or any other alleged premiums, fees, or Claims arising from the treatment of the OpCo Funded Debt Claims under the Approved Plan (capitalized terms used in this clause (10) but not defined herein shall have the meanings assigned to such terms in the Approved Plan), including any Claims for damages or other relief arising from such treatment, which, when taken together with the principal amount of all other Indebtedness Incurred pursuant to this Section 3.2(b)(10) and then outstanding, will not exceed $300.0 million, determined as of the date of Incurrence of such Indebtedness after giving effect to such Incurrence and the application of the proceeds therefrom; and
(11) in addition to the items referred to in Sections 3.2(b)(1) through (10) above, Indebtedness of the Parent Guarantor and its Restricted Subsidiaries in an aggregate outstanding principal amount which, when taken together with the principal amount of all other Indebtedness Incurred pursuant to this Section 3.2(b)(11) and then outstanding, will not exceed the greater of (x) $125.0 million and (y) 2.5% of the Parent Guarantor’s Adjusted Consolidated Net Tangible Assets, determined as of the date of Incurrence of such Indebtedness after giving effect to such Incurrence and the application of the proceeds therefrom.
(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 3.2:
(1) in the event an item of that Indebtedness meets the criteria of more than one of the types of Indebtedness described in Section 3.2(a) and (b), the Parent Guarantor, in its sole discretion, will classify such item of Indebtedness on the date of Incurrence and, subject to Section 3.2(c)(2) below, may later classify, reclassify or redivide all or a portion of such item of Indebtedness, in any manner that complies with this Section 3.2;
(2) all Indebtedness outstanding on the date of this Indenture under the Senior Secured Credit Agreements shall be deemed Incurred on the Issue Date under Section 3.2(b)(1);
(3) guarantees of, or obligations in respect of letters of credit supporting, Indebtedness which is otherwise included in the determination of a particular amount of Indebtedness shall not be included;
(4) if obligations in respect of letters of credit are Incurred pursuant to a Credit Facility and are being treated as Incurred pursuant to Section 3.2(b)(1) and the letters of credit relate to other Indebtedness, then such other Indebtedness shall not be included;
(5) the principal amount of any Disqualified Stock of the Parent Guarantor or a Restricted Subsidiary, or Preferred Stock of a Restricted Subsidiary, 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;
(6) Indebtedness permitted by this Section 3.2 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 3.2 permitting such Indebtedness; and
(7) the amount of Indebtedness issued at a price that is less than the principal amount thereof will be equal to the amount of the liability in respect thereof determined in accordance with GAAP. Accrual of interest, accrual of dividends, the amortization of debt discount or the accretion of accreted value, the payment of interest in the form of additional Indebtedness, the payment of dividends in the form of additional Preferred Stock or Disqualified Stock and unrealized losses or charges in respect of Hedging Obligations (including those resulting from the application of FASB ASC Topic No. 815, Derivatives and Hedging) will not be deemed to be an Incurrence of Indebtedness for purposes of this Section 3.2. The Parent Guarantor will not permit any of its Unrestricted Subsidiaries to Incur any Indebtedness (including to issue any Disqualified Stock) other than Non-Recourse Debt. If at any time an Unrestricted Subsidiary becomes a Restricted Subsidiary, any Indebtedness of such Subsidiary shall be deemed to be Incurred by a Restricted Subsidiary as of such date (and, if such Indebtedness is not permitted to be Incurred as of such date under this Section 3.2, the Parent Guarantor shall be in Default of this Section 3.2). For purposes of determining compliance with any U.S. dollar-denominated restriction on the Incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was Incurred, in the case of term Indebtedness, or first committed, in the case of revolving credit Indebtedness; provided that if such Indebtedness is Incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being refinanced. Notwithstanding any other provision of this Section 3.2, the maximum amount of Indebtedness that any Person may Incur pursuant to this Section 3.2 shall not be deemed to be exceeded solely as a result of fluctuations in the exchange rates of currencies. The principal amount of any Indebtedness Incurred to refinance other Indebtedness, if Incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such Refinancing Indebtedness is denominated that is in effect on the date of such refinancing. This Indenture shall not treat (1) unsecured Indebtedness as subordinated or junior to secured Indebtedness merely because it is unsecured or (2) senior Indebtedness 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: Indenture (Ultra Petroleum Corp)
Limitation on Indebtedness and Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) and the Company will not permit any of its Restricted Subsidiaries to issue Preferred Stock; provided, however, that the Company may Incur Indebtedness and any of the Subsidiary Guarantors may Incur Indebtedness and issue Preferred Stock if on the date of such Incurrence or issuance:
(1) the Consolidated Coverage Ratio for the Company and its Restricted Subsidiaries is at least 2.25 to 1.00, determined on a pro forma basis (including a pro forma application of proceeds); and
(2) no Default would occur as a consequence of, and no Event of Default would be continuing following, Incurring the Indebtedness or the application of its proceeds.
(b) Section 4.09(a) will not prohibit the Incurrence of the following Indebtedness:
(1) Indebtedness under one or more Credit Facilities of the Company or any Restricted Subsidiary Incurred pursuant to this clause (1) in an aggregate amount not to exceed the greater of (i) $335.0 million or (ii) the sum of $225.0 million and 30.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of the Incurrence of such Indebtedness after giving effect to the application of the proceeds therefrom;
(2) Guarantees Incurred by the Company or any Subsidiary Guarantor of Indebtedness of the Company or any Subsidiary Guarantor Incurred in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is a Subordinated Obligation or a Guarantor Subordinated Obligation, then the related Guarantee shall be subordinated in right of payment to the Notes or the Subsidiary Guarantee to at least the same extent as the Indebtedness being Guaranteed, as the case may be;
(3) Indebtedness of the Company owing to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owing to and held by the Company or any Restricted Subsidiary; provided, however, that (a)(i) if the Company is the obligor on such Indebtedness and the obligee is not a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes and (ii) if a Subsidiary Guarantor is the obligor of such Indebtedness and the obligee is neither the Company nor a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations of such Subsidiary Guarantor with respect to its Subsidiary Guarantee and (b)(i) any subsequent issuance or transfer of Capital Stock or any other event which 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 other than 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 Subsidiary, as the case may be, that was not permitted by this clause;
(4) Indebtedness represented by (a) the Notes issued on the Issue Date and all Subsidiary Guarantees, (b) any Indebtedness (other than the Indebtedness described in clauses (1), (2), (3), (6) or (7)) outstanding on the Issue Date, (c) any Exchange Notes issued in exchange for other Notes pursuant to a Registration Rights Agreement and (d) any Refinancing Indebtedness Incurred in respect of any Indebtedness described in this clause (4) or clause (5) or (7) or Incurred pursuant to Section 4.09(a);
(5) Permitted Acquisition Indebtedness;
(6) Indebtedness in respect of (a) self-insurance obligations, bid, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and (b) obligations represented by letters of credit for the account of the Company or a Restricted Subsidiary in order to provide security for workers’ compensation claims (in the case of clauses (a) and (b) other than for an obligation for money borrowed);
(7) Indebtedness represented by Capitalized Lease Obligations of the Company or any of its Restricted Subsidiaries (whether or not Incurred pursuant to sale and leaseback transactions), mortgage financings or purchase money obligations, Incurred in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property, in each case Incurred for the purpose of financing, refinancing, renewing, defeasing or refunding all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or such Restricted Subsidiary, provided that after giving effect to any such Incurrence, the aggregate principal amount of all Indebtedness Incurred pursuant to this clause (7), together with any Refinancing Indebtedness Incurred pursuant to clause (4) in respect of such Indebtedness, and then outstanding does not exceed the greater of $25.0 million or 2.5% of the Company’s Adjusted Consolidated Net Tangible Assets, determined as of the date of Incurrence of such Indebtedness after giving effect to such Incurrence and the application of the proceeds therefrom; and
(8) in addition to the items referred to in clauses (1) through (7) above, Indebtedness of the Company and its Restricted Subsidiaries in an aggregate outstanding principal amount which, when taken together with the principal amount of all other Indebtedness Incurred pursuant to this clause (8) and then outstanding, will not exceed the greater of $30.0 million or 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets, determined as of the date of Incurrence of such Indebtedness after giving effect to such Incurrence and the application of the proceeds therefrom; provided that not more than $10.0 million of such Indebtedness may be Indebtedness of a Restricted Subsidiary that is not a Subsidiary Guarantor.
(c) For purposes of determining compliance with, and the outstanding principal amount of any particular Indebtedness Incurred pursuant to and in compliance with, this covenant:
(1) in the event an item of that Indebtedness meets the criteria of more than one of the types of Indebtedness described in Section 4.09(a)-(b), the Company, in its sole discretion, will classify such item of Indebtedness on the date of Incurrence and, subject to clause (2) below, may later classify, reclassify or redivide all or a portion of such item of Indebtedness, in any manner that complies with this covenant;
(2) all Indebtedness outstanding on the date of this Indenture under the First Lien Credit Agreement, after giving effect to the initial offering and sale of Notes and the use of proceeds therefrom shall be deemed Incurred on the Issue Date under clause (1) of Section 4.09(b);
(3) Guarantees Incurred by the Company or any Subsidiary Guarantor of, or obligations Incurred by the Company or any Subsidiary Guarantor in respect of letters of credit supporting, Indebtedness which is otherwise included in the determination of a particular amount of Indebtedness shall not be included;
(4) if obligations in respect of letters of credit are Incurred pursuant to a Credit Facility and are being treated as Incurred pursuant to clause (1) of Section 4.09(b) and the letters of credit relate to other Indebtedness, then such other Indebtedness shall not be included to the extent of the underlying letter of credit;
(5) the principal amount of any Disqualified Stock of the Company or a Restricted Subsidiary, or Preferred Stock of a Restricted Subsidiary, 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;
(6) Indebtedness permitted by this Section 4.09 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.09 permitting such Indebtedness; and
(7) the amount of Indebtedness issued at a price that is less than the principal amount thereof will be equal to the amount of the liability in respect thereof determined in accordance with GAAP.
(d) Accrual of interest, accrual of dividends, the amortization of debt discount or the accretion of accreted value, the payment of interest in the form of additional Indebtedness, the payment of dividends in the form of additional shares of Preferred Stock or Disqualified Stock and unrealized losses or charges in respect of Hedging Obligations will not be deemed to be an Incurrence of Indebtedness for purposes of this Section 4.09.
Appears in 1 contract
Limitation on Indebtedness and Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur incur any Indebtedness (including Acquired Indebtedness) Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stock; provided, however, that the Company may Incur incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and any of the Restricted Subsidiary Guarantors may Incur incur Indebtedness and (including Acquired Debt) or issue Preferred Stock Stock, if on the date of such Incurrence or issuance:
(1) the Consolidated Fixed Charge Coverage Ratio for the Company and its Restricted Subsidiaries Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock is issued, as the case may be, would have been at least 2.25 2.0 to 1.001.0, determined on a pro forma basis (including a pro forma application of proceedsthe net proceeds therefrom); and, as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period. The first paragraph of this covenant will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”): 56
(1) the incurrence by the Company and the Restricted Subsidiaries, of Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed the greatest of (a) $800.0 million, (b) the Borrowing Base in effect under the Credit Agreement at such time, and (c) 30.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence;
(2) no Default would occur as a consequence of, the incurrence by the Company and no Event its Restricted Subsidiaries of Default would the Existing Indebtedness (other than pursuant to the Credit Agreement);
(3) the incurrence by the Company and the Guarantors of Indebtedness represented by the Notes to be continuing following, Incurring issued on the Indebtedness Issue Date and the related Note Guarantees;
(4) the incurrence by the Company or the application any of its proceeds.
(b) Section 4.09(a) will not prohibit Restricted Subsidiaries of Indebtedness represented by Finance Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the Incurrence purpose of financing all or any part of the following Indebtedness:
(1) Indebtedness under one purchase price or more Credit Facilities cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiary Incurred Subsidiaries, in an aggregate principal amount outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (1) in an aggregate amount 4), not to exceed the greater of (i) $335.0 100.0 million or and (ii) the sum of $225.0 million and 30.03.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of the Incurrence of such Indebtedness after giving effect to the application of the proceeds therefromincurrence or issuance;
(25) Guarantees Incurred the incurrence by the Company or any Subsidiary Guarantor of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any Subsidiary Guarantor Incurred of its Restricted Subsidiaries or any Disqualified Stock of the Company or any Preferred Stock of a Restricted Subsidiary, in accordance with each case that was permitted by this Indenture to be incurred under the provisions first paragraph of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is a Subordinated Obligation covenant or a Guarantor Subordinated Obligationclause (2), then the related Guarantee shall be subordinated in right (3), (4), (5), (14), (15) or (16) of payment to the Notes or the Subsidiary Guarantee to at least the same extent as the Indebtedness being Guaranteed, as the case may bethis paragraph;
(36) Indebtedness of the Company owing to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owing to and held incurrence by the Company or any of its Restricted SubsidiarySubsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that that:
(a)(ia) if the Company or a Guarantor is the obligor on such Indebtedness and the obligee 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 Obligations then due with respect to the Notes and Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and
(iib) if a Subsidiary Guarantor is the obligor of such Indebtedness and the obligee is neither the Company nor a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations of such Subsidiary Guarantor with respect to its Subsidiary Guarantee and (b)(ii) any subsequent issuance or transfer of Capital Stock or any other event which 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 other than that is not either the Company or a Restricted Subsidiary of the Company shall Company, will be deemed, in each case, to constitute an Incurrence incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clauseclause (6); 57
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(b) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations in the ordinary course and not for speculative purposes;
(9) the Guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this covenant; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes in right of payment, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business or consistent with industry practice or past practice and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business or consistent with industry practice or past practice;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of in kind obligations relating to net oil, natural gas liquid or natural gas balancing positions arising in the ordinary course of business;
(13) any obligation arising from agreements of the Company or any Restricted Subsidiary of the Company providing for indemnification, adjustment of purchase price, earn outs, or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture;
(14) any Permitted Acquisition Indebtedness;
(15) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness, the issuance by the Company of any Disqualified Stock or the issuance by any Restricted Subsidiary of Preferred Stock in an aggregate principal amount (or accreted value, as applicable) or liquidation preference at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock or Preferred Stock issued pursuant to this clause (15), not to exceed, at any one time outstanding, the greater of (i) $125.0 million and (ii) 4.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (15) shall cease to be deemed incurred or outstanding for purposes of this clause (15) but shall be deemed incurred or issued for purposes of the first paragraph of this covenant from and after the first date on which the Company, or such Restricted Subsidiary, as the case may be, could have incurred such Indebtedness, Disqualified Stock or Preferred Stock, as applicable, under the first paragraph of this covenant without reliance upon this clause (15)); and
(16) Indebtedness of Restricted Subsidiaries that are not Guarantors and Indebtedness incurred on behalf of, or representing guarantees of Indebtedness of, joint ventures of the Company and any Restricted Subsidiary; provided, however, that the aggregate principal amount of Indebtedness incurred under this clause (16), when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (16), together with any Permitted Refinancing Indebtedness in respect thereof incurred pursuant to clause (5) above, does not exceed the greater of (x) $125.0 million and (y) 4.0% of the Company’s Adjusted Consolidated Net Tangible Assets at the time of incurrence (it being understood that any Indebtedness incurred pursuant to this clause (16) shall cease to be deemed incurred or outstanding for purposes of this clause (16) but shall be deemed incurred for purposes of the first paragraph of this covenant from and after the first date on which such Restricted Subsidiary could have incurred such Indebtedness under the first paragraph of this covenant without reliance upon this clause (16). For purposes of determining compliance with this “Incurrence of Indebtedness and Issuance of Preferred Stock” covenant, in the event that an item of Indebtedness, Disqualified Stock or Preferred Stock 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 or issued pursuant to the first paragraph of this covenant, the Company will be permitted to divide, classify and reclassify such item of Indebtedness, Disqualified Stock or Preferred Stock on the date of its incurrence or issuance, or later redivide or reclassify all or a portion of such item of Indebtedness, Disqualified Stock or Preferred Stock, in any manner that complies with this covenant. At the time of incurrence or issuance, the Company will be entitled to divide and classify an item of Indebtedness, Disqualified Stock or Preferred Stock in more than one of the types of Indebtedness, Disqualified Stock or Preferred Stock described in the first paragraph above and in the definition of “Permitted Debt” without giving pro forma effect to the Indebtedness, Disqualified Stock or Preferred Stock incurred or issued pursuant to one or more categories of Permitted Debt when calculating the amount of Indebtedness, Disqualified Stock or Preferred Stock that may be incurred pursuant to the first paragraph above. Indebtedness under the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of “Permitted Debt.” The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributions, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this covenant. 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;
(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 1 contract
Samples: Indenture (Earthstone Energy Inc)
Limitation on Indebtedness and Preferred Stock. (a) The Company Issuer will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) ), and the Company Issuer will not permit any of its Restricted Subsidiaries to issue Preferred Stock; provided, however, that the Company Issuer may Incur Indebtedness and the Issuer and any of the Subsidiary Guarantors may Incur Indebtedness and issue Preferred Stock if on the date of such Incurrence or issuancethereof:
(1) the Consolidated Coverage Ratio for the Company Issuer and its Restricted Subsidiaries is at least 2.25 to 1.00, determined on a pro forma basis (including a pro forma application of proceeds); and
(2) no Default would occur as a consequence of, and no Event of Default would be continuing following, Incurring the Indebtedness or the application of its proceedsapplication.
(b) Section 4.09(a3.2(a) will not prohibit the Incurrence of the following Indebtedness:
(1) Indebtedness under one or more Credit Facilities of (a) the Company Issuer or any Restricted Subsidiary Guarantor Incurred pursuant to this clause (1Section 3.2(b)(1) in an aggregate amount not to exceed the greater of (i) $335.0 million 4.0 billion or (ii) the sum of $225.0 400.0 million and 30.0% of the CompanyIssuer’s Adjusted Consolidated Net Tangible Assets determined as of the date of the Incurrence of such Indebtedness after giving effect to the application of the proceeds therefromtherefrom and (b) any Foreign Subsidiary Incurred pursuant to this Section 3.2(b)(1) in an aggregate amount not to exceed $50.0 million, in each case outstanding at any one time;
(2) Guarantees Incurred by the Company or any Subsidiary Guarantor guarantees of Indebtedness of the Company or any Subsidiary Guarantor Incurred in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed guaranteed is a Subordinated Obligation or a Guarantor Subordinated Obligation, then the related Guarantee guarantee shall be subordinated in right of payment to the Notes Securities or the Subsidiary Guarantee to at least the same extent as the Indebtedness being Guaranteedguaranteed, as the case may be;
(3) Indebtedness of the Company Issuer owing to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owing to and held by the Company Issuer or any other Restricted Subsidiary; provided, however, that (a)(i) if the Company Issuer is the obligor on such Indebtedness and the obligee is not a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes Securities and (ii) if a Subsidiary Guarantor is the obligor of such Indebtedness and the obligee is neither the Company Issuer nor a another Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations of such Subsidiary Guarantor with respect to its Subsidiary Guarantee and (b)(i) any subsequent issuance or transfer of Capital Stock or any other event which results in any such Indebtedness being held by a Person other than the Company Issuer or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person other than the Company Issuer or a Restricted Subsidiary of the Company shall be deemed, in each case, to constitute an Incurrence of such Indebtedness by the Company Issuer or such Restricted Subsidiary, as the case may be, that was not permitted by this clauseSection 3.2(b)(3);
(4) Indebtedness represented by (a) the Securities issued on the Issue Date and all Guarantees, (b) any Indebtedness (other than the Indebtedness described in Section 3.2(b)(1), (2) and 4(a)) outstanding on the Issue Date, (c) any Exchange Securities and related guarantees issued pursuant to a Registration Rights Agreement and (d) any Refinancing Indebtedness Incurred in respect of any Indebtedness described in this Section 3.2(b)(4) or Section 3.2(b)(5) or (7) or Incurred pursuant to Section 3.2(a);
(5) Permitted Acquisition Indebtedness;
(6) Indebtedness Incurred in respect of (a) self-insurance obligations, bid, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Issuer or a Restricted Subsidiary in the ordinary course of business and any guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and (b) obligations represented by letters of credit for the account of the Issuer or a Restricted Subsidiary in order to provide security for workers’ compensation claims (in the case of clauses (a) and (b) other than for an obligation for money borrowed);
(7) Indebtedness of the Issuer or any Restricted Subsidiary represented by Capitalized Lease Obligations (whether or not incurred pursuant to Sale/Leaseback Transactions) or other Indebtedness Incurred in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property, in each case Incurred for the purpose of financing, refinancing, renewing, defeasing or refunding all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Issuer or its Restricted Subsidiaries; provided that the aggregate principal amount Incurred by the Issuer or any Restricted Subsidiary pursuant to this Section 3.2(b)(7) outstanding at any time shall not exceed 2.0% of the Issuer’s Adjusted Consolidated Net Tangible Assets; and provided further that the principal amount of any Indebtedness permitted under this Section 3.2(b)(7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement or development so financed;
(8) Preferred Stock (other than Disqualified Stock) of any Restricted Subsidiary;
(9) Cash Management Obligations of the Issuer or any Subsidiary Guarantor in an aggregate amount not to exceed $50.0 million outstanding at any one time; and
(10) in addition to the items referred to in Sections 3.2(b)(1) through (9) above, Indebtedness of the Issuer and its Restricted Subsidiaries in an aggregate outstanding principal amount which, when taken together with the principal amount of all other Indebtedness Incurred pursuant to this Section 3.2(b)(10) and then outstanding, will not exceed the greater of $250.0 million or 2.5% of the Issuer’s Adjusted Consolidated Net Tangible Assets, determined as of the date of Incurrence of such Indebtedness after giving effect to such Incurrence and the application of the proceeds therefrom.
(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 3.2:
(1) in the event an item of that Indebtedness meets the criteria of more than one of the types of Indebtedness described in Section 3.2(a) and (b), the Issuer, in its sole discretion, will classify such item of Indebtedness on the date of Incurrence and, subject to Section 3.2(c)(2) below may later classify, reclassify or redivide all or a portion of such item of Indebtedness, in any manner that complies with this Section 3.2;
(2) all Indebtedness outstanding on the date of this Indenture under the Senior Secured Credit Agreement shall be deemed Incurred on the Issue Date under Section 3.2(b)(1);
(3) guarantees of, or obligations in respect of letters of credit supporting, Indebtedness which is otherwise included in the determination of a particular amount of Indebtedness shall not be included;
(4) if obligations in respect of letters of credit are Incurred pursuant to a Credit Facility and are being treated as Incurred pursuant to Section 3.2(b)(1) and the letters of credit relate to other Indebtedness, then such other Indebtedness shall not be included;
(5) the principal amount of any Disqualified Stock of the Issuer, or Preferred Stock of a Restricted Subsidiary, 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;
(6) Indebtedness permitted by this Section 3.2 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 3.2 permitting such Indebtedness; and
(7) the amount of Indebtedness issued at a price that is less than the principal amount thereof will be equal to the amount of the liability in respect thereof determined in accordance with GAAP. Accrual of interest, accrual of dividends, the amortization of debt discount or the accretion of accreted value, the payment of interest in the form of additional Indebtedness, the payment of dividends in the form of additional Preferred Stock or Disqualified Stock and unrealized losses or charges in respect of Hedging Obligations (including those resulting from the application of FASB ASC Topic No. 815, Derivatives and Hedging) will not be deemed to be an Incurrence of Indebtedness for purposes of this Section 3.2. The Issuer will not permit any of its Unrestricted Subsidiaries to Incur any Indebtedness (including to issue any Disqualified Stock) other than Non-Recourse Debt. If at any time an Unrestricted Subsidiary becomes a Restricted Subsidiary, any Indebtedness of such Subsidiary shall be deemed to be Incurred by a Restricted Subsidiary as of such date (and, if such Indebtedness is not permitted to be Incurred as of such date under this Section 3.2, the Issuer shall be in Default of this Section 3.2). For purposes of determining compliance with any U.S. dollar-denominated restriction on the Incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was Incurred, in the case of term Indebtedness, or first committed, in the case of revolving credit Indebtedness; provided that if such Indebtedness is Incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being refinanced. Notwithstanding any other provision of this Section 3.2, the maximum amount of Indebtedness that any Person may Incur pursuant to this Section 3.2 shall not be deemed to be exceeded solely as a result of fluctuations in the exchange rates of currencies. The principal amount of any Indebtedness Incurred to refinance other Indebtedness, if Incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such Refinancing Indebtedness is denominated that is in effect on the date of such refinancing. This Indenture shall not treat (1) unsecured Indebtedness as subordinated or junior to secured Indebtedness merely because it is unsecured or (2) senior Indebtedness 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: Indenture (ANTERO RESOURCES Corp)
Limitation on Indebtedness and Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur 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 Indebtedness) Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or Preferred Stock; provided, however, that the Company or any Guarantor may Incur incur Indebtedness (including Acquired Debt), the Company may issue Disqualified Stock, and any of the Subsidiary Guarantors Guarantor may Incur Indebtedness and issue Preferred Stock or Disqualified Stock, if on the date of such Incurrence or issuance:
(1) the Consolidated Fixed Charge Coverage Ratio for the Company and its Restricted Subsidiaries 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, as the case may be, would have been at least 2.25 to 1.001.0, determined on a pro forma basis (including a pro forma application of proceedsthe net proceeds therefrom); and
(2) no Default would occur , as a consequence ofif such additional Indebtedness had been incurred, and no Event or such Disqualified Stock or Preferred Stock had been issued, as the case may be, at the beginning of Default would be continuing following, Incurring the Indebtedness or the application of its proceedssuch four-quarter period.
(b) Section 4.09(a) Notwithstanding the foregoing, the first paragraph of this covenant will not prohibit the Incurrence incurrence of any of the following Indebtedness:items of Indebtedness or the issuance of any Disqualified Stock or Preferred Stock described in clauses (4) and (7) (the items described below in this paragraph being referred to collectively as “Permitted Debt”):
(1) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness and letters of credit under one or more Credit Facilities in an aggregate principal amount (or accreted value, as applicable) 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 or and its Restricted Subsidiaries thereunder) not to exceed the greater of (A) $200.0 million, and (B) with respect to borrowings under an ABL Facility, the Borrowing Base;
(2) the incurrence by the Company and the Guarantors of Indebtedness represented by:
(a) the Notes and the Subsidiary Guarantees issued on the Issue Date;
(b) additional Priority Lien Debt (including additional Notes); provided that, immediately after giving effect to any Restricted Subsidiary Incurred such incurrence, the aggregate principal amount of Priority Lien Debt incurred under this clause (2)(b) then outstanding (including all Priority Lien Debt incurred to refinance any Indebtedness incurred pursuant to this clause (12)(b)) in an aggregate amount does not to exceed the greater of (i) $335.0 37.5 million or and (ii) the sum of $225.0 million and 30.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of the Incurrence of an amount such Indebtedness that after giving effect to such incurrence and the application use of proceeds thereof, the Priority Lien Leverage Ratio would not exceed 2.0 to 1.0; and
(c) Junior Lien Debt; provided that, immediately after giving effect to any such incurrence, the aggregate principal amount of Junior Lien Debt incurred under this clause (2)(c) then outstanding (including all Junior Lien Debt incurred to refinance any Indebtedness incurred pursuant to this clause (2)(c)) does not exceed the greater of (i) $100.0 million and (ii) an amount such that after giving effect to such incurrence and the use of proceeds therefromthereof, the Junior Lien Leverage Ratio would not exceed 1.0 to 1.0;
(23) Guarantees Incurred the incurrence by the Company or any Subsidiary Guarantor of Indebtedness its Restricted Subsidiaries of the Company or any Subsidiary Guarantor Incurred in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is a Subordinated Obligation or a Guarantor Subordinated Obligation, then the related Guarantee shall be subordinated in right of payment to the Notes or the Subsidiary Guarantee to at least the same extent as the Indebtedness being Guaranteed, as the case may beExisting Indebtedness;
(34) Indebtedness of the Company owing to and held by any Restricted Subsidiary incurrence or Indebtedness of a Restricted Subsidiary owing to and held issuance by the Company or any of its Restricted SubsidiarySubsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are applied to extend, renew, refund, refinance, replace, defease, discharge or otherwise retire for value, any Indebtedness (other than intercompany Indebtedness) or any Disqualified Stock of the Company, or any Indebtedness (other than intercompany Indebtedness) or Preferred Stock of any of the Restricted Subsidiaries of the Company, in each case that was permitted by this Indenture to be incurred or issued pursuant to the first paragraph of this covenant or under clauses (2), (3), (4), (6), (12) or (17) of this paragraph;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that (a)(ia) if the Company or any Guarantor is the obligor on such Indebtedness and a Restricted Subsidiary of the obligee Company that is not a Subsidiary GuarantorGuarantor is the obligee on such Indebtedness, such Indebtedness must will be expressly subordinated to the prior payment in full in cash of all obligations Obligations then due with respect to the Notes and (ii) if a Subsidiary Guarantor is Notes, in the obligor case of such Indebtedness the Company, and the obligee is neither Subsidiary Guarantees, in the Company nor case of a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations of such Subsidiary Guarantor with respect to its Subsidiary Guarantee and (b)(i) any subsequent issuance or transfer of Capital Stock or any other event which 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 is not then permitted by this clause (5);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred in connection with the purchase of, or for the purpose of financing the purchase of, all or any part of the purchase price or cost of design, construction, installation, improvement, deployment, refurbishment or modification of property, plant or equipment or furniture, fixtures and equipment, in each case, used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, renew, refund, refinance, replace, defease, discharge or otherwise retire for value any Indebtedness incurred pursuant to this clause (6), not to exceed the greater of (i) $100.0 million and (ii) $25.0 million plus 10.0% of the Company’s Consolidated Tangible Assets (in each case reduced by the then outstanding principal amount of Capital Lease Obligations that were outstanding on the Issue Date and any refinancing, extensions or replacements thereof) determined as of the date of such incurrence;
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that (a) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary of the Company, and (b) any sale or other transfer of any such Preferred Stock to a Person that is neither the Company shall nor its Restricted Subsidiary, will be deemed, in each case, to constitute an Incurrence issuance of such Indebtedness Preferred Stock by the Company or such Subsidiary, as the case may be, Restricted Subsidiary that was not permitted by this clauseclause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness consisting of Hedging Obligations entered into in the ordinary course of business and not for speculative purposes;
(9) 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 in connection with the disposition or acquisition of any business, assets or a Restricted Subsidiary of the Company or any business or assets of its Restricted Subsidiaries, other than Guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Restricted Subsidiary of the Company or any of its Restricted Subsidiaries for the purposes of financing such acquisition; provided, however, that (a) such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (a)) and (b) the maximum liability in respect of all such Indebtedness incurred in connection with a disposition 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 its Restricted Subsidiaries in connection with such disposition;
(10) 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 any other provision of this covenant; 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 issuance by a Restricted Subsidiary of the Company of Disqualified Stock to the Company or to any of its Restricted Subsidiaries; provided, however, that any subsequent event or issuance or transfer of any Equity Interests that results in the owner of such Disqualified Stock ceasing to be the Company or any of its Restricted Subsidiaries or any subsequent transfer of such Preferred Stock to a Person, other than the Company or one of its Restricted Subsidiaries, shall be deemed to be an issuance of Disqualified Stock by such Subsidiary that was not permitted by this clause (11);
(12) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Acquisition Indebtedness;
(13) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness incurred in the ordinary course of business under (a) documentary letters of credit, or surety bonds or insurance contracts, 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, surety bonds or insurance contracts issued for the purpose of supporting (i) workers’ compensation or similar liabilities of the Company or any of its Restricted Subsidiaries or (ii) 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 or similar insurance contracts for the Company and its Restricted Subsidiaries, and refinancings thereof;
(14) 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;
(15) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness to the extent that the net proceeds thereof are promptly deposited to defease or to satisfy and discharge the Notes;
(16) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness consisting of the financing of insurance premiums in customary amounts consistent with the operations and business of the Company and its Restricted Subsidiaries; and
(17) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable), including all Permitted Refinancing Indebtedness incurred to extend, renew, refund, refinance, replace, defease, discharge or otherwise retire for value any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (17), not to exceed, at any one time outstanding, the greater of (a) $25.0 million and (b) 2.5% of Consolidated Tangible Assets as of any date of incurrence or issuance after giving pro forma effect to such incurrence or issuance and the application of proceeds therefrom.
(c) To the extent the Company’s Unrestricted Subsidiaries incur Non-Recourse Indebtedness and any such Indebtedness ceases to be Non-Recourse Indebtedness of such Unrestricted Subsidiary, then such event shall be deemed to constitute an incurrence of Indebtedness by a Restricted Subsidiary of the Company that was subject to this covenant.
(d) For purposes of determining compliance with this covenant, in the event that an item of proposed Indebtedness (including Acquired Debt), Disqualified Stock or Preferred Stock meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (17) of the definition of “Permitted Debt” or is entitled to be incurred or issued pursuant to Section 3.2(a), the Company will be permitted, in its sole discretion, to divide, classify, redivide and reclassify such item on the date of its incurrence or issuance, or later redivide or reclassify all or a portion of such item, in any manner that complies with this Section 3.2. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributions, the accretion or amortization of original issue discount, the payment of interest in the form of additional Indebtedness, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional shares or units 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 Indenture; provided, in each such case, that the amount of any such accrual, accretion, amortization, reclassification or payment 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 calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term Indebtedness, or first committed, in the case of revolving credit Indebtedness; provided that if such Indebtedness is incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being refinanced. Notwithstanding any other provision of this Section 3.2, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary of the Company may incur pursuant to this covenant 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 in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such Permitted Refinancing Indebtedness is denominated that is in effect on the date of such refinancing.
Appears in 1 contract
Limitation on Indebtedness and Preferred Stock. (a) The Company Parent Guarantor will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) and the Company Parent Guarantor will not permit any of its Restricted Subsidiaries to issue Preferred Stock; provided, however, that the Company Parent Guarantor may Incur Indebtedness and the Issuer and any of the Subsidiary Guarantors may Incur Indebtedness and issue Preferred Stock if on the date of such Incurrence or issuancethereof:
(1) the Consolidated Coverage Ratio for the Company Parent Guarantor and its Restricted Subsidiaries is at least 2.25 to 1.00, determined on a pro forma basis (including a pro forma application of proceeds); and
(2) no Default would occur as a consequence of, and no Event of Default would be continuing following, Incurring the Indebtedness or the application of its proceedsapplication.
(b) Section 4.09(a3.2(a) will not prohibit the Incurrence of the following Indebtedness:
(1) Indebtedness under one or more Credit Facilities of (a) the Company Parent Guarantor, the Issuer or any Restricted Subsidiary Guarantor Incurred pursuant to this clause (1Section 3.2(b)(1) in an aggregate amount not to exceed the greater of (i) $335.0 million 2.5 billion or (ii) the sum of $225.0 400.0 million and 30.0% of the CompanyParent Guarantor’s Adjusted Consolidated Net Tangible Assets determined as of the date of the Incurrence of such Indebtedness after giving effect to the application of the proceeds therefromtherefrom and (b) any Foreign Subsidiary Incurred pursuant to this Section 3.2(b)(1) in an aggregate amount not to exceed $50.0 million, in each case outstanding at any one time;
(2) Guarantees Incurred by the Company or any Subsidiary Guarantor guarantees of Indebtedness of the Company or any Subsidiary Guarantor Incurred in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed guaranteed is a Subordinated Obligation or a Guarantor Subordinated Obligation, then the related Guarantee guarantee shall be subordinated in right of payment to the Notes Securities or the Subsidiary Guarantee to at least the same extent as the Indebtedness being Guaranteedguaranteed, as the case may be;
(3) Indebtedness of the Company Parent Guarantor owing to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owing to and held by the Company Parent Guarantor or any Restricted Subsidiary; provided, however, that (a)(i) if the Company Issuer is the obligor on such Indebtedness and the obligee is not a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes Securities and (ii) if a Subsidiary Guarantor is the obligor of such Indebtedness and the obligee is neither the Company Issuer nor a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations of such Subsidiary Guarantor with respect to its Subsidiary Guarantee and (b)(i) any subsequent issuance or transfer of Capital Stock or any other event which results in any such Indebtedness being held by a Person other than the Company Parent Guarantor or a Restricted Subsidiary of the Company Parent Guarantor and (ii) any sale or other transfer of any such Indebtedness to a Person other than the Company Parent Guarantor or a Restricted Subsidiary of the Company Parent Guarantor shall be deemed, in each case, to constitute an Incurrence of such Indebtedness by the Company Parent Guarantor or such Restricted Subsidiary, as the case may be, that was not permitted by this clauseSection 3.2(b)(3);
(4) Indebtedness represented by (a) the Securities issued on the Issue Date and all Guarantees, (b) any Indebtedness (other than the Indebtedness described in Section 3.2(b)(1), (2) and 4(a)) outstanding on the Issue Date, (c) any Exchange Securities and related guarantees issued pursuant to a Registration Rights Agreement and (d) any Refinancing Indebtedness Incurred in respect of any Indebtedness described in this Section 3.2(b)(4) or Section 3.2(b)(5) or (7) or Incurred pursuant to Section 3.2(a);
(5) Permitted Acquisition Indebtedness;
(6) Indebtedness Incurred in respect of (a) self-insurance obligations, bid, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Parent Guarantor or a Restricted Subsidiary in the ordinary course of business and any guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and (b) obligations represented by letters of credit for the account of the Parent Guarantor or a Restricted Subsidiary in order to provide security for workers’ compensation claims (in the case of clauses (a) and (b) other than for an obligation for money borrowed);
(7) Indebtedness of the Parent Guarantor or any Restricted Subsidiary represented by Capitalized Lease Obligations (whether or not incurred pursuant to Sale/Leaseback Transactions) or other Indebtedness Incurred in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property, in each case Incurred for the purpose of financing, refinancing, renewing, defeasing or refunding all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Parent Guarantor or its Restricted Subsidiaries; provided that the aggregate principal amount Incurred by the Parent Guarantor or any Restricted Subsidiary pursuant to this Section 3.2(b)(7) outstanding at any time shall not exceed 2.0% of the Parent Guarantor’s Adjusted Consolidated Net Tangible Assets; and provided further that the principal amount of any Indebtedness permitted under this Section 3.2(b)(7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement or development so financed;
(8) Preferred Stock (other than Disqualified Stock) of any Restricted Subsidiary;
(9) Cash Management Obligations of the Issuer or any Guarantor in an aggregate amount not to exceed $50.0 million outstanding at any one time; and
(10) in addition to the items referred to in Sections 3.2(b)(1) through (9) above, Indebtedness of the Parent Guarantor and its Restricted Subsidiaries in an aggregate outstanding principal amount which, when taken together with the principal amount of all other Indebtedness Incurred pursuant to this Section 3.2(b)(10) and then outstanding, will not exceed the greater of $250.0 million or 2.5% of the Parent Guarantor’s Adjusted Consolidated Net Tangible Assets, determined as of the date of Incurrence of such Indebtedness after giving effect to such Incurrence and the application of the proceeds therefrom.
(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 3.2:
(1) in the event an item of that Indebtedness meets the criteria of more than one of the types of Indebtedness described in Section 3.2(a) and (b), the Parent Guarantor, in its sole discretion, will classify such item of Indebtedness on the date of Incurrence and, subject to Section 3.2(c)(2) below may later classify, reclassify or redivide all or a portion of such item of Indebtedness, in any manner that complies with this Section 3.2;
(2) all Indebtedness outstanding on the date of this Indenture under the Senior Secured Credit Agreement shall be deemed Incurred on the Issue Date under Section 3.2(b)(1);
(3) guarantees of, or obligations in respect of letters of credit supporting, Indebtedness which is otherwise included in the determination of a particular amount of Indebtedness shall not be included;
(4) if obligations in respect of letters of credit are Incurred pursuant to a Credit Facility and are being treated as Incurred pursuant to Section 3.2(b)(1) and the letters of credit relate to other Indebtedness, then such other Indebtedness shall not be included;
(5) the principal amount of any Disqualified Stock of the Parent Guarantor or a Restricted Subsidiary, or Preferred Stock of a Restricted Subsidiary that is not a Subsidiary 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;
(6) Indebtedness permitted by this Section 3.2 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 3.2 permitting such Indebtedness; and
(7) the amount of Indebtedness issued at a price that is less than the principal amount thereof will be equal to the amount of the liability in respect thereof determined in accordance with GAAP. Accrual of interest, accrual of dividends, the amortization of debt discount or the accretion of accreted value, the payment of interest in the form of additional Indebtedness, the payment of dividends in the form of additional shares of Preferred Stock or Disqualified Stock and unrealized losses or charges in respect of Hedging Obligations (including those resulting from the application of FASB ASC Topic No. 815, Derivatives and Hedging) will not be deemed to be an Incurrence of Indebtedness for purposes of this Section 3.2. The Parent Guarantor will not permit any of its Unrestricted Subsidiaries to Incur any Indebtedness (including to issue any shares of Disqualified Stock) other than Non-Recourse Debt. If at any time an Unrestricted Subsidiary becomes a Restricted Subsidiary, any Indebtedness of such Subsidiary shall be deemed to be Incurred by a Restricted Subsidiary as of such date (and, if such Indebtedness is not permitted to be Incurred as of such date under this Section 3.2, the Parent Guarantor shall be in Default of this Section 3.2). For purposes of determining compliance with any U.S. dollar-denominated restriction on the Incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was Incurred, in the case of term Indebtedness, or first committed, in the case of revolving credit Indebtedness; provided that if such Indebtedness is Incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being refinanced. Notwithstanding any other provision of this Section 3.2, the maximum amount of Indebtedness that any Person may Incur pursuant to this Section 3.2 shall not be deemed to be exceeded solely as a result of fluctuations in the exchange rates of currencies. The principal amount of any Indebtedness Incurred to refinance other Indebtedness, if Incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such Refinancing Indebtedness is denominated that is in effect on the date of such refinancing. This Indenture shall not treat (1) unsecured Indebtedness as subordinated or junior to secured Indebtedness merely because it is unsecured or (2) senior Indebtedness 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: Indenture (ANTERO RESOURCES Corp)
Limitation on Indebtedness and Preferred Stock. (a) The Company will notCreate, and will not permit any of its Restricted Subsidiaries toincur, issue, assume, Guarantee or otherwise become directly or indirectlyindirectly liable, Incur contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Indebtedness) and Debt), or issue any Disqualified Stock or, in the Company will not permit case of any Subsidiary of its Restricted Subsidiaries to the Borrower, issue Preferred Stockany shares of preferred stock; provided, however, that the Company Borrower may Incur incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and any of the Subsidiary Guarantors may Incur incur Indebtedness and (including Acquired Debt) or issue Preferred Disqualified Stock if on the date of such Incurrence or issuance:
(1) the Consolidated Fixed Charge Coverage Ratio for the Company and its Restricted Subsidiaries Borrower's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 2.25 2.0 to 1.001, determined on a pro forma basis (including a pro forma application of proceedsthe net proceeds therefrom); and
(2) no Default would occur , as a consequence ofif the additional Indebtedness had been incurred or Disqualified Stock had been issued, and no Event as the case may be, at the beginning of Default would be continuing following, Incurring the Indebtedness or the application of its proceedssuch four-quarter period.
Section 6.1 (b) Section 4.09(aa) will not prohibit the Incurrence incurrence of any of the following Indebtedness:items of Indebtedness (collectively, "Permitted Debt"):
(1i) the incurrence by the Borrower of additional Indebtedness and letters of credit under one or more Credit Facilities (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company Borrower thereunder) in an aggregate amount up to $50,000,000 at any time outstanding;
(ii) the incurrence by the Borrower of Indebtedness pursuant to any Loan Document, the aggregate principal amount of which is evidenced by the G&R Series J Mortgage Bond, and the incurrence by any Subsidiary Guarantor of a Subsidiary Guarantee of such Indebtedness pursuant to Section 6.15;
(iii) the incurrence by the Borrower and its Subsidiaries of the Existing Indebtedness;
(iv) the incurrence by the Borrower of $130,000,000 aggregate principal amount of Indebtedness represented by the 6-1/2% General and Refunding Mortgage Notes, Series I, due 2012 issued under the General and Refunding Mortgage Indenture (and the related exchange notes to be issued pursuant to the registration rights agreement) and the incurrence by any Subsidiary Guarantor of a Subsidiary Guarantee of such Indebtedness (including, without limitation, the related exchange notes to be issued pursuant to the registration rights agreement entered into in connection therewith);
(v) the incurrence by the Borrower or any Restricted of the Subsidiary Incurred Guarantors of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of the Borrower or such Subsidiary Guarantor, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (1) in an aggregate amount v), not to exceed the greater of (i) $335.0 million or (ii) the sum of $225.0 million and 30.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of the Incurrence of such Indebtedness after giving effect to the application of the proceeds therefrom20,000,000 at any time outstanding;
(2vi) Guarantees Incurred the incurrence by the Company Borrower or any Subsidiary Guarantor of its Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of the Company which are used to refund, refinance or any Subsidiary Guarantor Incurred in accordance with the provisions replace Indebtedness (other than intercompany Indebtedness) that was incurred under Section 6.1(a) or clauses (iii), (iv) (vi) or (xii) of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is a Subordinated Obligation or a Guarantor Subordinated Obligation, then the related Guarantee shall be subordinated in right of payment to the Notes or the Subsidiary Guarantee to at least the same extent as the Indebtedness being Guaranteed, as the case may beSection 6.1(b);
(3vii) Indebtedness of the Company owing to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owing to and held incurrence by the Company Borrower or any Restricted Subsidiaryof its Subsidiaries of intercompany Indebtedness between or among the Borrower or any of its Subsidiaries; provided, however, that that:
(a)(iA) if the Company Borrower is the obligor on such Indebtedness and the obligee is not a Subsidiary GuarantorIndebtedness, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes Loans and other Obligations;
(iiB) if a Subsidiary Guarantor is the obligor of on such Indebtedness and the obligee is neither the Company nor a Subsidiary GuarantorIndebtedness, such Indebtedness must be is expressly subordinated to the prior payment in full in cash of all obligations of such Subsidiary Guarantor with respect to its Guarantor's Subsidiary Guarantee and (b)(i) any subsequent issuance or transfer of Capital Stock or any other event which 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 other than 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 Subsidiary, as the case may be, that was not permitted by this clauseGuarantee;
Appears in 1 contract
Samples: Credit Agreement (Nevada Power Co)
Limitation on Indebtedness and Preferred Stock. (a) The Company Parent Guarantor will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) and the Company Parent Guarantor will not permit any of its Restricted Subsidiaries to issue Preferred Stock; provided, however, that the Company Parent Guarantor may Incur Indebtedness and any of the Subsidiary Guarantors may Incur Indebtedness and issue Preferred Stock if on the date of such Incurrence or issuancethereof:
(1) the Consolidated Coverage Ratio for the Company Parent Guarantor and its Restricted Subsidiaries is at least 2.25 to 1.00, determined on a pro forma basis (including a pro forma application of proceeds); and
(2) no Default would occur as a consequence of, and no Event of Default would be continuing following, Incurring the Indebtedness or the application of its proceedsapplication.
(b) Section 4.09(a3.2(a) will not prohibit the Incurrence of the following Indebtedness:
(1) Indebtedness under one or more Credit Facilities of (a) the Company Parent Guarantor, the Issuer or any Restricted Subsidiary Guarantor Incurred pursuant to this clause (1Section 3.2(b)(1) in an aggregate amount not to exceed the greater of (i) $335.0 500.0 million or (ii) the sum of $225.0 250.0 million and 30.0% of the Company’s Parent Guarantor's Adjusted Consolidated Net Tangible Assets determined as of the date of the Incurrence of such Indebtedness after giving effect to the application of the proceeds therefromtherefrom and (b) any Foreign Subsidiary Incurred pursuant to this Section 3.2(b)(1) in an aggregate amount not to exceed $30.0 million, in each case outstanding at any one time;
(2) Guarantees Incurred by the Company or any Subsidiary Guarantor guarantees of Indebtedness of the Company or any Subsidiary Guarantor Incurred in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed guaranteed is a Subordinated Obligation or a Guarantor Subordinated Obligation, then the related Guarantee guarantee shall be subordinated in right of payment to the Notes Securities or the Subsidiary Guarantee to at least the same extent as the Indebtedness being Guaranteedguaranteed, as the case may be;
(3) Indebtedness of the Company Parent Guarantor owing to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owing to and held by the Company Parent Guarantor or any Restricted Subsidiary; provided, however, that (a)(i) if the Company Parent Guarantor is the obligor on such Indebtedness and the obligee is not a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes Securities and (ii) if a Subsidiary Guarantor is the obligor of such Indebtedness and the obligee is neither the Company Parent Guarantor nor a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations of such Subsidiary Guarantor with respect to its Subsidiary Guarantee and (b)(i) any subsequent issuance or transfer of Capital Stock or any other event which results in any such Indebtedness being held by a Person other than the Company Parent Guarantor or a Restricted Subsidiary of the Company Parent Guarantor and (ii) any sale or other transfer of any such Indebtedness to a Person other than the Company Parent Guarantor or a Restricted Subsidiary of the Company Parent Guarantor shall be deemed, in each case, to constitute an Incurrence of such Indebtedness by the Company Parent Guarantor or such Subsidiary, as the case may be, that was not permitted by this clauseSection 3.2(b)(3);
(4) Indebtedness represented by (a) the Securities issued on the Issue Date and all Guarantees, (b) any Indebtedness (other than the Indebtedness described in Section 3.2(b)(1), (2) and 4(a)) outstanding on the Issue Date, (c) any Exchange Securities and related guarantees issued pursuant to a Registration Rights Agreement and (d) any Refinancing Indebtedness Incurred in respect of any Indebtedness described in this Section 3.2(b)(4) or Section 3.2(b)(5) or (7) or Incurred pursuant to Section 3.2(a);
(5) Permitted Acquisition Indebtedness;
(6) Indebtedness Incurred in respect of (a) self-insurance obligations, bid, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Parent Guarantor or a Restricted Subsidiary in the ordinary course of business and any guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and (b) obligations represented by letters of credit for the account of the Parent Guarantor or a Restricted Subsidiary in order to provide security for workers' compensation claims (in the case of clauses (a) and (b) other than for an obligation for money borrowed);
(7) Indebtedness of the Parent Guarantor or any Restricted Subsidiary represented by Capitalized Lease Obligations (whether or not incurred pursuant to Sale/Leaseback Transactions) or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property, in each case Incurred for the purpose of financing, refinancing, renewing, defeasing or refunding all or any part
Appears in 1 contract
Limitation on Indebtedness and Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) and the Company will not permit any of its Restricted Subsidiaries to issue Preferred Stock; provided, however, that the Company may Incur Indebtedness and any of the Subsidiary Guarantors may Incur Indebtedness and issue Preferred Stock if on the date of such Incurrence or issuance:
(1) the Consolidated Coverage Ratio for the Company and its Restricted Subsidiaries is at least 2.25 to 1.00, determined on a pro forma basis (including a pro forma application of proceeds); and
(2) no Default would occur as a consequence of, and no Event of Default would be continuing following, Incurring the Indebtedness or the application of its proceeds.
(b) Section 4.09(a7.22(a) will not prohibit the Incurrence of the following Indebtedness:
(1) Indebtedness under one or more Credit Facilities of the Company or any Restricted Subsidiary Incurred pursuant to this clause (1) in an aggregate amount not to exceed the greater of (i) $335.0 million or (ii) the sum of $225.0 million and 30.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of the Incurrence of such Indebtedness after giving effect to the application of the proceeds therefromconstituting a Permitted Reserve Based Facility;
(2) Guarantees Incurred by the Company or any Subsidiary Guarantor of Indebtedness of the Company or any Subsidiary Guarantor Incurred in accordance with the provisions of this IndentureIndenture (including any increase in principal amount as a result of a PIK Payment and any PIK Interest Notes in respect thereof); provided provided, however that in the event such Indebtedness that is being Guaranteed is a Subordinated Obligation or a Guarantor Subordinated Obligation, then the related Guarantee shall be subordinated in right of payment to the Notes or the Subsidiary Guarantee to at least the same extent as the Indebtedness being Guaranteed, as the case may be;
(3) Indebtedness of the Company owing to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owing to and held by the Company or any Restricted Subsidiary; provided, however, however that (a)(i) if the Company is the obligor on such Indebtedness and the obligee is not a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes and (ii) if a Subsidiary Guarantor is the obligor of such Indebtedness and the obligee is neither the Company nor a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations of such Subsidiary Guarantor with respect to its Subsidiary Guarantee and (b)(i) any subsequent issuance or transfer of Capital Stock or any other event which 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 other than 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 Subsidiary, as the case may be, that was not permitted by this clause;
(4) Indebtedness represented by (a) the Notes issued on the Issue Date (together with any PIK Payments in respect thereof) and all Subsidiary Guarantees, (b) any Indebtedness (other than the Indebtedness described in clauses (1), (2), (3), (6) or (7)) outstanding on the Issue Date and (c) any Refinancing Indebtedness Incurred in respect of any Indebtedness described in this clause (4) or clause (5) or (7) or Incurred pursuant to Section 7.22(a);
(5) Permitted Acquisition Indebtedness;
(6) Indebtedness in respect of (a) self-insurance obligations, bid, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and (b) obligations represented by letters of credit for the account of the Company or a Restricted Subsidiary in order to provide security for workers’ compensation claims (in the case of clauses (a) and (b) other than for an obligation for money borrowed);
(7) Indebtedness represented by Capitalized Lease Obligations of the Company or any of its Restricted Subsidiaries (whether or not Incurred pursuant to sale and leaseback transactions), mortgage financings or purchase money obligations, Incurred in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property, in each case Incurred for the purpose of financing, refinancing, renewing, defeasing or refunding all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or such Restricted Subsidiary; provided, however that after giving effect to any such Incurrence, the aggregate principal amount of all Indebtedness Incurred pursuant to this clause (7), together with any Refinancing Indebtedness Incurred pursuant to clause (4) in respect of such Indebtedness, and then outstanding does not exceed the greater of $5.0 million or 1.0% of the Company’s Adjusted Consolidated Net Tangible Assets, determined as of the date of Incurrence of such Indebtedness after giving effect to such Incurrence and the application of the proceeds therefrom; and
(8) Cash Management Obligations Incurred in the ordinary course of business; and
(9) in addition to the items referred to in clauses (1) through (8) above, Indebtedness of the Company and the Subsidiary Guarantors in an aggregate outstanding principal amount which, when taken together with the principal amount of all other Indebtedness Incurred pursuant to this clause (9) and then outstanding, will not exceed the greater of $15.0 million or 2.0% of the Company’s Adjusted Consolidated Net Tangible Assets, determined as of the date of Incurrence of such Indebtedness after giving effect to such Incurrence and the application of the proceeds therefrom.
(c) For purposes of determining compliance with, and the outstanding principal amount of any particular Indebtedness Incurred pursuant to and in compliance with, this covenant:
(1) in the event an item of that Indebtedness meets the criteria of more than one of the types of Indebtedness described in Section 7.22(a)-(b), the Company, in its sole discretion, will, in each case, subject to clause (2) below, classify such item of Indebtedness on the date of Incurrence in any manner that complies with this covenant;
(2) all Indebtedness outstanding on the date of this Indenture under the First Lien Credit Agreement, after giving effect to the initial offering and sale of Notes and the use of proceeds therefrom shall be deemed Incurred on the Issue Date under clause (1) of Section 7.22(b) and may not later be reclassified;
(3) Guarantees Incurred by the Company or any Subsidiary Guarantor of, or obligations Incurred by the Company or any Subsidiary Guarantor in respect of letters of credit supporting, Indebtedness which is otherwise included in the determination of a particular amount of Indebtedness shall not be included;
(4) if obligations in respect of letters of credit are Incurred pursuant to a Credit Facility and are being treated as Incurred pursuant to clause (1) of Section 7.22(b) and the letters of credit relate to other Indebtedness, then such other Indebtedness shall not be included to the extent of the underlying letter of credit;
(5) the principal amount of any Disqualified Stock of the Company or a Restricted Subsidiary, or Preferred Stock of a Restricted Subsidiary, 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;
(6) Indebtedness permitted by this Section 7.22 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 7.22 permitting such Indebtedness; and
(7) the amount of Indebtedness issued at a price that is less than the principal amount thereof will be equal to the amount of the liability in respect thereof determined in accordance with GAAP.
(d) Accrual of interest, accrual of dividends, the amortization of debt discount or the accretion of accreted value, the payment of interest in the form of additional Indebtedness, the payment of dividends in the form of additional shares of Preferred Stock or Disqualified Stock and unrealized losses or charges in respect of Hedging Obligations will not be deemed to be an Incurrence of Indebtedness for purposes of this Section 7.22.
(e) The Company will not permit any of its Unrestricted Subsidiaries to Incur any Indebtedness, or issue any shares of Disqualified Stock, other than Non-Recourse Debt. If at any time an Unrestricted Subsidiary becomes a Restricted Subsidiary, any Indebtedness of such Subsidiary shall be deemed to be Incurred by a Restricted Subsidiary as of such date and, if such Indebtedness is not permitted to be Incurred as of such date under this Section 7.22, the Company shall be in Default of this Section 7.22.
(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, however that if such Indebtedness is Incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being refinanced. Notwithstanding any other provision of this covenant, the maximum amount of Indebtedness that the Company may Incur pursuant to this covenant shall not be deemed to be exceeded solely as a result of fluctuations in the exchange rates of currencies. The principal amount of any Indebtedness Incurred to refinance other Indebtedness, if Incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such Refinancing Indebtedness is denominated that is in effect on the date of such refinancing.
(g) Nothing contained in this Indenture is intended to treat (1) unsecured Indebtedness as subordinated or junior to secured Indebtedness merely because it is unsecured or (2) senior Indebtedness 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
Limitation on Indebtedness and Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) and the Company will not permit any of its Restricted Subsidiaries to issue Preferred Stock; provided, however, that the Company may Incur Indebtedness and any of the Subsidiary Guarantors may Incur Indebtedness and issue Preferred Stock if on the date of such Incurrence or issuancethereof:
(1) the Consolidated Coverage Ratio for the Company and its Restricted Subsidiaries is at least 2.25 to 1.00, determined on a pro forma basis (including a pro forma application of proceeds); and
(2) no Default would occur as a consequence of, and no Event of Default would be continuing following, Incurring the Indebtedness or the application of its proceedsapplication.
(b) Section 4.09(a3.2(a) will not prohibit the Incurrence of the following Indebtednessfollowing:
(1) Indebtedness under one or more Credit Facilities of (including the Company or any Restricted Subsidiary Senior Secured Credit Agreement) Incurred pursuant to this clause (1) by the Issuers or any Subsidiary Guarantor in an aggregate amount outstanding at any one time not to exceed the greater of (i) $335.0 300.0 million or (ii) the sum of $225.0 million and 30.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of the Incurrence of such Indebtedness after giving effect to the application of the proceeds therefrom;
(2) Guarantees Incurred by the Company or any Subsidiary Guarantor guarantees of Indebtedness of the Company or any Subsidiary Guarantor Incurred in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed guaranteed is a Subordinated Obligation or a Guarantor Subordinated Obligation, then the related Guarantee guarantee shall be subordinated in right of payment to the Notes Securities or the Subsidiary Guarantee Guarantees to at least the same extent as the Indebtedness being Guaranteedguaranteed, as the case may be;
(3) Indebtedness of the Company owing to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owing to and held by the Company or any Restricted Subsidiary; provided, however, that (a)(i) if the Company is the obligor on such Indebtedness and the obligee is not a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes Securities and (ii) if a Subsidiary Guarantor is the obligor of such Indebtedness and the obligee is neither the Company nor a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations of such Subsidiary Guarantor with respect to its Subsidiary Guarantee and (b)(i) any subsequent issuance or transfer of Capital Stock or any other event which 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 other than 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 clauseSection 3.2(b)(3);
(4) Indebtedness represented by (a) the Securities issued on the Issue Date and all Subsidiary Guarantees, (b) any Indebtedness (other than the Indebtedness described in Section 3.2(b)(1), (3), (4)(a) and (9) outstanding on the Issue Date), (c) any Exchange Securities and related Subsidiary Guarantees issued pursuant to a Registration Rights Agreement and (d) any Refinancing Indebtedness Incurred in respect of any Indebtedness described in this Section 3.2(b)(4) or Section 3.2(b)(5) or Incurred pursuant to Section 3.2(a);
(5) Permitted Acquisition Indebtedness;
(6) Indebtedness Incurred in respect of (a) self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds provided by the Company or a Restricted Subsidiary in the ordinary course of business and any guarantees or letters of credit functioning as or supporting any of such obligations or bonds and (b) obligations represented by letters of credit for the account of the Company or a Restricted Subsidiary in order to provide security for workers’ compensation claims (in the case of both clauses (a) and (b) other than for an obligation for money borrowed);
(7) Indebtedness of the Company or any Subsidiary Guarantor represented by Capitalized Lease Obligations (whether or not incurred pursuant to Sale/Leaseback Transactions) or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property, in each case Incurred for the purpose of financing, refinancing, renewing, defeasing or refunding all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or its Subsidiary Guarantors; provided that the aggregate principal amount incurred by the Company or any Subsidiary Guarantor pursuant to this Section 3.2(b)(7) outstanding at any time shall not exceed the greater of (x) $25.0 million and (y) 2.5% of the Company’s Adjusted Consolidated Net Tangible Assets; and provided further that the principal amount of any Indebtedness permitted under this Section 3.2(b)(7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed;
(8) Indebtedness to the extent that the net proceeds thereof are promptly deposited to defease the Securities or to satisfy and discharge the Indenture;
(9) in addition to the items referred to in Sections 3.2(b)(1) through (8) above, Indebtedness of the Company and its Restricted Subsidiaries in an aggregate outstanding principal amount which, when taken together with the principal amount of all other Indebtedness Incurred pursuant to this clause (9) and then outstanding, will not exceed the greater of (a) $35.0 million and (b) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets.
(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 3.2:
(1) in the event an item of that Indebtedness meets the criteria of more than one of the types of Indebtedness described in Section 3.2(a) and (b), the Company, in its sole discretion, will classify such item of Indebtedness on the date of Incurrence and, subject to Section 3.2(c)(2) below may later classify, reclassify or redivide all or a portion of such item of Indebtedness, in any manner that complies with this Section 3.2;
(2) any Indebtedness outstanding on the date of this Indenture under the Senior Secured Credit Agreement shall be deemed Incurred on the Issue Date under Section 3.2(b)(1);
(3) guarantees of, or obligations in respect of letters of credit supporting, Indebtedness which is otherwise included in the determination of a particular amount of Indebtedness shall not be included;
(4) the principal amount of any Disqualified Stock of the Company or a Restricted Subsidiary, or Preferred Stock of a Restricted Subsidiary, will be equal to the greater of the maximum mandatory redemption or repurchase price (including, in either case, any redemption or repurchase premium) or the liquidation preference thereof;
(5) Indebtedness permitted by this Section 3.2 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 3.2 permitting such Indebtedness; and
(6) the amount of Indebtedness issued at a price that is less than the principal amount thereof will be equal to the amount of the liability in respect thereof determined in accordance with GAAP. Accrual of interest, accrual of dividends, the amortization of debt discount or the accretion of accreted value and unrealized losses or charges in respect of Hedging Obligations (including those resulting from the application of Statement of Financial Accounting Standard No. 133) will not be deemed to be an Incurrence of Indebtedness for purposes of this Section 3.2. The Company will not permit any of its Unrestricted Subsidiaries to Incur any Indebtedness other than Non-Recourse Debt. If at any time an Unrestricted Subsidiary becomes a Restricted Subsidiary, any Indebtedness of such Subsidiary shall be deemed to be Incurred by a Restricted Subsidiary as of such date (and, if such Indebtedness is not permitted to be Incurred as of such date under this Section 3.2, the Company shall be in Default of this Section 3.2). This Indenture will not treat (1) unsecured Indebtedness as subordinated or junior to secured Indebtedness merely because it is unsecured or (2) senior Indebtedness 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: Indenture (Alta Mesa Energy LLC)
Limitation on Indebtedness and Preferred Stock. (a) The Company From and after the Escrow Assumption, ARP will not, and will not permit any of its the Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) and the Company ARP will not permit any of its the Restricted Subsidiaries to issue Preferred Stock; provided, however, that ARP, the Company may Incur Indebtedness and any of the Subsidiary Guarantors may Incur Indebtedness and issue Preferred Stock if on the date of such Incurrence or issuancethereof:
(1) the Consolidated Coverage Ratio for ARP and the Company and its Restricted Subsidiaries is at least 2.25 to 1.00, determined on a pro forma basis (including a pro forma application of proceeds); and
(2) no Default will have occurred or be continuing or would occur as a consequence of, and no Event of Default would be continuing following, Incurring the Indebtedness or the application of its proceedstransactions relating to such Incurrence.
(b) Section 4.09(a) hereof will not prohibit the Incurrence of the following IndebtednessIndebtedness or issuance of the following Preferred Stock, as the case may be:
(1) Indebtedness under of ARP Incurred pursuant to one or more Credit Facilities of the Company or any Restricted Subsidiary Incurred pursuant to this clause (1) in an aggregate amount not to exceed the greater of (ia) $335.0 500.0 million less the aggregate amount of all permanent principal repayments since the Issue Date under a Credit Facility made under Section 4.07(a)(iii)(A) hereof, or (iib) the sum of (x) $225.0 350.0 million and 30.0less the aggregate amount of all permanent principal repayments since the Issue Date under a Credit Facility that are made pursuant to Section 4.07(a)(iii)(A) plus (y) 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of the Incurrence of such Indebtedness after giving effect to the application of the proceeds therefrom, in each case outstanding at any one time;
(2) Guarantees Incurred by ARP, the Company or any Subsidiary Guarantor Guarantors of Indebtedness of ARP, the Company or any a Subsidiary Guarantor Guarantor, as the case may be, Incurred in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is a Subordinated Obligation or a Guarantor Subordinated Obligation, then the related Guarantee shall be subordinated in right of payment to the Notes or the Subsidiary Guarantee to at least the same extent as the Indebtedness being Guaranteed, as the case may be;
(3) Indebtedness of the Company ARP owing to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owing to and held by the Company ARP or any Restricted Subsidiary; provided, however, that (a)(i) if the Company is the obligor on such Indebtedness and the obligee is not a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes and (ii) if a Subsidiary Guarantor is the obligor of such Indebtedness and the obligee is neither the Company nor a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations of such Subsidiary Guarantor with respect to its Subsidiary Guarantee and (b)(ii) any subsequent issuance or transfer of Capital Stock or any other event which results in any such Indebtedness being held by a Person other than the Company ARP or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person other than the Company ARP or a Restricted Subsidiary of the Company shall be deemed, in each case, to constitute an Incurrence of such Indebtedness by the Company ARP or such Restricted Subsidiary, as the case may be;
(4) Indebtedness represented by (a) the Notes issued on the Issue Date, and the related Exchange Notes issued in a registered exchange offer (or shelf registration) for the Notes pursuant to the Registration Rights Agreement, (b) any Indebtedness (other than the Indebtedness described in clauses (1) and (2) of clause (b) of this Section 4.09) outstanding on the Release Date, including the Existing Notes, and (c) any Refinancing Indebtedness Incurred in respect of any Indebtedness described in this clause (4) or clause (5) or Incurred pursuant to Section 4.09(a) hereof;
(5) Indebtedness of a Person that becomes a Restricted Subsidiary or is acquired by ARP or a Restricted Subsidiary or merged into ARP or a Restricted Subsidiary in accordance with this Indenture and outstanding on the date on which such Person became a Restricted Subsidiary or was acquired by or was merged into ARP or such Restricted Subsidiary (other than Indebtedness Incurred (a) to provide all or any portion of the funds utilized to consummate the transaction or series of related transactions pursuant to which such Person became a Restricted Subsidiary or was otherwise acquired by or was merged into ARP or a Restricted Subsidiary or (b) otherwise in connection with, or in contemplation of, such acquisition); provided, however, that at the time such Person becomes a Restricted Subsidiary or is acquired by or was merged into ARP or a Restricted Subsidiary, ARP would have been able to Incur $1.00 of additional Indebtedness pursuant to Section 4.09(a) hereof after giving effect to the Incurrence of such Indebtedness pursuant to this clause (5);
(6) the Incurrence by ARP or any Restricted Subsidiary of Indebtedness represented by Capitalized 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 improvements or carrying costs of property used in the business of ARP or such Restricted Subsidiary, and Refinancing Indebtedness Incurred to Refinance any Indebtedness Incurred pursuant to this clause (6) in an aggregate outstanding principal amount which, when taken together with the principal amount of all other Indebtedness Incurred pursuant to this clause (6) and then outstanding, will not at any time outstanding exceed the greater of (a) $25.0 million and (b) 3.0% of Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence;;
(7) the Incurrence by ARP or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, payment obligations in connection with health or other types of social security benefits, unemployment or other insurance or self-insurance obligations, reclamation, statutory obligations, bankers’ acceptances and bid, performance, surety and appeal bonds or other similar obligations incurred in the ordinary course of business, including guarantees and obligations respecting standby letters of credit supporting such obligations, to the extent not drawn (in each case other than an obligation for money borrowed);
(8) Capital Stock (other than Disqualified Stock) of ARP, the Company or any of the Subsidiary Guarantors;
(9) the Incurrence by ARP 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 ARP’s or any such Restricted Subsidiary’s being a general partner or member of, or owner of an Equity Interest in, such Unrestricted Subsidiary or Joint Venture and not as guarantor of such Indebtedness and provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (9) and then outstanding does not exceed $25.0 million;
(10) Indebtedness owed to Parent not to exceed $50.0 million in the aggregate, provided that all such Indebtedness shall be unsecured and subordinated to the Notes;
(11) the Incurrence by ARP or any of its Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees issued or provided for the account of ARP and any of its Restricted Subsidiaries in the ordinary course of business, including guarantees and obligations of ARP 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);
(12) the issuance by any of the Restricted Subsidiaries to ARP or to any of its Restricted Subsidiaries of any Preferred Stock; provided that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than ARP or a Restricted Subsidiary; and
(b) any sale or other transfer of any such Preferred Stock to a Person that is neither ARP nor a 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 clauseclause (12); and
(13) in addition to the items referred to in clauses (1) through (12) above, Indebtedness of ARP, the Company and its Subsidiary Guarantors in an aggregate outstanding principal amount which, when taken together with the principal amount of all other Indebtedness Incurred pursuant to this clause (13) and then outstanding, will not exceed the greater of (a) $50.0 million and (b) 5.0% of Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence.
(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 an item of that Indebtedness meets the criteria of more than one of the types of Indebtedness described in clauses (a) and (b) of this Section 4.09, the Issuers, in their sole discretion, will classify such item of Indebtedness on the date of Incurrence and, subject to clause (ii) below may later reclassify such item of Indebtedness and only be required to include the amount and type of such Indebtedness in one of such clauses;
(2) all Indebtedness outstanding on the Release Date under the Senior Secured Credit Agreement shall be deemed Incurred under Section 4.09(b)(1);
(3) Guarantees of, or obligations in respect of letters of credit supporting, Indebtedness which is otherwise included in the determination of a particular amount of Indebtedness shall not be included;
(4) if obligations in respect of letters of credit are Incurred pursuant to a Credit Facility and the letters of credit relate to other Indebtedness, then such other Indebtedness shall not be included;
(5) the principal amount of any Disqualified Stock of ARP or a Restricted Subsidiary, or Preferred Stock of a Restricted Subsidiary that is not an Issuer or a Subsidiary 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;
(6) Indebtedness permitted by this Section 4.09 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.09 permitting such Indebtedness; and
(7) the amount of Indebtedness issued at a price that is less than the principal amount thereof will be equal to the amount of the liability in respect thereof determined in accordance with GAAP.
(d) Accrual of interest, accrual of dividends, the amortization of debt discount or the accretion of accreted value, the payment of interest in the form of additional Indebtedness, the payment of dividends in the form of additional shares of Preferred Stock or Disqualified Stock and unrealized losses or charges in respect of Hedging Obligations (including those resulting from the application of ASC 815) will not be deemed to be an Incurrence of Indebtedness for purposes of this Section 4.09. The amount of any Indebtedness outstanding as of any date shall be (i) the accreted value thereof in the case of any Indebtedness issued with original issue discount and (ii) the principal amount or liquidation preference thereof, together with any interest thereon that is more than 30 days past due, in the case of any other Indebtedness.
(e) If at any time an Unrestricted Subsidiary becomes a Restricted Subsidiary, any Indebtedness of such Subsidiary shall be deemed to be Incurred by a Restricted Subsidiary as of such date (and, if such Indebtedness is not permitted to be Incurred as of such date under this Section 4.09, the Issuers 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 Indebtedness does not exceed the principal amount of such Indebtedness being refinanced. Notwithstanding any other provision of this Section 4.09, the maximum amount of Indebtedness that the Issuers 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 Indebtedness is denominated that is in effect on the date of such refinancing.
(g) This Indenture will not treat (1) unsecured Indebtedness as subordinated or junior to secured Indebtedness merely because it is unsecured or (2) senior Indebtedness 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
Limitation on Indebtedness and Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) and the Company will not permit any of its Restricted Subsidiaries to issue Preferred Stock; provided, however, that the Company may Incur Indebtedness and any of the Subsidiary Guarantors may Incur Indebtedness and issue Preferred Stock if on the date of such Incurrence or issuance:
(1) the Consolidated Coverage Ratio for the Company and its Restricted Subsidiaries is at least 2.25 to 1.00, determined on a pro forma basis (including a pro forma application of proceeds); and
(2) no Default would occur as a consequence of, and no Event of Default would be continuing following, Incurring the Indebtedness or the application of its proceeds.
(b) Section 4.09(a7.22(a) will not prohibit the Incurrence of the following Indebtedness:
(1) Indebtedness under one or more Credit Facilities of the Company or any Restricted Subsidiary Incurred pursuant to this clause (1) in an aggregate principal amount not to exceed the greater of $50.0 million; provided, however that any Indebtedness Incurred pursuant to this clause (i1) $335.0 million or (ii) the sum in excess of $225.0 20.0 million shall be Incurred solely if the First Lien Credit Agreement is refinanced with a Permitted First Lien Replacement Facility and 30.0% of such Incurrence is permitted by the Company’s Adjusted Consolidated Net Tangible Assets determined borrowing base set forth in such Permitted First Lien Replacement Facility as of in effect at the date of the Incurrence time of such Indebtedness after giving effect to the application of the proceeds therefromIncurrence;
(2) Guarantees Incurred by the Company or any Subsidiary Guarantor of Indebtedness of the Company or any Subsidiary Guarantor Incurred in accordance with the provisions of this IndentureIndenture (including any increase in principal amount as a result of a PIK Payment and any PIK Interest Notes in respect thereof); provided provided, however that in the event such Indebtedness that is being Guaranteed is a Subordinated Obligation or a Guarantor Subordinated Obligation, then the related Guarantee shall be subordinated in right of payment to the Notes or the Subsidiary Guarantee to at least the same extent as the Indebtedness being Guaranteed, as the case may be;
(3) Indebtedness of the Company owing to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owing to and held by the Company or any Restricted Subsidiary; provided, however, however that (a)(i) if the Company is the obligor on such Indebtedness and the obligee is not a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes and (ii) if a Subsidiary Guarantor is the obligor of such Indebtedness and the obligee is neither the Company nor a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations of such Subsidiary Guarantor with respect to its Subsidiary Guarantee and (b)(i) any subsequent issuance or transfer of Capital Stock or any other event which 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 other than 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 Subsidiary, as the case may be, that was not permitted by this clause;
(4) Indebtedness represented by (a) the Notes issued on the Issue Date (together with any PIK Interest Notes issued in respect thereof) and all Subsidiary Guarantees, (b) any Indebtedness (other than the Indebtedness described in clauses (1), (2), (3), (6) or (7)) outstanding on the Issue Date and (c) any Refinancing Indebtedness Incurred in respect of any Indebtedness described in this clause (4) or clause (5) or (7) or Incurred pursuant to Section 7.22(a);
(5) Permitted Acquisition Indebtedness;
(6) Indebtedness in respect of (a) self-insurance obligations, bid, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and (b) obligations represented by letters of credit for the account of the Company or a Restricted Subsidiary in order to provide security for workers’ compensation claims (in the case of clauses (a) and (b) other than for an obligation for money borrowed);
(7) Indebtedness represented by Capitalized Lease Obligations of the Company or any of its Restricted Subsidiaries (whether or not Incurred pursuant to sale and leaseback transactions), mortgage financings or purchase money obligations, Incurred in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property, in each case Incurred for the purpose of financing, refinancing, renewing, defeasing or refunding all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or such Restricted Subsidiary; provided, however that after giving effect to any such Incurrence, the aggregate principal amount of all Indebtedness Incurred pursuant to this clause (7), together with any Refinancing Indebtedness Incurred pursuant to clause (4) in respect of such Indebtedness, and then outstanding does not exceed the greater of $5.0 million or 1.0% of the Company’s Adjusted Consolidated Net Tangible Assets, determined as of the date of Incurrence of such Indebtedness after giving effect to such Incurrence and the application of the proceeds therefrom; and
(8) Cash Management Obligations Incurred in the ordinary course of business; and
(9) in addition to the items referred to in clauses (1) through (8) above, Indebtedness of the Company and the Subsidiary Guarantors in an aggregate outstanding principal amount which, when taken together with the principal amount of all other Indebtedness Incurred pursuant to this clause (9) and then outstanding, will not exceed the greater of $15.0 million or 2.0% of the Company’s Adjusted Consolidated Net Tangible Assets, determined as of the date of Incurrence of such Indebtedness after giving effect to such Incurrence and the application of the proceeds therefrom.
(c) For purposes of determining compliance with, and the outstanding principal amount of any particular Indebtedness Incurred pursuant to and in compliance with, this covenant:
(1) in the event an item of that Indebtedness meets the criteria of more than one of the types of Indebtedness described in Section 7.22(a)-(b), the Company, in its sole discretion, will, in each case, subject to clause (2) below, classify such item of Indebtedness on the date of Incurrence in any manner that complies with this covenant;
(2) all Indebtedness outstanding on the date of this Indenture under the First Lien Credit Agreement, after giving effect to the initial offering and sale of Notes and the use of proceeds therefrom shall be deemed Incurred on the Issue Date under clause (1) of Section 7.22(b) and may not later be reclassified;
(3) Guarantees Incurred by the Company or any Subsidiary Guarantor of, or obligations Incurred by the Company or any Subsidiary Guarantor in respect of letters of credit supporting, Indebtedness which is otherwise included in the determination of a particular amount of Indebtedness shall not be included;
(4) if obligations in respect of letters of credit are Incurred pursuant to a Credit Facility and are being treated as Incurred pursuant to clause (1) of Section 7.22(b) and the letters of credit relate to other Indebtedness, then such other Indebtedness shall not be included to the extent of the underlying letter of credit;
(5) the principal amount of any Disqualified Stock of the Company or a Restricted Subsidiary, or Preferred Stock of a Restricted Subsidiary, 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;
(6) Indebtedness permitted by this Section 7.22 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 7.22 permitting such Indebtedness; and
(7) the amount of Indebtedness issued at a price that is less than the principal amount thereof will be equal to the amount of the liability in respect thereof determined in accordance with GAAP.
(d) Accrual of interest, accrual of dividends, the amortization of debt discount or the accretion of accreted value, the payment of interest in the form of additional Indebtedness, the payment of dividends in the form of additional shares of Preferred Stock or Disqualified Stock and unrealized losses or charges in respect of Hedging Obligations will not be deemed to be an Incurrence of Indebtedness for purposes of this Section 7.22.
(e) The Company will not permit any of its Unrestricted Subsidiaries to Incur any Indebtedness, or issue any shares of Disqualified Stock, other than Non-Recourse Debt. If at any time an Unrestricted Subsidiary becomes a Restricted Subsidiary, any Indebtedness of such Subsidiary shall be deemed to be Incurred by a Restricted Subsidiary as of such date and, if such Indebtedness is not permitted to be Incurred as of such date under this Section 7.22, the Company shall be in Default of this Section 7.22.
(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, however that if such Indebtedness is Incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being refinanced. Notwithstanding any other provision of this covenant, the maximum amount of Indebtedness that the Company may Incur pursuant to this covenant shall not be deemed to be exceeded solely as a result of fluctuations in the exchange rates of currencies. The principal amount of any Indebtedness Incurred to refinance other Indebtedness, if Incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such Refinancing Indebtedness is denominated that is in effect on the date of such refinancing.
(g) Nothing contained in this Indenture is intended to treat (1) unsecured Indebtedness as subordinated or junior to secured Indebtedness merely because it is unsecured or (2) senior Indebtedness 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: Indenture (Goodrich Petroleum Corp)
Limitation on Indebtedness and Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) and the Company will not permit any of its Restricted Subsidiaries to issue Preferred Stock; provided, however, that the Company may Incur Indebtedness Issuers and any of the Subsidiary Guarantors may Incur Indebtedness and issue Preferred Stock if on the date of such Incurrence or issuancethereof:
(1) the Consolidated Coverage Ratio for the Company and its Restricted Subsidiaries is at least 2.25 to 1.00, determined on a pro forma basis (including a pro forma application of proceeds); and
(2) no Default would occur as a consequence of, and no Event of Default would be continuing following, Incurring the Indebtedness or the application of its proceedsapplication.
(b) Section 4.09(a3.2(a) will not prohibit the Incurrence of the following Indebtednessfollowing:
(1) Indebtedness under one or more Credit Facilities of (including the Company or any Restricted Subsidiary Senior Secured Credit Agreement) Incurred pursuant to this clause (1) by the Issuers or any Subsidiary Guarantor in an aggregate amount outstanding at any one time not to exceed the greater greatest of (i) $335.0 million or 300.0 million, (ii) the sum of $225.0 million and 30.035.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of the Incurrence of such Indebtedness after giving effect to the application of the proceeds therefrom, and (iii) the Borrowing Base at the time of incurrence;
(2) Guarantees Incurred by the Company or any Subsidiary Guarantor guarantees of Indebtedness of the Company or any Subsidiary Guarantor Incurred in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed guaranteed is a Subordinated Obligation or a Guarantor Subordinated Obligation, then the related Guarantee guarantee shall be subordinated in right of payment to the Notes Securities or the Subsidiary Guarantee Guarantees to at least the same extent as the Indebtedness being Guaranteedguaranteed, as the case may be;
(3) Indebtedness of the Company owing to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owing to and held by the Company or any Restricted Subsidiary; provided, however, that (a)(i) if the Company is the obligor on such Indebtedness and the obligee is not a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes Securities and (ii) if a Subsidiary Guarantor is the obligor of such Indebtedness and the obligee is neither the Company nor a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations of such Subsidiary Guarantor with respect to its Subsidiary Guarantee and (b)(i) any subsequent issuance or transfer of Capital Stock or any other event which 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 other than 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 clauseSection 3.2(b)(3);
(4) Indebtedness represented by (a) the Securities issued on the Issue Date and all Subsidiary Guarantees, (b) any Indebtedness (other than the Indebtedness described in Section 3.2(b)(1), (3), (4)(a) and (9) outstanding on the Issue Date), (c) any Exchange Securities and related Subsidiary Guarantees issued pursuant to a Registration Rights Agreement and (d) any Refinancing Indebtedness Incurred in respect of any Indebtedness described in this Section 3.2(b)(4) or Section 3.2(b)(5) or Incurred pursuant to Section 3.2(a);
(5) Permitted Acquisition Indebtedness;
(6) Indebtedness Incurred in respect of (a) self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds provided by the Company or a Restricted Subsidiary in the ordinary course of business and any guarantees or letters of credit functioning as or supporting any of such obligations or bonds and (b) obligations represented by letters of credit for the account of the Company or a Restricted Subsidiary in order to provide security for workers’ compensation claims (in the case of both clauses (a) and (b) other than for an obligation for money borrowed);
(7) Indebtedness of the Issuers or any Subsidiary Guarantor represented by Capitalized Lease Obligations (whether or not incurred pursuant to Sale/Leaseback Transactions) or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property, in each case Incurred for the purpose of financing, refinancing, renewing, defeasing or refunding all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or its Subsidiary Guarantors; provided that the aggregate principal amount incurred by the Issuers or any Subsidiary Guarantor pursuant to this Section 3.2(b)(7) outstanding at any time shall not exceed the greater of (x) $40.0 million and (y) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets; and provided further that the principal amount of any Indebtedness permitted under this Section 3.2(b)(7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed;
(8) Indebtedness to the extent that the net proceeds thereof are promptly deposited to defease the Securities or to satisfy and discharge the Indenture;
(9) in addition to the items referred to in Sections 3.2(b)(1) through (8) above, Indebtedness of the Company and its Restricted Subsidiaries in an aggregate outstanding principal amount which, when taken together with the principal amount of all other Indebtedness Incurred pursuant to this clause (9) and then outstanding, will not exceed the greater of (a) $50.0 million and (b) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets.
(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 3.2:
(1) in the event an item of that Indebtedness meets the criteria of more than one of the types of Indebtedness described in Section 3.2(a) and (b), the Company, in its sole discretion, will classify such item of Indebtedness on the date of Incurrence and, subject to Section 3.2(c)(2) below may later classify, reclassify or redivide all or a portion of such item of Indebtedness, in any manner that complies with this Section 3.2;
(2) any Indebtedness outstanding on the date of this Indenture under the Senior Secured Credit Agreement shall be deemed Incurred on the Issue Date under Section 3.2(b)(1);
(3) guarantees of, or obligations in respect of letters of credit supporting, Indebtedness which is otherwise included in the determination of a particular amount of Indebtedness shall not be included;
(4) the principal amount of any Disqualified Stock of the Company or a Restricted Subsidiary, or Preferred Stock of a Restricted Subsidiary, will be equal to the greater of the maximum mandatory redemption or repurchase price (including, in either case, any redemption or repurchase premium) or the liquidation preference thereof;
(5) Indebtedness permitted by this Section 3.2 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 3.2 permitting such Indebtedness; and
(6) the amount of Indebtedness issued at a price that is less than the principal amount thereof will be equal to the amount of the liability in respect thereof determined in accordance with GAAP. Accrual of interest, accrual of dividends, the amortization of debt discount or the accretion of accreted value and unrealized losses or charges in respect of Hedging Obligations (including those resulting from the application of ASC-815) will not be deemed to be an Incurrence of Indebtedness for purposes of this Section 3.2. The Company will not permit any of its Unrestricted Subsidiaries to Incur any Indebtedness other than Non-Recourse Debt. If at any time an Unrestricted Subsidiary becomes a Restricted Subsidiary, any Indebtedness of such Subsidiary shall be deemed to be Incurred by a Restricted Subsidiary as of such date (and, if such Indebtedness is not permitted to be Incurred as of such date under this Section 3.2, the Company shall be in Default of this Section 3.2). This Indenture will not treat (1) unsecured Indebtedness as subordinated or junior to secured Indebtedness merely because it is unsecured or (2) senior Indebtedness 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: Indenture (Alta Mesa Holdings, LP)
Limitation on Indebtedness and Preferred Stock. Create, incur, assume or suffer to exist any Indebtedness or preferred stock (other than preferred stock which, by its terms, does not require the payment of any cash dividends thereon or impose any cash penalties for the failure to declare cash dividends thereon), except:
(a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) and the Company will not permit any of its Restricted Subsidiaries to issue Preferred Stock; provided, however, that the Company may Incur Indebtedness and any of the Subsidiary Guarantors may Incur Indebtedness and issue Preferred Stock if on the date of such Incurrence or issuance:
(1) the Consolidated Coverage Ratio for the Company and its Restricted Subsidiaries is at least 2.25 to 1.00, determined on a pro forma basis (including a pro forma application of proceeds); and
(2) no Default would occur as a consequence of, and no Event of Default would be continuing following, Incurring the Indebtedness or the application of its proceeds.Borrower under this Agreement;
(b) Section 4.09(a) will not prohibit the Incurrence Indebtedness of the following Indebtedness:Borrower to any Subsidiary and of any Subsidiary to the Borrower or any other Subsidiary;
(1c) Indebtedness under one or more Credit Facilities of the Company Borrower and any of its Subsidiaries incurred to finance or any Restricted Subsidiary Incurred refinance
(i) the acquisition and construction of a new headquarters park for the Borrower, not to exceed $130,000,000 in the aggregate, and (ii) the acquisition of other fixed or capital assets (whether pursuant to this clause (1a loan, a Financing Lease or otherwise) in an aggregate principal amount not exceeding, as to the Borrower and its Subsidiaries, $50,000,000 at any time outstanding;
(d) short-term Indebtedness of Foreign Subsidiaries incurred for working capital purposes, and standby letters of credit (other than Standby Letters of Credit) issued for the account of Foreign Subsidiaries, in an aggregate principal amount not to exceed $150,000,000 at any time outstanding;
(e) Indebtedness on account of commercial letters of credit issued for the account of the Borrower and its Subsidiaries in the ordinary course of business;
(f) Indebtedness outstanding on the date hereof and listed on Schedule V and any refinancings, refundings, renewals or extensions thereof in an amount not to exceed the greater then current principal amount thereof;
(g) Indebtedness of a corporation which becomes a Subsidiary after the date hereof, provided that (i) $335.0 million or such Indebtedness existed at the time such corporation became a Subsidiary and was not created in anticipation thereof and (ii) the sum of $225.0 million and 30.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of the Incurrence of such Indebtedness immediately after giving effect to the application acquisition of such corporation by the proceeds therefromBorrower no Default or Event of Default shall have occurred and be continuing;
(2h) Guarantees Incurred Indebtedness on account of commercial paper issued by the Company or any Subsidiary Guarantor of Indebtedness Borrower; provided that the sum of the Company or aggregate outstanding principal amount of such commercial paper and the Aggregate Outstanding Extensions of Credit shall at no time exceed the aggregate amount of the Revolving Credit Commitments then in effect;
(i) additional Indebtedness not exceeding $25,000,000 in aggregate principal amount at any Subsidiary Guarantor Incurred one time outstanding;
(j) Guarantee Obligations permitted pursuant to subsection 9.4; and
(k) additional Indebtedness the Net Proceeds of which are applied in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is a Subordinated Obligation or a Guarantor Subordinated Obligation, then the related Guarantee shall be subordinated in right of payment to the Notes or the Subsidiary Guarantee to at least the same extent as the Indebtedness being Guaranteed, as the case may be;
(3) Indebtedness of the Company owing to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owing to and held by the Company or any Restricted Subsidiary; provided, however, that (a)(i) if the Company is the obligor on such Indebtedness and the obligee is not a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes and (ii) if a Subsidiary Guarantor is the obligor of such Indebtedness and the obligee is neither the Company nor a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations of such Subsidiary Guarantor with respect to its Subsidiary Guarantee and (b)(i) any subsequent issuance or transfer of Capital Stock or any other event which 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 other than 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 Subsidiary, as the case may be, that was not permitted by this clause;subsection 5.5(b).
Appears in 1 contract
Limitation on Indebtedness and Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) and the Company will not permit any of its Restricted Subsidiaries Non-Guarantor Subsidiary to issue Preferred Stock; provided, however, that the Company may Incur Indebtedness and any of the Subsidiary Guarantors may Incur Indebtedness and issue Preferred Stock if on the date of such Incurrence or issuancethereof:
(1) the Consolidated Coverage Ratio for of the Company and its Restricted Subsidiaries is at least 2.25 to 1.00, determined on a pro forma basis (including a pro forma application of proceeds); and
(2) no Default would occur as a consequence of, and no Event of Default would be continuing following, Incurring the Indebtedness or entering into the application of its proceedstransactions relating to such Incurrence.
(b) Section 4.09(a3.2(a) will not prohibit the Incurrence of the following Indebtedness:Indebtedness or the issuance of the Preferred Stock referred to in clause (7) of this Section 3.2(a):
(1) Indebtedness under one or more Credit Facilities of the Company or any Restricted Subsidiary Guarantor Incurred pursuant to this clause (1Section 3.2(b)(1) in an aggregate amount not to exceed the greater greatest of (i) $335.0 million or 250.0 million, (ii) the sum of $225.0 million and 30.035.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of the Incurrence of such Indebtedness after giving effect to the application of the proceeds therefromtherefrom or (iii) the Borrowing Base, in each case outstanding at any one time;
(2) Guarantees by (a) the Company or Subsidiary Guarantors of Indebtedness Incurred by the Company or any Subsidiary Guarantor of Indebtedness of the Company or any Subsidiary Guarantor Incurred in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is a Subordinated Obligation or a Guarantor Subordinated Obligation, then the related Guarantee shall be subordinated in right of payment to the Notes Securities or the Subsidiary Guarantee to at least the same extent as the Indebtedness being Guaranteed, as the case may bebe or (b) Non-Guarantor Subsidiaries of Indebtedness Incurred by Non-Guarantor Subsidiaries in accordance with the provisions of this Indenture;
(3) Indebtedness of the Company owing to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owing to and held by the Company or any Restricted Subsidiary; provided, however, that that
(a)(ia) if the Company is the obligor on such Indebtedness and the obligee is not a Subsidiary GuarantorNon-Guarantor Subsidiary, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations Obligations with respect to the Notes and Securities;
(iib) if a Subsidiary Guarantor is the obligor of such Indebtedness and the obligee is neither the Company nor a Subsidiary GuarantorNon-Guarantor Subsidiary, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations of such Subsidiary Guarantor with respect to its Subsidiary Guarantee and Guarantee; and
(b)(ii) any subsequent issuance or transfer of Capital Stock or any other event which results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and Company; and
(ii) any sale or other transfer of any such Indebtedness to a Person other than the Company or a Restricted Subsidiary of the Company shall be deemed, in each casecase under this clause (3)(c), to constitute an Incurrence of such Indebtedness by the Company or such Subsidiary, as the case may be, that was not permitted by this clauseSection 3.2(b)(3);
Appears in 1 contract
Samples: Indenture (Warren Resources Inc)
Limitation on Indebtedness and Preferred Stock. (a) The Company Holdings will not, and will not permit any of its the Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) and the Company Holdings will not permit any of its the Restricted Subsidiaries to issue Preferred Stock; provided, however, that the Company Holdings may Incur Indebtedness and the Company and any of the Subsidiary Guarantors may Incur Indebtedness and issue Preferred Stock if on the date of such Incurrence or issuancethereof:
(1) the Consolidated Coverage Ratio for Holdings and the Company and its Restricted Subsidiaries is at least 2.25 to 1.00, determined on a pro forma basis (including a pro forma application of proceeds); and
(2) no Default will have occurred or be continuing or would occur as a consequence of, and no Event of Default would be continuing following, Incurring the Indebtedness or the application of its proceedstransactions relating to such Incurrence.
(b) Section 4.09(a5.09(a) hereof will not prohibit the Incurrence of the following IndebtednessIndebtedness or issuance of the following Preferred Stock, as the case may be:
(1) Indebtedness under of the Company Incurred pursuant to one or more Credit Facilities of the Company or any Restricted Subsidiary Incurred pursuant to this clause (1) in an aggregate amount not to exceed the greater of (ia) $335.0 735.0 million less the aggregate amount of all permanent principal repayments since the Original Issue Date under a Credit Facility made under Section 5.07(a)(iii)(A) hereof, or (iib) the sum of $225.0 million and 30.040.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of the Incurrence of such Indebtedness after giving effect to the application of the proceeds therefrom, in each case outstanding at any one time;
(2) Guarantees Incurred by the Company or any Subsidiary Guarantor Guarantors of Indebtedness of the Company or any Subsidiary Guarantor a Guarantor, as the case may be, Incurred in accordance with the provisions of this the Indenture; provided that in the event such Indebtedness that is being Guaranteed is a Subordinated Obligation or a Guarantor Subordinated Obligation, then the related Guarantee shall be subordinated in right of payment to the Notes or the Subsidiary Guarantee to at least the same extent as the Indebtedness being Guaranteed, as the case may be;
(3) Indebtedness of the Company Holdings owing to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owing to and held by the Company Holdings or any Restricted Subsidiary; provided, however, that (a)(i) if the Company is the obligor on such Indebtedness and the obligee is not a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes and (ii) if a Subsidiary Guarantor is the obligor of such Indebtedness and the obligee is neither the Company nor a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations of such Subsidiary Guarantor with respect to its Subsidiary Guarantee and (b)(ii) any subsequent issuance or transfer of Capital Stock or any other event which results in any such Indebtedness being held by a Person other than the Company Holdings or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person other than the Company Holdings or a Restricted Subsidiary of the Company shall be deemed, in each case, to constitute an Incurrence of such Indebtedness by the Company Holdings or such Restricted Subsidiary, as the case may be;
(4) Indebtedness represented by (a) the Notes issued on the Issue Date, (b) any Indebtedness (other than the Indebtedness described in clauses (1) and (2) of clause (b) of this Section 5.09) outstanding on the Original Issue Date, including the Existing Notes issued on the Original Issue Date, and any Indebtedness incurred prior to the Issue Date under the provision of the Existing Notes Indenture similar to Section 5.09(a) and (c) any Refinancing Indebtedness Incurred in respect of any Indebtedness described in this clause (4) or clause (5) or Incurred pursuant to Section 5.09(a) hereof;
(5) Indebtedness of a Person that becomes a Restricted Subsidiary or is acquired by Holdings or a Restricted Subsidiary or merged into Holdings or a Restricted Subsidiary in accordance with the Indenture and outstanding on the date on which such Person became a Restricted Subsidiary or was acquired by or was merged into Holdings or such Restricted Subsidiary (other than Indebtedness Incurred (a) to provide all or any portion of the funds utilized to consummate the transaction or series of related transactions pursuant to which such Person became a Restricted Subsidiary or was otherwise acquired by or was merged into Holdings or a Restricted Subsidiary or (b) otherwise in connection with, or in contemplation of, such acquisition); provided, however, that at the time such Person becomes a Restricted Subsidiary or is acquired by or was merged into Holdings or a Restricted Subsidiary, Holdings would have been able to Incur $1.00 of additional Indebtedness pursuant to Section 5.09(a) hereof after giving effect to the Incurrence of such Indebtedness pursuant to this clause (5);
(6) the Incurrence by Holdings or any Restricted Subsidiary of Indebtedness represented by Capitalized 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 improvements or carrying costs of property used in the business of Holdings or such Restricted Subsidiary, and Refinancing Indebtedness Incurred to Refinance any Indebtedness Incurred pursuant to this clause (6) in an aggregate outstanding principal amount which, when taken together with the principal amount of all other Indebtedness Incurred pursuant to this clause (6) and then outstanding, will not exceed $40.0 million at any time outstanding;
(7) the Incurrence by Holdings, the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, payment obligations in connection with health or other types of social security benefits, unemployment or other insurance or self-insurance obligations, reclamation, statutory obligations, bankers’ acceptances and bid, performance, surety and appeal bonds or other similar obligations incurred in the ordinary course of business, including guarantees and obligations respecting standby letters of credit supporting such obligations, to the extent not drawn (in each case other than an obligation for money borrowed);
(8) Capital Stock (other than Disqualified Stock) of Holdings, the Company or any of the Subsidiary Guarantors;
(9) Indebtedness owed to Parent not to exceed $50.0 million in the aggregate, provided that all such Indebtedness shall be unsecured and subordinated to the Notes; and
(10) in addition to the items referred to in clauses (1) through (9) above, Indebtedness of Holdings, the Company and its Subsidiary Guarantors in an aggregate outstanding principal amount which, when taken together with the principal amount of all other Indebtedness Incurred pursuant to this clause (10) and then outstanding, will not exceed the greater of (a) $50.0 million and (b) 4.0% of Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence, at any time outstanding.
(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 5.09:
(1) in the event an item of that Indebtedness meets the criteria of more than one of the types of Indebtedness described in clauses (a) and (b) of this Section 5.09, the Issuers, in their sole discretion, will classify such item of Indebtedness on the date of Incurrence and, subject to clause (ii) below may later reclassify such item of Indebtedness and only be required to include the amount and type of such Indebtedness in one of such clauses;
(2) all Indebtedness outstanding on the date of the Indenture under the Senior Secured Credit Agreement shall be deemed Incurred on the Original Issue Date under Section 5.09(b)(1);
(3) Guarantees of, or obligations in respect of letters of credit supporting, Indebtedness which is otherwise included in the determination of a particular amount of Indebtedness shall not be included;
(4) if obligations in respect of letters of credit are Incurred pursuant to a Credit Facility and are being treated as Incurred pursuant to Section 5.09(b)(1) and the letters of credit relate to other Indebtedness, then such other Indebtedness shall not be included;
(5) the principal amount of any Disqualified Stock of Holdings or a Restricted Subsidiary, or Preferred Stock of a Restricted Subsidiary that is not an Issuer or a Subsidiary 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;
(6) Indebtedness permitted by this clause;Section 5.09 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 5.09 permitting such Indebtedness; and
(7) the amount of Indebtedness issued at a price that is less than the principal amount thereof will be equal to the amount of the liability in respect thereof determined in accordance with GAAP.
(d) Accrual of interest, accrual of dividends, the amortization of debt discount or the accretion of accreted value, the payment of interest in the form of additional Indebtedness, the payment of dividends in the form of additional shares of Preferred Stock or Disqualified Stock and unrealized losses or charges in respect of Hedging Obligations (including those resulting from the application of SFAS 133) will not be deemed to be an Incurrence of Indebtedness for purposes of this Section 5.09. The amount of any Indebtedness outstanding as of any date shall be
(i) the accreted value thereof in the case of any Indebtedness issued with original issue discount and (ii) the principal amount or liquidation preference thereof, together with any interest thereon that is more than 30 days past due, in the case of any other Indebtedness.
(e) If at any time an Unrestricted Subsidiary becomes a Restricted Subsidiary, any Indebtedness of such Subsidiary shall be deemed to be Incurred by a Restricted Subsidiary as of such date (and, if such Indebtedness is not permitted to be Incurred as of such date under this Section 5.09, the Issuers shall be in Default of this Section 5.09).
(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 Indebtedness does not exceed the principal amount of such Indebtedness being refinanced. Notwithstanding any other provision of this Section 5.09, the maximum amount of Indebtedness that the Issuers may Incur pursuant to this Section 5.09 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 Indebtedness is denominated that is in effect on the date of such refinancing.
(g) The Indenture will not treat (1) unsecured Indebtedness as subordinated or junior to secured Indebtedness merely because it is unsecured or (2) senior Indebtedness 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 (Atlas Energy Resources, LLC)
