Limitation on Restricted Payments (a) The Issuer will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly:
(1) declare or pay any dividend or make any other payment or distribution on account of the Issuer’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation involving the Issuer or its Restricted Subsidiaries) or to the direct or indirect holders of the Issuer’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as holders (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Issuer or any of its Restricted Subsidiaries and other than dividends or distributions payable to the Issuer or its Restricted Subsidiaries on at least a pro rata basis);
(2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation involving the Issuer) any Equity Interests of the Issuer or any Parent Entity other than Equity Interests held by the Issuer or any of its Restricted Subsidiaries;
(3) make any principal payment on, or purchase, repurchase, redeem, defease or otherwise acquire or retire for value, prior to scheduled maturity, scheduled repayment or scheduled sinking fund payment, any subordinated Indebtedness (excluding any intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiaries), except (i) a payment of principal at the Stated Maturity thereof or (ii) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of any subordinated Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or payment at final maturity, in each case due within one year of the date of purchase, repurchase, redemption, defeasance or other acquisition or retirement for value; or
(4) make any Restricted Investment in any Person, (all such payments and other actions set forth in clauses (1) through (4) above being collectively referred to as “Restricted Payments”), unless, at the time of any such Restricted Payment, no Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment, and:
(A) if the Fixed Charge Coverage Ratio for the applicable Test Period at the time of such Restricted Payment is greater than or equal to 1.75 to 1.00, such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Issuer and its Restricted Subsidiaries since the Reference Date (excluding Restricted Payments permitted by clauses (2) through (23) of Section 4.07(b)), is less than the sum, without duplication, of:
(i) Cumulative Distributable Cash, determined as of the date such Restricted Payment is made; plus
(ii) 100% of the aggregate net cash proceeds and the Fair Market Value of marketable securities and other property received by the Issuer since the Reference Date (x) as a contribution to its common equity capital or (y) in consideration of the sale or issuance of Equity Interests of the Issuer (other than Disqualified Stock or Designated Preferred Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock of the Issuer or convertible or exchangeable Indebtedness of the Issuer, in each case that have been converted into or exchanged for Equity Interests of the Issuer or any Parent Entity (other than Equity Interests (or Disqualified Stock or convertible or exchangeable Indebtedness) sold to a Subsidiary of the Issuer); plus
(iii) the aggregate amount of Retained Asset Sale Proceeds and Declined Excess Proceeds since the Reference Date; plus
(iv) to the extent that any Restricted Investment that was made after the Reference Date is sold for cash or otherwise liquidated or repaid for cash, 100% of the aggregate amount received by the Issuer or its Restricted Subsidiaries in cash and the Fair Market Value of property other than cash received; plus
(v) the net reduction in Restricted Investments after the Reference Date resulting from dividends, liquidating distributions, redemptions, repayments of loans or advances, or other transfers of assets in each case to the Issuer or any of its Restricted Subsidiaries from any Person (including, without limitation, Unrestricted Subsidiaries and Joint Ventures) or from redesignation of Unrestricted Subsidiaries as Restricted Subsidiaries; plus
(vi) $2.0 billion, in the case of each of the foregoing items (ii) through (v) for purposes of this clause (A), to the extent such amounts have not been included in Cumulative Distributable Cash for any period commencing on or after the Reference Date (such items (ii) through (v) being referred to collectively as “Incremental Funds”); minus
(vii) the aggregate amount of Incremental Funds previously expended pursuant to this clause (A) or clause (B) below; or
(B) if the Fixed Charge Coverage Ratio for the applicable Test Period at the time of such Restricted Payment is less than 1.75 to 1.00, such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Issuer and its Restricted Subsidiaries during the quarter in which such Restricted Payment is made (excluding Restricted Payments permitted by clauses (2) through (19) of Section 4.07(b)) is less than the sum, without duplication, of:
(i) the greater of (x) $2.0 billion and (y) 60.0% of Distributable Cash for the applicable Test Period, less the aggregate amount of all Restricted Payments made by the Issuer and its Restricted Subsidiaries pursuant to this clause (B)(i) during the period beginning on the Reference Date and ending on the last day of the fiscal quarter immediately preceding the quarter in which such Restricted Payment is made; plus
(ii) Incremental Funds to the extent such amounts have not previously been expended pursuant to this clause (B) or clause (A) above (including any amounts that were included in Cumulative Distributable Cash for any period commencing on or after the Reference Date and expended pursuant to clause (A) above).
(b) The preceding provisions will not prohibit:
(1) the payment of any dividend or the consummation of any redemption within 60 days after the date of declaration of the dividend or giving of the redemption notice, as the case may be, if at the date of declaration or notice, the dividend or redemption payment would have complied with this Indenture;
(2) the making of any Restricted Payment in exchange for, or out of or with the net cash proceeds of the substantially concurrent sale or issuance (other than to a Subsidiary of the Issuer) of, Equity Interests of the Issuer (other than Disqualified Stock), or from the substantially concurrent contribution to the common equity capital of the Issuer (other than from a Subsidiary of the Issuer); provided that the amount of any net cash proceeds that are utilized for any such Restricted Payment will not be or not have been included in Incremental Funds;
(3) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer held by any future, present or former employee, director, officer, manager, contractor, consultant or advisor (or their respective Controlled Investment Affiliates or Immediate Family Members) of the Issuer or any of its Restricted Subsidiaries pursuant to any equity subscription agreement, stock option agreement, restricted stock grant, shareholders’ agreement or similar agreement; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $50 million in any calendar year (with unused amounts in any calendar year being carried over to succeeding calendar years); and provided further, that such amount in any calendar year may be increased by an amount not to exceed the cash proceeds from (i) the sale of Equity Interests of the Issuer received by the Issuer or a Restricted Subsidiary during such calendar year, in each case to any future, present or former employee, director, officer, manager, contractor, consultant or advisor (or their respective Controlled Investment Affiliates or Immediate Family Members) of the Issuer or any of its Restricted Subsidiaries (to the extent not included in Incremental Funds) and (ii) key man life insurance policies received by the Issuer or any of its Restricted Subsidiaries in such calendar year;
(4) the defeasance, redemption, repurchase, repayment or other acquisition of subordinated Indebtedness with the net cash proceeds from an incurrence of Refinancing Indebtedness;
(5) the repurchase, redemption or other acquisition or retirement for value of any Preferred Stock, any Disqualified Stock or any subordinated Indebtedness pursuant to provisions similar to those described in Sections 4.10 and 4.15 hereof; provided that all Notes tendered by Holders of the Notes in connection with a Change of Control Offer or Asset Sale Offer, as applicable, have been repurchased, redeemed or acquired for value;
(6) [reserved];
(7) [reserved];
(8) the declaration and payment of regularly scheduled or accrued dividends to holders of any class or series of Disqualified Stock of the Issuer or its Restricted Subsidiaries or any Preferred Equity of any Restricted Subsidiary (other than the Issuer or the Guarantors) issued on or after the Reference Date in accordance with Section 4.09;
(9) payments of cash, dividends, distributions, advances or other Restricted Payments by the Issuer or any of its Restricted Subsidiaries to allow the payment of cash in lieu of the issuance of fractional shares upon the exercise of options, warrants or similar securities or the conversion or exchange of Capital Stock of any such Person;
(10) (i) the declaration and payment of dividends to holders of any class or series of Designated Preferred Stock (other than Disqualified Stock) issued by the Issuer after the Reference Date; provided that for the applicable Test Period, after giving effect to such issuance or declaration on a pro forma basis, the Issuer could incur $1.00 of additional Indebtedness pursuant to Section 4.09(a); and (ii) the declaration and payment of dividends to any Parent Entity, the proceeds of which will be used to fund the payment of dividends to holders of any class or series of Designated Preferred Stock (other than Disqualified Stock) issued by such Parent Entity after the Reference Date; provided that the amount of dividends paid pursuant to this subclause (ii) shall not exceed the aggregate amount of cash actually contributed to the Issuer from the sale of such Designated Preferred Stock;
(11) the payment of any dividend (or, in the case of any partnership or limited liability company, any similar distribution) by a Restricted Subsidiary to the holders of its Equity Interests in accordance with the charter, partnership agreement, limited liability company agreement or other governing documents of such Restricted Subsidiary or on a pro rata basis or a more favorable basis to the Issuer or the Restricted Subsidiary that is the parent of the Restricted Subsidiary making such payment;
(12) any payments pursuant to clauses (19) through (21) of Section 4.11(b)(19);
(13) additional Restricted Payments made after the Issue Date in an aggregate amount pursuant to this clause (13) not to exceed the greater of (A) $100 million and (B) 3.0% of Distributable Cash for the applicable Test Period;
(14) other Restricted Payments, so long as the Holdco Debt Ratio is no greater than 0.95 to 1.0 determined on a pro forma basis for the applicable Test Period; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under this clause (14), no Event of Default shall have occurred and be continuing or would otherwise occur as a consequence thereof;
(15) the purchase by the Issuer of fractional shares arising out of stock dividends, splits or combinations or business combinations and payments or distributions to dissenting stockholders pursuant to applicable law in connection with a consolidation, merger or transfer of assets;
(16) dividends or other distributions by the Issuer or any Restricted Subsidiary of (x) Capital Stock of an Unrestricted Subsidiary, or (y) Indebtedness owed to the Issuer or a Restricted Subsidiary by, an Unrestricted Subsidiary, in each case, other than an Unrestricted Subsidiary the principal asset of which is (i) cash and Cash Equivalents or (ii) intellectual property that is material to the Issuer and its Subsidiaries, taken as a whole;
(17) any prepayment, redemption, purchase, repurchase or defeasance of Equity Interests or subordinated Indebtedness pursuant to a Permitted Transaction;
(18) any prepayment, redemption, purchase, repurchase or defeasance of any Equity Interests (i) pursuant to any definitive agreement in effect as of the Reference Date and (ii) up to an additional aggregate amount pursuant to this clause (18) not to exceed $1.5 billion;
(19) the defeasance, redemption, repurchase, repayment or other acquisition of subordinated Indebtedness that constitutes a Non-Recourse Financing;
(20) (i) the declaration and payment of dividends on the common stock or common Equity Interests of the Issuer or any Parent Entity (and any equivalent declaration and payment of a distribution of any security exchangeable for such common stock or common Equity Interests to the extent required by the terms of any such exchangeable securities and any Restricted Payment to any such Parent Entity to fund the payment by such Parent Entity of dividends on such entity’s Capital Stock), following a public offering of such common stock or common Equity Interests (or such exchangeable securities, as applicable), in an amount in any fiscal year not to exceed the sum of (A) 7% of the amount of net cash proceeds received by or contributed to the Issuer or any of its Restricted Subsidiaries from any such public offering and (B) 7% of Market Capitalization; or (ii) in lieu of all or a portion of the dividends permitted by subclause (i), any prepayment, purchase, repurchase, redemption, defeasance, discharge, retirement or other acquisition of the Issuer’s Capital Stock (and any equivalent prepayment, purchase, repurchase, redemption, defeasance, discharge, retirement or other acquisition of any security exchangeable for such common stock or common equity interests to the extent required by the terms of any such exchangeable securities and any Restricted Payment to any Parent Entity to fund the prepayment, purchase, repurchase, redemption, defeasance, discharge, retirement or other acquisition of such entity’s Capital Stock) for aggregate consideration that, when taken together with dividends permitted by subclause (i), does not exceed the amount contemplated by subclause (i);
(21) Restricted Payments made in connection with or relating to, and deemed reasonably necessary by the Issuer in good faith for the consummation of, any IPO Reorganization Transactions or Tax Restructuring; provided that if immediately after giving pro forma effect to any such IPO Reorganization Transactions or Tax Restructuring and the transactions to be consummated in connection therewith, any distributed asset ceases to be owned by the Issuer or any Restricted Subsidiary (or any entity ceases to be a Restricted Subsidiary), the applicable portion of such Restricted Payment must be otherwise permitted under another provision of this covenant (and constitute utilization of such other Restricted Payment exception or capacity);
(22) payments made or expected to be made (including repurchases of Capital Stock) by the Issuer or any of its Restricted Subsidiaries in respect of withholding or similar Taxes payable in connection with the exercise or vesting of Capital Stock or any other equity award by any future, present or former employee, director, officer, manager, contractor, consultant or advisor (or their respective Controlled Investment Affiliates or Immediate Family Members) of the Issuer or any of its Restricted Subsidiaries or any Parent Entity and purchases, repurchases, redemptions, defeasances or other acquisitions or retirements of Capital Stock deemed to occur upon the exercise, conversion or exchange of stock options, warrants, equity-based awards or other ri