Loans and Investments Each of the Loan Parties shall not and shall not permit any of their Subsidiaries to, at any time make or suffer to remain outstanding any loan or advance to, or purchase, acquire or own any stock, bonds, notes or securities of, or any partnership interest (whether general or limited) or limited liability company interest in, or any other investment or interest in, or make any capital contribution to, any other Person, except:
(a) (i) trade credit extended on usual and customary terms in the ordinary course of business, (ii) bank deposits in the ordinary course of business, (iii) endorsement of negotiable instruments held for collection in the ordinary course of business and (iv) lease, utility and other similar deposits in the ordinary course of business;
(b) advances to employees to meet expenses incurred by such employees in the ordinary course of business;
(c) (i) cash and Permitted Investments, (ii) investments by any Loan Party in Equity Interests in their respective Subsidiaries existing as of the Effective Date, and (iii) other investments, advances and loans existing on the date of this Agreement and described on Schedule 6.04;
(d) loans, advances and investments to, or in, the Borrower or any Subsidiary;
(e) investments in Swap Agreements as permitted by Section 6.01(f);
(f) Permitted Acquisitions, including Subsidiaries acquired pursuant to Permitted Acquisitions and investments of such Subsidiaries at the time of their respective Acquisition pursuant to Permitted Acquisitions;
(g) ownership of equity interests or securities acquired in connection with the satisfaction or enforcement of Indebtedness or claims due or owing to a Loan Party or any of its Subsidiaries in the ordinary course of business or as security for any such Indebtedness or claim;
(h) Guarantees permitted by Section 6.03;
(i) any other investment, loan or advance (other than Acquisitions) so long as the aggregate amount of all such investments, loans and advances does not exceed $20,000,000 during the term of this Agreement; and
(j) loans, advances and investments (other than Acquisitions) not otherwise permitted by any of the foregoing, provided that immediately prior to and after giving effect (including giving effect on a pro forma basis) to any such loan, advance or investment (i) no Default or Event of Default exists or would result therefrom and (ii) the Borrower is in compliance with the financial covenants set forth in Sections 6.14 and 6.15.
Designation of Unrestricted Subsidiaries The Borrower Representative may at any time after the Closing Date designate any Restricted Subsidiary as an Unrestricted Subsidiary and subsequently re-designate any Unrestricted Subsidiary as a Restricted Subsidiary, if other than for purposes of designating a Restricted Subsidiary as an Unrestricted Subsidiary that is a Receivables Subsidiary in connection with the establishment of a Qualified Receivables Financing (i) the Interest Coverage Ratio of UK Holdco and the Restricted Subsidiaries for the most recently ended Reference Period preceding such designation or re-designation, as applicable, would have been, on a Pro Forma Basis, at least the lesser of (x) 2.00 to 1.00 and (y) the Interest Coverage Ratio as of the most recently ended Reference Period and (ii) no Event of Default has occurred and is continuing or would result therefrom. The designation of any Restricted Subsidiary as an Unrestricted Subsidiary after the Closing Date shall constitute an Investment by the applicable Loan Party or Restricted Subsidiary therein at the date of designation in an amount equal to the Fair Market Value of the applicable Loan Party’s or Restricted Subsidiary’s investment therein; provided that if any subsidiary (a “Subject Subsidiary”) being designated as an Unrestricted Subsidiary has a subsidiary that was previously designated as an Unrestricted Subsidiary (the “Previously Designated Unrestricted Subsidiary”) in compliance with the provisions of this Agreement, the Investment of such Subject Subsidiary in such Previously Designated Unrestricted Subsidiary shall not be taken into account, and shall be excluded, in determining whether the Subject Subsidiary may be designated as an Unrestricted Subsidiary hereunder. The designation of any Unrestricted Subsidiary as a Restricted Subsidiary shall constitute (x) the incurrence at the time of designation of Indebtedness or Liens of such Subsidiary existing at such time, and (y) a return on any Investment by the applicable Loan Party or Restricted Subsidiary in Unrestricted Subsidiaries pursuant to the preceding sentence in an amount equal to the Fair Market Value at the date of such designation of such Loan Party’s or Restricted Subsidiary’s Investment in such Subsidiary. For the avoidance of doubt, neither a Borrower nor UK Holdco shall be permitted to be an Unrestricted Subsidiary. At any time a Subsidiary is designated as an Unrestricted Subsidiary hereunder, the Borrower Representative shall cause such Subsidiary to be designated as an Unrestricted Subsidiary (or any similar applicable term) under the Senior Secured Notes.
Investments, Acquisitions, Loans and Advances The Borrower shall not, nor shall it permit any Subsidiary to (i) directly or indirectly, make, retain or have outstanding any investments (whether through the purchase of stock or obligations or otherwise) in any Person, real property or improvements on real property, or any loans, advances, lines of credit, mortgage loans or other financings (including pursuant to sale/leaseback transactions) to any other Person, or (ii) acquire any real property, improvements on real property or all or any substantial part of the assets or business of any other Person or division thereof; provided, however, that the foregoing shall not apply to nor operate to prevent, with respect to the Borrower or any Subsidiary, any of the following:
(a) investments in direct obligations of the United States of America or of any agency or instrumentality thereof whose obligations constitute full faith and credit obligations of the United States of America, provided that any such obligations shall mature within one (1) year of the date of issuance thereof;
(b) investments in commercial paper with a Rating of at least P-1 by Mxxxx’x and at least A-1 by S&P maturing within one (1) year of the date of issuance thereof;
(c) investments in certificates of deposit issued by any Lender or by any United States commercial bank having capital and surplus of not less than $100,000,000 which have a maturity of one (1) year or less;
(d) investments in repurchase obligations with a term of not more than seven (7) days for underlying securities of the types described in subsection (a) above entered into with any bank meeting the qualifications specified in subsection (c) above, provided all such agreements require physical delivery of the securities securing such repurchase agreement, except those delivered through the Federal Reserve Book Entry System;
(e) investments in money market funds that invest solely, and which are restricted by their respective charters to invest solely, in investments of the type described in the immediately preceding subsections (a), (b), (c), and (d) above;
(f) the Borrower’s investments from time to time in Stock and Stock Equivalents (including, for the avoidance of doubt, marketable securities) issued by any real estate company or real estate investment trust (“REIT Shares”); provided that at least 90% of such REIT Shares shall issued by real estate companies listed on the New York Stock Exchange, Inc., the NYSE AMEX or the NASDAQ Stock Market;
(g) the Borrower’s investments from time to time in its Subsidiaries, and investments made from time to time by a Subsidiary in one or more of its Subsidiaries;
(h) intercompany advances made from time to time among the Borrower and its Subsidiaries in the ordinary course of business to finance working capital needs;
(i) investments from time to time in individual Real Properties (including Eligible Properties) or in entities which own such individual Real Properties (including Eligible Properties), provided that such investment does not cause a breach of the financial covenants set forth in Section 8.20 hereof or clauses (k), (l) or (m) below;
(j) cash investments in joint ventures in an amount not to exceed in the aggregate at any one time outstanding 10% of the Total Asset Value at such time;
(k) investments in Assets Under Development in an amount not to exceed in the aggregate at any one time outstanding 10% of the Total Asset Value at such time;
(l) investments in Land Assets in an amount not to exceed in the aggregate at any one time outstanding 10% of the Total Asset Value at such time;
(m) investments in Ground Leases in an amount not to exceed in the aggregate at any one time outstanding 10% of the Total Asset Value at such time;
(n) investments in deposit account and securities accounts opened in the ordinary course of business and in compliance with the terms of this Agreement;
(o) investments pursuant to Hedging Agreements that are not otherwise prohibited by the terms of this Agreement;
(p) investments in manufactured homes for lease or resale; and
(q) purchase money loans made by UMH Sales and Finance Inc. (a Subsidiary), or any successor thereto, to purchasers of manufactured homes; and
(r) other investments in addition to those otherwise permitted by this Section in an amount not to exceed in the aggregate at any one time 5% of the Total Asset Value at such time. Investments of the type described in clauses (j), (k), (l), (m), and (r) immediately preceding shall, at no time, exceed in the aggregate at any one time, 20% of the Total Asset Value of the Borrower and its Subsidiaries at such time. In determining the amount of investments, acquisitions, loans, and advances permitted under this Section, investments and acquisitions shall always be taken at the book value (as defined in GAAP) thereof, and loans and advances shall be taken at the principal amount thereof then remaining unpaid.
Limitation on Designations of Unrestricted Subsidiaries Level 3 shall not designate (1) the Borrower or Level 3 LLC as an Unrestricted Subsidiary or (2) any other Subsidiary (other than a newly created Subsidiary in which no Investment has previously been made) as an “Unrestricted Subsidiary” under this Agreement (a “Designation”) unless in the case of this clause (2):
(a) no Default or Event of Default shall have occurred and be continuing at the time of or after giving effect to such Designation;
(b) immediately after giving effect to such Designation, Level 3 would be able to Incur $1.00 of Indebtedness under paragraph (a) of Section 6.01; and
(c) Level 3 would not be prohibited under any provision of this Agreement from making an Investment at the time of Designation (assuming the effectiveness of such Designation) in an amount (the “Designation Amount”) equal to the portion (proportionate to Level 3’s equity interest in such Restricted Subsidiary) of the Fair Market Value of the net assets of such Restricted Subsidiary on such date. In the event of any such Designation, Level 3 shall be deemed to have made an Investment constituting a Restricted Payment pursuant to Section 6.03 for all purposes of this Agreement in the Designation Amount; provided, however, that, upon a Revocation of any such Designation of a Subsidiary, Level 3 shall be deemed to continue to have a permanent “Investment” in an Unrestricted Subsidiary of an amount (if positive) equal to (i) Level 3’s “Investment” in such Subsidiary at the time of such Revocation less (ii) the portion (proportionate to Level 3’s equity interest in such Subsidiary) of the Fair Market Value of the net assets of such Subsidiary at the time of such Revocation. At the time of any Designation of any Subsidiary as an Unrestricted Subsidiary, such Subsidiary shall not own any Capital Stock of Level 3 or any Restricted Subsidiary. In addition, neither Level 3 nor any Restricted Subsidiary shall at any time (x) provide credit support for, or a Guarantee of, any Indebtedness of any Unrestricted Subsidiary (including any undertaking, agreement or instrument evidencing such Indebtedness); provided, however, that Level 3 or a Restricted Subsidiary may pledge Capital Stock or Indebtedness of any Unrestricted Subsidiary on a nonrecourse basis such that the pledgee has no claim whatsoever against Level 3 other than to obtain such pledged Capital Stock or Indebtedness, (y) be directly or indirectly liable for any Indebtedness of any Unrestricted Subsidiary or (z) be directly or indirectly liable for any Indebtedness which provides that the holder thereof may (upon notice, lapse of time or both) declare a default thereon or cause the payment thereof to be accelerated or payable prior to its final scheduled maturity upon the occurrence of a default with respect to any Indebtedness, Lien or other obligation of any Unrestricted Subsidiary (including any right to take enforcement action against such Unrestricted Subsidiary), except in the case of clause (x) or (y) to the extent permitted under Sections 6.03 and 6.09. Unless Designated as an Unrestricted Subsidiary, any Person that becomes a Subsidiary of Level 3 will be classified as a Restricted Subsidiary; provided, however, that such Subsidiary shall not be designated as a Restricted Subsidiary and shall be automatically classified as an Unrestricted Subsidiary if either of the requirements set forth in clauses (a) and (b) of the immediately following paragraph will not be satisfied immediately following such classification. Except as provided in the first sentence of this Section 6.10, no Restricted Subsidiary may be redesignated as an Unrestricted Subsidiary. A Designation may be revoked (a “Revocation”) by a Board Resolution of Level 3 delivered to the Administrative Agent, provided that Level 3 will not make any Revocation unless:
(a) no Default or Event of Default shall have occurred and be continuing at the time of and after giving effect to such Revocation; and
(b) all Liens and Indebtedness of such Unrestricted Subsidiary outstanding immediately following such Revocation would, if Incurred at such time, have been permitted to be Incurred at such time for all purposes of this Agreement. All Designations and Revocations must be evidenced by Board Resolutions of Level 3 delivered to the Administrative Agent (i) certifying compliance with the foregoing provisions and (ii) giving the effective date of such Designation or Revocation. Upon Designation of a Restricted Subsidiary as an Unrestricted Subsidiary in compliance with this Section 6.10, such Restricted Subsidiary shall, by delivery of documentation providing for such release in form satisfactory to the Administrative Agent, be released from any Guarantee (in the case of a Guarantor) and its obligations under the Collateral Agreement (in the case of a Grantor) previously made by such Subsidiary.
Investments, Loans, Advances, Guarantees and Acquisitions Borrower will not, and will not permit any of its Subsidiaries to, acquire or form any new Subsidiaries after the Closing Date, acquire, form or suffer to exist any new Affiliates after the Closing Date, purchase, hold or acquire (including pursuant to any merger, other than a merger permitted by Section 5.4) any Stock, evidences of indebtedness or other securities (including any option, warrant or other right to acquire any of the foregoing) of, make or permit to exist any loans or advances to, guarantee any obligations of, or make or permit to exist any investment or any other interest in, any other Person, or purchase or otherwise acquire (in one transaction or a series of transactions (including pursuant to any merger)) any assets of any other Person constituting a business unit, except:
(a) Permitted Investments;
(b) investments existing on the date as of the last financial statement furnished to the Bank as set forth on Annex 2;
(c) Investments consisting of extensions of credit in the nature of accounts receivable arising from the grant of trade credit in the ordinary course of business;
(d) loans and advances to officers, directors and employees of Borrower or any Subsidiary in the ordinary course of the business of the Borrower and its Subsidiaries as presently conducted in compliance with all applicable laws (including, to the extent applicable, the Sxxxxxxx-Xxxxx Act of 2002, as amended) in an aggregate principal amount not to exceed $5,000 at any time outstanding; and
(e) investments made by Borrower in the equity securities of any Domestic Subsidiary and made by any Domestic Subsidiary in the equity securities of any other Domestic Subsidiary provided that (i) any such equity securities owned by Borrower or any Domestic Subsidiary shall become Collateral pursuant to this Agreement.
Limitation on Investments, Loans and Advances Make any advance, loan, extension of credit or capital contribution to, or purchase any stock, bonds, notes, debentures or other securities of or any assets constituting a business unit of, or make any other investment in (such advances, loans, extensions of credit, capital contributions, purchases and investments being herein called "Investments"), any Person, except:
(a) extensions of trade credit in the ordinary course of business;
(b) Investments in Cash Equivalents;
(c) any Investment by the Borrower or any Restricted Subsidiary (other than any Special Purpose Subsidiary) in Persons engaged in the telecommunications business or businesses related thereto, provided that (i) such Person, if it shall be a Subsidiary, shall become a Restricted Subsidiary unless (A) such Person or assets shall be acquired with (I) proceeds of capital contributed to the Borrower expressly for such purpose and/or (II) funds of the Borrower in such amount that, after giving effect thereto, the Special Payment Condition shall be satisfied, provided that the Borrower shall have made a Pro Rata Payment Offer in an amount equal to such Investment and (B) the Borrower designates such Person, by notice to the Administrative Agent, as an Unrestricted Subsidiary and (ii) immediately prior and after giving effect to such Investment, the Borrower is in Pro Forma Compliance;
(d) any Investment by the Borrower or any Restricted Subsidiary (other than any Special Purpose Subsidiary) in Persons not engaged in the telecommunications business or businesses related thereto if, after giving effect thereto, the aggregate amount of such Investments then held by the Borrower and its Restricted Subsidiaries does not exceed (x) at any time prior to the date on which the Special Payment Condition shall have occurred, $50,000,000, or (y) thereafter, 5% of then Total Capitalization; provided that (i) such Person, or the Person which shall become the owner of any assets acquired in connection with such Investment, shall become a Restricted Subsidiary unless (A) such Person or assets shall be acquired with (I) proceeds of capital contributed to the Borrower expressly for such purpose and/or (II) funds of the Borrower in such amount that after giving effect thereto, the Special Payment Condition shall be satisfied, provided that the Borrower shall have made a Pro Rata Payment Offer in an amount equal to such Investment and (B) the Borrower designates such Person, by notice to the Administrative Agent, an Unrestricted Subsidiary and (ii) immediately prior and after giving effect to such Investment, the Borrower is in Pro Forma Compliance;
(e) any Investment arising from the acquisition by the Borrower and its Restricted Subsidiaries of any System or Systems in connection with any Asset Swap, provided that (i) to the extent that the Borrower and its Restricted Subsidiaries give consideration for the System or Systems acquired by them in connection with such Asset Swap that is in addition to the System or Systems transferred by them in exchange therefor, such Asset Swap shall be deemed to constitute an Investment and shall be permitted only if the provisions of subsection 6.6(e) and 6.8(c) shall be complied with in connection therewith and (ii) immediately prior and after giving effect to such Investment the Borrower is in Pro Forma Compliance;
(f) loans and advances to employees of the Borrower and its Restricted Subsidiaries in an aggregate principal amount outstanding not to exceed $10,000,000 at any one time outstanding;
(g) Investments by the Borrower in its Restricted Subsidiaries and Investments by any Restricted Subsidiary (other than any Special Purpose Subsidiary) in the Borrower or by any Restricted Subsidiary (other than any Special Purpose Subsidiary) in any other Restricted Subsidiary; and
(h) promissory notes and other deferred payment obligations that constitute proceeds of Asset Sales that are permitted by subsection 6.6.
Unrestricted Subsidiaries The Borrower:
(a) will cause the management, business and affairs of the Borrower and each Restricted Subsidiary to be conducted in such a manner (including, without limitation, by keeping separate books of account, furnishing separate financial statements of Unrestricted Subsidiaries to creditors and potential creditors thereof and by not permitting Properties of the Credit Parties to be commingled) so that each Unrestricted Subsidiary will be treated as an entity separate and distinct from the Borrower and the Restricted Subsidiaries;
(b) will cause each Unrestricted Subsidiary (i) to refrain from maintaining its assets in such a manner that would make it costly or difficult to segregate, ascertain or identify as its individual assets from those of the Borrower or any Restricted Subsidiary and (ii) to observe all corporate formalities;
(c) will not, and will not permit any other Restricted Subsidiary to, incur, assume, guarantee or be or become liable for any Debt of any of the Unrestricted Subsidiaries;
(d) will not, and will not permit any Restricted Subsidiary to, permit any credit agreement for a senior credit facility, a loan agreement for a senior credit facility, a note purchase agreement for the sale of promissory notes or an indenture governing capital markets debt instruments pursuant to which the Borrower or any Restricted Subsidiary is a borrower, issuer or guarantor (the “Relevant Debt”), the terms of which would, upon the occurrence of a default under any Debt of an Unrestricted Subsidiary, (i) result in, or permit the holder of any Relevant Debt to declare a default on such Relevant Debt or (ii) cause the payment of any Relevant Debt to be accelerated or payable before the fixed date on which the principal of such Relevant Debt is due and payable; and
(e) will not permit any Unrestricted Subsidiary to hold any Equity Interest in, or any Debt of, any Credit Party.
Acquisitions and Investments Borrower will not, nor will it permit any Subsidiary of Borrower to, make or suffer to exist any Investments (including without limitation, loans and advances to, and other Investments in, Subsidiaries of Borrower), or commitments therefor, or become or remain a partner in any partnership or joint venture, or to make any Entity Acquisition of any Person, except:
(i) Cash Equivalents;
(ii) Investments in existing Subsidiaries of Borrower, Investments in Subsidiaries of Borrower formed for the purpose of developing or acquiring industrial properties, or Investments in existing or newly formed joint ventures and partnerships engaged solely in the business of purchasing, developing, owning, operating, leasing and managing industrial properties;
(iii) transactions permitted pursuant to Section 6.12;
(iv) Investments permitted pursuant to Section 6.23; and
(v) Entity Acquisitions of Persons whose primary operations consist of the ownership, development, operation and management of industrial properties; provided that, after giving effect to such Entity Acquisitions and Investments, Borrower continues to comply with all its covenants herein. Entity Acquisitions permitted pursuant to this Section 6.15 shall be deemed to be “Permitted Acquisitions”.
Loans, Advances and Investments Neither the Seller nor any Restricted Subsidiary shall make any loan (other than Mortgage Loans), advance, or capital contribution to, or investment in (including any investment in any Restricted Subsidiary, joint venture or partnership), or purchase or otherwise acquire any of the capital stock, securities, ownership interests, or evidences of indebtedness of, any Person (collectively, “Investment”), or otherwise acquire any interest in, or control of, another Person, except for the following:
(a) Cash Equivalents;
(b) Any acquisition of securities or evidences of indebtedness of others when acquired by the Seller in settlement of accounts receivable or other debts arising in the ordinary course of its business, so long as the aggregate amount of any such securities or evidences of indebtedness is not material to the business or condition (financial or otherwise) of the Seller;
(c) Mortgage Notes acquired in the ordinary course of the Seller’s business;
(d) Investment in any existing Affiliate or any Subsidiary (including Investments by the Seller in CH Funding, LLC, a Delaware limited liability company) or JV; provided that (i) at the time any such investment is made and immediately thereafter, the Seller and the Restricted Subsidiaries are in compliance with all covenants set forth in the Repurchase Documents and no Default or Event of Default shall have occurred and be continuing and (ii) the aggregate outstanding amount of all such Investments shall not exceed $10,000,000 at any time;
(e) Loans to officers or employees in an aggregate amount not to exceed $300,000; and
(f) Investments in companies in the business of originating and servicing mortgage loans so long as such Investment is a direct equity investment and so long as such Investment does not cause a breach of any other covenant (affirmative or negative) hereunder.
Investments, Loans and Advances Purchase, hold or acquire any Equity Interests, evidences of indebtedness or other securities of, make or permit to exist any loans or advances to, or make or permit to exist any investment or any other interest in, any other Person, except:
(a) (i) investments by the Borrower and the Subsidiaries existing on the date hereof in the Equity Interests of the Subsidiaries, and (ii) additional investments by the Borrower and the Subsidiaries in the Equity Interests of the Subsidiaries; provided that (A) any such Equity Interests held by a Loan Party shall be pledged pursuant to the Guarantee and Pledge Agreement (subject to the limitations and exceptions referred to therein) and (B) investments made after the Closing Date by Loan Parties in, and loans and advances made after the Closing Date by Loan Parties to, Subsidiaries that are not Loan Parties (determined without regard to any write-downs or write-offs of such investments, loans and advances) shall only be permitted (x) pursuant to funding commitments in effect on, and disclosed to the Lender on or prior to, the Closing Date or (y) with the prior written consent of the Lender;
(b) investments in cash and Permitted Investments;
(c) loans or advances made by the Borrower to any Subsidiary and made by any Subsidiary to the Borrower or any other Subsidiary; provided that (i) any such loans and advances made to a Loan Party shall be unsecured, (ii) any such loans and advances made to any Loan Party shall be subordinated to the Obligations pursuant to an Affiliate Subordination Agreement and (iii) the amount of such loans and advances made by Loan Parties to Subsidiaries that are not Loan Parties shall be subject to the limitation set forth in paragraph (a) above;
(d) investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with, customers and suppliers, in each case in the ordinary course of business; and
(e) other loans, advances and investments made in the ordinary course of business of the Borrower and its Subsidiaries. Notwithstanding the foregoing, the Borrower and its Subsidiaries shall not be permitted to make any material investment in illiquid, complex structured products for which no external market price, liquid market quotes or price based on common agreed modeling is available except (i) pursuant to Investment Commitments in effect on the Closing Date and entered into in the ordinary course of business or (ii) with the prior written consent of the Lender.
