Restricted Payments; Certain Payments of Indebtedness Sample Clauses: 2k Samples

Restricted Payments; Certain Payments of Indebtedness. (a) Neither Holdings, Intermediate Holdings nor any Borrower will, nor will they permit any Restricted Subsidiary, to pay or make, directly or indirectly, any Restricted Payment, except: (i) Each Borrower and each Restricted Subsidiary may make Restricted Payments to Intermediate Holdings, a Borrower or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a wholly-owned Subsidiary of a Borrower, such Restricted Payment is made to Intermediate Holdings, such Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests; (ii) payments or distributions to satisfy dissenters’ or appraisal rights, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of assets (other than with respect to the Transactions) that complies with Section 6.03; (iii) Holdings and any Intermediate Holdings may declare and make dividend payments or other distributions payable solely in the Equity Interests of such Person; (iv) Restricted Payments made in connection with or in order to consummate the Transactions (including, without limitation, (A) cash payments to holders of Equity Interests of Target as provided by the Acquisition Agreement, (B) Restricted Payments to direct and indirect parent companies of Holdings to finance a portion of the consideration for the Acquisition and (C) other payments with respect to working capital adjustments or otherwise, to the extent contemplated by the Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv)); (v) repurchases of Equity Interests in Holdings (or Restricted Payments by Holdings to allow repurchases of Equity Interest in any direct or indirect parent of Holdings) or Intermediate Holdings deemed to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price of such stock options or warrants or other incentive interest; (vi) Restricted Payments to Holdings which Holdings may use to redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted stock units or stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests) held by current or former officers, managers, consultants, directors and employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), Holdings, the Borrowers and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, profits interest, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that the aggregate amount of Restricted Payments permitted by this clause (vi) after the Effective Date, together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu thereof, shall not exceed the sum of (A) the greater of $15.0 million and 5.0% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings (which subsequent to an IPO shall be increased to the greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings), (B) the amount in any fiscal year equal to the cash proceeds of key man life insurance policies received by Holdings, the Borrowers or the Restricted Subsidiaries after the Effective Date, (C) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year may be carried forward to succeeding fiscal years; (vii) Holdings and any Intermediate Holdings may make Restricted Payments in cash: (A) without duplication of any Permitted Tax Distribution, the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (a)(vii)(A) shall not exceed the Tax liability that Holdings and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers or their Restricted Subsidiaries; (B) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof or any Intermediate Holdings) attributable to the ownership or operations of Holdings, the Borrowers and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of Holdings, the Borrowers and the Restricted Subsidiaries and (y) otherwise permitted to be paid by Holdings, the Borrowers and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the Borrowers or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x); (C) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence; (D) the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(m); provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) Holdings or any Intermediate Holdings shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to Holdings, the Borrowers or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with Holdings, the Borrowers or any of the Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrowers and the Restricted Subsidiaries; and (G) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful); (viii) in addition to the foregoing Restricted Payments, the Borrowers and any Intermediate Holdings may make additional Restricted Payments to any Intermediate Holdings and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt, in an aggregate amount, when taken together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii), not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as no Event of Default shall have occurred and be continuing (or, in the case of the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h) or (i)), the Available Amount that is Not Otherwise Applied plus (C) the Available Equity Amount that is Not Otherwise Applied; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; (xi) Holdings may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiii) payments made or expected to be made by Holdings, any Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to 5.00 to 1.0 and (B) there is no continuing Event of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make Restricted Payments in cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a). (b) Neither Holdings, Intermediate Holdings nor any Borrower will, nor will they permit any Restricted Subsidiary to, make or pay, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, except: (i) payment of regularly scheduled interest and principal payments as, in the form of payment and when due in respect of any Indebtedness, other than payments in respect of any Junior Financing prohibited by the subordination provisions thereof; (ii) refinancings of Junior Financing Indebtedness with proceeds of other Junior Financing Indebtedness permitted to be in

Appears in 6 contracts

Sources: First Lien Credit Agreement (New Whale Inc.), Credit Agreement (New Whale Inc.), Credit Agreement (Endeavor Group Holdings, Inc.)

Restricted Payments; Certain Payments of Indebtedness. (a) ~~Neither Holdings, Intermediate Holdings nor any~~ The Borrower ~~will~~will not, nor will ~~they~~ it permit any ~~Restricted Subsidiary~~Subsidiary to, ~~to pay~~ declare or make~~, directly or indirectly~~, any Restricted Payment, except: (i) ~~Each~~ the Borrower may declare and pay dividends with respect to its common stock payable solely in additional shares of its common stock, and, with respect to its preferred stock, payable solely in additional shares of such preferred stock or in shares of its common stock; (ii) Subsidiaries may declare and pay distributions ratably with respect to their capital stock, membership or partnership interests or other similar Equity Interests; (iii) [reserved]; (iv) the Borrower and ~~each Restricted Subsidiary~~ the Subsidiaries may (A) purchase or pay cash in lieu of fractional shares of its Equity Interests arising out of stock dividends, splits, or business combinations or in connection with issuance of Qualified Equity Interests of the Borrower pursuant to mergers, consolidations or other acquisitions permitted by this Agreement, (B) pay cash in lieu of fractional shares upon the exercise of warrants, options or other securities convertible into or exercisable for Qualified Equity Interests of the Borrower, and (C) make payments in connection with the retention of Qualified Equity Interests in payment of withholding Taxes in connection with equity-based compensation plans to the extent that net share settlement arrangements are deemed to be repurchases; (v) the Borrower may make Restricted Payments to ~~Intermediate Holdings, a Borrower~~ the direct or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a wholly-owned Subsidiary of a Borrower, such Restricted Payment is made to Intermediate Holdings, such Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests indirect equity holders of the relevant class of Equity Interests; (ii) payments or distributions to satisfy dissenters’ or appraisal rights, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of assets (other than with respect to the Transactions) that complies with Section 6.03; (iii) Holdings and any Intermediate Holdings may declare and make dividend payments or other distributions payable solely in the Equity Interests of such Person; (iv) Restricted Payments made in connection with or in order to consummate the Transactions (including, without limitation, (A) cash payments to holders of Equity Interests of Target as provided by the Acquisition Agreement, (B) Restricted Payments to direct and indirect parent companies of Holdings to finance a portion of the consideration for the Acquisition and (C) other payments with respect to working capital adjustments or otherwise, Borrower to the extent contemplated by the Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv)); (v) repurchases of Equity Interests in Holdings (or Restricted Payments by Holdings to allow repurchases of Equity Interest in any direct or indirect parent of Holdings) or Intermediate Holdings deemed to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price of such stock options or warrants or other incentive interest; (vi) Restricted Payments to Holdings which Holdings may use to redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted stock units or stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests) held by current or former officers, managers, consultants, directors and employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), Holdings, the Borrowers and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, profits interest, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that the aggregate amount of Restricted Payments permitted by this clause (vi) after the Effective Date, together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu thereof, shall not exceed the sum of (A) the greater of $15.0 million and 5.0% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings (which subsequent to an IPO shall be increased to the greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings), (B) the amount in any fiscal year equal to the cash proceeds of key man life insurance policies received by Holdings, the Borrowers or the Restricted Subsidiaries after the Effective Date, (C) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests tax liabilities are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year may be carried forward to succeeding fiscal years; (vii) Holdings and any Intermediate Holdings may make Restricted Payments in cash: (A) without duplication of any Permitted Tax Distribution, the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (a)(vii)(A) shall not exceed the Tax liability that Holdings and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers or their Restricted Subsidiaries; (B) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof or any Intermediate Holdings) attributable to the ownership or operations of ~~Holdings~~the Borrower, the Borrowers and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of Holdings, the Borrowers and the Restricted Subsidiaries and (y) otherwise permitted to be paid by Holdings, the Borrowers and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the Borrowers or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x); (C) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any its direct or indirect ~~parent of Holdings to pay) franchise~~ Subsidiaries and ~~similar Taxes~~any Subsidiary, and other fees and expenses, required to maintain its organizational existence; (D) the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(m); provided that (1A) the amount of such Restricted ~~Payment~~ Payments shall not exceed the tax liabilities that the Borrower and the direct or indirect Subsidiaries would be ~~made substantially concurrently with~~ required to pay in respect of Federal, state and local taxes were the ~~closing of such Investment~~ Borrower and ~~(2) Holdings~~ the direct or any Intermediate Holdings shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to Holdings, the Borrowers or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with Holdings, the Borrowers or any of the Restricted indirect Subsidiaries to pay such Taxes as stand-alone taxpayers less any tax payable directly by the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings Borrower or any direct or indirect ~~parent company of Holdings~~ Subsidiary and (B) all Restricted Payments made to the ~~extent~~ direct or indirect equity holders of the Borrower pursuant to this clause (v) are used by such ~~salaries, bonuses and other benefits are attributable to~~ Person solely for the ~~ownership or operation of Holdings, the Borrowers and the Restricted Subsidiaries; and~~purposes specified herein; (Gvi) the ~~proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to~~ Borrower may make Restricted Payments in the form of cash payments in respect of its preferred Equity Interests and other dividends, distributions and repurchases in respect of its Equity Interests in an aggregate amount not to ~~allow~~ exceed (x) $6,000,000 in any ~~direct~~ fiscal year of the Borrower in respect of dividends on preferred Equity Interests and (y) $1,000,000 in any fiscal year of the Borrower in respect of stock repurchases and other Restricted Payments; provided that before and immediately after giving effect to such Restricted Payment, no Specified Event of Default has occurred and is continuing or indirect parent thereof to pay) fees and expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful)would result therefrom; (~~viii~~vii) ~~in addition to~~ the ~~foregoing Restricted Payments,~~ Borrower and the ~~Borrowers and any Intermediate Holdings~~ Subsidiaries may make additional Restricted Payments to any Intermediate Holdings and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt, in an aggregate ~~amount, when taken together with~~ amount not exceeding $5,000,000 throughout the ~~aggregate amount~~ term of ~~loans and advances to Holdings made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by~~ this clause (viii), not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as no Event of Default shall have occurred and be continuing (or, in the case of the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h) or (i)), the Available Amount that is Not Otherwise Applied plus (C) the Available Equity Amount that is Not Otherwise Applied; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity InterestsAgreement; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any futurethat, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; (xi) Holdings may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiii) payments made or expected to be made by Holdings, any Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that immediately after giving effect to such Restricted Payment ~~(A) on a Pro Forma Basis, the Total Leverage Ratio is less than~~ no Default or ~~equal to 5.00 to 1.0 and (B) there is no continuing~~ Event of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration Default has occurred and ~~payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense~~is continuing; and (~~xviii~~viii) ~~Holdings~~the Borrower may purchase, ~~Intermediate Holdings~~redeem, retire or otherwise acquire for value of Equity Interests (and any ~~Borrower~~ related stock appreciation rights, plans, equity incentive or achievement plans or any Restricted Subsidiary may make Restricted Payments in cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a proposed Restricted Payment (or a portion thereofsimilar plans) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a ~~manner that otherwise complies~~ person being acquired in any Permitted Acquisition in connection with ~~this Section 6.08(a)~~such Permitted Acquisition. (b) ~~Neither Holdings, Intermediate Holdings nor any~~ The Borrower ~~will,~~ will not nor will ~~they~~ it permit any ~~Restricted~~ Subsidiary to, ~~make or pay~~make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest ~~on any Junior Financing~~on, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of of, any ~~Junior Financing~~Subordinated Indebtedness (other than intercompany loans among Subsidiary Loan Parties and the Borrower), except: (i) payment of regularly scheduled interest and principal payments ~~as, in the form of payment~~ as and when due in respect of ~~any~~ such Indebtedness, other than ~~payments in respect of any Junior Financing~~ as prohibited by ~~the~~ any subordination provisions thereof; (ii) ~~refinancings~~ prepayments in respect of ~~Junior Financing~~ the Google Note, earn-outs, milestone and other similar deferred purchase price obligations in an aggregate amount not to exceed the Available Basket Amount; provided that (x) before and immediately after giving effect to any such prepayment, no Specified Event of Default has occurred and is continuing or would result therefrom and (y) pro forma Liquidity after giving effect thereto shall exceed $100,000,000; (iii) the cash payments in respect of any earn-out, milestone and other similar deferred purchase price obligations in an aggregate amount not to exceed, when taken together with the aggregate amount of Investments made pursuant to Section 6.04(a)(iv), $5,000,000 per fiscal year and $25,000,000 during the term of this Agreement; provided that (x) before and immediately after giving effect to any such Investment, no Specified Event of Default has occurred and is continuing or would result therefrom and (y) pro forma Liquidity after giving effect thereto shall exceed $50,000,000; (iv) the refinancing thereof with any Indebtedness ~~with proceeds~~ (to the extent such Indebtedness constitutes a Permitted Refinancing); and (v) the conversion or exchange of any such Indebtedness into, or redemption, repurchase, prepayment, defeasance or other ~~Junior Financing~~ retirement of any such Indebtedness ~~permitted to be in~~with, ▇▇▇▇▇▇▇▇’s Equity Interests.

Appears in 5 contracts

Sources: Credit Agreement (Tempus AI, Inc.), Credit Agreement (Tempus AI, Inc.), Credit Agreement (Tempus AI, Inc.)

Restricted Payments; Certain Payments of Indebtedness. (a) Neither ~~Holdings, Intermediate~~ Holdings nor ~~any~~ the Parent Borrower will, nor will they permit any Restricted ~~Subsidiary,~~ Subsidiary or Intermediate Parent to pay or make, directly or indirectly, any Restricted Payment, except: (i) ~~Each Borrower and~~ each Restricted Subsidiary may make Restricted Payments to ~~Intermediate Holdings, a~~ the Parent Borrower or any other Restricted Subsidiary; (ii) Holdings, any Intermediate Parent, the Parent Borrower and each Restricted Subsidiary may declare and make dividend payments or other distributions payable solely in the Equity Interests of such Person; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a wholly-owned Subsidiary of a the Parent Borrower, such Restricted Payment is made to ~~Intermediate Holdings, such~~ the Parent Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests; (iiiii) ~~payments or distributions~~ Restricted Payments made on the Effective Date to ~~satisfy dissenters’ or appraisal rights, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of assets (other than with respect to~~ consummate the Transactions~~) that complies with Section 6.03; (iii) Holdings and any Intermediate Holdings may declare and make dividend payments or other distributions payable solely in the Equity Interests of such Person~~; (iv) Restricted Payments made in connection with or in order to consummate the Transactions (including, without limitation, (A) cash payments to holders of Equity Interests of Target as provided by the Acquisition Agreement, (B) Restricted Payments to direct and indirect parent companies of Holdings to finance a portion of the consideration for the Acquisition and (C) other payments with respect to working capital adjustments or otherwise, to the extent contemplated by the Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv)); (v) repurchases of Equity Interests in Holdings (or Restricted Payments by Holdings to allow repurchases of Equity Interest in any direct or indirect parent of Holdings) ), the Parent Borrower or ~~Intermediate Holdings~~ any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants ~~or other incentive interests~~ if such Equity Interests represent a portion of the exercise price of such ~~stock~~ options or ~~warrants or other incentive interest~~warrants; (viv) Restricted Payments to Holdings which Holdings may use to redeem, acquire, retire or repurchase its Equity Interests (or any ~~options, warrants, restricted stock units~~ options or warrants or stock appreciation rights ~~or other equity-linked interests~~ issued with respect to any of such Equity Interests) (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests) held by current or former officers, managers, consultants, directors and employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), ~~Holdings,~~ the ~~Borrowers~~ Parent Borrower and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, ~~profits interest,~~ employment termination agreement or any other employment agreements or equity holders’ ~~agreement; provided that the~~ agreement in an aggregate amount ~~of Restricted Payments permitted by this clause (vi)~~ after the Effective Date, together with the aggregate amount of loans and advances to Holdings made pursuant to Section ~~6.04(m~~6.04(l) in lieu ~~thereof~~of Restricted Payments permitted by this clause (v), ~~shall~~ not to exceed ~~the sum of (A) the greater~~ $7,500,000 in any calendar year subject to maximum of $~~15.0 million and 5.0% of Consolidated EBITDA for~~ 50,000,000 (the ~~most recently ended Test Period in any fiscal year of Holdings (which subsequent to an IPO shall be increased~~ “Total Repurchase Cap”) prior to the ~~greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings), (B) the~~ Latest Maturity Date; provided that such amount in any ~~fiscal~~ calendar year ~~equal~~ may be increased by an amount not to exceed the cash proceeds of key man life insurance policies received by ~~Holdings,~~ the ~~Borrowers~~ Parent Borrower or ~~the~~ its Restricted Subsidiaries after the Effective Date~~, (C) the cash proceeds from the sale~~ ; provided further that repurchases of Equity Interests held by the chief executive officer of the Parent Borrower (~~other than Disqualified Equity Interests~~or such chief executive’s spouse, former spouse, successors, executors, administrators, heirs, legatees or distributees) ~~of Holdings (~~pursuant to the ~~extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and,~~ foregoing provisions shall not be subject to the ~~extent contributed~~ foregoing annual cap but shall be permitted in an amount not to ~~Holdings,~~ exceed the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year may be carried forward to succeeding fiscal yearsTotal Repurchase Cap; (~~vii~~vi) any Intermediate Parent, the Parent Borrower and the Restricted Subsidiaries may make Restricted Payments in cash to Holdings and any Intermediate Parent and, where applicable, Holdings and such Intermediate Parent may make Restricted Payments in cash:; (A) ~~without duplication of any Permitted Tax Distribution,~~ the proceeds of which shall be used by Holdings or any Intermediate ~~Holdings~~ Parent to pay ~~(or~~ its Tax liability to ~~make Restricted Payments to allow any direct or indirect parent~~ the relevant jurisdiction in respect of ~~Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a~~ consolidated, ~~combined~~ combined, unitary or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are affiliated returns attributable to the income of ~~Holdings and/or~~ the Parent Borrower and its Subsidiaries; provided that Restricted Payments made pursuant to this clause (~~a)(vii)(A~~a)(vi)(A) shall not exceed the Tax liability that ~~Holdings~~ the Parent Borrower and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this ~~subclause~~ clause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of ~~Holdings~~ the Parent Borrower may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to ~~Holdings, the Borrowers~~ Parent Borrower or ~~their~~ its Restricted Subsidiaries; (B) the proceeds of which shall be used by Holdings or any Intermediate ~~Holdings~~ Parent to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, ~~accounting, tax reporting~~ accounting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, in an aggregate amount not to exceed amount together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (2) a)(vi)(B), $2,000,000 in any fiscal year plus any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof or any Intermediate ~~Holdings~~Parent) attributable to the ownership or operations of ~~Holdings, the Borrowers~~ Holdings and the Restricted Subsidiaries, (32) fees and expenses (x) due and payable by any of ~~Holdings, the Borrowers and~~ the Restricted Subsidiaries and (y) otherwise permitted to be paid by ~~Holdings, the Borrowers and the~~ such Restricted ~~Subsidiaries~~ Subsidiary under this Agreement and (43) ~~payments that would otherwise be~~ amounts due and payable pursuant to the Investor Management Agreement permitted to be paid ~~directly by Holdings, the Borrowers or the Restricted Subsidiaries~~ pursuant to Section ~~6.09(iii) or (x~~6.09(iv); (C) the proceeds of which shall be used by Holdings or any Intermediate ~~Holdings~~ Parent to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise Taxes and ~~similar~~ other fees, Taxes, ~~and other fees~~ and expenses, required to maintain its ~~organizational~~ corporate existence; (D) the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section ~~6.08(a)(vi~~6.08(a)(v); (E) to finance any Investment permitted to be made pursuant to Section 6.04 (other than ~~Section 6.04(m)~~6.04 (l) and, for the avoidance of doubt, including any Storage Investment; provided that (1A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2B) other than with respect to a Storage Investment, Holdings or any Intermediate ~~Holdings~~ Parent shall, immediately following the closing thereof, cause (x1) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to ~~Holdings,~~ the ~~Borrowers~~ Parent Borrower or the Restricted Subsidiaries or (y2) the Person formed or acquired to merge into or consolidate with ~~Holdings,~~ the ~~Borrowers~~ Parent Borrower or any of the Restricted Subsidiaries to the extent such ~~merger, amalgamation~~ merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrowers and the Restricted Subsidiaries; and (GF) the proceeds of which shall be used by Holdings or any Intermediate ~~Holdings~~ Parent to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity ~~offering,~~ or debt offering ~~or other non-ordinary course transaction not prohibited~~ permitted by this ~~Agreement (whether or not such offering or other transaction is successful)~~Agreement; (~~viii~~vii) in addition to the foregoing Restricted ~~Payments~~Payments and so long as no Event of Default shall have occurred and be continuing or would result therefrom, the ~~Borrowers~~ Parent Borrower and any Intermediate ~~Holdings~~ Parent may make additional Restricted Payments to any Intermediate ~~Holdings~~ Parent and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate ~~Holdings~~ Parent to make any payments in respect of any Permitted Holdings Debt, in an aggregate amount, when taken together with the aggregate amount of (1) prepayments, redemptions, purchases, defeasances and other payments in respect of Junior Financings made pursuant to Section 6.08(b)(iv) or (2) loans and advances to Holdings made pursuant to Section ~~6.04(m~~6.04(l) in lieu of Restricted Payments permitted by this clause (~~viii~~vii), not to exceed the sum of (A) ~~an amount at~~ (x) $15,000,000 or (y) if the ~~time~~ Total Net Leverage Ratio as of ~~making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for~~ the most recently ended Test Period ~~after giving Pro Forma Effect~~ for which financial statements have been delivered is equal to ~~the making of such Restricted Payment~~ or less than 2.50 to 1.00, $25,000,000 plus (B) so long as no Event of Default shall have occurred and be continuing (or, in the case of the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h) or (i)), the Available Amount that is Not Otherwise ~~Applied plus (C) the Available Equity Amount that is Not Otherwise~~ Applied;; and (ixviii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; (xi) Holdings may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiii) payments made or expected to be made by Holdings, any Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to 5.00 to 1.0 and (B) there is no continuing Event of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make Restricted Payments in cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a). (b) Neither ~~Holdings, Intermediate~~ Holdings nor ~~any~~ the Parent Borrower will, nor will they permit any other Restricted Subsidiary to, make or ~~pay~~agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoing, except: (i) payment of regularly scheduled interest and principal payments as, in the form of payment and when due in respect of any Indebtedness, other than payments in respect of any Junior Financing prohibited by the subordination provisions thereof; (ii) refinancings of Indebtedness to the extent permitted by Section 6.01; (iii) the conversion of any Junior Financing ~~Indebtedness~~ to Equity Interests (other than Disqualified Equity Interests) of Holdings or any of its direct or indirect parent companies or any Intermediate Parent; and (iv) prepayments, redemptions, purchases, defeasances and other payments in respect of Junior Financings prior to their scheduled maturity in an aggregate amount, when taken together with ~~proceeds~~ the aggregate amount of ~~other Junior Financing Indebtedness~~ (1) Restricted Payments made pursuant to Section 6.08(a)(vii) and (2) loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (iv) not to ~~be in~~exceed the sum of (A) (x) $10,000,000 or (y) if the Total Net Leverage Ratio as of the most recently ended Test Period for which financial statements have been delivered is equal to or less than 2.50 to 1.00, $20,000,000 plus (B) the Available Amount that is Not Otherwise Applied.

Appears in 4 contracts

Sources: Credit Agreement (SMART Global Holdings, Inc.), Credit Agreement (SMART Global Holdings, Inc.), Credit Agreement (SMART Global Holdings, Inc.)

Restricted Payments; Certain Payments of Indebtedness. (a) ~~Neither Holdings~~The Borrower will not, ~~Intermediate Holdings nor any Borrower will, nor~~ and will ~~they~~ not permit any Restricted ~~Subsidiary~~Subsidiary to, to pay or make, directly or indirectly, any Restricted Payment, except: (i) ~~Each Borrower and~~ each Restricted Subsidiary may make Restricted Payments to ~~Intermediate Holdings, a~~ the Borrower or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a wholly-owned Subsidiary of a the Borrower, such Restricted Payment is made to ~~Intermediate Holdings, such~~ the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests; (ii) ~~payments or distributions~~ Restricted Payments to satisfy appraisal or other dissenters’ ~~or appraisal~~ rights, pursuant to or in connection with a consolidation, amalgamation, ~~merger or~~ merger, transfer of assets ~~(other than with respect to the Transactions)~~ or acquisition that complies with Section ~~6.03~~6.03 or Section 6.04; (iii) ~~Holdings and any Intermediate Holdings~~ the Borrower may declare and make dividend payments or other distributions payable solely in the Equity Interests of ~~such Person~~the Borrower; (iv) Restricted Payments made in connection with or in order to consummate the Transactions (including, without limitation, (A) cash payments to holders of Equity Interests of Target as provided by the Acquisition Agreement, (B) Restricted Payments to direct and indirect parent companies of Holdings to finance a portion of the consideration for the Acquisition and (C) other payments with respect to working capital adjustments or otherwise, to the extent contemplated by the Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv))[reserved]; (v) repurchases of Equity Interests in ~~Holdings~~ the Borrower (or Restricted Payments by ~~Holdings~~ the Borrower to allow repurchases of Equity ~~Interest~~ Interests in Holdings or any direct or indirect parent of Holdings) ), or ~~Intermediate Holdings~~ any Restricted Subsidiary deemed to occur upon exercise of ~~stock~~ equity options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price of such ~~stock~~ equity options or warrants or other incentive ~~interest~~interests; (vi) Restricted Payments to Holdings which Holdings may use to redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted stock units or stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) (or to make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity ~~Interests~~Interests or other such interests) held by current or former officers, managers, consultants, directors and employees and other service providers (or their respective Affiliates, spouses, former spouses, other Permitted Transferees, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), ~~Holdings,~~ the ~~Borrowers~~ Borrower and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment or engagement of any such Person or otherwise in accordance with any ~~stock~~ equity option or ~~stock~~ equity appreciation rights plan, any management, director and/or employee ~~stock~~ equity ownership or incentive plan, ~~stock~~ equity subscription plan, profits interest, employment termination agreement or any other employment or service agreements with any director, officer or consultant or partnership or equity holders’ agreement; provided ~~that~~ that, except with respect to non-discretionary repurchases, the aggregate amount of Restricted Payments permitted by this clause (vi) after the Effective Date, together with the aggregate amount of loans and advances to Holdings (or any direct or indirect parent thereof) made pursuant to Section 6.04(m) in lieu thereof, shall ~~not~~ not, in any fiscal year of the Borrower, exceed the sum of (Aa) the greater of $~~15.0 million~~ 65,000,000 and ~~5.0~~50.0% of Consolidated EBITDA for the most recently ended Test Period in as of such time determined on a Pro Forma Basis (net of any ~~fiscal year~~ proceeds from the reissuance or resale of ~~Holdings (which subsequent~~ such Equity Interests to ~~an IPO shall be increased to~~ another Person received by Holdings, the ~~greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in~~ Borrower or any ~~fiscal year of Holdings~~Restricted Subsidiary), (Bb) the amount ~~in any fiscal year~~ equal to the cash proceeds of key man life insurance policies received by Holdings, the ~~Borrowers~~ Borrower or the Restricted Subsidiaries after the Effective Date, and (Cc) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket ~~hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision~~hereunder; provided that any unused portion of the preceding basket calculated pursuant to clauses (Aa) and (Bb) above for any fiscal year may be carried forward to succeeding fiscal years; provided, further, that any Indebtedness Incurred or Investments or payments made in reliance upon the Available RP Capacity Amount utilizing the unused amounts available pursuant to this Section 6.08(a)(vi) shall reduce the amounts available pursuant to this Section 6.08(a)(vi); (vii) ~~Holdings~~ the Borrower and ~~any Intermediate Holdings~~ the Restricted Subsidiaries may make Restricted Payments ~~in cash~~to Holdings and any Parent Entity: (A) without duplication of any Permitted Tax Distribution, the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (a)(vii)(A) shall not exceed the Tax liability that Holdings and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers or their Restricted Subsidiaries; (B) the proceeds of which shall be used by ~~Holdings or any Intermediate~~ Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent ~~thereof or any Intermediate Holdings~~thereof) attributable to the ownership or operations of Holdings, the ~~Borrowers~~ Borrower and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of Holdings, the ~~Borrowers~~ Borrower and the Restricted Subsidiaries and (y) otherwise ~~permitted~~ not prohibited to be paid by Holdings, the ~~Borrowers~~ Borrower and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the ~~Borrowers~~ Borrower or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x); (CB) the proceeds of which shall be used by ~~Holdings or any Intermediate~~ Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence; (DC) the proceeds of which shall be used by Holdings (or any other direct or indirect parent thereof) to make Restricted Payments of the type permitted by Section 6.08(a)(iv), Section 6.08(a)(vi) or Section ~~6.08(a)(vi~~6.08(a)(xi); (ED) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(m); provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) Holdings or any ~~Intermediate Holdings~~ Parent Entity shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to ~~Holdings,~~ the ~~Borrowers~~ Borrower or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with ~~Holdings,~~ the ~~Borrowers~~ Borrower or any of the Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (FE) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to ~~officers~~ officers, employees and ~~employees~~ other service providers of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the ~~Borrowers~~ Borrower and the Restricted Subsidiaries; and (GF) the proceeds of which shall be used by ~~Holdings or any Intermediate~~ Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful); (viii) ~~in addition to the foregoing~~ Restricted ~~Payments, the Borrowers and any Intermediate Holdings may make additional~~ Payments (including Restricted Payments to ~~any Intermediate Holdings and~~ Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings ~~or by any Intermediate Holdings~~ to make any payments in respect of any ~~Permitted Holdings Debt,~~ Indebtedness of Holdings) (A) in an aggregate ~~amount~~amount not to exceed, at the time of making any such Restricted Payment and when taken together with the aggregate amount of loans and advances to Holdings (or any direct or indirect parent thereof) made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii), not to exceed the sum of (A) ~~an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed~~ the greater of $~~75.0 million~~ 39,000,000 and 2530% of Consolidated EBITDA for the most recently ended Test Period ~~after giving~~ as of such time determined on a Pro Forma ~~Effect to the making of such Restricted Payment~~ Basis plus (B) ~~so long as no Event of Default shall have occurred and be continuing (or, in~~ the ~~case of the use of the Starter Basket~~ Available Amount that is Not Otherwise ~~Applied~~Applied (provided that, with respect to any Restricted Payment made in reliance on clause (b) of the definition of “Available Amount” pursuant to this clause (B), no Event of Default under Section 7.01(a), (b), (h) or (i~~)), the Available Amount that is Not Otherwise Applied~~ ) shall be continuing or would result therefrom) plus (C) the Available Equity Amount that is Not Otherwise Applied; provided that any Indebtedness Incurred or Investments or payments made in reliance upon the Available RP Capacity Amount utilizing the unused amounts available pursuant to this Section 6.08(a)(viii) shall reduce the amounts available pursuant to this Section 6.08(a)(viii); (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (xa) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, ~~manager~~ manager, consultant or ~~consultant~~ other service provider and any repurchases of Equity Interests in consideration of such payments including deemed ~~repurchases~~ repurchases, in each case, in connection with the exercise of ~~stock~~ equity options and the vesting of restricted ~~stock~~ equity and restricted ~~stock units~~equity units and (b) payments or other adjustments to outstanding Equity Interests in accordance with any management equity plan, equity option plan or any other similar employee benefit plan, agreement or arrangement in connection with any Restricted Payment; (xi) ~~Holdings~~ the Borrower or any Restricted Subsidiary may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) ~~the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of~~ Restricted Payments in an annual amount not to ~~any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to~~ exceed the sum of (a) ~~6.0~~$50,000,000 plus (b) 7.0% ~~per annum~~ of the net cash proceeds ~~of such IPO~~ received by or contributed to ~~Intermediate Parent or Parent, other than public~~ the Borrower from the IPO and any follow on offerings ~~with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and~~ plus (bc) 7.0% of the market capitalization of ~~Intermediate~~ Parent on the date of the declaration of a Restricted Payment in reliance on this clause (xii); provided that any Indebtedness Incurred or ~~Parent at~~ Investments or payments made in reliance upon the ~~time of such IPO~~Available RP Capacity Amount utilizing the unused amounts available pursuant to this Section 6.08(a)(xii) shall reduce the amounts available pursuant to this Section 6.08(a)(xii); (xiii) payments made or expected to be made by Holdings, ~~any~~ the Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, ~~manager~~ manager, consultant or ~~consultant~~ other service provider (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to ~~5.00~~ 3.50 to ~~1.0~~ 1.00 and (B) there is no continuing Event of ~~Default~~Default under Section 7.01(a), (b), (h) or (i); (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments)[reserved]; (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a the Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted ~~Subsidiaries,~~ Subsidiaries the primary assets of which are Permitted ~~Investments~~Investments (except to the extent that such Permitted Investments constitute the proceeds of any sale of the assets or equity of any Unrestricted Subsidiary)); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense[reserved]; and (xviii) ~~Holdings, Intermediate Holdings, any~~ the Borrower ~~or any Restricted Subsidiary~~ may make Restricted Payments in ~~cash to~~ cash, the proceeds of which shall be used by Holdings to ~~permit~~ pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to ~~make~~pay), ~~and~~ for any taxable period for which the Borrower and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes (a “Tax Group”) of which Holdings ~~may make~~or a direct or indirect parent of Holdings is the common parent (or the Borrower is a disregarded entity or partnership directly or indirectly owned by a member or members of such a Tax Group), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of the Borrower and/or its applicable Subsidiaries; provided that (a) Restricted Payments made pursuant to this clause (a)(xviii) shall not exceed the Tax liability that the Borrower and/or its applicable Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group for all relevant taxable periods and (b) Restricted Payments under this clause (a)(xviii) in respect of ~~Permitted Tax Distributions. For purposes~~ any Taxes attributable to the income of ~~determining compliance with this Section 6.08(a), in~~ any Unrestricted Subsidiaries may be made only to the ~~event~~ extent that ~~a proposed~~ such Unrestricted Subsidiaries have made cash payments for such purpose to the Borrower or its Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a)Subsidiaries. (b) ~~Neither Holdings~~The Borrower will not, ~~Intermediate Holdings nor any Borrower will, nor~~ and will ~~they~~ not permit any ~~Restricted~~ Subsidiary Loan Party to, make or pay, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) ~~of or in respect~~ of principal of or interest on any Junior Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, prepayment, defeasance, acquisition, cancellation or termination of any Junior ~~Financing~~Financing more than one year prior to the scheduled maturity date thereof (any such payment, a “Restricted Debt Payment”), except: (i) payment of regularly scheduled interest and principal payments as, in the form of payment and when due in respect of any Indebtedness, other than payments in respect of any Junior Financing prohibited by the subordination provisions thereof; (ii) refinancings of Junior Financing Indebtedness with proceeds of of, or in exchange for, other Junior Financing Indebtedness permitted to be inincurred under Section 6.01; (iii) the conversion of any Junior Financing to Equity Interests (other than Disqualified Equity Interests) of Holdings or any of its direct or indirect parent companies; (iv) Restricted Debt Payments in an aggregate amount not to exceed the sum of (A) an amount at the time of making any such Restricted Debt Payment and when taken together with the aggregate amount of loans and advances to Holdings (or any direct or indirect parent thereof) made pursuant to Section 6.04(m) in lieu of Restricted Deb

Appears in 4 contracts

Sources: Credit Agreement (EverCommerce Inc.), Credit Agreement (EverCommerce Inc.), Credit Agreement (EverCommerce Inc.)

Restricted Payments; Certain Payments of Indebtedness. (a) Neither ~~Holdings, Intermediate~~ Holdings nor ~~any~~ the Parent Borrower will, nor will they permit any Restricted ~~Subsidiary,~~ Subsidiary or Intermediate Parent to pay or make, directly or indirectly, any Restricted Payment, except: (i) ~~Each Borrower and~~ each Restricted Subsidiary may make Restricted Payments to ~~Intermediate Holdings, a~~ the Parent Borrower or any other Restricted Subsidiary; (ii) Holdings, any Intermediate Parent, the Parent Borrower and each Restricted Subsidiary may declare and make dividend payments or other distributions payable solely in the Equity Interests of such Person; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a wholly-owned Subsidiary of a the Parent Borrower, such Restricted Payment is made to ~~Intermediate Holdings, such~~ the Parent Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests; (iiiii) ~~payments or distributions~~ Restricted Payments made on the Effective Date to ~~satisfy dissenters’ or appraisal rights, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of assets (other than with respect to~~ consummate the Transactions~~) that complies with Section 6.03; (iii) Holdings and any Intermediate Holdings may declare and make dividend payments or other distributions payable solely in the Equity Interests of such Person~~; (iv) Restricted Payments made in connection with or in order to consummate the Transactions (including, without limitation, (A) cash payments to holders of Equity Interests of Target as provided by the Acquisition Agreement, (B) Restricted Payments to direct and indirect parent companies of Holdings to finance a portion of the consideration for the Acquisition and (C) other payments with respect to working capital adjustments or otherwise, to the extent contemplated by the Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv)); (v) repurchases of Equity Interests in Holdings (or Restricted Payments by Holdings to allow repurchases of Equity Interest in any direct or indirect parent of Holdings) ), the Parent Borrower or ~~Intermediate Holdings~~ any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants ~~or other incentive interests~~ if such Equity Interests represent a portion of the exercise price of such ~~stock~~ options or ~~warrants or other incentive interest~~warrants; (v) [Intentionally Omitted]; (vi) ~~Restricted Payments to Holdings which Holdings may use to redeem, acquire, retire or repurchase its Equity Interests (or~~ any options, warrants, restricted stock units or stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests) held by current or former officers, managers, consultants, directors and employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), HoldingsIntermediate Parent, the ~~Borrowers~~ Parent Borrower and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, profits interest, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that the aggregate amount of Restricted Payments permitted by this clause (vi) after the Effective Date, together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu thereof, shall not exceed the sum of (A) the greater of $15.0 million and 5.0% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings (which subsequent to an IPO shall be increased to the greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings), (B) the amount in any fiscal year equal to the cash proceeds of key man life insurance policies received by Holdings, the Borrowers or the Restricted Subsidiaries after the Effective Date, (C) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year may be carried forward to succeeding fiscal years; (vii) Holdings and any Intermediate Holdings may make Restricted Payments in ~~cash:~~cash to SMART Global Holdings, Inc., Holdings and any Intermediate Parent and, where applicable, Holdings and such Intermediate Parent may make Restricted Payments in cash in an aggregate amount not to exceed $1,000,000 after the Restatement Effective Date and prior to the first anniversary of the Restatement Effective Date and $200,000 for each year thereafter; (A) ~~without duplication of any Permitted Tax Distribution,~~ the proceeds of which shall be used by Holdings or any Intermediate ~~Holdings~~ Parent to pay ~~(or~~ its Tax liability to ~~make Restricted Payments to allow any direct or indirect parent~~ the relevant jurisdiction in respect of ~~Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a~~ consolidated, ~~combined~~ combined, unitary or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are affiliated returns attributable to the income of ~~Holdings and/or~~ the Parent Borrower and its Subsidiaries; provided that Restricted Payments made pursuant to this clause (~~a)(vii)(A~~a)(vi)(A) shall not exceed the Tax liability that ~~Holdings~~ the Parent Borrower and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this ~~subclause~~ clause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of ~~Holdings~~ the Parent Borrower may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to ~~Holdings, the Borrowers~~ Parent Borrower or ~~their~~ its Restricted Subsidiaries; (B) the proceeds of which shall be used by Holdings or any Intermediate ~~Holdings~~ Parent to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay~~) (1~~) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, ~~accounting, tax reporting~~ accounting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof or any Intermediate Holdings) attributable to the ownership or operations of Holdings, the Borrowers and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of Holdings, the Borrowers and the Restricted Subsidiaries and (y) otherwise permitted to be paid by Holdings, the Borrowers and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the Borrowers or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x); (C) the proceeds of which shall be used by Holdings or any Intermediate ~~Holdings~~ Parent to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise Taxes and ~~similar~~ other fees, Taxes, ~~and other fees~~ and expenses, required to maintain its ~~organizational~~ corporate existence; (D) the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv~~) or Section 6.08(a)(vi~~); (E) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(m); provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) Holdings or any Intermediate Holdings shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to Holdings, the Borrowers or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with Holdings, the Borrowers or any of the Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrowers and the Restricted Subsidiaries[Intentionally Omitted]; and (GF) the proceeds of which shall be used by Holdings or any Intermediate ~~Holdings~~ Parent to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity ~~offering,~~ or debt offering or other non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful); (viii) in addition to the foregoing Restricted Payments, the Borrowers and any Intermediate Holdings may make additional Restricted Payments to any Intermediate Holdings and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt, in an aggregate amount, when taken together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii), not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as no Event of Default shall have occurred and be continuing (or, in the case of the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h) or (i)), the Available Amount that is Not Otherwise Applied plus (C) the Available Equity Amount that is Not Otherwise Applied;Agreement; and (ixvii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; (xi) Holdings may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiii) payments made or expected to be made by Holdings, any Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to 5.00 to 1.0 and (B) there is no continuing Event of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make Restricted Payments in cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a). (b) Neither ~~Holdings, Intermediate~~ Holdings nor ~~any~~ the Parent Borrower will, nor will they permit any other Restricted Subsidiary to, make or ~~pay~~agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoing, except: (i) payment of regularly scheduled interest and principal payments as, in the form of payment and when due in respect of any Indebtedness, other than payments in respect of any Junior Financing prohibited by the subordination provisions thereof;; and (ii) ~~refinancings~~ the conversion of any Junior Financing ~~Indebtedness with proceeds~~ to Equity Interests (other than Disqualified Equity Interests) of ~~other Junior Financing Indebtedness permitted to be in~~Holdings or any of its direct or indirect parent companies or any Intermediate Parent.

Appears in 4 contracts

Sources: Credit Agreement (SMART Global Holdings, Inc.), Credit Agreement (SMART Global Holdings, Inc.), Credit Agreement (SMART Global Holdings, Inc.)

Restricted Payments; Certain Payments of Indebtedness. (a) ~~Neither Holdings, Intermediate Holdings nor any~~ The Borrower ~~will, nor~~ will ~~they permit any Restricted Subsidiary, to~~ not pay or make, directly or indirectly, any Restricted Payment, except: (i) ~~Each~~ [reserved]; (ii) to the extent constituting a Restricted Payment, the Borrower may consummate any transaction permitted by Section 6.03 (other than clause (f) thereof), Section 6.04 (other than Section 6.04(m)(i) and (t)), Section 6.05 (other than Section 6.05(f)) and Section 6.09 (other than Section 6.09(ix)); (iii) Restricted Payments (not consisting of cash or Cash Equivalents) made in lieu of fees or expenses (including by way of discount), in each ~~Restricted Subsidiary~~ case in connection with any Permitted Receivables Financing permitted under Section 6.01; (iv) (A) the Borrower may (or may make Restricted Payments to ~~Intermediate Holdings~~permit any Parent Entity to) (x) redeem, a repurchase, retire or otherwise acquire in whole or in part any Equity Interests of the Borrower or any other ~~Restricted Subsidiary; provided that~~ Group Member or any Equity Interests of any Parent Entity (“Treasury Equity Interests”), in exchange for, or with the ~~case~~ proceeds (to the extent contributed to Holdings or the Borrower substantially concurrently) of the sale or issuance (other than to the Borrower or any other Group Member) of, other Equity Interests or rights to acquire its Equity Interests (“Refunding Equity Interests”) and (y) declare and pay dividends on any Treasury Equity Interests out of any such proceeds and (B) the Borrower may make Restricted Payment by a Restricted Subsidiary that is not a wholly-owned Subsidiary of a Borrower, such Restricted Payment is made to Intermediate Holdings, such Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests; (ii) payments or distributions to satisfy dissenters’ or appraisal rights, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of assets (other than with respect to the Transactions) that complies with Section 6.03; (iii) Holdings and any Intermediate Holdings may declare and make dividend payments or other distributions Payments payable solely in the ~~Equity Interests of such Person; (iv) Restricted Payments made in connection with or in order to consummate the Transactions (including, without limitation, (A) cash payments to holders~~ form of Equity Interests ~~of Target as provided by the Acquisition Agreement~~(other than Disqualified Equity Interests, (B) Restricted Payments to direct and indirect parent companies of Holdings to finance a portion of the consideration for the Acquisition and (C) other payments with respect to working capital adjustments or otherwise, except to the extent ~~contemplated~~ issued by the ~~Acquisition Agreement); provided that the earnout contemplated by Exhibit F~~ Borrower to ~~the Acquisition Agreement shall not be permitted on the basis of this clause (iv)~~Holdings or another Group Member); (v) ~~repurchases~~ repurchases, redemptions, acquisitions or retirements of Equity Interests upon (or provisions for withholdings in ~~Holdings (~~connection with), or Restricted Payments ~~by Holdings~~ to any Parent Entity to allow ~~repurchases~~ repurchases, redemptions, acquisitions or retirements of Equity ~~Interest~~ Interests upon (or provisions for withholdings in ~~any direct or indirect parent of Holdings) or Intermediate Holdings deemed to occur upon~~ connection with), the exercise of ~~stock options or warrants or~~ options, warrants, other incentive interests or other securities convertible into or exchangeable for Equity Interests if such Equity Interests represent all or a portion of the exercise price of of, or Tax withholdings with respect to, such ~~stock options or warrants~~ options, warrants, other incentive interests or other ~~incentive interest~~securities; (vi) ~~Restricted Payments to Holdings which Holdings~~ the Borrower may ~~use to~~ redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted ~~stock units or~~ stock, stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) (or make Restricted Payments to allow any ~~of Holdings’ direct or indirect parent companies~~ Parent Entity to so redeem, retire, acquire or repurchase ~~their~~ its Equity Interests) held by current or former officers, managers, consultants, directors and employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings Interests (or any ~~direct~~ options, warrants, restricted stock, stock appreciation rights or ~~indirect parent thereof~~other equity-linked interests issued with respect to any of such Equity Interests), ~~Holdings~~in each case, ~~the Borrowers and the Restricted Subsidiaries~~held directly or indirectly by Permitted Payees, upon or in connection with the death, disability, retirement or termination of employment or service of, or breach of restrictive covenants by, any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, ~~profits interest~~stock subscription or equity incentive award agreement, employment termination agreement or any other employment agreements or equity holders’ agreement~~; provided that~~ : (A) so long as the aggregate amount of Restricted Payments ~~permitted by~~ made pursuant to this clause (viA) ~~after the Effective Date~~in any fiscal year, together with the aggregate amount of loans and advances to Holdings (or any Parent Entity) previously made pursuant to Section 6.04(m) in lieu ~~thereof~~of Restricted Payments permitted by this clause (A), ~~shall~~ does not exceed the ~~sum~~ greater of (Ax) ~~the greater of~~ $~~15.0 million~~ 125,000,000 and ~~5.0~~(y) 7.5% of Consolidated EBITDA for the most recently ended Test Period ~~in any fiscal year of Holdings~~ (which ~~subsequent to an IPO~~ shall ~~be increased~~ increase to the greater of (x) $~~30.0 million~~ 225,000,000 and 10(y) 13.5% of Consolidated EBITDA for the most recently ended Test Period ~~in any fiscal year~~ following the consummation of ~~Holdings~~an IPO), (B) the amount in any fiscal year equal to the cash proceeds of key man life insurance policies received by Holdings, the Borrowers or the Restricted Subsidiaries after the Effective Date, (C) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused ~~portion of the preceding basket calculated~~ amounts pursuant to ~~clauses~~ this clause (A) ~~and (B) above for~~ during any fiscal year ~~may be carried~~ shall carry forward to into succeeding fiscal years; (B) with the Net Proceeds obtained from any key-man life insurance policies; and (C) with the amount of any cash bonuses otherwise payable to any Permitted Payee that are foregone in exchange for the receipt of Equity Interests of the Borrower or any Parent Entity pursuant to any compensation arrangement, including any deferred compensation plan; (vii) ~~Holdings and any Intermediate Holdings~~ the Borrower may make Restricted Payments ~~in cash~~to Holdings or any Parent Entity: (A) ~~without duplication of any Permitted Tax Distribution~~(i) so long as Holdings and the Borrower are each treated as pass-through entities for U.S. federal income tax purposes, ~~the proceeds of which shall be used by Holdings or any Intermediate Holdings~~ to pay ~~(or to make Restricted Payments to allow~~ the U.S. federal, state and local net income tax liabilities of any direct or indirect ~~parent~~ owner of all or any part of a Borrower’s equity in an amount determined by reference to an assumed tax rate not to exceed the greater of the combined effective rate that would be applicable to (1) a U.S. corporation or (2) a natural Person, in each case, that is resident in New York, NY, and that owns 100% of the equity of Holdings (taking into account any basis step-up in the Acquisition, the deductibility of state and local taxes (in the case of such U.S. corporation), any net operating losses or other tax attributes and the character of such income), solely to the extent such tax liabilities are attributable to net income from the Borrower’s U.S. operations conducted by Restricted Subsidiaries that are Domestic Subsidiaries treated as pass-through entities for U.S. federal income tax purposes, without duplication of, and net of, any such taxes (including under Section 1446 of the Code) paid directly or withheld by Holdings and its subsidiaries or (ii) for any taxable year in which Holdings is not treated as a pass-through entity for U.S. federal income tax purposes, to pay the tax liabilities of Holdings to ~~pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary~~ the extent such tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that liabilities are attributable to the ~~income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (a)(vii)(A) shall not exceed~~ activities of, or Holdings’ ownership of, the ~~Tax liability that Holdings and/or~~ Borrower or its Subsidiaries and Joint Ventures (~~as applicable) would have incurred were~~ any such ~~Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that~~ Restricted ~~Payments under~~ Payment permitted pursuant this ~~subclause~~ paragraph (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings), ~~the Borrowers or their Restricted Subsidiaries~~a “Permitted Tax Distribution”); (B) the proceeds of which shall be used by ~~Holdings or any Intermediate Holdings~~ such Parent Entity to pay ~~(or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay)~~ (1) its general operating and compliance costs and expenses (including operating expenses ~~incurred in the ordinary course of business~~ and other corporate overhead costs and expenses (including administrative, legal, audit, accounting, tax and other reporting and similar ~~expenses payable to third parties~~costs and expenses)) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by ~~directors~~ Company Persons attributable to the ownership or ~~officers~~ operations of ~~Holdings~~ any Parent Entity, the Borrower and the other Group Members, (3) fees, expenses and other amounts (x) due and payable by the Borrower or the other Group Members and (y) otherwise permitted to be paid by the Borrower and the other Group Members under this Agreement, (4) its costs, expenses and liabilities in connection with any ~~parent thereof~~ litigation or ~~any Intermediate Holdings)~~ arbitration attributable to the ownership or operations of Holdings, the ~~Borrowers~~ Borrower and the ~~Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of Holdings, the Borrowers and the Restricted Subsidiaries~~ other Group Members and (~~y) otherwise permitted to be paid by Holdings, the Borrowers and the Restricted Subsidiaries under this Agreement and (4~~5) payments that would otherwise be permitted to be paid directly by ~~Holdings,~~ the ~~Borrowers~~ Borrower or the ~~Restricted Subsidiaries~~ other Group Members pursuant to Section 6.09(iii), (v) or (x); (C) the proceeds of which shall be used by Holdings (or any ~~Intermediate Holdings~~ Parent Entity) to pay (~~or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay~~1) ~~franchise~~ franchise, excise and similar Taxes, and other ~~fees~~ fees, Taxes and expenses, required to maintain its organizational ~~existence~~existence and (2) fees, expenses or Taxes described in clause (b) or (d) of the definition of “Net Proceeds” with respect to any Parent Entity or any direct or indirect equity holder thereof; (D) the proceeds of which ~~shall~~ will be ~~used by Holdings~~ applied to ~~make Restricted Payments~~ the payment of advisory fees, consulting, expenses, indemnities, subsequent transaction fees and exit fees and other amounts as permitted by pursuant to Section ~~6.08(a)(iv) or Section 6.08(a)(vi~~6.09(x), and related indemnities and reasonable expenses; (E) the proceeds of which shall be used by any Parent Entity to finance any Investment that would be permitted to be made by the Borrower or any other Group Member pursuant to Section 6.04 other than Section ~~6.04(m~~6.04(m)(i); provided that (1) such Restricted Payment shall be made substantially concurrently with the closing or consummation of such Investment or at future times as may be scheduled at the time of such closing or consummation to be made thereafter in connection therewith and (2) ~~Holdings or any Intermediate Holdings~~ such Parent Entity shall, ~~immediately~~ promptly following the closing ~~thereof~~or consummation thereof or at future times as may be scheduled at the time of such closing or consummation to be made thereafter in connection therewith, cause (x) all property acquired (whether assets or Equity ~~Interests but not including any loans or advances made pursuant to Section 6.04(b)~~Interests) to be contributed to ~~Holdings~~the Borrower or any such other Group Member (which contribution will not, for the ~~Borrowers or~~ avoidance of doubt, increase the ~~Restricted Subsidiaries~~ Available Amount) or (y) the Person formed or acquired to ~~merge into~~ merge, amalgamate or consolidate with ~~Holdings,~~ or into the ~~Borrowers~~ Borrower or ~~any of the Restricted Subsidiaries~~ such other Group Member to the extent such merger, amalgamation or consolidation is permitted in by Section 6.03) ), in order to consummate such Investment, in each case in accordance with the requirements of ~~Sections 5.11 and 5.12~~Section 5.11; (F) the proceeds of which shall be used to pay customary salary, ~~bonus~~ bonus, long-term incentive, indemnity, severance and other ~~benefits~~ benefits, including payments to service providers of the Borrower or its subsidiaries pursuant to any equity plan (whether in the form of options, cash settled options or otherwise), payable to ~~officers and employees of Holdings~~ Company Persons, as well as applicable employment, social security or ~~any direct or indirect parent company of Holdings~~ similar Taxes, in each case to the extent such ~~salaries~~salary, ~~bonuses and~~ bonuses, incentives, indemnities, severance or other benefits are attributable to the ownership or operation of ~~Holdings,~~ the ~~Borrowers~~ Borrower and ~~the Restricted Subsidiaries; and~~its subsidiaries and/or Joint Ventures; (G) the proceeds of which shall be used by ~~Holdings or~~ any ~~Intermediate Holdings~~ Parent Entity to pay (~~or to make Restricted Payments to allow any direct or indirect parent thereof to pay~~i) fees and expenses related to any successful or unsuccessful equity issuance or offering or debt issuance, incurrence or offering, ~~debt offering~~ disposition or acquisition, Investment or other ~~non-ordinary course~~ transaction not prohibited by this ~~Agreement (~~Agreement, in each case whether or not ~~such offering~~ consummated, and including advisory, refinancing, subsequent transaction and exit fees of any Parent Entity and expenses and indemnities of any trustee, agent, arranger, underwriter or ~~other transaction is successful)~~Person acting in a similar role and (ii) after the consummation of an IPO or issuance of debt securities, Public Company Costs; (H) the proceeds of which shall be used for the payment of insurance premiums to the extent attributable to any Parent Entity, the Borrower or any of its Subsidiaries; (viii) in addition to the foregoing Restricted Payments, the ~~Borrowers and any Intermediate Holdings~~ Borrower may make additional Restricted Payments to ~~any Intermediate~~ Holdings and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt, in an aggregate ~~amount, when taken together with the aggregate~~ amount ~~of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii),~~ not to exceed the sum of (A) ~~an amount at~~ the ~~time~~ portion, if any, of ~~making any such~~ the Restricted Payment ~~and together with any other Restricted Payment made utilizing~~ Amount on the relevant date of determination that the Borrower elects to apply pursuant to this clause (A~~) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment~~ ), plus (B) so long as no Event of Default shall have occurred and be continuing (or, in the case of the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h) or (i)), the Available Amount that is Not Otherwise Applied as in effect immediately prior to the time of making of such Restricted Payment, so long as, in the case of any utilization of clause (b) of the definition of the Available Amount pursuant to this clause (viii)(B), no Specified Event of Default has occurred and is continuing or would immediately result after giving Pro Forma Effect to such Restricted Payment at the applicable time determined in accordance with Section 1.09(a) plus (C) the Available ~~Equity~~ Excluded Contribution Amount that is Not Otherwise ~~Applied~~Applied as in effect immediately prior to the time of making such Restricted Payment; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other than Disqualified Equity Interests, except to the extent issued by the Borrower to another Group Member) or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests (and in no event shall such contribution or issuance so utilized increase the Available Amount) (other than Disqualified Equity Interests~~; provided that such new Equity Interests contain terms and provisions at least as advantageous~~ , except to the ~~Lenders in all respects material~~ extent issued by the Borrower to ~~their interests as those contained in the Equity Interests redeemed thereby~~another Group Member); (x) ~~payments made~~ the Borrower may make Restricted Payments to satisfy dissenters’ rights (including in connection with, or ~~expected~~ as a result of, the exercise of appraisal rights and the settlement of any claims or actions, whether actual, contingent or potential), pursuant to ~~be made in respect of withholding~~ or ~~similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases~~ in connection with ~~the exercise of stock options and the vesting of restricted stock and restricted stock units~~any acquisition, merger, amalgamation or consolidation or Disposition that complies with Section 6.05 or any other transaction permitted hereunder; (xi) ~~Holdings may~~ Restricted Payments to any Parent Entity to enable such Parent Entity to (aA) pay cash in lieu of the issuance of fractional Equity Interests in connection with any dividend, ~~split~~ split, reverse split, the exercise of any warrant, option or ~~combination thereof~~ other security convertible into or exchangeable for Equity Interests of such Parent Entity, or in connection with any merger, amalgamation, consolidation, other business combination, acquisition or other Investment not prohibited hereunder, or any ~~Permitted Acquisition~~ combination of the foregoing and/or (~~or other similar Investment) and (b~~B) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such ~~conversion and may make payments on convertible Indebtedness in accordance with its terms~~conversion; (xii) following the ~~declaration and payment~~ consummation of ~~Restricted Payment on Holdings’ common stock (or~~ an IPO, the ~~payment~~ making of Restricted Payments to any ~~direct or indirect parent company of Holdings~~ Parent Entity to fund a the payment of regular dividends or other amounts on such ~~company~~Parent Entity’s ~~common stock)~~Equity Interests, ~~following consummation of~~ in an ~~IPO, of up~~ aggregate amount per annum not to exceed the sum of (ai) 7.0% of Market Capitalization and (ii) 6.0% per annum of the ~~net~~ aggregate amount of proceeds from (x) a Qualifying IPO or (y) a SPAC IPO, to the extent of any cash ~~proceeds~~ held by the SPAC IPO Entity and remaining following the consummation of ~~such~~ a SPAC IPO and, in each case of clause (x) or (y), received by by, or contributed ~~to Intermediate Parent~~ to, the Borrower or ~~Parent,~~ any other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPOGroup Member; (xiii) payments made ~~or expected to be made~~ by ~~Holdings, any~~ the Borrower or any ~~Restricted Subsidiary~~ other Group Member in respect of withholding or similar ~~taxes~~ Taxes payable upon exercise or vesting of Equity Interests by any ~~future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or~~ Permitted ~~Transferees)~~ Payee and any repurchases of Equity Interests in consideration of such payments or payments described in the preceding clauses (v), (vi) or (xi), including demand or deemed ~~to occur upon~~ repurchases in connection with the exercise of stock options or warrants ~~if such Equity Interests represent a portion~~ and the issuance or vesting of ~~the exercise price of such options or warrants or required withholding or~~ restricted stock, restricted stock units and similar ~~taxes~~stock based awards; (xiv) from and after the one year anniversary of the Closing Date, additional Restricted Payments; provided that on a Pro Forma Basis after giving effect to such Restricted ~~Payment~~ Payment, at the applicable time determined in accordance with Section 1.09(a), (A) ~~on a Pro Forma Basis,~~ the Total Net Leverage Ratio is less than or equal to ~~5.00 to 1.0~~ 5.10:1.00 as of the Test Period most recently ended and (B) ~~there is~~ no continuing Event of ~~Default~~Default has occurred and is continuing or would immediately result after giving Pro Forma Effect to such Restricted Payment; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any Permitted Reorganization, IPO Reorganization Transactions (~~limited~~other than with respect to clause (d) of the definition thereof) or Tax Restructuring; provided that if immediately after giving Pro Forma Effect to any such Permitted Reorganization, IPO Reorganization Transactions or Tax Restructuring and the transactions to be consummated in connection therewith, any distributed asset ceases to be owned by the ~~case~~ Borrower or another Group Member (or any entity ceases to be a Restricted Subsidiary), the applicable portion of ~~payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments~~such Restricted Payment must be otherwise permitted under another provision of this Section 6.08(a) (and constitute utilization of such other Restricted Payment exception or capacity); (xvi) the ~~distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a~~ Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make Restricted Payments ~~in cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect~~ the proceeds of ~~Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses~~ which are applied (i) ~~through (xviii) above~~on or about the Closing Date, solely to effect the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a). (b) Neither Holdings, Intermediate Holdings nor any Borrower will, nor will they permit any Restricted Subsidiary to, make or pay, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account consummation of the ~~purchase~~Transactions, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, except: (i) payment of regularly scheduled interest and principal payments as, in the form of payment and when due in respect of any Indebtedness, other than payments in respect of any Junior Financing prohibited by the subordination provisions thereof; (ii) ~~refinancings~~ on and after the Closing Date, to satisfy any payment obligations owing, or as otherwise required, under the Acquisition Agreement or any Permitted Acquisition or other Investment not prohibited hereunder (including, in each case, payment of ~~Junior Financing Indebtedness~~ working capital and/or purchase price adjustments) and to pay related transaction costs and (iii) to satisfy any settlement of claims or actions in connection with ~~proceeds of~~ the Transactions or any Permitted Acquisition or other ~~Junior Financing Indebtedness permitted~~ Investment not prohibited hereunder or to ~~be in~~satisfy indemnity or other similar obligations in connection with the Transactions or any Permitted Acquisiti

Appears in 4 contracts

Sources: First Lien Credit Agreement (Clarios International Inc.), First Lien Credit Agreement (Clarios International Inc.), First Lien Credit Agreement (Clarios International Inc.)

Restricted Payments; Certain Payments of Indebtedness. (a) ~~Neither Holdings, Intermediate Holdings nor any Borrower will, nor will they permit any Restricted Subsidiary, to~~ Parent shall not pay or make, directly or indirectly, any Restricted Payment, ~~except~~except that: (i) ~~Each Borrower and each Restricted Subsidiary~~ Parent may ~~make Restricted Payments to Intermediate Holdings~~pay for the repurchase, ~~a Borrower~~ redemption, retirement or other acquisition or retirement for value of Capital Stock of Parent held by any ~~other Restricted Subsidiary; provided that in~~ Permitted Payee: (A) [reserved]; (B) with the ~~case~~ proceeds of any ~~such Restricted Payment by a Restricted Subsidiary~~ sale or issuance of, or of any capital contribution in respect of, the Capital Stock of Parent; plus (C) with the proceeds of any key-man life insurance policies; plus (D) with the amount of any Cash bonuses otherwise payable to any Permitted Payee that ~~is not a wholly-owned Subsidiary~~ are foregone in exchange for the receipt of ~~a Borrower~~Capital Stock of Parent pursuant to any compensation, ~~such Restricted Payment is made to Intermediate Holdings, such Borrower,~~ arrangement including any ~~Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests~~deferred compensation plan; (ii) ~~payments or distributions~~ Parent may make Restricted Payments in an amount not to ~~satisfy dissenters’ or appraisal rights~~exceed (A) the portion, ~~pursuant~~ if any, of the Available Amount on such date that Parent elects to or apply to this clause (ii)(A) plus (B) the portion, if any, of the Available Excluded Contribution Amount on such date that Parent elects to apply to this clause (ii)(B) (plus, without duplication of amounts referred to in ~~connection with a consolidation~~this clause (B), ~~amalgamation, merger or transfer of assets (other than with respect~~ in an amount equal to the ~~Transactions) that complies~~ Net Proceeds from a Disposition of property or assets acquired after the Closing Date, if the acquisition of such property or assets was financed with ~~Section 6.03~~Available Excluded Contribution Amounts); (iii) ~~Holdings and any Intermediate Holdings may declare and make dividend payments or other distributions payable solely in the Equity Interests of such Person~~[reserved]; (iv) ~~Restricted Payments made~~ Parent may repurchase, redeem, acquire or retire Capital Stock upon (or make provisions for withholdings in connection ~~with or in order to consummate~~ with) the Transactions (including, without limitation, (A) cash payments to holders of Equity Interests of Target as provided by the Acquisition Agreement, (B) Restricted Payments to direct and indirect parent companies of Holdings to finance a portion of the consideration for the Acquisition and (C) other payments with respect to working capital adjustments or otherwise, to the extent contemplated by the Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv)); (v) repurchases of Equity Interests in Holdings (or Restricted Payments by Holdings to allow repurchases of Equity Interest in any direct or indirect parent of Holdings) or Intermediate Holdings deemed to occur upon exercise of ~~stock~~ warrants, options or ~~warrants~~ other securities convertible into or ~~other incentive interests~~ exchangeable for Capital Stock if such ~~Equity Interests represent~~ Capital Stock represents all or a portion of the exercise price of of, or tax withholdings with respect to, such ~~stock~~ warrants, options or ~~warrants~~ other securities convertible into or ~~other incentive interest~~exchangeable for Capital Stock as part of a “cashless” exercise; (v) Parent may make Restricted Payments the proceeds of which are applied on the Closing Date, solely to effect the consummation of the Transactions; (vi) Parent may make Restricted Payments to Holdings which Holdings may use to redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted stock units or stock appreciation rights or other equity-linked interests issued with respect to any Capital Stock in an amount in any given Fiscal Year not to exceed (A) the greater of ~~such Equity Interests~~(x) $75,000,000 and (or y) an amount equal to 6% of the Market Capitalization of Parent at the time of declaration thereof minus (B) any utilization of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A); (vii) Parent may make Restricted Payments to ~~allow any of Holdings’ direct or indirect parent companies to so~~ (i) redeem, ~~retire~~repurchase, defease, discharge, retire or otherwise acquire ~~or repurchase their Equity Interests) held by current or former officers, managers, consultants, directors and employees~~ any Capital Stock (~~or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees~~“Treasury Capital Stock”) of ~~Holdings~~ Parent and/or any Restricted Subsidiary in exchange for, or out of the proceeds of the substantially concurrent sale (other than to Parent and/or any Restricted Subsidiary) of, Qualified Capital Stock of Parent in respect of Qualified Capital Stock (“Refunding Capital Stock”) and (ii) declare and pay dividends on any Treasury Capital Stock out of the proceeds of the substantially concurrent sale or issuance (other than to Parent or a Restricted Subsidiary) of any ~~direct or indirect parent thereof~~Refunding Capital Stock; (viii) to the extent constituting a Restricted Payment, Parent may consummate any transaction permitted by Section 6.06 (other than Section 6.06(j)), ~~Holdings, the Borrowers~~ Section 6.07 (other than Section 6.07(g)) and ~~the~~ Section 6.09 (other than Section 6.09(d)); (ix) Parent may make additional Restricted ~~Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise~~ Payments in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, profits interest, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that the an aggregate amount ~~of Restricted Payments permitted by this clause (vi) after the Effective Date, together with the aggregate amount of loans and advances~~ not to ~~Holdings made pursuant to Section 6.04(m) in lieu thereof, shall not~~ exceed ~~the sum of~~ (A) the greater of $~~15.0 million~~ 230,000,000 and ~~5.0~~35% of Consolidated Adjusted EBITDA ~~for~~ as of the last day of the most recently ended Test Period minus (B) any utilization of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A); (x) Parent may pay any ~~fiscal year~~ dividend or other distribution or consummate any redemption within 60 days after the date of ~~Holdings~~ the declaration thereof or the provision of a redemption notice with respect thereto, as the case may be, if at the date of such declaration or notice, the dividend, distribution or redemption contemplated by such declaration or redemption notice would have complied with the provisions of this Section 6.04(a); (~~which subsequent to an IPO shall be increased to~~ xi) Parent may make any Restricted Payment constituting the ~~greater~~ distribution or payment of ~~$30.0 million and 10% of Consolidated EBITDA~~ Receivables Fees; (xii) Parent may make additional Restricted Payments so long as, as measured at the time provided for ~~the most recently ended Test Period~~ in ~~any fiscal year of Holdings~~Section 1.04(e), (Bi) the ~~amount in~~ Total Leverage Ratio would not exceed 4.00:1.00, calculated on a Pro Forma Basis and (ii) there shall exist no Specified Event of Default hereunder; (xiii) [reserved]; (xiv) For any fiscal year equal to the cash proceeds of key man life insurance policies received by Holdings, the Borrowers or the Restricted Subsidiaries after the Effective Date, (C) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of any direct or indirect taxable period for which Parent ~~Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings,~~ and/or any of its Subsidiaries or ~~any direct~~ joint ventures are members of a consolidated, combined or ~~indirect~~ similar income tax group for U.S. federal and/or applicable state or local income tax purposes (a “Tax Group”), Parent ~~Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale~~ and each of ~~such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of~~ its Subsidiaries may make additional Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year may be carried forward to succeeding fiscal years; (vii) Holdings and any Intermediate Holdings may make Restricted Payments in cash: (A) without duplication of any Permitted Tax Distribution, the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent ~~(a “~~of such Tax ~~Group”),~~ Group to pay the portion of any U.S. federal, ~~state,~~ state or local ~~or foreign~~ income Taxes ~~(as applicable)~~ of such Tax ~~Group~~ Group, or any franchise taxes imposed in lieu thereof, for such taxable period that are attributable to the income of ~~Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (a)(vii)(A) shall not exceed the Tax liability that Holdings~~ Parent and/or its Subsidiaries ~~(as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group;~~ and provided, further, that Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers or their Restricted Subsidiaries; (B) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses joint ventures (including ~~administrative, legal, accounting, tax reporting~~ pursuant to any Tax sharing agreement entered into by Parent and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof or any Intermediate Holdings) attributable to the ownership or operations of Holdings, the Borrowers and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of Holdings, the Borrowers and the Restricted Subsidiaries and (y) otherwise permitted to be paid by Holdings, the Borrowers and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the Borrowers or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (xits Subsidiaries); (Cxv) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence[reserved]; (Dxvi) Parent may make a distribution, by dividend or otherwise, of the ~~proceeds of which shall be used by Holdings~~ Capital Stock of, or debt owed to ~~make~~ any Loan Party or any Restricted ~~Payments permitted by Section 6.08(a)(iv)~~ Subsidiary by, any Unrestricted Subsidiary (or ~~Section 6.08(a)(vi); (E) to finance any Investment permitted to be made pursuant to Section 6.04~~ a Restricted Subsidiary that owns one or more Unrestricted Subsidiaries, provided that such Restricted Subsidiary owns no other material assets other than ~~Section 6.04(m~~Capital Stock of one or more Unrestricted Subsidiaries); provided that ~~(1)~~ any such Capital Stock or debt that represents an Investment by Parent or any Restricted ~~Payment~~ Subsidiary shall be ~~made substantially concurrently with~~ deemed to continue to charge (as utilization) the ~~closing of~~ respective clause under Section 6.06 pursuant to which such Investment was made; (xvii) Parent may make payments and distributions to satisfy dissenters’ rights (~~2) Holdings~~ including in connection with, or as a result of, the exercise of appraisal rights and the settlement of any ~~Intermediate Holdings shall, immediately following the closing thereof, cause (x) all property acquired~~ claims or actions (whether ~~assets~~ actual, contingent or ~~Equity Interests but not including any loans or advances made~~ potential) in respect thereof), pursuant to ~~Section 6.04(b)) to be contributed to Holdings~~or in connection with any acquisition, ~~the Borrowers or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with Holdings~~merger, ~~the Borrowers or any of the Restricted Subsidiaries to the extent such merger~~consolidation, amalgamation or ~~consolidation~~ Disposition that complies with Section 6.07 or any other transaction permitted hereunder; (xviii) Parent may make a Restricted Payment to holders of any class or series of Disqualified Capital Stock of Parent that is ~~permitted in Section 6.03) in order to consummate such Investment, in each case~~ issued in accordance with the requirements of Sections 5.11 and 5.12; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrowers and the Restricted SubsidiariesSection 6.01; and (Gxix) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful); (viii) in addition to the foregoing Restricted Payments, the Borrowers and any Intermediate Holdings Parent may make additional Restricted Payments to any Intermediate Holdings and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt, in an aggregate amount, when taken together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii), not to exceed the sum of (A) an amount at the time of making any such a Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as no Event of Default shall have occurred and be continuing (or, in the case of the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h) or (i)), the Available Amount that is Not Otherwise Applied plus (C) the Available Equity Amount that is Not Otherwise Applied; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar U.S. or non-U.S. Taxes ~~payable by~~ with respect to any ~~future, present or former employee, director, manager or consultant and~~ Permitted Payee’s compensation and/or any repurchases of ~~Equity Interests~~ Capital Stock in consideration of such ~~payments~~ payments, including deemed repurchases in connection with the exercise of stock options ~~and~~ or the ~~vesting~~ issuance of restricted stock and restricted stock units; (xi) Holdings may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiii) payments made or expected to be made by Holdings, any Borrower or any Restricted Subsidiary in respect of withholding units or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to 5.00 to 1.0 and (B) there is no continuing Event of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make Restricted Payments in cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (stock-based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a)awards. (b) ~~Neither Holdings, Intermediate Holdings nor any Borrower will~~Parent shall not, nor ~~will they~~ shall it permit any Restricted Subsidiary to, make ~~or pay, directly or indirectly,~~ any ~~payment or other distribution (whether~~ prepayment in ~~cash, securities or other property) of~~ Cash on or in respect of principal of or interest on any ~~Junior Financing, or any payment or other distribution (whether in cash, securities or other property)~~Restricted Debt, including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any ~~Junior Financing~~Restricted Debt more than one year prior to the scheduled maturity date thereof (collectively, “Restricted Debt Payments”), except: (i) ~~payment~~ any refinancing, purchase, defeasance, redemption, repurchase, repayment or other acquisition or retirement of any Restricted Debt made by exchange for, or out of the proceeds of, Refinancing Indebtedness permitted by Section 6.01; (ii) payments as part of, or to enable another Person to make, an “applicable high yield discount obligation” catch-up payment; (iii) payments of regularly scheduled principal and interest and ~~principal~~ payments asof fees, ~~in the form of payment~~ expenses and indemnification obligations as and when due ~~in respect of any Indebtedness,~~ (other than payments in with respect ~~of any~~ to Junior ~~Financing~~ Indebtedness that are prohibited by the subordination provisions thereof); (iiiv) ~~refinancings~~ additional Restricted Debt Payments in an aggregate amount not to exceed (A)(1) the greater of ~~Junior Financing Indebtedness~~ (x) $230,000,000 and (y) 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period minus (2) any utilization of the Available RDP Capacity Amount in reliance on unused capacity under the immediately preceding clause (A)(1) plus (B) the Available RP Capacity Amount; (A) Restricted Debt Payments in exchange for, or with proceeds of any issuance of, Qualified Capital Stock of Parent and/or any Restricted Subsidiary and/or any capital contribution in respect of Qualified Capital Stock of Parent or any Restricted Subsidiary (other ~~Junior Financing Indebtedness~~ than issuances to or contributions by Parent or any Restricted Subsidiaries), (B) Restricted Debt Payments as a result of the conversion of all or any portion of any Restricted Debt into Qualified Capital Stock of Parent and/or any Restricted Subsidiary and (C) to the extent constituting a Restricted Debt Payment, payment-in-kind interest with respect to any Restricted Debt that is permitted under Section 6.01; (vi) Restricted Debt Payments in an aggregate amount not to ~~be in~~exceed (A) the portion, if any, of the Available Amount on such date that Parent elects to apply to this clause (vi)(A) plus (B) the portion, if any, of the Available Excluded Contribution Amount on such date that Parent elects to apply to this clause (vi)(B) (plus, without duplication of amounts previously referred to in this clause (B), in an amount equal to the Net Proceeds from a Disposition of property or assets acquired after the Closing Date, if the acquisition of such property or assets was financed solely with Available Excluded Contribution Amounts); and (vii) additional Restricted Debt Payments so long as, as measured at the time provided for in Section 1.04(e), (i) the Total Leverage Ratio would not exceed 4.00:1.00, calculated on a Pro Forma Basis and (ii) there shall exist no Specified Event of Default.

Appears in 4 contracts

Sources: Credit Agreement (Reynolds Consumer Products Inc.), Credit Agreement (Reynolds Consumer Products Inc.), Credit Agreement (Reynolds Consumer Products Inc.)

Restricted Payments; Certain Payments of Indebtedness. (a) Neither ~~Holdings, Intermediate~~ Holdings nor ~~any~~ the Borrower will, nor will they permit any Restricted ~~Subsidiary~~Subsidiary to, to pay or make, directly or indirectly, any Restricted Payment, except: (i) ~~Each Borrower and~~ each Restricted Subsidiary of Holdings may make Restricted Payments to ~~Intermediate Holdings, a Borrower~~ Holdings or any ~~other~~ Restricted ~~Subsidiary; provided that~~ Subsidiary of Holdings (and, in the case of any such ~~Restricted Payment by a Restricted~~ Subsidiary that is not a wholly-owned ~~Subsidiary of a Borrower~~Subsidiary, ~~such Restricted Payment is made to Intermediate Holdings, such Borrower, any Restricted Subsidiary and~~ to each other owner of Equity Interests of such ~~Restricted~~ Subsidiary ratably based on their relative ownership interests of the relevant class of Equity Interests); provided, that, in the case of any Restricted Payment to Holdings, any such Restricted Payment is made not earlier than five (5) Business Days prior to the expected use of the proceeds of such Restricted Payment in a manner otherwise permitted by this Agreement; (ii) ~~payments or distributions~~ to ~~satisfy dissenters’ or appraisal rights~~the extent constituting a Restricted Payment, ~~pursuant to or in connection with a consolidation~~the Borrower, ~~amalgamation, merger or transfer of assets~~ International Holdings and any Restricted Subsidiary may consummate any transaction permitted by Section 6.03 and Section 6.04 (other than ~~with respect to the Transactions~~Section 6.04(j), (m), (n), (q) ~~that complies with Section 6.03~~and (t)); (iii) ~~Holdings and any Intermediate Holdings may declare and make dividend payments or other distributions payable solely in~~ to the extent constituting a Restricted Payment, the conversion of the Senior Secured Convertible Notes into Equity Interests ~~of such Person~~pursuant to the terms thereof; (iv) Restricted Payments by the Borrower to Holdings, the proceeds of which are used within five (5) Business Days of the receipt of such Restricted Payment by Holdings to permit Holdings to make repurchases, redemptions or reductions in number of shares issued (including, by utilization of the “net share” concept) by Holdings of any Equity Interests in Holdings, as applicable, made in connection with ~~or in order~~ (I) the surrender of shares by employees to ~~consummate~~ (x) facilitate the ~~Transactions (including, without limitation~~payment by such employees of the taxes associated with compensation received by such employees under Holdings’ stock-based compensation plans and, (Ay) ~~cash payments~~ to ~~holders~~ satisfy the purchase price of ~~Equity Interests~~ nonqualified stock options and (II) the deduction by Holdings, of ~~Target as provided by the Acquisition Agreement, (B) Restricted Payments to direct and indirect parent companies of Holdings to finance~~ a portion of restricted stock or performance shares previously (i.e. prior to the ~~consideration~~ date of the deduction) granted to employees under Holdings’ stock-based compensation plans to facilitate the payment by such employees of the taxes associated with the vesting of such restricted stock and performance shares, in an amount not to exceed (for ~~the Acquisition~~ both clauses (I) and (C) other payments with respect to working capital adjustments or otherwise, to the extent contemplated by the Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (ivII)), together with all Restricted Payments made pursuant to Section 6.08(a)(xiv), $150,000.00 in the aggregate following the Forbearance Effective Date; provided, in each case, that prior to and after giving effect to such repurchases, redemptions or reductions no Default or Event of Default exists or is continuing; (v) repurchases of Equity Interests in Holdings (or Restricted Payments by Holdings to allow repurchases of Equity Interest in any direct or indirect parent of Holdings) or Intermediate Holdings deemed to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price of such stock options or warrants or other incentive interest;[reserved]: (vi) Restricted Payments to Holdings which Holdings may use to redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted stock units or stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests) held by current or former officers, managers, consultants, directors and employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), Holdings, the Borrowers and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, profits interest, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that the aggregate amount of Restricted Payments permitted by this clause (vi) after the Effective Date, together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu thereof, shall not exceed the sum of (A) the greater of $15.0 million and 5.0% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings (which subsequent to an IPO shall be increased to the greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings), (B) the amount in any fiscal year equal to the cash proceeds of key man life insurance policies received by Holdings, the Borrowers or the Restricted Subsidiaries after the Effective Date, (C) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year may be carried forward to succeeding fiscal years[reserved]; (vii) ~~Holdings and any Intermediate Holdings may make~~ to the extent constituting a Restricted ~~Payments in cash: (A) without duplication~~ Payment, payments of ~~any Permitted Tax Distribution,~~ the Senior Secured Convertible Notes made pursuant to an exchange for or out of the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of Indebtedness constituting a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (a)(vii)(A) shall not exceed the Tax liability that Holdings and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers or their Restricted Subsidiaries; (B) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof or any Intermediate Holdings) attributable to the ownership or operations of Holdings, the Borrowers and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of Holdings, the Borrowers and the Restricted Subsidiaries and (y) otherwise permitted to be paid by Holdings, the Borrowers and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the Borrowers or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x); (C) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence; (D) the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(m); provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) Holdings or any Intermediate Holdings shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to Holdings, the Borrowers or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with Holdings, the Borrowers or any Permitted Refinancing of the ~~Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is~~ Senior Secured Convertible Notes permitted in under Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrowers and the Restricted Subsidiaries; and (G) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful6.01(xxiii); (viii) in addition to the foregoing Restricted Payments, the Borrowers and any Intermediate Holdings may make additional Restricted Payments to any Intermediate Holdings and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt, in an aggregate amount, when taken together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii), not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as no Event of Default shall have occurred and be continuing (or, in the case of the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h) or (i)), the Available Amount that is Not Otherwise Applied plus (C) the Available Equity Amount that is Not Otherwise Applied[reserved]; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; (xi) Holdings may (aA) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof ~~or any Permitted Acquisition (or other similar Investment)~~ and (bB) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms, in both cases of (A) and (B), in an amount not to exceed $500,000 in the aggregate; provided, that, prior to and after giving effect to such Restricted Payment, no Event of Default exists or is continuing; (xii) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO[reserved]; (xiii) any Restricted Payment made on the Effective Date required to consummate the Reorganization Plan; and (xiv) payments made ~~or expected to be made~~ by ~~Holdings, any Borrower~~ Holdings or any Restricted Subsidiary (including payments to Holdings to enable Holdings to make such payments substantially simultaneously with receipt thereof (and in any event not later than five (5) Business Days after receipt thereof)) in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled ~~Affiliates, Immediate Family Members~~ Affiliates or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar ~~taxes;~~ taxes (~~xiv) additional Restricted Payments; provided that after giving effect~~ including payments to such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to 5.00 to 1.0 and (B) there is no continuing Event of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends Holdings in respect of ~~JV Preferred Equity Interests issued in accordance with Section 6.01 to~~ the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make Restricted Payments in cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(aforegoing), in ~~the event that a proposed~~ an amount not to exceed, together with all Restricted ~~Payment (or a portion thereof) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled~~ Payments made pursuant to ~~classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii~~Section 6.08(a)(iv), $150,000.00 in ~~a manner that otherwise complies with this Section 6.08(a)~~the aggregate following the Forbearance Effective Date. (b) Neither ~~Holdings, Intermediate~~ Holdings nor ~~any~~ the Borrower will, nor will they permit any Restricted Subsidiary to, make or pay, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any ~~Junior Financing~~such Indebtedness prior to the scheduled maturity date thereof (collectively, “Restricted Debt Payments”), except: (i) payment of regularly scheduled interest and principal payments, payments asof fees, ~~in the form of payment~~ expenses and indemnification obligations when due in respect of any Indebtedness, other than payments in respect of any Junior Financing prohibited by the subordination provisions thereof; (ii) refinancings of ~~Junior Financing~~ Indebtedness with proceeds of ~~other Junior Financing~~ Permitted Refinancing Indebtedness permitted to be inincurred under Section 6.01; (iii) the conversion of any Junior Financing to or payments with Equity Interests (other than Disqualified Equity Interests) of Holdings; (iv) prepayments, redemptions, purchases, defeasances and other payments or distributions in respect of Junior Financings prior to their scheduled maturity in an aggregate amount not to exceed an amount at the time of making any such prepayment, redemption, purchase, defeasance or other payment or distributions, together with any other such prepayment, redemption, purchase, defeasance or other payment or distributions made utilizing this clause (iv), not to exceed the portion, if any, of the Restricted Debt Payment Amount that the Borrower elects to apply pursuant to this clause (iv); (v) any Restricted Debt Payments made on the Effective Date required to consummate the Reorganization Plan; (vi) a prepayment of Loans (as defined in the ABL North America Credit Agreement as in effect on the Forbearance Effective Date) solely pursuant to Section 2.03(c)(i) of the ABL North America Credit Agreement (as in effect on the Forbearance Effective Date) in an amount not exceeding the gross cash proceeds received by any Subsidiary of International Holdings from the Dutch/Danish Tax Refund (as defined in the ABL North America Credit Agreement as in effect on the Forbearance Effective Date); (vii) [reserved]; (viii) [reserved]; (ix) [reserved]; and (x) payments as part of an applicable high yield discount obligation or AHYDO catch-up payment. (c) Neither Holdings nor the Borrower will, nor will they permit any Restricted Subsidiary to, amend or modify any documentation governing any Junior Financing, in each case if the effect of such amendment or modification (when taken as a whole) is in violation of any Intercreditor Agreement or other applicable intercreditor agreement or subordination agreement. Notwithstanding anything herein to the contrary, the foregoing provisions of this Section 6.08 will not prohibit the payment of any Restricted Payment or the consummation of any irrevocable redemption, purchase, defeasance or other payment within 60 days after the date of declaration of such Restricted Payment or the giving of irrevocable notice of such redemption, purchase, defeasance or other payment, as applicable, if at the date of declaration or the giving of such notice such payment would have complied with the provisions of this Agreement. In addition, any payments contemplated by Section 2.12 of the ABL North America Intercreditor Agreement with respect to Remaining Foreign Sale Proceeds shall be permitted hereunder, subject to the terms of the ABL North America Intercreditor Agreement.

Appears in 3 contracts

Sources: Forbearance Agreement and First Omnibus Amendment to Credit Agreement and Loan Documents (Endurant Capital Management LP), Forbearance Agreement and First Omnibus Amendment to Credit Agreement and Loan Documents (TENOR CAPITAL MANAGEMENT Co., L.P.), Forbearance Agreement and First Omnibus Amendment to Credit Agreement and Loan Documents (DG Capital Management, LLC)

Restricted Payments; Certain Payments of Indebtedness. (a) ~~Neither Holdings~~Prior to the Acquisition Closing Date, ~~Intermediate Holdings nor any~~ the Borrower ~~will~~will not, ~~nor~~ and will ~~they~~ not permit any Restricted Subsidiary, ~~to pay~~ and, after the Acquisition Closing Date, Parent will not, and will not permit any Restricted Subsidiary to, declare or ~~make, directly or indirectly,~~ make any Restricted Payment, ~~except~~except that: (i) ~~Each Borrower~~ (A) the Restricted Subsidiaries may declare and ~~each~~ make Restricted Payments ratably with respect to their Equity Interests and (B) any Restricted Subsidiary may make a Restricted ~~Payments~~ Payment to ~~Intermediate Holdings, a Borrower~~ the Parent or any ~~other~~ Restricted ~~Subsidiary; provided that~~ Subsidiary (so long as, in the case of ~~any such~~ this clause (B), if the Restricted Subsidiary making the Restricted Payment ~~by a Restricted Subsidiary that~~ is not ~~a wholly-~~wholly owned ~~Subsidiary of a Borrower~~(directly or indirectly) by the Parent, such Restricted Payment is made ~~to Intermediate Holdings, such Borrower, any Restricted Subsidiary and to each other owner~~ ratably among the holders of ~~Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of~~ its Equity Interests); (ii) ~~payments or distributions to satisfy dissenters’ or appraisal rights, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of assets (other than~~ the Parent and the Restricted Subsidiaries may declare and make Restricted Payments with respect to its Equity Interests payable solely in shares of Qualified Equity Interests (so long as, in the ~~Transactions~~case of this clause (ii), if the Restricted Subsidiary making the Restricted Payment is not wholly owned (directly or indirectly) ~~that complies with Section 6.03~~by the Parent, such Restricted Payment is made ratably among the holders of its Equity Interests); (iii) ~~Holdings and any Intermediate Holdings may declare and make dividend payments or other distributions payable solely in~~ the Equity Interests of such Person; (iv) Restricted Payments made in connection with or in order to consummate the Transactions (including, without limitation, (A) cash payments to holders of Equity Interests of Target as provided by the Acquisition Agreement, (B) Restricted Payments to direct and indirect parent companies of Holdings to finance a portion of the consideration for the Acquisition and (C) other payments with respect to working capital adjustments or otherwise, to the extent contemplated by the Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv)); (v) repurchases of Equity Interests in Holdings (or Restricted Payments by Holdings to allow repurchases of Equity Interest in any direct or indirect parent of Holdings) or Intermediate Holdings deemed to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price of such stock options or warrants or other incentive interest; (vi) Restricted Payments to Holdings which Holdings may use to redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted stock units or stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests) held by current or former officers, managers, consultants, directors and employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), Holdings, the Borrowers Parent and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, profits interest, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that the aggregate amount of Restricted Payments permitted by this clause (vi) after the Effective Date, together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu thereof, shall not exceed the sum of (A) the greater of $15.0 million and 5.0% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings (which subsequent to an IPO shall be increased to the greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings), (B) the amount in any fiscal year equal to the cash proceeds of key man life insurance policies received by Holdings, the Borrowers or the Restricted Subsidiaries after the Effective Date, (C) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year may be carried forward to succeeding fiscal years; (vii) Holdings and any Intermediate Holdings may make Restricted Payments at such times and in ~~cash:~~ such amounts (A) ~~without duplication of any Permitted Tax Distribution, the proceeds of which~~ as shall be ~~used by Holdings~~ necessary to permit any Parent Entity to discharge their respective general corporate and overhead or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (a)(vii)(A) shall not exceed the Tax liability that Holdings and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers or their Restricted Subsidiaries; (B) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other ~~corporate overhead costs and~~ expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof or any Intermediate Holdings) attributable to the ownership or operations of Holdings, the Borrowers and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of Holdings, the Borrowers and the Restricted Subsidiaries and (y) otherwise permitted to be paid by Holdings, the Borrowers and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the Borrowers or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x); (C) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar ~~Taxes, and other fees and expenses,~~ taxes required to maintain its ~~organizational~~ corporate existence; (D) the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(m); provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) Holdings or any Intermediate Holdings shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to Holdings, the Borrowers or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with Holdings, the Borrowers or any of the Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of ~~Holdings~~ the Parent, Holdco and directors fees and director and officer indemnification obligations) incurred in the ordinary course and (B) for any Related Taxes; (iv) the Parent may make payments (or may make Restricted Payments to any Parent Entity, the proceeds of which will be used to make payments) at such times and in such amounts as are necessary to make payments of or on account of (1) monitoring or management or similar fees or transaction fees and (2) reimbursement of out-of-pocket costs, expenses and indemnities, in each case to any Equity Investor or any ~~direct or indirect parent company~~ of ~~Holdings~~ its Affiliates, in each case to the extent permitted by Section 6.09; (v) [Reserved]; (vi) the Restricted Subsidiaries may make a Restricted Payment in connection with the acquisition of additional Equity Interests in any Restricted Subsidiary from minority shareholders; (vii) the Parent or any Restricted Subsidiary may make repurchases of Equity Interests deemed to occur upon the cashless exercise of stock options when such ~~salaries~~Equity Interests represents a portion of the exercise price thereof; (viii) [Reserved]; (ix) the Parent and its Restricted Subsidiaries may make Restricted Payments pursuant to the Intercompany License Agreements; (x) Restricted Payments made (A) (i) in connection with the Transactions (including, ~~bonuses~~ for the avoidance of doubt, the Return of Value Payment and the Seattle Payment), (ii) in respect of working capital adjustments or purchase price adjustments pursuant to any Permitted Acquisition or other permitted Investments (other than pursuant to Section 6.04(aa)), and (iii) to satisfy indemnity and other ~~benefits are attributable~~ obligations under the Merger Agreement and in respect of Permitted Acquisitions or other permitted Investments, and (B) to the ~~ownership~~ Parent or ~~operation of Holdings, the Borrowers and the~~ any Restricted ~~Subsidiaries; and~~Subsidiary effectuate a Permitted Tax Restructuring; (Gxi) Restricted Payments necessary to consummate transactions permitted pursuant to Section 6.03 and to make Investments permitted pursuant to Section 6.04 (other than pursuant to Section 6.04(aa)); (xii) [Reserved]; (xiii) [Reserved]; (xiv) the Parent or any Restricted Subsidiary may make additional Restricted Payments in an amount that shall not exceed $250,000,000; (xv) the Parent or any Restricted Subsidiary may make additional Restricted Payments to the extent that such Restricted Payments are made with net proceeds received by the Parent after the Closing Date from the issuance or sale of Qualified Equity Interests of the Parent or proceeds of an equity contribution made to the Parent (other than any Cure Amount) (which such equity proceeds so utilized shall not also increase the Available Amount); (xvi) distributions or payments of Securitization Fees, sales contributions and other transfers of Securitization Assets or Receivables Assets and purchases of Securitization Assets or Receivables Assets pursuant to a Securitization Repurchase Obligations, in each case in connection with a Qualified Securitization Financing or a Receivables Facility; (xvii) the Parent may make Restricted Payments to any Parent Entity the proceeds of which shall be used ~~by Holdings or any Intermediate Holdings~~ to pay ~~(or to make Restricted Payments to allow any direct or indirect parent thereof to pay)~~ customary costs, fees and expenses related to any unsuccessful equity ~~offering,~~ or debt offering ~~or other non-ordinary course transaction not prohibited~~ permitted by this ~~Agreement (whether or not~~ Agreement, so long as the proceeds of such offering were intended to be contributed to the Parent or ~~other transaction is successful)~~such offering was otherwise related to the business of the Parent;. (~~viii~~xviii) ~~in addition to~~ the ~~foregoing~~ Parent and the Restricted ~~Payments, the Borrowers and any Intermediate Holdings~~ Subsidiaries may make ~~additional~~ Restricted Payments to any Intermediate Holdings and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt, in an aggregate amount, when taken together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii), not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as no Event of Default shall have occurred and be continuing (or, in the case of the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h) or (i)), the Available Amount that is Not Otherwise Applied plus (C) the Available Equity Amount that is Not Otherwise Applied; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; (xi) Holdings may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any ~~Permitted Acquisition (~~Acquisition, Investment or other ~~similar Investment)~~ transaction otherwise permitted hereunder and (b) honor any conversion request by a holder of convertible Indebtedness (to the extent such conversion request is paid solely in shares of Qualified Equity Interests of the Parent) and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (~~xii~~xix) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiii) payments made or expected to be made by Holdings, any Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that ~~after giving effect to~~ at the time of declaration of such Restricted ~~Payment (A)~~ Payment, no Event of Default has occurred and is continuing and the First Lien Leverage Ratio computed on a Pro Forma ~~Basis,~~ Basis as of the ~~Total Leverage Ratio~~ Applicable Date of Determination is less than ~~or equal to 5.00 to 1.0 and (B) there is no continuing Event of Default~~3.00:1.00; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvixx) the ~~distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a~~ Parent and the Restricted ~~Subsidiary by, Unrestricted~~ Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make Restricted Payments in ~~cash~~ an aggregate amount not to ~~Holdings~~ exceed the Available Amount; provided however that at the time of declaration of such Restricted Payment utilizing amounts pursuant to ~~permit Holdings to make~~clause (b) of the definition of “Available Amount”, no Event of Default shall have occurred and ~~Holdings~~ be continuing; (xxi) the Parent may ~~make,~~ make Restricted Payments consisting of Equity Interests in ~~respect~~ any Unrestricted Subsidiary, whether pursuant to a distribution, dividend or any other transaction not prohibited hereunder; (xxii) [Reserved]; (xxiii) the making of ~~Permitted Tax Distributions. For purposes~~ any Restricted Payment within 60 days after the date of ~~determining compliance~~ declaration thereof, if at the date of such declaration such Restricted Payment would have complied with another provision of this Section 6.08(a)~~, in~~ ; provided that the ~~event that a proposed Restricted Payment (or a portion thereof) meets the criteria~~ making of ~~clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification)~~ such Restricted Payment ~~(or portion thereof) between~~ will reduce capacity for Restricted Payments pursuant to such ~~clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a).~~other provision when so made; (b) ~~Neither Holdings~~prior to the Acquisition Closing Date, ~~Intermediate Holdings nor~~ the Borrower will not, and will not permit any ~~Borrower will~~Restricted Subsidiary, ~~nor~~ and, after the Acquisition Closing Date, Parent will ~~they~~ not, and will not permit any Restricted Subsidiary to, (A) make ~~or pay, directly or indirectly,~~ any ~~payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior Financing, or any~~ voluntary payment or other distribution (whether in cash, securities or other property), ~~including any sinking fund~~ of or ~~similar deposit~~in respect of principal or interest, ~~on account~~ or such payment by way of the purchase, redemption, retirement, acquisition, cancellation or ~~termination~~ termination, in each case prior to the final scheduled maturity thereof, of any ~~Junior Financing~~Material Indebtedness that is contractually subordinated in right of payment to any of the Obligations (it being understood that Indebtedness shall not be deemed to be subordinated in right of payment to the Obligations merely because such Indebtedness is secured by a Lien that is junior to the Liens securing the applicable portion of the Obligations) or (B) solely to the extent that Indebtedness has a Lien on substantially all of the Collateral securing Obligations that is junior to the Lien on the Collateral securing the Obligations, make any voluntary prepayment of the principal of such Indebtedness outstanding under Section 6.01(a)(xviii), Section 6.01(a)(xxx) or Section 6.01(a)(xxxii) except: (i) payment of regularly scheduled interest and principal payments (and fees, indemnities and expenses payable) as, ~~in the form of payment~~ and when due in respect of any ~~Indebtedness, other than payments~~ such Indebtedness to the extent permitted by any subordination or intercreditor provisions in respect ~~of any Junior Financing prohibited by the subordination provisions~~ thereof; (ii) ~~refinancings~~ refinancings, replacements, substitutions, extensions, restructurings, exchanges and renewals of ~~Junior Financing~~ any such Indebtedness to the extent such refinancing, replacement, exchange or renewed Indebtedness is permitted by Section 6.01 and any fees and expenses in connection therewith; (iii) payments of intercompany Indebtedness permitted under Section 6.01 to the extent permitted by any subordination provisions in respect thereof; (iv) convert, exchange, redeem, repay or prepay such Indebtedness into or for Equity Interests of the Parent (other than Disqualified Equity Interests of the Parent, except to the extent permitted under Section 6.01(b)); (v) AHYDO Catch-Up Payments relating to Indebtedness of the Parent and its Restricted Subsidiaries so long as no Event of Default under Section 7.01(a), 7.01(b), 7.01(h) or 7.01(i) has occurred and is continuing; (vi) any such other payments, redemptions, repurchases, retirements, terminations or cancellations of Indebtedness or other distributions in an amount not to exceed (A) the greater of $75,000,000 and 5% of Consolidated EBITDA plus (B) the Available Amount; provided however that in the case of payments or distributions made pursuant to this clause (vi)(B), at the time of making such payment or distribution with amounts pursuant to clause (b) of the definition of “Available Amount”, no Event of Default shall have occurred and be continuing; (vii) any such other payments, redemptions, repurchases, retirements, terminations or cancellations of Indebtedness or other distributions made with net proceeds received by the Parent after the Closing Date from the issuance or sale of Qualified Equity Interests of the Parent or proceeds of an equity contribution initially made to the Parent (other ~~Junior Financing~~ than any Cure Amount) (which such equity proceeds so utilized shall not also increase the Available Amount); (viii) the payment, redemption, repurchase, retirement, termination or cancellation of Indebtedness within 60 days of the date of the Redemption Notice if, at the date of any payment, redemption, repurchase, retirement, termination or cancellation notice in respect thereof (the “Redemption Notice”), such payment, redemption, repurchase, retirement termination or cancellation would have complied with another provision of this Section 6.08(b); provided that such payment, redemption, repurchase, retirement termination or cancellation shall reduce capacity under such other provision; (ix) other payments, redemptions, repurchases, retirements, terminations or cancellations of Indebtedness in lieu of and not in excess of the amount of (after giving effect to any other such payments, redemptions, repurchases, retirements, terminations or cancellations of Indebtedness or Investments pursuant to Section 6.04(ff)), Restricted Payments to the extent permitted to be inmade in accordance with Section 6.08(xiv); and (x) any such other payments, redemptions, repurchases, retirements, terminations or cancellations of Indebtedness or other distributions; provided that at the time of making such payment or distribution no Event of Default has occurred and is continuing and the First Lien Leverage Ratio computed on a Pro Forma Basis as of the Applicable Date of Determination is less than 3.00:1.00.

Appears in 3 contracts

Sources: Credit Agreement (Micro Focus International PLC), Credit Agreement (Seattle SpinCo, Inc.), Credit Agreement (Micro Focus International PLC)

Restricted Payments; Certain Payments of Indebtedness. (a) ~~Neither Holdings, Intermediate Holdings nor any Borrower will, nor will they permit any~~ No member of the Restricted ~~Subsidiary, to~~ Group shall pay or make, directly or indirectly, or declare, any Restricted Payment, ~~except~~other than any Restricted Payment by a member of the Restricted Group to a Loan Party (or to another member of the Restricted Group and then to a Loan Party), provided, however, so long as no Default or Event of Default then exists or would result therefrom: (i) ~~Each Borrower and each Restricted Subsidiary~~ the Parent may make Restricted Payments ~~to Intermediate Holdings, a Borrower or any other Restricted Subsidiary; provided that~~ in the ~~case~~ minimum amount necessary to maintain its status as a REIT (including the 90% distribution requirement of any such Restricted Payment by a Restricted Subsidiary that is not a wholly-owned Subsidiary of a Borrower, such Restricted Payment is made to Intermediate Holdings, such Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests Section 857(a) of the ~~relevant class~~ Internal Revenue Code), so long as such distribution is comprised of ~~Equity Interests~~the maximum amount possible in non-cash consideration to maintain such REIT status; (ii) ~~payments or distributions~~ the Parent may pay de minimis cash settlement amounts to ~~satisfy dissenters’ or appraisal rights, pursuant to or~~ its shareholders in ~~connection with a consolidation, amalgamation, merger or transfer~~ respect of ~~assets (other than with respect to the Transactions) that complies with Section 6.03;~~fractional shares resulting from share splits; and (iii) ~~Holdings and any Intermediate Holdings~~ Subsidiaries of the Parent that are not Loan Parties may declare and make ~~dividend payments or other~~ distributions ~~payable solely in~~ to equity owners which are not Loan Parties concurrently with any distribution made to the ~~Equity Interests~~ equity owners of such ~~Person; (iv) Restricted Payments made~~ Subsidiary which are Loan Parties in ~~connection with or~~ amounts proportionate to such non-Loan Party’s ownership in order to consummate the Transactions (including, without limitation, (A) cash payments to holders of Equity Interests of Target as provided by the Acquisition Agreement, (B) Restricted Payments to direct such Subsidiary and ~~indirect parent companies of Holdings to finance a portion of the consideration for the Acquisition and (C) other payments with respect to working capital adjustments or otherwise,~~ to the extent ~~contemplated by the Acquisition Agreement); provided that the earnout contemplated by Exhibit F~~ required pursuant to the Acquisition Agreement shall not be permitted on the basis of this clause (iv)); (v) repurchases of Equity Interests in Holdings (or Restricted Payments by Holdings to allow repurchases of Equity Interest in any direct or indirect parent of Holdings) or Intermediate Holdings deemed to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion terms of the ~~exercise price~~ corresponding organizational agreements of such stock options or warrants or other incentive interest; (vi) Restricted Payments to Holdings which Holdings may use to redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted stock units or stock appreciation rights or other equity-linked interests issued with respect to any Subsidiary in effect as of such Equity Interests) (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests) held by current or former officers, managers, consultants, directors and employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), Holdings, the Borrowers and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, profits interest, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that the aggregate amount of Restricted Payments permitted by this clause (vi) after the Effective Date, together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu thereof, shall not exceed the sum of (A) the greater of $15.0 million and 5.0% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings (which subsequent to an IPO shall be increased to the greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings), (B) the amount in any fiscal year equal to the cash proceeds of key man life insurance policies received by Holdings, the Borrowers or the Restricted Subsidiaries after the Effective Date, (C) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year may be carried forward to succeeding fiscal years; (vii) Holdings and any Intermediate Holdings may make Restricted Payments in cash: (A) without duplication of any Permitted Tax Distribution, the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (a)(vii)(A) shall not exceed the Tax liability that Holdings and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers or their Restricted Subsidiaries; (B) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof or any Intermediate Holdings) attributable to the ownership or operations of Holdings, the Borrowers and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of Holdings, the Borrowers and the Restricted Subsidiaries and (y) otherwise permitted to be paid by Holdings, the Borrowers and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the Borrowers or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x); (C) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence; (D) the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(m); provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) Holdings or any Intermediate Holdings shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to Holdings, the Borrowers or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with Holdings, the Borrowers or any of the Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrowers and the Restricted Subsidiaries; and (G) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful); (viii) in addition to the foregoing Restricted Payments, the Borrowers and any Intermediate Holdings may make additional Restricted Payments to any Intermediate Holdings and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt, in an aggregate amount, when taken together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii), not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as no Event of Default shall have occurred and be continuing (or, in the case of the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h) or (i)), the Available Amount that is Not Otherwise Applied plus (C) the Available Equity Amount that is Not Otherwise Applied; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; (xi) Holdings may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiii) payments made or expected to be made by Holdings, any Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to 5.00 to 1.0 and (B) there is no continuing Event of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make Restricted Payments in cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a). (b) ~~Neither Holdings, Intermediate Holdings nor~~ No member of the Restricted Group shall make any ~~Borrower will, nor will they permit any Restricted Subsidiary to, make or pay, directly or indirectly, any payment or other distribution~~ voluntary prepayment (whether in cash, securities or other property) of on or in respect of principal of or interest on any ~~Junior Financing~~Indebtedness (including, ~~or any payment or other distribution (whether in cash~~without limitation, ~~securities or other property~~under the Second Lien Credit Agreement), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any ~~Junior Financing~~such Indebtedness prior to the scheduled maturity, ~~except~~except for: (i) payment of Indebtedness created under the Loan Documents; (ii) payment of regularly scheduled interest and principal payments ~~as,~~ as and when due in ~~the form~~ respect of Indebtedness permitted by Section 9.14; (iii) payment of mandatory prepayments as and when due in respect of any ~~Indebtedness, other than payments in respect of any Junior Financing prohibited~~ Indebtedness permitted by ~~the subordination provisions thereof~~Section 9.14; (iiiv) ~~refinancings~~ Refinancings of ~~Junior Financing~~ Indebtedness ~~with proceeds~~ to the extent permitted by Section 9.14; and (v) payment of ~~other Junior Financing Indebtedness permitted~~ intercompany indebtedness to ~~be in~~the extent not prohibited by this Agreement.

Appears in 3 contracts

Sources: First Lien Credit Agreement (Pennsylvania Real Estate Investment Trust), First Lien Credit Agreement (Pennsylvania Real Estate Investment Trust), First Lien Credit Agreement (Pennsylvania Real Estate Investment Trust)

Restricted Payments; Certain Payments of Indebtedness. (a) Neither ~~Holdings, Intermediate~~ Holdings nor ~~any~~ the Borrower will, nor will they permit any Restricted ~~Subsidiary~~Subsidiary or Intermediate Parent to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, except: (i) ~~Each Borrower and~~ each Restricted Subsidiary may make Restricted Payments to ~~Intermediate Holdings, a~~ the Borrower or any other Restricted Subsidiary; (ii) Holdings, any Intermediate Parent, the Borrower and each Restricted Subsidiary may declare and make dividend payments or other distributions payable solely in the Equity Interests of such Person; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a ~~wholly-owned~~ Wholly Owned Subsidiary of a the Borrower, such Restricted Payment is made to ~~Intermediate Holdings, such~~ the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests; (ii) payments or distributions to satisfy dissenters’ or appraisal rights, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of assets (other than with respect to the Transactions) that complies with Section 6.03; (iii) ~~Holdings and any Intermediate Holdings may declare and make dividend payments or other distributions payable solely in the Equity Interests of such Person~~[Reserved]; (iv) Restricted Payments made in connection with or in order to consummate the Transactions (including, without limitation, (A) cash payments to holders of Equity Interests of Target as provided by the Acquisition Agreement, (B) Restricted Payments to direct and indirect parent companies of Holdings to finance a portion of the consideration for the Acquisition and (C) other payments with respect to working capital adjustments or otherwise, to the extent contemplated by the Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv)); (v) repurchases of Equity Interests in Holdings (or Restricted Payments by Holdings to allow repurchases of Equity ~~Interest~~ Interests in any direct or indirect parent of Holdings) ), the Borrower or ~~Intermediate Holdings~~ any Restricted Subsidiary deemed to occur upon the exercise of stock options or warrants ~~or other incentive interests~~ if such Equity Interests represent a portion of the exercise price of such ~~stock~~ options or ~~warrants or other incentive interest~~warrants; (viv) ~~Restricted Payments to Holdings which~~ Holdings may ~~use to~~ redeem, acquire, retire or repurchase its Equity Interests (or any ~~options, warrants, restricted stock units~~ options or warrants or stock appreciation rights ~~or other equity-linked interests~~ issued with respect to any of such Equity Interests) (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies or any Employee Holding Vehicle to so redeem, retire, acquire or repurchase ~~their~~ Equity ~~Interests~~Interests of Holdings or such entity) held by current or former officers, managers, consultants, directors and employees or their permitted transferees (or their respective ~~spouses, former spouses, successors~~estates, executors, trustees, administrators, heirs, legatees or ~~distributees~~distributes) of Holdings (or any direct or indirect parent thereof), ~~Holdings,~~ the ~~Borrowers~~ Borrower and the Restricted Subsidiaries, or held by any Employee Holding Vehicle for the benefit of any of the foregoing, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, ~~profits interest,~~ employment termination agreement or any other employment agreements or equity holders’ agreement~~; provided that the~~ , in an aggregate amount ~~of Restricted Payments permitted by this clause (vi)~~ after the ~~Effective Date,~~ Closing Date together with the aggregate amount of loans and advances to Holdings made pursuant to Section ~~6.04(m~~6.04(l) in lieu ~~thereof, shall~~ of Restricted Payments permitted by this clause (v) not to exceed $15,000,000 in any calendar year with unused amounts in any calendar year (including in any event the ~~sum~~ aggregate unused amount of (Acarry-forward under the Existing Credit Agreement) ~~the greater~~ being carried over to succeeding calendar years subject to a maximum of $~~15.0 million and 5.0% of Consolidated EBITDA for the most recently ended Test Period~~ 30,000,000 in any ~~fiscal~~ calendar year ~~of Holdings~~ (~~which subsequent to an IPO shall be increased~~ without giving effect to the ~~greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings~~following proviso)~~, (B) the~~ ; provided that such amount in any ~~fiscal~~ calendar year ~~equal~~ may be increased by an amount not to exceed the cash proceeds of key man life insurance policies received by ~~Holdings,~~ the ~~Borrowers~~ Borrower or ~~the~~ its Restricted Subsidiaries after the Effective Date, (C) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests Closing Date and ~~are~~ not ~~Cure Amounts and have not otherwise been~~ previously applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year may be carried forward to succeeding fiscal years; (vii) Holdings and any Intermediate Holdings may make Restricted Payments in cash: (A) without duplication of any Permitted Tax Distribution, the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (~~a)(vii)(A~~v); (vi) ~~shall not exceed~~ so long as the Borrower and Holdings are each treated as a pass-through or disregarded entity (a “Flow-Through Entity”) for U.S. federal and state income tax purposes, Borrower may make distributions to Holdings and Holdings may make distributions to its members for Permitted Tax ~~liability that Holdings and/or its Subsidiaries~~ Distributions at such times and with respect to such periods as Tax Distributions (as ~~applicable~~defined in the Holdings LLC Agreement) ~~would have incurred were such Taxes determined~~ are required to be made or designated pursuant to the Holdings LLC Agreement; provided that after an IPO, if Holdings is not a Flow-Through Entity, so long as ~~if such entity(ies) were~~ Borrower is a ~~stand~~Flow-~~alone taxpayer or~~ Through Entity, Borrower may make Permitted Tax Distributions to Holdings on a ~~stand-alone group~~quarterly basis and at the end of a Taxable Year (with the determination of the Permitted Tax Distributions to be made by substituting Borrower for Holdings in the applicable definitions); ~~and provided, further,~~ provided further that Restricted Payments under this ~~subclause~~ clause (Avi) in respect of any ~~Taxes~~ taxes attributable to the income of any Unrestricted Subsidiaries of ~~Holdings~~ the Borrower may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to ~~Holdings,~~ the ~~Borrowers~~ Borrower or ~~their~~ its Restricted Subsidiaries; (Bvii) any Intermediate Parent, the Borrower and the Restricted Subsidiaries may make Restricted Payments in cash to Holdings and any Intermediate Parent and, where applicable, Holdings and such Intermediate Parent may make Restricted Payments in cash: (A) the proceeds of which shall be used by Holdings or any Intermediate ~~Holdings~~ Parent to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, ~~accounting, tax reporting~~ accounting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, in an aggregate amount together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (2a)(vii)(A) not to exceed (x) $2,000,000 in any fiscal year occurring prior to the year in which an IPO occurs and (y) $4,000,0000 in any fiscal year occurring in the year in which an IPO occurs and in each fiscal year thereafter plus, in each case, any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent ~~thereof or any Intermediate Holdings~~thereof) attributable to the ownership or operations of ~~Holdings, the Borrowers~~ Holdings and the Restricted ~~Subsidiaries,~~ Subsidiaries or otherwise payable by Holdings pursuant to the Holdings LLC Agreement and (32) fees and expenses (x) due and payable by any of ~~Holdings, the Borrowers and~~ the Restricted Subsidiaries and (y) otherwise permitted to be paid (but not paid) by ~~Holdings, the Borrowers and the~~ such Restricted ~~Subsidiaries~~ Subsidiary under this ~~Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the Borrowers or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x)~~Agreement; (CB) the proceeds of which shall be used by Holdings or any Intermediate ~~Holdings~~ Parent to pay ~~(or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay)~~ franchise ~~and similar Taxes,~~ taxes and other ~~fees~~ fees, taxes and ~~expenses,~~ expenses required to maintain its organizational existence; (DC) the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section ~~6.08(a)(vi~~6.08(a)(v); (ED) to finance any Investment permitted to be made pursuant to Section ~~6.04 other than Section 6.04(m)~~6.04; provided that (1A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2B) Holdings or any Intermediate ~~Holdings~~ Parent shall, immediately following the closing thereof, cause (x1) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to ~~Holdings,~~ the ~~Borrowers~~ Borrower or the Restricted Subsidiaries or (y2) the Person formed or acquired to merge into or consolidate with ~~Holdings,~~ the ~~Borrowers~~ Borrower or any of the Restricted Subsidiaries (to the extent such ~~merger, amalgamation~~ merger or consolidation is permitted in under Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (FE) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrowers and the Restricted Subsidiaries; and (G) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity ~~offering,~~ or debt offering ~~or other non-ordinary course transaction not prohibited~~ permitted by this ~~Agreement~~ Agreement; and (~~whether or not such offering or other transaction is successful)~~F) the proceeds of which shall be used to make payments permitted by clause (b)(iv) of this Section 6.08; (viii) in addition to the foregoing Restricted Payments and so long as (x) no Default shall have occurred and be continuing or would result therefrom and (y) the Borrower would be in compliance with the covenants set forth in Sections 6.12 and 6.13 on a Pro Forma Basis as of the end of the most recent Test Period for which financial statements are available (after giving Pro Forma Effect to such additional Restricted Payments), the ~~Borrowers~~ Borrower and any Intermediate ~~Holdings~~ Parent may make additional Restricted Payments to any Intermediate Parent and Holdings ~~and Holdings,~~ the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate ~~Holdings~~ Parent to make any payments in respect of any Permitted Holdings Debt, in an aggregate amount, ~~when taken~~ together with the aggregate amount of ~~loans~~ (1) prepayments, redemptions, purchases, defeasances and ~~advances to Holdings~~ other payments in respect of Junior Financings made pursuant to Section ~~6.04(m~~6.08(b)(iv) and (2) loans and advances made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (viii), not to exceed (x) $25,000,000 plus (y) at any time on or after the ~~sum~~ 2013 Third Quarter Financial Statements Delivery Date, the aggregate amount of the Net Proceeds of the issuance of, or contribution in respect of existing, Qualified Equity Interests, in each case to the extent contributed to the Borrower as cash common equity after the Closing Date (~~A) an amount at the time of making~~ other than any such issuance or contribution made pursuant to Section 7.02 or any issuance to or contribution from a Restricted ~~Payment and together with any other Restricted Payment made utilizing this clause (A~~Subsidiary) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as no Event of Default shall have occurred and be continuing (or, in the case of the use of the Starter Basket that ~~is Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h) or (i)), the Available Amount that is~~ are Not Otherwise Applied plus (Cz) at any time on or after the ~~Available Equity Amount~~ 2013 Third Quarter Financial Statements Delivery Date, the amount of Cumulative Excess Cash Flow that is Not Otherwise Applied; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) ~~payments~~ Restricted Payments made ~~or expected~~ during the Pre-IPO Period that the Borrower, in good faith, determines are reasonably necessary to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with effectuate the ~~exercise of stock options and the vesting of restricted stock and restricted stock units;~~IPO Reorganization Transactions; and (xi) ~~Holdings may (a) pay cash~~ in ~~lieu of fractional Equity Interests in connection with~~ addition to the foregoing Restricted Payments, on the Closing Date, the Borrower and any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and Intermediate Parent may make ~~payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of~~ additional Restricted Payments to any ~~direct or indirect parent company~~ Intermediate Parent and Holdings the proceeds of which may be utilized by Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiii) payments made or expected to be made by Holdings, any Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) make additional Restricted Payments; provided that ~~after giving effect to~~ the aggregate amount of all such Restricted ~~Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to 5.00 to 1.0 and (B) there is no continuing Event of Default; (xv) Restricted~~ Payments ~~constituting or otherwise~~ made ~~in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments~~ pursuant to ~~a tax receivable agreement, to Permitted Tax Receivable Payments);~~ this clause (~~xvi~~xi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make Restricted Payments in cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a)shall not exceed $100,000,000. (b) Neither ~~Holdings, Intermediate~~ Holdings nor ~~any~~ the Borrower will, nor will they permit any Restricted Subsidiary or Intermediate Parent to, make or ~~pay~~agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoing, except: (i) payment of regularly scheduled interest and principal payments ~~as, in the form of payment~~ as and when due in respect of any Indebtedness, other than payments in respect of any Junior Financing prohibited by the subordination provisions thereof; (ii) refinancings of Indebtedness to the extent permitted by Section 6.01; (iii) the conversion of any Junior Financing ~~Indebtedness~~ to Equity Interests (other than Disqualified Equity Interests) of Holdings or any of its direct or indirect parent companies or any Intermediate Parent; and (iv) so long as (x) no Default shall have occurred and be continuing or would result therefrom and (y) the Borrower would be in compliance with ~~proceeds~~ the covenants set forth in Sections 6.12 and 6.13 on a Pro Forma Basis as of the end of the most recent Test Period for which financial statements are available (after giving Pro Forma Effect to such prepayments, redemptions, purchases, defeasances and other payments), prepayments, redemptions, purchases, defeasances and other payments in respect of Junior ~~Financing Indebtedness permitted~~ Financings prior to ~~be in~~their scheduled maturity in an aggregate amount, together with the aggregate amount of (1) Restricted Payments made pursuant to clause (a)(viii) and (2) loans and advances made pursuant to Section 6.04(l) in lieu thereof not to exceed the sum of (x) $25,000,000 plus (y) at any time on or after the 2013 Third Quarter Financial Statements Delivery Date, the amount of the Net Proceeds of issuances of, or contributions in respect of existing, Qualified Equity Interests, in each case to the extent contributed to the Borrower as cash common equity after the Closing Date (other than any such issuance or contribution made pursuant to Section 7.02 or any issuance to or contribution from a Restricted Subsidiary) that are Not Otherwise Applied plus (z) at any time on or after the 2013 Third Quarter Financial Statements Delivery Date, the amount of Cumulative Excess Cash Flow that is Not Otherwise Applied.

Appears in 3 contracts

Sources: Incremental Revolving Facility Amendment and Joinder Agreement (Virtu Financial, Inc.), Credit Agreement (Virtu Financial, Inc.), Credit Agreement (Virtu Financial, Inc.)

Restricted Payments; Certain Payments of Indebtedness. (a) Neither Holdings, Intermediate Holdings nor any Borrower will, nor will they permit any Restricted ~~Subsidiary~~Subsidiary to, to pay or make, directly or indirectly, any Restricted Payment, except: (i) Each Borrower and each Restricted Subsidiary may make Restricted Payments to Intermediate Holdings, a Borrower or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a wholly-owned Subsidiary of a Borrower, such Restricted Payment is made to Intermediate Holdings, such Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests; (ii) ~~payments or distributions~~ Restricted Payments to satisfy appraisal or other dissenters’ ~~or appraisal~~ rights, pursuant to or in connection with a consolidation, amalgamation, ~~merger or~~ merger, transfer of assets ~~(other than with respect to the Transactions)~~ or acquisition that complies with Section ~~6.03~~6.03 or Section 6.04; (iii) ~~Holdings~~ Holdings, any Intermediate Parent and ~~any~~ Intermediate Holdings may declare and make dividend payments or other distributions payable solely in the Equity Interests of such Person; (iv) Restricted Payments made in connection with or in order to consummate the Transactions (including, without limitation, (A) cash payments to holders of Equity Interests of Target as provided by the Acquisition Agreement, (B) Restricted Payments to direct and indirect parent companies of Holdings to finance a portion of the consideration for the Acquisition and (C) other payments with respect to working capital adjustments or otherwise, to the extent contemplated by the Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv))[reserved]; (v) repurchases of Equity Interests in Holdings (or Restricted Payments by Holdings to allow repurchases of Equity Interest in any direct or indirect parent of Holdings) or Intermediate Holdings deemed to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price of such stock options or warrants or other incentive ~~interest~~interests; (vi) Restricted Payments to Holdings which Holdings may use to redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted stock units or stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests) held by current or former officers, partners, managers, consultants, directors and employees (or their respective Affiliates, spouses, former spouses, other Permitted Transferees, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), Intermediate Holdings, the Borrowers and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, profits interest, employment termination agreement or any other employment agreements or equity holders’ agreement; provided ~~that~~ that, except with respect to non-discretionary repurchases, the aggregate amount of Restricted Payments permitted by this clause (vi) after the Effective Date, together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu thereof, shall not exceed the sum of (Aa) the greater of $~~15.0 million~~ 41,250,000 and ~~5.0~~7.5% of Consolidated EBITDA (provided that, after the occurrence of an IPO, such amount shall be of the greater of $85,000,000 and 15% of Consolidated EBITDA) for the most recently ended Test Period in any fiscal year of Holdings (~~which subsequent~~ net of any proceeds from the reissuance or resale of such Equity Interests to ~~an IPO shall be increased to the greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in~~ another Person received by Holdings or any ~~fiscal year of Holdings~~Restricted Subsidiary), (Bb) the amount in any fiscal year ~~equal~~ may be increased by an amount not to exceed the cash proceeds of ~~key man life insurance policies~~ any Key Man Policy A received by Holdings, Intermediate Holdings, the Borrowers or the Restricted Subsidiaries after the Effective Date, and (Cc) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any ~~future, present~~ current or former ~~employees~~officers, ~~directors~~partners, ~~managers or consultants~~ managers, consultants, directors and employees of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the ~~payment of Restricted Payments by virtue of~~ Available Equity Amount, the Available ~~Equity~~ RP Capacity Amount or are otherwise applied to increase any other basket ~~hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision~~hereunder; provided that any unused portion of the preceding basket calculated pursuant to clauses (Aa) and (Bb) above for any fiscal year may be carried forward to succeeding fiscal years; provided, further, that any Indebtedness incurred or Investments or payments made in reliance upon the Available RP Capacity Amount utilizing the unused amounts available pursuant to this Section 6.08(a)(vi) shall reduce the amounts available pursuant to this Section 6.08(a)(vi); (vii) Holdings, any Intermediate Parent or Intermediate Holdings may make Restricted Payments in cash to Holdings and any Intermediate Parent and, where applicable, Holdings and such Intermediate Parent may make Restricted Payments in cash: (A) ~~without duplication of any Permitted Tax Distribution,~~ the proceeds of which shall be used by Holdings or any Intermediate ~~Holdings~~ Parent to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for any taxable period for which Intermediate Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Intermediate Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of Intermediate Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (a)(vii)(A) shall not exceed the Tax liability that Intermediate Holdings and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Intermediate Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings, Intermediate Holdings, the Borrowers or their Restricted Subsidiaries; (B) the proceeds of which shall be used by Holdings or any Intermediate ~~Holdings~~ Parent to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof or any Intermediate ~~Holdings~~Parent) attributable to the ownership or operations of Holdings, Intermediate Holdings, the Borrowers and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of Intermediate Holdings, the Borrowers and the Restricted Subsidiaries and (y) otherwise permitted to be paid by Intermediate Holdings, the Borrowers and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Intermediate Holdings, the Borrowers or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x); (C) the proceeds of which shall be used by Holdings or any Intermediate ~~Holdings~~ Parent to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence; (D) the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section ~~6.08(a)(iv) or Section~~ 6.08(a)(vi); (E) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(m); provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) Holdings or any Intermediate ~~Holdings~~ Parent shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to Intermediate Holdings, the Borrowers or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with Intermediate Holdings, the Borrowers or any of the Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Intermediate Holdings, the Borrowers and the Restricted Subsidiaries; and (G) the proceeds of which shall be used by Holdings or any Intermediate ~~Holdings~~ Parent to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful); (viii) in addition to the foregoing Restricted Payments, Holdings, the ~~Borrowers~~ Borrowers, Intermediate Holdings, any Intermediate Parent and any ~~Intermediate Holdings~~ Restricted Subsidiary may make additional Restricted Payments to Intermediate Holdings, any Intermediate ~~Holdings~~ Parent and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate ~~Holdings~~ Parent to make any payments in respect of any Permitted Holdings Debt, in an aggregate amount, when taken together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii), not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $~~75.0 million~~ 165,000,000 and 2530% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted ~~Payment plus~~ Payment, (B) so long as no Event of Default shall have occurred and be continuing or would result therefrom (or, in the case of the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h) or (i)), ) the Available Amount that is Not Otherwise Applied ~~plus~~ and (C) the Available Equity Amount that is Not Otherwise Applied; provided that any Indebtedness incurred or Investments or payments made in reliance upon the Available RP Capacity Amount utilizing the unused amounts available pursuant to this Section 6.08(a)(viii) shall reduce the amounts available pursuant to this Section 6.08(a)(viii); (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (xa) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock ~~units~~units and (b) payments or other adjustments to outstanding Equity Interests in accordance with any management equity plan, stock option plan or any other similar employee benefit plan, agreement or arrangement in connection with any Restricted Payment; (xi) Holdings and Intermediate Holdings may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment of Restricted Payment on Holdings’ or Intermediate Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, in an annual amount for each fiscal year of up Holdings equal to the sum of (a) an amount equal to 6.0% ~~per annum~~ of the net cash proceeds of such IPO (and any subsequent public offerings) received by or contributed to ~~Intermediate Parent or Parent~~Holdings and/or its Subsidiaries, other than public offerings with respect to ~~Intermediate Parent’s or Parent’s~~ common stock registered on Form S-8 and (b) an amount equal to 7.0% of the market capitalization of ~~Intermediate Parent or Parent~~ the IPO Entity at the election of Holdings, at the time of such IPO; provided that any Indebtedness incurred or Investments or payments made in reliance upon the Available RP Capacity Amount utilizing the unused amounts available pursuant to this Section 6.08(a)(xii) shall reduce the amounts available pursuant to this Section 6.08(a)(xii); (xiii) payments made or expected to be made by Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment (and for the avoidance of doubt any related incurrence of Indebtedness) (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to ~~5.00~~ 4.50 to ~~1.0~~ 1.00 and (B) there is no continuing Event of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, Intermediate Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense~~; and~~; (xviii) Intermediate Holdings, any Intermediate ~~Holdings~~Parent, any Borrower or any Restricted Subsidiary may make Restricted Payments in cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of (A) Permitted Tax ~~Distributions. For purposes of determining compliance with this Section 6.08(a)~~Distributions and (B) Key Employee Distributions (provided that, in ~~the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (xviii) above~~any fiscal year, the ~~Borrowers will be entitled~~ amount of Key Employee Distributions made pursuant to ~~classify or later reclassify~~ this clause (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a). (b) Neither Holdings, Intermediate Holdings nor any Borrower will, nor will they permit any Restricted Subsidiary to, make or pay, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, except: (i) payment of regularly scheduled interest and principal payments as, in the form of payment and when due in respect of any Indebtedness, other than payments in respect of any Junior Financing prohibited by the subordination provisions thereof; (ii) refinancings of Junior Financing Indebtedness with proceeds of other Junior Financing Indebtedness permitted to be in

Appears in 3 contracts

Sources: Credit Agreement (Endeavor Group Holdings, Inc.), Credit Agreement (Endeavor Group Holdings, Inc.), Credit Agreement (Endeavor Group Holdings, Inc.)

Restricted Payments; Certain Payments of Indebtedness. (a) ~~Neither Holdings, Intermediate Holdings nor any~~ The Borrower ~~will~~will not, nor will ~~they~~ the Borrower permit any Restricted ~~Subsidiary~~Subsidiary to, ~~to pay~~ declare or ~~make, directly or indirectly,~~ make any Restricted Payment, except: (i) ~~Each Borrower and each~~ (A) any Restricted Subsidiary may make a Restricted ~~Payments~~ Payment to ~~Intermediate Holdings, a~~ the Borrower or any other Restricted ~~Subsidiary; provided that in~~ Subsidiary of the ~~case of any such~~ Borrower (so long as, if the Restricted Subsidiary making the Restricted Payment ~~by a Restricted Subsidiary that~~ is not ~~a wholly-~~wholly owned ~~Subsidiary of a~~ (directly or indirectly) by the Borrower, such Restricted Payment is made ratably among the holders of its Equity Interests) and (B) the Borrower may make a Restricted Payment to ~~Intermediate Holdings, such Borrower,~~ a Holding Company and any Holding Company may make a Restricted ~~Subsidiary and~~ Payment to ~~each other owner of Equity Interests of~~ another Holding Company so long as such Restricted ~~Subsidiary based on their relative ownership interests~~ Payment is promptly thereafter contributed to the Borrower or another Loan Party that is not Holdings; provided that, for the avoidance of doubt, a Restricted Payment shall only be permitted pursuant to this Section 6.06(a)(i)(B) to the ~~relevant class~~ extent such subsequent contribution does not increase availability or capacity to make Restricted Payments under any provision of ~~Equity Interests;~~this Section 6.06. (ii) ~~payments~~ Restricted Payments payable solely in shares of Qualified Equity Interests (so long as, in the case of this clause (ii), if the Restricted Subsidiary making the Restricted Payment is not wholly owned (directly or ~~distributions to satisfy dissenters’ or appraisal rights~~indirectly) by the Borrower, ~~pursuant to or in connection with a consolidation, amalgamation, merger or transfer~~ such Restricted Payment is made ratably among the holders of ~~assets (other than with respect to the Transactions) that complies with Section 6.03~~its Equity Interests); (iii) ~~Holdings and any Intermediate Holdings may declare and make dividend payments or other distributions payable solely~~ Restricted Payments in connection with the acquisition of additional Equity Interests ~~of such Person~~in any Holding Company (other than Holdings) or Restricted Subsidiary from minority shareholders; (iv) repurchases of Equity Interests deemed to occur upon the cashless exercise of stock options when such Equity Interests represents a portion of the exercise price thereof; (v) Restricted Payments ~~made~~ to allow any Parent Entity (or, after an IPO, the Public Company), any Holding Company, the Borrower or any Restricted Subsidiary to purchase a Holding Company’s or any Parent Entity’s (or, after an IPO, the Public Company’s) Equity Interests from present or former consultants, directors, manager, officers or employees of any Parent Entity (or, after an IPO, the Public Company), any Holding Company, the Borrower or any Restricted Subsidiary, or their estates, descendants, family, spouses or former spouses, upon the death, disability or termination of employment of such consultant, director, officer or employee or pursuant to any employee, management, director or manager equity plan, employee, management, director or manager stock option plan or any other employee, management, director or manager benefit plan or any agreement (including any stock subscription or shareholder agreement) with any employee, director, manager, officer or consultant of any Parent Entity (or, after an IPO, the Public Company), any Holding Company, the Borrower or any Restricted Subsidiary, provided that the aggregate amount of payments under this clause (v) subsequent to the Closing Date (net of proceeds received by the Borrower subsequent to the date hereof in connection with resales of any stock or common stock options so purchased (which amounts, to the extent that such cash proceeds from the issuance of any such stock are utilized to make payments pursuant to this clause in ~~order~~ excess of the amounts otherwise permitted hereunder, are Not Otherwise Applied)) per fiscal year shall not exceed the greater of (x) $7,500,000 and (y) 7.5% of LTM EBITDA (provided that, after the occurrence of an IPO, such amount shall be of the greater of $15,000,000 and 15% of LTM EBITDA) calculated on a Pro Forma Basis as of the Applicable Date of Determination (with unused amounts in any fiscal year being carried over to the next succeeding fiscal year), plus the amount of any key-man life insurance policies; provided that the cancellation of Indebtedness owing to Holdings or any of the Subsidiaries (and not involving a cash advance made by Holdings or any of the Subsidiaries) in connection with a repurchase of any such Equity Interests and the redemption or cancellation of such Equity Interests without cash payment will not be deemed to constitute a Restricted Payment for purposes of this covenant or any other provision of this Agreement; (vi) Restricted Payments pursuant to Intercompany License Agreements; (vii) Restricted Payments (i) to consummate the Transactions (including, ~~without limitation~~but not limited to, ~~(A) cash payments to holders of Equity Interests of Target as provided by~~ the ~~Acquisition Agreement, (B)~~ Closing Date Distribution); it being understood that any such Restricted Payments to direct and indirect parent companies of Holdings to finance a portion of the consideration for the Acquisition and (C) other payments with respect to working capital adjustments or otherwise, to the extent contemplated by the Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv)); (v) repurchases of Equity Interests in Holdings (or Restricted Payments by Holdings to allow repurchases of Equity Interest in any direct or indirect parent of Holdings) or Intermediate Holdings deemed to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price of such stock options or warrants or other incentive interest; (vi) Restricted Payments to Holdings which Holdings may use to redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted stock units or stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests) held by current or former officers, managers, consultants, directors and employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), Holdings, the Borrowers and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, profits interest, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that the aggregate amount of Restricted Payments permitted by this clause (vi) after the Effective Date, together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu thereof, shall not exceed the sum of (A) the greater of $15.0 million and 5.0% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings (which subsequent to an IPO shall be increased to the greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings), (B) the amount in any fiscal year equal to the cash proceeds of key man life insurance policies received by Holdings, the Borrowers or the Restricted Subsidiaries after the Effective Date, (C) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year may be carried forward to succeeding fiscal years; (vii) Holdings and any Intermediate Holdings may make Restricted Payments in cash: (A) without duplication of any Permitted Tax Distribution, the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (a)(vii)(A) shall not exceed the Tax liability that Holdings and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers or their Restricted Subsidiaries; (B) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof or any Intermediate Holdings) attributable to the ownership or operations of Holdings, the Borrowers and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of Holdings, the Borrowers and the Restricted Subsidiaries and (y) otherwise permitted to be paid by Holdings, the Borrowers and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the Borrowers or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x); (C) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence; (D) the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(m); provided that (1) such Restricted Payment shall be made substantially concurrently with the ~~closing~~ Closing Date, (ii) in respect of ~~such Investment and~~ working capital adjustments or purchase price adjustments pursuant to the Recapitalization Agreement, any Permitted Acquisition or other permitted Investments (2) Holdings or any Intermediate Holdings shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made other than pursuant to Section ~~6.04(b~~6.04(aa)), (iii) to ~~be contributed~~ satisfy indemnity and other similar obligations under the Recapitalization Agreement, Permitted Acquisitions or other permitted Investments, and (iv) to dissenting stockholders in connection with, or as a result of, their exercise of appraisal rights and the settlement of any claims or actions (whether actual, contingent or potential) with respect thereto (including any accrued interest), in each case of this clause (vii), with respect to Investments permitted hereunder; (viii) Restricted Payments necessary to consummate transactions permitted pursuant to Section 6.03 and to make Investments permitted pursuant to Section 6.04 (other than pursuant to Section 6.04(aa)); (ix) forgiveness or cancellation of any Indebtedness owed to any Holding Company or any Restricted Subsidiary (and not involving a cash advance made by any Holding Company or any Restricted Subsidiary) issued for repurchases of any Equity Interests of a Parent Entity (or, after an IPO, the Public Company’s), Holdings, ~~the Borrowers~~ a Holding Company or the Borrower; (i) additional Restricted ~~Subsidiaries~~ Payments; provided that (a) no Event of Default has occurred and is continuing or would result therefrom and (yb) the ~~Person formed or acquired to merge into or consolidate with Holdings, the Borrowers or any~~ Total Net Leverage Ratio after giving effect thereto on a Pro Forma Basis as of the Applicable Date of Determination is less than or equal to 6.25 to 1.00 and (ii) additional Restricted ~~Subsidiaries~~ Payments in an amount not in excess of the Available Excluded Contribution Amount so long as no Event of Default has occurred and is continuing or would result from the making of such Restricted Payment; (xi) distributions or payments of Securitization Fees, sales contributions and other transfers of Securitization Assets or Receivables Assets and purchases of Securitization Assets or Receivables Assets pursuant to ~~the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such Investment~~Securitization Repurchase Obligations, in each case in ~~accordance~~ connection with ~~the requirements of Sections 5.11 and 5.12~~a Qualified Securitization Financing or a Receivables Facility; (Fxii) Restricted Payments the proceeds of which shall be used to pay customary ~~salary~~costs, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrowers and the Restricted Subsidiaries; and (G) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any unsuccessful equity ~~offering,~~ or debt offering ~~or other non-ordinary course transaction not prohibited~~ permitted by this ~~Agreement (whether or not such offering or other transaction is successful)~~Agreement; (~~viii~~xiii) ~~in addition to the foregoing Restricted Payments, the Borrowers and any Intermediate Holdings may make additional~~ Restricted Payments to any Intermediate Holdings and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt, in an aggregate amount, when taken together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii), not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as no Event of Default shall have occurred and be continuing (or, in the case of the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h) or (i)), the Available Amount that is Not Otherwise Applied plus (C) the Available Equity Amount that is Not Otherwise Applied; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; (xi) Holdings may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any ~~Permitted Acquisition (~~Acquisition, Investment or other ~~similar Investment)~~ transaction otherwise permitted hereunder, and (b) honor any conversion request by a holder of convertible Indebtedness (to the extent such conversion request is paid solely in shares of Qualified Equity Interests of Holdings (or any Parent Entity)) and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (~~xii~~xiv) Restricted Payments in an aggregate amount not to exceed (A) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum greater of (ax) ~~6.0~~$25,000,000 and (y) 25.0% ~~per annum~~ of LTM EBITDA calculated on a Pro Forma Basis as of the ~~net cash proceeds~~ Applicable Date of ~~such IPO received by~~ Determination (less any amounts reallocated to Section 6.04(q)(B) or ~~contributed to Intermediate Parent or Parent~~Section 6.06(b)(vi)(A)) plus (B) the Available Amount; provided, ~~other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent~~ however, that at the time of such IPO; (xiii) payments made or expected to be made by Holdings, any Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect to making such Restricted Payment ~~(A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal~~ pursuant to ~~5.00 to 1.0 and~~ this clause (B~~) there is~~ ), no ~~continuing~~ Event of ~~Default~~Default pursuant to Sections 7.01(a), (b), (h) or (i) has occurred and is continuing or would result therefrom; (xv) Restricted Payments ~~constituting or otherwise~~ to the extent that such Restricted Payments are made with (A) any capital contributions made in ~~connection with or relating~~ cash by any Person other than a Restricted Subsidiary to Holdings after the Closing Date (other than any Cure Amount) to the extent Not Otherwise Applied; and (B) any Net Proceeds of any issuance of Qualified Equity Interests after the Closing Date of Holdings (other than any Cure Amount) to any ~~IPO Reorganization Transactions (limited~~Person other than a Restricted Subsidiary to the extent Not Otherwise Applied, and to the extent, in each case, such contributions and Net Proceeds have been contributed to the ~~case~~ Qualified Equity Interests of ~~payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments~~the Borrower or any other Loan Party (other than Holdings); (xvi) Restricted Payments at such times and in such amounts as shall be necessary to permit any Parent Entity and any Holding Company to discharge their respective general corporate and overhead or other expenses (including franchise and similar taxes required to maintain its corporate existence, customary salary, bonus and other benefits payable to officers and employees of any Holding Companies or any Parent Entity and directors fees and director and officer indemnification obligations) incurred in the ordinary course of business; (xvii) Restricted Payments to Holding Companies and any Parent Entities at such times and in such amounts as are necessary to make Permitted Investor Payments; (xviii) Restricted Payments made (i) in connection with reorganizations and other activities related to tax planning and reorganization; provided that, in the good-faith judgment of the Borrowers and Administrative Agent, after giving effect to any such reorganizations and activities, there is no material adverse impact on the value of the (A) Collateral granted to the Collateral Agent for the benefit of the Secured Parties or (B) Guarantees of the Obligations pursuant to the Guaranty, (ii) in connection with, and reasonably related to, the consummation of an IPO, or (iii) to pay costs and expenses related to an IPO (whether or not such IPO is in fact consummated) and, after the consummation of an IPO, Public Company Costs; (xix) after an IPO, cash Restricted Payments to equity holders of the Public Company in an aggregate amount per annum not exceeding the sum of (x) 7.0% of Market Capitalization plus (y) 6.0% of the Net Cash Proceeds received by the Loan Parties from such IPO to the extent Not Otherwise Applied; provided that no Event of Default has occurred and is continuing or would result therefrom; (xx) the making of any Restricted Payment within sixty (60) days after the date of declaration thereof, if at the date of such declaration such Restricted Payment would have complied with another provision of this Section 6.06(a); provided that the making of such declaration will reduce capacity for Restricted Payments pursuant to such other provision when such declaration is made; (xxi) for so long as the Borrower is a member of a consolidated, combined, or similar group for U.S. federal, state, or local income tax purposes of which Holdings (or any Parent Entity) is the parent (or is an entity disregarded as separate from a member of any such group), Restricted Payments to Holdings to pay (or to make Restricted Payments to any such Parent Entity to pay) tax liabilities (to the extent such tax liabilities are attributable to the Borrower and its Restricted Subsidiaries and, to the extent of amounts actually received from its Unrestricted Subsidiaries, its Unrestricted Subsidiaries) in an amount not to exceed the amount of any U.S. federal, state and/or local income taxes that the Borrower, its Restricted Subsidiaries and/or its Unrestricted Subsidiaries, as applicable, would have paid for such taxable period had the Borrower, its Restricted Subsidiaries and/or its Unrestricted Subsidiaries, as applicable, been a stand-alone corporate taxpayer or a stand-alone corporate group; and (xxii) the distribution, by dividend or otherwise, of ~~shares of~~ Equity Interests ~~of,~~ of or Indebtedness owed to Holdings, a the Borrower or a Restricted Subsidiary ~~by,~~ by Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are ~~Permitted Investments); (xvii) the declaration~~ cash and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make Restricted Payments in cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(aCash Equivalents). (b) ~~Neither Holdings, Intermediate Holdings nor any~~ The Borrower ~~will~~will not, nor will ~~they~~ the Borrower permit any Restricted Subsidiary to, make any voluntary or ~~pay, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior Financing, or any~~ optional payment or other distribution (whether in cash, securities or other property), of or in respect of principal or interest (including ~~any sinking fund or similar deposit, on account~~ by way of the optional or voluntary purchase, redemption, retirement, acquisition, cancellation or ~~termination~~ termination, in each case prior to the final scheduled maturity thereof) of any ~~Junior Financing,~~ Indebtedness that is by its terms subordinated in right of payment to all or any portion of the Obligations except: (i) payment of regularly scheduled interest and principal payments (and fees, indemnities and expenses payable) as, ~~in the form of payment~~ and when due in respect of any ~~Indebtedness, other than payments~~ such Indebtedness to the extent not prohibited by any subordination or intercreditor provisions in respect ~~of any Junior Financing prohibited by the subordination provisions~~ thereof; (ii) ~~refinancings~~ a Permitted Refinancing of ~~Junior Financing~~ any such Indebtedness ~~with proceeds~~ to the extent such Permitted Refinancing is permitted by Section 6.01; (iii) payments of ~~other Junior Financing~~ intercompany Indebtedness permitted under Section 6.01 to ~~be in~~the extent not prohibited by any subordination provisions in respect thereof; (iv) conversions, exchanges, redemptions, repayments or prepayments of such Indebtedness into, or for, Equity Interests (other than Disqualified Equity Interests, except to the extent permitted under Section 6.01(y)) of any Parent Entity or Holdings; (v) AHYDO Catch-Up Payments relating to Indebtedness of the Borrower and the Restricted Subsidiaries so long as no Event of Default under Section 7.01(a), (b), (h) or (i) has occurred and is continuing; (vi) any such payments or other distributions in an amount not to exceed (A) the greater of (x) $25,000,000 and (y) 25.0% of LTM EBITDA calculated on a Pro Forma Basis as of the Applicable Date of Determination (plus unused amounts under Section 6.06(a)(xiv)(A) reallocated to this clause (vi)(A), but less any amounts reallocated from this clause (vi)(A) to Section 6.04(q)(B)) plus (B) the Available Amount; provided, however, that in the case of payments or distributions made pursuant to this clause (vi)(B), at the time of making such payment or distribution, no Event of Default pursuant to Section 7.01(a), (b), (h) or (i) has occurred and is continuing or would result therefrom; (vii) payments or distributions made with (A) any capital contributions made in cash by any Person other than a Restricted Subsidiary to Holdings after the Closing Date (other than any Cure Amount) to the extent Not Otherwise Applied; and (B) any Net Proceeds of any issuance of Qualified Equity Interests after the Closing Date of Holdings (other than any Cure Amount) to any Person other than a Restricted Subsidiary to the extent Not Otherwise Applied, and to the extent, in each case, such Net Proceeds and contributions have been contributed to the Qualified Equity Interests of the Borrower or any other Loan Party (other than Holdings); (viii) the payment, redemption, repurchase, retirement, termination or cancellation of Indebtedness within sixty (60) days of the date of the Redemption Notice if, at the date of any payment, redemption, repurchase, retirement, termination or cancellation notice in respect thereof (the “Redemption Notice”), such payment, redemption, repurchase, retirement termination or cancellation would have complied with another provision of this Section 6.06(b); provided that such payment, redemption, repurchase, retirement termination or cancellation shall reduce capacity under such other provision; and (ix) (i) any Holding Company or any Restricted Subsidiary may make additional payments and distributions; provided that the Total Net Leverage Ratio after giving effect thereto on a Pro Forma Basis as of the Applicable Date of Determination is less than or equal to 6.25 to 1.00 and (ii) any Holding Company or any Restricted Subsidiary may make additional payments and distributions in an amount not to exceed the Available Excluded Contribution Amount so long as no Event of Default has occurred and is continuing or would result from the making of such payment or distribution.

Appears in 3 contracts

Sources: First Lien Credit Agreement (GoodRx Holdings, Inc.), First Lien Credit Agreement (GoodRx Holdings, Inc.), First Lien Credit Agreement (GoodRx Holdings, Inc.)

Restricted Payments; Certain Payments of Indebtedness. (a) Neither ~~Holdings, Intermediate~~ Holdings nor ~~any~~ the Borrower will, nor will they permit any Restricted ~~Subsidiary,~~ Subsidiary to pay or make, directly or indirectly, any Restricted Payment, except: (i) ~~Each~~ The Borrower and each Restricted Subsidiary may make Restricted Payments to ~~Intermediate Holdings, a~~ the Borrower or any other Restricted ~~Subsidiary; provided that~~ Subsidiary (and, in the case of any such ~~Restricted Payment by a Restricted~~ Subsidiary that is not a wholly-owned ~~Subsidiary of a Borrower~~Subsidiary, ~~such Restricted Payment is made to Intermediate Holdings, such Borrower, any Restricted Subsidiary and~~ to each other owner of Equity Interests of such ~~Restricted~~ Subsidiary based on their relative ownership interests of the relevant class of Equity Interests); (ii) payments or distributions to satisfy dissenters’ or appraisal rights, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of assets (other than with respect to the Transactions) that complies with Section 6.03[reserved]; (iii) Holdings and any Intermediate ~~Holdings~~ Parent may declare and make dividend payments or other distributions payable solely in the Equity Interests of such Person; (iv) Restricted Payments made in connection with or in order to consummate the Transactions and the fees and expenses related thereto (~~including, without limitation, (A) cash payments to holders of Equity Interests of Target as provided by the Acquisition Agreement, (B)~~ including Restricted Payments (x) to direct and indirect parent companies of ~~Holdings~~ Merger Sub to finance a portion of the consideration for the ~~Acquisition~~ Acquisition, (y) to holders of Equity Interests of the Target (immediately prior to giving effect to the Acquisition) including pursuant to Section 1.01 of the Merger Agreement and (Cz) post-closing purchase price or other ~~payments with~~ adjustments contemplated by the Merger Agreement) and Restricted Payments in respect to of working capital adjustments or ~~otherwise,~~ purchase price adjustments and to satisfy indemnity and other similar obligations under the ~~extent contemplated by the Acquisition~~ Merger Agreement~~); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv))~~; (v) repurchases of Equity Interests in Holdings (or Restricted Payments by Holdings to allow repurchases of Equity Interest in any direct or indirect parent of Holdings) or any Intermediate ~~Holdings~~ Parent, the Borrower or any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price of such stock options or warrants or other incentive ~~interest~~interests; (vi) Restricted Payments to Holdings which Holdings may use to redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted ~~stock units or~~ stock, stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity ~~Interests~~Interests or to make principal or interest payments with respect to any unsecured promissory notes issued by any Parent Entity in connection therewith) held by current or former officers, managers, consultants, directors and employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), ~~Holdings~~any Intermediate Parent, the ~~Borrowers~~ Borrower and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, ~~profits interest,~~ employment termination agreement or any other employment agreements or equity holders’ agreement; provided ~~that~~ that, the aggregate amount of Restricted Payments permitted by this clause (vi) after the Effective Date, together with the aggregate amount of loans and advances to Holdings previously made pursuant to Section 6.04(m) in lieu ~~thereof~~of Restricted Payments permitted by this clause (vi), shall not exceed ~~the sum of (A) the greater of~~ $~~15.0 million and 5.0% of Consolidated EBITDA for the most recently ended Test Period~~ 5,000,000 in any fiscal year (or, following consummation of ~~Holdings (which subsequent to~~ an ~~IPO shall be increased to the greater of~~ IPO, $~~30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period~~ 10,000,000 in any fiscal year) with unused amounts in any fiscal year ~~of Holdings), (B) the~~ being carried over to succeeding fiscal years; provided that such amount in any fiscal year ~~equal~~ may be increased by an amount not to exceed the cash proceeds of any key man life insurance policies received by Holdings, the Borrowers or the Restricted Subsidiaries after the Effective Date, (C) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year may be carried forward to succeeding fiscal yearspolicy; (vii) any Intermediate Parent and the Borrower may make Restricted Payments in cash to Holdings and any Intermediate Parent and, where applicable, Holdings and such Intermediate Parent may make Restricted Payments in cash: (A) without duplication of any Permitted Tax Distribution, the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (a)(vii)(A) shall not exceed the Tax liability that Holdings and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent ~~that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers or their Restricted Subsidiaries~~constituting a Tax Distribution; (B) the proceeds of which shall be used by Holdings or any Intermediate ~~Holdings~~ Parent to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof or any Intermediate ~~Holdings~~Parent) attributable to the ownership or operations of Holdings, any Intermediate Parent, the ~~Borrowers~~ Borrower and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of ~~Holdings,~~ the ~~Borrowers~~ Borrower and the Restricted Subsidiaries and (y) otherwise permitted to be paid by ~~Holdings,~~ the ~~Borrowers~~ Borrower and the Restricted Subsidiaries under this ~~Agreement~~ Agreement, (4) [reserved] and (45) payments that would otherwise be permitted to be paid directly by ~~Holdings,~~ the ~~Borrowers~~ Borrower or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x); (C) the proceeds of which shall be used by Holdings or any Intermediate ~~Holdings~~ Parent to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence; (D) the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(m); provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) Holdings or any Intermediate ~~Holdings~~ Parent shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to ~~Holdings,~~ the ~~Borrowers~~ Borrower or the Restricted Subsidiaries or (y) the Person formed or acquired to ~~merge~~ merge, amalgamate into or consolidate with ~~Holdings,~~ the ~~Borrowers~~ Borrower or any of the Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the ~~Borrowers~~ Borrower and the Restricted Subsidiaries~~; and~~; (G) the proceeds of which shall be used by Holdings or any Intermediate ~~Holdings~~ Parent to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity ~~offering,~~ or debt offering ~~or other non-ordinary course transaction~~ not prohibited by this Agreement (whether or not such offering ~~or other transaction~~ is successful);; and (H) the proceeds of which shall be used to make payments in connection with any tax receivable agreements entered into in connection with an IPO Reorganization Transaction. (viii) in addition to the foregoing Restricted Payments, the ~~Borrowers~~ Borrower and any Intermediate ~~Holdings~~ Parent may make additional Restricted Payments to Holdings and any Intermediate ~~Holdings and Holdings~~Parent, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate ~~Holdings~~ Parent to make any payments in respect of any Permitted Holdings Debt, in an aggregate amount, when taken together with the aggregate amount of loans and advances to Holdings previously made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii), not to exceed the sum of (A) an amount at the time of making any such Restricted ~~Payment and~~ Payment, together with any other Restricted Payment previously made utilizing this ~~clause~~ subclause (A) and the aggregate amount of payments previously made utilizing Section 6.08(b)(iv)(A) below, not to exceed the greater of $~~75.0 million~~ 10,000,000 and 2535% of Consolidated EBITDA for the most recently ended Test ~~Period after giving Pro Forma Effect to the making of such Restricted Payment~~ Period, plus (B) so long as (i) no Event of Default shall have occurred and be continuing and (~~or, in the case of the use of the Starter Basket that~~ ii) unless such Restricted Payment is ~~Not Otherwise Applied, no Event of Default under Section 7.01(a),~~ made pursuant to clause (~~b), (h~~i) or (~~i))~~iii) of the definition of Available Amount, after giving effect to such Restricted Payment, the Interest Coverage Ratio on a Pro Forma Basis is not less than 2.00 to 1.00, the Available ~~Amount that is Not Otherwise Applied plus (C) the Available Equity~~ Amount that is Not Otherwise Applied; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; (xi) Holdings or any Intermediate Parent may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such Permitted IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPODistributions; (xiii) payments made or expected to be made by Holdings, any Intermediate Parent, the Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled ~~Affiliates, Immediate Family Members~~ Affiliates or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Net Leverage Ratio is less than or equal to ~~5.00~~ 4.50 to ~~1.0~~ 1.00 and (B) there is no continuing Event of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization ~~Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments);~~Transactions; and (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a any Intermediate Parent, the Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make Restricted Payments in cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a). (b) Neither ~~Holdings, Intermediate~~ Holdings nor ~~any~~ the Borrower will, nor will they permit any Restricted Subsidiary ~~to,~~ to make or pay, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, except: (i) payment of regularly scheduled interest and principal payments as, in the form of payment and when due in respect of any Indebtedness, other than payments in respect of any Junior Financing prohibited by the subordination provisions thereof; (ii) refinancings of ~~Junior Financing~~ Indebtedness with proceeds of ~~other Junior Financing~~ Permitted Refinancing Indebtedness permitted to be inincurred under Section 6.01; (iii) the conversion of any Junior Financing to Equity Interests (other than Disqualified Equity Interests) of Holdings or any of its direct or indirect parent companies or any Intermediate Parent; (iv) prepayments, redemptions, purchases, defeasances and other payments in respect of Junior Financings prior to their scheduled maturity in an aggregate amount not to exceed the sum of (A) an amount at the time of making any such payment, together with any other payments previously made utilizing this subclause (A) and Restricted Payments previously made utilizing Section 6.08(a)(viii)(A), not to exceed the greater of $10,000,000 and 35% of Consolidated EBITDA for the most recently ended Test Period, plus (B) so long as (i) no Event of Default shall have occurred and be continuing and (ii) unless such payment is made pursuant to clause (i) or (iii) of the definition of Available Amount, after giving effect to such payment, the Interest Coverage Ratio on a Pro Forma Basis is not less than 2.00 to 1.00, the Available Amount that is Not Otherwise Applied; and (v) prepayments, redemptions, purchases, defeasances and other payments in respect of Junior Financings prior to their scheduled maturity; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Net Leverage Ratio is less than or equal to 4.50 to 1.00 and (B) there is no continuing Event of Default. (c) Neither Holdings nor the Borrower will, nor will they permit any Restricted Subsidiary or Intermediate Parent to, amend or modify any documentation governing any Junior Financing, in each case if the effect of such amendment or modification (when taken as a whole) is materially adverse to the Lenders. Notwithstanding anything herein to the contrary, the foregoing provisions of this Section 6.08 will not prohibit the payment of any Restricted Payment or the consummation of any irrevocable redemption, purchase, defeasance or other payment within 60 days after the date of declaration thereof or the giving of such irrevocable notice, as applicable, if at the date of declaration or the giving of such notice such payment would have complied with the provisions of this Agreement.

Appears in 3 contracts

Sources: Credit Agreement (European Wax Center, Inc.), Incremental Assumption and Amendment (European Wax Center, Inc.), Incremental Assumption and Amendment (European Wax Center, Inc.)

Restricted Payments; Certain Payments of Indebtedness. (a) Neither ~~Holdings, Intermediate~~ Holdings nor ~~any Borrower will~~the Company will declare or make, ~~nor will they permit any Restricted Subsidiary,~~ or agree to pay or make, directly or indirectly, any Restricted Payment, except: (i) ~~Each Borrower and each Restricted Subsidiary~~ Holdings may make (A) Restricted Payments ~~to Intermediate Holdings, a Borrower or any other Restricted Subsidiary; provided that~~ payable solely in the case of any such Restricted Payment by a Restricted Subsidiary that is not a wholly-owned Subsidiary of a Borrower, such Restricted Payment is made to Intermediate Holdings, such Borrower, any Restricted Subsidiary and to each other owner of Qualified Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests; (ii) payments or distributions to satisfy dissenters’ or appraisal rights, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of assets (other than with respect to the Transactions) that complies with Section 6.03; (iii) Holdings and any Intermediate Holdings may declare and make dividend payments or other distributions payable solely in the Equity Interests of such Person; (iv) Restricted Payments made in connection with or in order to consummate the Transactions (including, without limitation, (A) cash payments to holders of Equity Interests of Target as provided by the Acquisition AgreementHoldings, (B) Restricted Payments ~~to direct and indirect parent companies~~ from the Net Cash Proceeds of the issuance by Holdings of Qualified Equity Interests or a substantially contemporaneous capital contribution in respect of Qualified Equity Interests of Holdings ~~to finance a portion of the consideration for the Acquisition~~ and (C) ~~other payments with respect to working capital adjustments or otherwise, to~~ Restricted Payments from the ~~extent contemplated by~~ proceeds of Restricted Payments permitted under this Section 6.08 that are received from the ~~Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv))~~Company; (vii) ~~repurchases of~~ the Company may make Restricted Payments payable solely in Qualified Equity Interests of the Company and may make Restricted Payments from the Net Cash Proceeds of the issuance by the Company of Qualified Equity Interests or a substantially contemporaneous capital contribution in respect of Qualified Equity Interests of the Company; (iii) the Company may make Restricted Payments to Holdings (and Holdings may make Restricted Payments to any direct or indirect parent thereof) the proceeds of which are used to purchase, repurchase, retire, redeem or otherwise acquire the Equity Interests of Holdings (or ~~Restricted Payments by Holdings to allow repurchases~~ of ~~Equity Interest in~~ any such direct or indirect parent of Holdings) or ~~Intermediate Holdings deemed to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion~~ of the ~~exercise price~~ Company (following a Qualified Public Offering of ~~such stock options or warrants or other incentive interest;~~ the Company) (~~vi) Restricted Payments to Holdings which Holdings may use to redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted stock units or~~ including related stock appreciation rights or ~~other equity-linked interests issued with respect to~~ similar securities) held by any future, present or former employee, director, officer, manager or consultant (or their respective Controlled Investment Affiliates or Immediate Family Members) of Holdings, the Company, any of ~~such Equity Interests) (~~its Subsidiaries or ~~make Restricted Payments to allow~~ any of ~~Holdings’~~ its direct or indirect parent companies pursuant to ~~so redeem~~any management equity plan or stock option plan or any other management or employee benefit plan or agreement, ~~retire~~or any stock subscription or shareholder agreement (including, ~~acquire or repurchase their Equity Interests) held~~ for the avoidance of doubt, any principal and interest payable on any notes issued by ~~current or former officers~~the Holdings, ~~managers, consultants, directors and employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (~~the Company or any direct or indirect parent ~~thereof~~company of Holdings in connection with such purchase, repurchase, retirement, redemption or other acquisition), including any Equity Interest rolled over by management of the Holdings, the Borrowers and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, profits interest, employment termination agreement Company or any ~~other employment agreements~~ direct or ~~equity holders’ agreement~~indirect parent company of Holdings in connection with the Transactions (as defined in the Existing Credit Agreement); provided that the aggregate amount of Restricted Payments ~~permitted by~~ made under this clause does not exceed $5,000,000 for any fiscal year (~~vi)~~ which amount shall be increased to $10,000,000 on and after the ~~Effective Date~~date of a Qualified Public Offering); provided, ~~together with~~ further, that each of the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu thereof, shall not exceed the sum of (A) the greater of $15.0 million and 5.0% of Consolidated EBITDA for the most recently ended Test Period amounts in any fiscal year ~~of Holdings (which subsequent to an IPO shall~~ under this clause may be increased by an amount not to ~~the greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings),~~ exceed: (~~B) the amount in any fiscal year equal to the cash proceeds of key man life insurance policies received by Holdings, the Borrowers or the Restricted Subsidiaries after the Effective Date, (C~~A) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of ~~Holdings (to~~ the ~~extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests)~~ Company and, to the extent contributed to ~~Holdings~~the Company, the cash proceeds from the sale of Equity Interests of Holdings or any direct or indirect ~~Parent Entity or management investment vehicle~~parent company of Holdings, in each case to any future, present or former employees, directors, ~~managers~~ officers, managers, or consultants (or their respective Controlled Investment Affiliates or Immediate Family Members) of Holdings, the Company, any of its Subsidiaries or any of its direct or indirect ~~Parent Entity or management investment vehicle~~ parent companies that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests ~~are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and~~ have not otherwise been applied to the payment of Restricted Payments by virtue of ~~the Available Equity Amount~~ clause (i) or ~~are otherwise applied to increase any other basket hereunder and~~ (Dii) of this Section 6.08(a); plus (B) the ~~aggregate~~ cash proceeds of key man life insurance policies received by Holdings, the Company or its Subsidiaries after the Effective Date; less (C) the amount ~~required to be paid under~~ of any Restricted Payments previously made with the ~~▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to~~ cash proceeds described in clauses (A) and (B) ~~above for any fiscal year may be carried forward to succeeding fiscal years; (vii) Holdings and any Intermediate Holdings may make Restricted Payments in cash: (A) without duplication~~ of any Permitted Tax Distribution, the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (a)(vii)(A) shall not exceed the Tax liability that Holdings and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone groupiii); and provided, further, that ~~Restricted Payments under this subclause (A) in respect~~ cancellation of ~~any Taxes attributable~~ Indebtedness owing to the ~~income~~ Company from any future, present or former employees, directors, officers, managers, or consultants of ~~any Unrestricted Subsidiaries of Holdings may be made only to~~ the ~~extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers~~ Company (or their ~~Restricted Subsidiaries; (B) the proceeds of which shall be used by Holdings~~ respective Controlled Investment Affiliates or ~~any Intermediate Holdings to pay (or to make Restricted Payments to allow~~ Immediate Family Members), any direct or indirect parent company of ~~Holdings to pay) (1) its operating expenses incurred in~~ the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (Company or any ~~parent thereof~~ of the Company’s Subsidiaries in connection with a repurchase of Equity Interests of the Company or any ~~Intermediate Holdings) attributable~~ of its direct or indirect parent companies will not be deemed to ~~the ownership~~ constitute a Restricted Payment for purposes of this covenant or ~~operations~~ any other provision of Holdings, the Borrowers and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of Holdings, the Borrowers and the Restricted Subsidiaries and (y) otherwise permitted to be paid by Holdings, the Borrowers and the Restricted Subsidiaries under this ~~Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the Borrowers or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x)~~Agreement; (Civ) non-cash repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants; (v) the ~~proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to~~ Company may make Restricted Payments to ~~allow any direct or indirect parent of~~ Holdings ~~to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence;~~ (D) the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(m); provided that (1) such Restricted Payment shall be made substantially concurrently together with the closing of such Investment and (2) Holdings or any Intermediate Holdings shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section ~~6.04(b~~6.04(q)) ~~to be contributed to Holdings, the Borrowers or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with Holdings, the Borrowers~~ in amounts required for Holdings or any direct or indirect parent company of ~~the Restricted Subsidiaries~~ Holdings to pay, in each case, without duplication, (A) franchise and excise taxes and other fees, taxes and expenses required to maintain their corporate existence; (B) foreign, federal, state, provincial, municipal and local income and similar taxes, to the extent such ~~merger~~income taxes are attributable to the income of the Company and its Subsidiaries and, ~~amalgamation or consolidation is permitted~~ to the extent of the amount actually received from its Unrestricted Subsidiaries, in ~~Section 6.03) in order~~ amounts required to ~~consummate~~ pay such ~~Investment,~~ taxes to the extent attributable to the income of such Unrestricted Subsidiaries; provided that in each case the amount of such payments in ~~accordance with~~ any fiscal year does not exceed the ~~requirements~~ amount that the Company and its Subsidiaries would be required to pay in respect of ~~Sections 5.11~~ foreign, federal, state, provincial, municipal and ~~5.12~~local taxes for such fiscal year were the Company, its Restricted Subsidiaries and its Unrestricted Subsidiaries (to the extent described above) to pay such taxes separately from any such parent company; (FC) ~~the proceeds of which shall be used to pay~~ customary salary, bonus and other benefits payable to employees, directors, officers and ~~employees~~ managers of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of ~~Holdings~~the Company and its Subsidiaries, including the ~~Borrowers~~ Company’s proportionate share of such amounts relating to such parent entity being a public company; (D) general corporate operating and overhead costs and expenses of Holdings or any direct or indirect parent company of Holdings not in excess of $2,000,000 in any fiscal year, to the ~~Restricted~~ extent such costs and expenses are attributable to the ownership or operation of the Company and its Subsidiaries, including the Company’s proportionate share of such amounts relating to such parent entity being a public company; (E) fees and expenses other than to Affiliates of the Company related to any unsuccessful equity or debt offering of such parent company; (F) amounts payable pursuant to the Management Services Agreements, (including any amendment thereto so long as any such amendment is not materially disadvantageous in the good faith judgment of the board of directors of the Company to the Lenders when taken as a whole, as compared to the Management Services Agreement as in effect on the Effective Date), solely to the extent such amounts are not paid directly by the Company or its Subsidiaries; and (G) cash payments in lieu of issuing fractional shares in connection with the ~~proceeds~~ exercise of ~~which shall be used by Holdings~~ warrants, options or ~~any Intermediate Holdings to pay (~~other securities convertible into or ~~to make Restricted Payments to allow~~ exchangeable for Equity Interests of Holdings, the Company or any direct or indirect parent ~~thereof~~ company of Holdings. (vi) to ~~pay~~the extent constituting Restricted Payments, Holdings and the Company may enter into and consummate the Transactions; (vii) ~~fees~~ to the extent constituting Restricted Payments, Holdings and ~~expenses related to~~ the Company may enter into and consummate transactions expressly permitted by any ~~equity offering, debt offering~~ provision of Section 6.03 or 6.09 (other ~~non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful~~than Section 6.09(e)); (viii) the Company may make Restricted Payments to Holdings to finance any investment permitted to be made pursuant to Section 6.04 (other than Section 6.04(m)); provided that (A) such Restricted Payment shall be made substantially concurrently with the closing of such investment and (B) Holdings shall, immediately following the closing thereof, cause (i) all property acquired (whether assets or Equity Interests) to be contributed to the Company or its Subsidiaries or (ii) the merger or amalgamation (to the extent permitted in Section 6.03) of the Person formed or acquired into the Company or its Subsidiaries in order to consummate such investment; (ix) Holdings may make Restricted Payments with the proceeds of the issuance of Indebtedness of Holdings permitted by Section 6.01 (other than (x) Section 6.01(c) and (y) any such Indebtedness Guaranteed by or secured directly or indirectly by the assets of the Company or any of its Subsidiaries); (x) in addition to the foregoing Restricted Payments, Holdings and the ~~Borrowers and any Intermediate Holdings~~ Company may make additional Restricted Payments to any Intermediate Holdings and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt, in an aggregate amount, when taken together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii), not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as no Event of Default shall have occurred and be continuing (or, in the case of the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h) or (i)), the Available Amount that is Not Otherwise Applied plus (C) the Available Equity Amount that is Not Otherwise Applied; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity InterestsPayments; provided that ~~such new Equity Interests contain terms and provisions at least as advantageous to~~ each of the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock unitsPayment Conditions is satisfied; (xi) ~~Holdings may~~ the distribution, as a dividend or otherwise (~~a) pay cash in lieu~~ and the declaration of ~~fractional Equity Interests in connection with~~ such dividend), of shares of capital stock of, or Indebtedness owed to the Company or a Subsidiary by, any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its termsUnrestricted Subsidiary; (xii) other Restricted Payments by Holdings and the ~~declaration~~ Company which, together with investments, loans and ~~payment~~ advances made pursuant to Section 6.04(w) and Restricted Debt Payments made pursuant to Section 6.08(b)(vii), do not exceed $25,000,000 in the aggregate; provided that, at the time such Restricted Payments are made and after giving effect thereto, no Liquidity Event or Event of Default exists or has occurred and is continuing; and (xiii) to the extent constituting Restricted ~~Payment on Holdings’ common stock~~ Payments, Holdings and the Company may make any non-compete, bonus or “earn-out” payments payable to former stockholders of Holdings (or ~~the payment of Restricted Payments to~~ any direct or indirect parent ~~company of Holdings~~ thereof) or the Company pursuant to ~~fund a payment of dividends~~ agreements in effect on ~~such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of~~ the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO;Effective Date; and (~~xiii~~xiv) Holdings and the Company may make Restricted Payments in respect of any payments made or expected to be made by Holdings, ~~any Borrower~~ the Company or any ~~Restricted~~ Subsidiary or any direct or indirect parent company of Holdings in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective ~~controlled Affiliates,~~ Controlled Investment Affiliates or Immediate Family ~~Members or Permitted Transferees~~Members) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to 5.00 to 1.0 and (B) there is no continuing Event of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make Restricted Payments in cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a). (b) ~~Neither Holdings, Intermediate Holdings nor any Borrower~~ No Loan Party will, nor will ~~they~~ it permit any ~~Restricted~~ Subsidiary to, make or ~~pay~~agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of on the Senior Secured Notes, the Senior Subordinated Notes, any other Subordinated Indebtedness or ~~interest on~~ any ~~Junior Financing~~Indebtedness that refinances, extends, refunds, replaces or renews any such Indebtedness (collectively, “Restricted Indebtedness”), or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any ~~Junior Financing~~Restricted Indebtedness (collectively, “Restricted Debt Payments”), except: (i) ~~payment of regularly scheduled interest~~ extensions, refinancings, refundings, replacements and ~~principal payments as, in the form of payment and when due in respect~~ renewals of any ~~Indebtedness, other than payments in respect of any Junior Financing prohibited~~ such Restricted Indebtedness to the extent permitted by ~~the subordination provisions thereof~~Section 6.01; (ii) ~~refinancings~~ payment of ~~Junior Financing~~ secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness (other than Borrowing Base Assets) so long as such sale is permitted by Section 6.05 (other than sales, transfers and dispositions under Section 6.05(j)); (iii) payment of Restricted Indebtedness in exchange for or with proceeds of any substantially contemporaneous issuance of Qualified Equity Interests or substantially contemporaneous capital contribution in respect of Qualified Equity Interests of Holdings or the Company; (iv) payment of Restricted Indebtedness under the Senior Secured Notes (or any extensions, renewals, refinancing, refundings or replacements thereof permitted under Section 6.01(g) and Section 6.02(w)), with the Net Cash Proceeds of any sale, transfer or other ~~Junior Financing~~ disposition of any Noteholder First Lien Collateral, or, in the case of any such extensions, refinancings, refundings, renewals or replacements, any property or assets in respect of which the security interest of the holders thereunder has priority over the security interest of the Agent, for the benefit of the Secured Parties, in such property or assets, pursuant to the Intercreditor Agreement or another intercreditor agreement in form and substance reasonably satisfactory to the Agent that is no less favorable to the Secured Parties than the Intercreditor Agreement; (v) payment of Restricted Indebtedness ~~permitted~~ with the Net Cash Proceeds of Qualified Equity Interests of Holdings or the Company; (vi) other Restricted Debt Payments; provided that each of the Payment Conditions is satisfied (it being understood and agreed that, if an irrevocable notice or contractual obligation is given in, made or arises in respect of any Restricted Debt Payment, the foregoing conditions only need to be insatisfied at the time of the giving of such irrevocable notice or entering into (or effectiveness of) any such contractual obligation); and (vii) other Restricted Debt Payments which, together with any investments, loans or advances made pursuant to Section 6.04(w) and Restricted Payments made pursuant to Section 6.08(a)(xii), do not exceed $25,000,000 in the aggregate; provided that, at the time such Restricted Debt Payments are made and after giving effect thereto, no Liquidity Event or Event of Default exists or has occurred and is continuing.

Appears in 2 contracts

Sources: Credit Agreement (ATD Corp), Credit Agreement (American Tire Distributors Holdings, Inc.)

Restricted Payments; Certain Payments of Indebtedness. (a) ~~Neither Holdings~~Each Borrower will not, ~~Intermediate Holdings nor any Borrower will, nor~~ and will ~~they~~ not permit any Restricted ~~Subsidiary~~Subsidiary to, ~~to pay~~ declare or make, directly or indirectly, any Restricted Payment, except: (i) ~~Each~~ such Borrower may declare and ~~each Restricted Subsidiary may make Restricted Payments~~ pay dividends with respect to Intermediate Holdings, a Borrower or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a wholly-owned Subsidiary of a Borrower, such Restricted Payment is made to Intermediate Holdings, such Borrower, any Restricted Subsidiary and to each other owner of its Equity Interests payable solely in additional shares of ~~such Restricted Subsidiary based on their relative ownership interests of the relevant class of~~ its Equity Interests; (ii) ~~payments or distributions to satisfy dissenters’ or appraisal rights, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of assets (other than~~ Restricted Subsidiaries may declare and pay dividends with respect to their Equity Interests (provided that if such Restricted Subsidiary is not wholly-owned by the ~~Transactions) that complies with Section 6.03~~Parent Borrower, such dividends must be made on a pro rata basis to the holders of its Equity Interests or on a greater than ratable basis to the extent such greater payments are made solely to a Restricted Subsidiary); (iii) ~~Holdings~~ to the extent constituting Restricted Payments, the Parent Borrower and ~~any Intermediate Holdings~~ its Restricted Subsidiaries may ~~declare and make dividend payments~~ enter into transactions expressly permitted by Sections 6.03, 6.04, 6.05 or ~~other distributions payable solely in the Equity Interests of such Person~~6.08; (iv) ~~Restricted Payments made~~ repurchases by the Parent Borrower of partial interests in its Equity Interests for nominal amounts which are required to be repurchased in connection with ~~or in order to consummate~~ the Transactions (including, without limitation, (A) cash payments to holders of Equity Interests of Target as provided by the Acquisition Agreement, (B) Restricted Payments to direct and indirect parent companies of Holdings to finance a portion of the consideration for the Acquisition and (C) other payments with respect to working capital adjustments or otherwise, to the extent contemplated by the Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv)); (v) repurchases of Equity Interests in Holdings (or Restricted Payments by Holdings to allow repurchases of Equity Interest in any direct or indirect parent of Holdings) or Intermediate Holdings deemed to occur upon exercise of stock options or warrants ~~or other incentive interests if such~~ to permit the issuance of only whole shares of Equity ~~Interests represent a portion of the exercise price of such stock options or warrants or other incentive interest~~Interests; (viv) ~~Restricted Payments to Holdings which Holdings~~ the Parent Borrower may ~~use to redeem~~pay for the repurchase, ~~acquire, retire~~ retirement or ~~repurchase its~~ other acquisition or retirement for value of Equity Interests of the Parent Borrower (~~or any options, warrants, restricted stock units or~~ including related stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interestssimilar securities) held by ~~current~~ any future, present or former ~~officers~~director, ~~managers~~officer, ~~consultants~~member of management, ~~directors and employees~~ employee or consultant of the Parent Borrower or any of its Subsidiaries (or ~~their respective spouses, former spouses, successors, executors, administrators~~the estate, heirs, ~~legatees~~ family members, spouse, former spouse, domestic partner or ~~distributees~~former domestic partner of any of the foregoing); provided that (A) at the time of ~~Holdings (or~~ any ~~direct or indirect parent thereof), Holdings, the Borrowers and the Restricted Subsidiaries, upon the death, disability~~such repurchase, retirement or ~~termination of employment of any such Person~~ other acquisition or ~~otherwise in accordance with any stock option~~ retirement for value no Default has occurred and is continuing or ~~stock appreciation rights plan~~would result therefrom, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, profits interest, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that (B) the aggregate amount of Restricted Payments ~~permitted by~~ made under this clause (viv) after the Effective Date, together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu thereof, shall not exceed the sum of (A) the greater of $15.0 million and 5.0% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year does not exceed (x) $20,000,000 (the “Yearly Limit”) plus (y) the portion of ~~Holdings~~ the Yearly Limit from each of the immediately preceding four fiscal years (~~which subsequent to an IPO shall be increased to the greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in~~ not including any fiscal year ~~of Holdings),~~ ending prior to 2016) which was not expended by the Parent Borrower for Restricted Payments in such fiscal years (B) the ~~amount~~ “Carryover Amount” and in calculating the Carryover Amount for any fiscal ~~year~~ year, the Yearly Limit applicable to the previous fiscal years shall be deemed to have been utilized first by any Restricted Payments made under this clause (v) in such fiscal year) plus (z) an amount equal to ~~the cash proceeds of key man life insurance policies received by Holdings, the Borrowers or the Restricted Subsidiaries after the Effective Date, (C)~~ the cash proceeds from the sale of Equity Interests to directors, officers, members of management, employees or consultants of the Parent Borrower or of its Subsidiaries (~~other than Disqualified Equity Interests~~or the estate, heirs, family members, spouse or former spouse of any of the foregoing) ~~of Holdings~~ in such fiscal year; (to vi) the ~~extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale~~ repurchase of Equity Interests of ~~any direct or indirect~~ the Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle Borrower that occurs ~~after~~ upon the ~~Effective Date~~cashless exercise of stock options, to warrants or other convertible securities as a result of the ~~extent~~ Parent Borrower accepting such options, warrants or other convertible securities as satisfaction of the ~~cash proceeds from the sale~~ exercise price of such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year may be carried forward to succeeding fiscal yearsInterests; (vii) ~~Holdings~~ the Parent Borrower and any ~~Intermediate Holdings~~ Restricted Subsidiary may ~~make Restricted Payments in cash: (A) without duplication of any Permitted Tax Distribution, the proceeds of which shall be used by Holdings or any Intermediate Holdings to~~ pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (a)(vii)(A) shall not exceed the Tax liability that Holdings and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers or their Restricted Subsidiaries; (B) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof or any Intermediate Holdings) attributable to the ownership or operations of Holdings, the Borrowers and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of Holdings, the Borrowers and the Restricted Subsidiaries and (y) otherwise permitted to be paid by Holdings, the Borrowers and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the Borrowers or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x); (C) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence; (D) the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(m); provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) Holdings or any Intermediate Holdings shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to Holdings, the Borrowers or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with Holdings, the Borrowers or any of the Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrowers and the Restricted Subsidiaries; and (G) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful); (viii) in addition to the foregoing Restricted Payments, the Borrowers and any Intermediate Holdings may make additional Restricted Payments to any Intermediate Holdings and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt, in an aggregate amount, when taken together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii), not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as no Event of Default shall have occurred and be continuing (or, in the case of the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h) or (i)), the Available Amount that is Not Otherwise Applied plus (C) the Available Equity Amount that is Not Otherwise Applied; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; (xi) Holdings may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with (i) any ~~such conversion and may make payments on~~ dividend, split or combination of its Equity Interests or any Permitted Acquisition (or similar Investment) or (ii) the exercise of warrants, options or other securities convertible ~~Indebtedness in accordance with~~ into or exchangeable for Equity Interests of the Parent Borrower or any of its ~~terms~~Subsidiaries; (~~xii~~viii) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiii) payments made or expected to be made by Holdings, any Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases repurchase of Equity Interests deemed to occur upon the non-cash exercise of ~~stock options or warrants if such~~ Equity Interests ~~represent a portion of the exercise price of such options or warrants or required withholding or similar taxes~~to pay Taxes; (~~xiv~~ix) ~~additional~~ the Parent Borrower and its Restricted ~~Payments~~Subsidiaries may make Restricted Payments in an aggregate amount not to exceed the Available Amount; provided that ~~after giving effect to~~ (A) no Event of Default shall exist or result therefrom and (B) the Parent Borrower shall be in compliance with the Financial Covenant on a Pro Forma Basis for the most recently ended Test Period, in each case determined, at the election of the Parent Borrower, at the time of (x) declaration of such Restricted Payment or (Ay) the making or consummation, as applicable, of such Restricted Payment; (x) the Parent Borrower and its Restricted Subsidiaries may make Restricted Payments in an aggregate amount in any fiscal year not to exceed (i) prior to the consummation of the Merger, the greater of $100,000,000 and 12.5% of Adjusted EBITDA or (ii) thereafter, the greater of $350,000,000 and 18.5% of Adjusted EBITDA (in each case as determined at the time any such Restricted Payment is made (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period on or prior to the date of determination), it being agreed that the Parent Borrower shall be permitted to carry forward unused amounts to subsequent fiscal years (beginning with unused amounts in the fiscal year ending June 30, 2016); provided that as of the date of any such Restricted Payment and after giving effect thereto, the Parent Borrower shall be in compliance with the Financial Covenant on a Pro Forma Basis for the most recently ended Test Period and no Event of Default shall exist or result therefrom; (xi) the Parent Borrower and its Restricted Subsidiaries may make Restricted Payments if the Total Net Leverage Ratio on a Pro Forma Basis as of the end of the most recent Test Period is less than or equal to ~~5.00~~ 2.50 to ~~1.0 and (B) there is~~ 1.00; provided that no ~~continuing~~ Event of ~~Default~~Default shall exist or result therefrom; (xii) the Parent Borrower and its Restricted Subsidiaries may make Restricted Payments in an aggregate amount not to exceed $500,000,000; provided that as of the date of any such Restricted Payment and after giving effect thereto, no Event of Default shall exist or result therefrom; (xiii) Restricted Payments made on or after the Closing Date relating to the Transactions; and (xiv) any Borrower may make Restricted Payments in an amount not to exceed the amount of Excluded Contributions previously received by the Parent Borrower Not Otherwise Applied; (xv) ~~Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in~~ repurchases of the ~~case of payments~~ Parent Borrower’s Class A common stock pursuant to ~~a tax receivable agreement~~the share repurchase authorization described in that certain Form 8-K of the Parent Borrower dated August 13, ~~to Permitted Tax Receivable Payments); (xvi)~~ 2015 and the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest ExpenseParent Borrower’s share repurchase program referenced therein; and (xviii) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make Restricted Payments in cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a). (b) ~~Neither Holdings, Intermediate Holdings nor any~~ Each Borrower ~~will~~will not, nor will ~~they~~ it permit any of its Restricted ~~Subsidiary~~ Subsidiaries to, make ~~or pay~~any payment, directly or indirectly, ~~any payment or other distribution (whether in cash, securities or other property) of or~~ in respect of ~~principal~~ any purchase, redemption, retirement, acquisition, cancellation or termination of ~~or interest on~~ any Junior ~~Financing~~Indebtedness prior to the scheduled maturity thereof (it being understood that payments of regularly scheduled principal, interest, mandatory prepayments, mandatory offers to purchase, fees, expenses and indemnification obligations shall be permitted) (such Indebtedness, collectively, “Restricted Indebtedness”), or any other payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any ~~Junior Financing~~Restricted Indebtedness or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoing, except: (i) ~~payment~~ refinancings of ~~regularly scheduled interest and principal payments as, in~~ Restricted Indebtedness to the ~~form of payment and when due in respect of any Indebtedness, other than payments in respect of any Junior Financing prohibited~~ extent permitted by ~~the subordination provisions thereof~~Section 6.01; (ii) ~~refinancings~~ payments or other distributions in respect of ~~Junior Financing~~ principal or interest on, or payment or other distribution on account of the purchase, redemption, retirement, acquisition, cancellation or termination of, Restricted Indebtedness, if the Total Net Leverage Ratio on a Pro Forma Basis as of the end of the most recent Test Period is less than or equal to 2.50 to 1.00 and no Event of Default exists or would result from the making of such payment or distribution; (iii) payments or other distributions in respect of the purchase, redemption, retirement, acquisition, cancellation or termination of, Restricted Indebtedness, in an aggregate amount not to exceed $25,000,000; provided that at the time of any such payment or other distribution, no Event of Default shall exist or result therefrom; (iv) payments or other distributions in respect of the purchase, redemption, retirement, acquisition, cancellation or termination of, Restricted Indebtedness, in an aggregate amount not exceed to the Available Amount; provided that as of the date of any such payment and after giving effect thereto (A) no Event of Default shall exist or result therefrom and (B) the Parent Borrower shall be in compliance with the Financial Covenant on a Pro Forma Basis for the most recently ended Test Period; provided that, with respect to any such purchase, redemption, retirement, acquisition, cancellation or termination of, Restricted Indebtedness the notice of which is irrevocable, such conditions shall, at the election of the Parent Borrower, be tested at the time of the delivery of notice with ~~proceeds~~ respect to such purchase, redemption, retirement, acquisition, cancellation or termination; provided, however, that notwithstanding the foregoing, the absence of ~~other Junior Financing~~ an Event of Default shall be a condition to the consummation of any such purchase, redemption, retirement, acquisition, cancellation or termination; (v) payment-in-kind interest with respect to Restricted Indebtedness permitted by this Agreement; (vi) payments as part of an “applicable high yield discount obligation” catch up payment with respect to Restricted Indebtedness permitted by this Agreement; and (vii) the conversion of any Restricted Indebtedness to Equity Interests (other than Disqualified Equity Interests) or the prepayment of Restricted Indebtedness in an amount not to exceed the amount of Excluded Contributions previously received by the Parent Borrower. Notwithstanding the foregoing, the making of any dividend, payment or other distribution or the consummation of any irrevocable redemption within 180 days after the date of declaration of such dividend, payment or other distribution or giving of the redemption notice, as applicable, will not be inprohibited if, at the date of declaration or notice such dividend, payment or other distribution or redemption would have complied with the terms of this Agreement.

Appears in 2 contracts

Sources: Incremental Assumption Agreement and Refinancing Amendment to Credit Agreement (Coty Inc.), Credit Agreement (Coty Inc.)

Restricted Payments; Certain Payments of Indebtedness. (a) ~~Neither Holdings, Intermediate Holdings nor~~ None of the Borrower or any ~~Borrower will, nor~~ Subsidiary will ~~they permit any Restricted Subsidiary, to pay~~ declare or make, directly or indirectly, any Restricted Payment, ~~except~~or incur any obligation (contingent or otherwise) to do so, except that: (i) ~~Each~~ any Subsidiary may declare and pay dividends or make other distributions with respect to its Equity Interests, in each case ratably to the holders of such Equity Interests (or if not ratably, on a basis more favorable to the Borrower and ~~each Restricted Subsidiary may make Restricted Payments to Intermediate Holdings, a Borrower or any other Restricted Subsidiary; provided that in~~ the case of any such Restricted Payment by a Restricted Subsidiary that is not a wholly-owned Subsidiary of a Borrower, such Restricted Payment is made to Intermediate Holdings, such Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity InterestsLoan Parties); (ii) ~~payments or distributions to satisfy dissenters’ or appraisal rights, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of assets (other than~~ the Borrower may declare and pay dividends with respect to its Equity Interests payable solely in shares of Qualified Equity Interests of the ~~Transactions) that complies with Section 6.03~~Borrower; (iii) ~~Holdings and any Intermediate Holdings~~ the Borrower may ~~declare and make dividend payments~~ repurchase, purchase, acquire, cancel or ~~other distributions payable solely in the~~ retire for value Equity Interests of the Borrower from present or former employees, officers, directors or consultants (or their estates or beneficiaries under their estates) of the Borrower or any Subsidiary upon the death, disability, retirement or termination of employment or service of such ~~Person~~employees, officers, directors or consultants, or to the extent required, pursuant to employee benefit plans, employment agreements, stock purchase agreements or stock purchase plans, or other benefit plans; provided that the aggregate amount of Restricted Payments made pursuant to this Section 6.08(a)(iii) shall not exceed $10,000,000 in the aggregate; (iv) ~~Restricted Payments made~~ the Borrower may make cash payments (A) to satisfy an employee’s withholding tax obligations incurred in connection with the exercise, vesting or ~~in order to consummate the Transactions (including~~acquisition of warrants, ~~without limitation, (A) cash payments to holders of~~ options or other securities convertible into or exchangeable for Equity Interests ~~of Target as provided by~~ in the ~~Acquisition Agreement,~~ Borrower and (B) ~~Restricted Payments to direct and indirect parent companies of Holdings to finance a portion~~ in lieu of the ~~consideration~~ issuance of fractional shares representing insignificant interests in the Borrower in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Equity Interests in the Acquisition and (C) other payments with respect to working capital adjustments or otherwise, to the extent contemplated by the Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv))Borrower; (v) ~~repurchases of~~ the Borrower may acquire Equity Interests ~~in Holdings (or Restricted Payments by Holdings to allow repurchases~~ of ~~Equity Interest in any direct or indirect parent of Holdings) or Intermediate Holdings deemed to occur~~ the Borrower upon the exercise of stock options ~~or warrants or other incentive interests~~ for such Equity Interests of the Borrower if such Equity Interests represent a portion of the exercise price of such stock options or ~~warrants~~ in connection with tax withholding obligations arising in connection with the exercise of options by, or ~~other incentive interest~~the vesting of restricted Equity Interests held by, any current or former director, officer or employee of the Borrower or its Subsidiaries; (vi) ~~Restricted Payments to Holdings which Holdings~~ the Borrower may ~~use to redeem, acquire, retire~~ convert or ~~repurchase its Equity Interests (or~~ exchange any options, warrants, restricted stock units or stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests) held by current or former officers, managers, consultants, directors and employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), Holdings, the Borrowers and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, profits interest, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that the aggregate amount of Restricted Payments permitted by this clause (vi) after the Effective Date, together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu thereof, shall not exceed the sum of (A) the greater of $15.0 million and 5.0% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings (which subsequent to an IPO shall be increased to the greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings), (B) the amount in any fiscal year equal to the cash proceeds of key man life insurance policies received by Holdings, the Borrowers or the Restricted Subsidiaries after the Effective Date, (C) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of ~~any direct~~ the Borrower for or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests are contributed to Holdings in the form of common Equity Interests or into Qualified Equity Interests ~~and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue~~ of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year may be carried forward to succeeding fiscal yearsBorrower; (vii) Holdings and any Intermediate Holdings may make Restricted Payments in cash: (A) without duplication of any Permitted Tax Distribution, the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (a)(vii)(A) shall not exceed the Tax liability that Holdings and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers or their Restricted Subsidiaries; (B) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof or any Intermediate Holdings) attributable to the ownership or operations of Holdings, the Borrowers and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of Holdings, the Borrowers and the Restricted Subsidiaries and (y) otherwise permitted to be paid by Holdings, the Borrowers and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the Borrowers or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x); (C) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence; (D) the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(m); provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) Holdings or any Intermediate Holdings shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to Holdings, the Borrowers or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with Holdings, the Borrowers or any of the Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrowers and the Restricted Subsidiaries; and (G) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful); (viii) in addition to the foregoing Restricted Payments, the Borrowers and any Intermediate Holdings may make additional Restricted Payments to any Intermediate Holdings and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt, in an aggregate amount, when taken together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii), not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as no Event of Default shall have occurred and be continuing or would result therefrom, the Borrower may on any date make Restricted Payments not otherwise permitted under this Agreement so long as, at the time of the making of such Restricted Payment, the Leverage Ratio, calculated on a Pro Forma Basis as of the date of making thereof, is not in excess of 2.75 to 1.00; (orviii) any Subsidiary may repurchase its Equity Interests held by minority shareholders or interest holders in a Permitted Acquisition or another transaction permitted by Section 6.04(t) (it being understood that for purposes of Section 6.04, the Borrower shall be deemed the purchaser of such Equity Interests and such repurchase shall constitute an Investment by the Borrower in a Person that is not a Subsidiary in the ~~case~~ amount of such purchase unless such Subsidiary becomes a Loan Party in connection with such repurchase); (ix) so long as, at the ~~use~~ date of ~~the Starter Basket that is Not Otherwise Applied~~declaration thereof, no Event of Default ~~under Section 7.01(a), (b), (h)~~ shall have occurred and be continuing or ~~(i))~~would result therefrom, the ~~Available Amount that is Not Otherwise Applied plus (C) the Available Equity Amount that is Not Otherwise Applied; (ix) redemptions in whole~~ Borrower may repurchase or ~~in part of any of~~ redeem its Equity Interests ~~for another class of~~ from its ~~Equity Interests or with proceeds from substantially concurrent~~ equity ~~contributions or issuances of new Equity Interests~~holders in an amount not to exceed $10,000,000; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;and (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; (xi) Holdings may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiii) payments made or expected to be made by Holdings, any Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to 5.00 to 1.0 and (B) there is no continuing Event of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make Restricted Payments in cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on within 60 days after the date of ~~such reclassification)~~ declaration thereof, if at the date of declaration of such Restricted ~~Payment (or portion thereof) between~~ Payments, such ~~clauses (i) through (xviii), in a manner that otherwise complies with~~ Restricted Payments would have been permitted pursuant to another clause of this Section 6.08(a). (b) ~~Neither Holdings, Intermediate Holdings nor~~ None of the Borrower or any ~~Borrower will, nor~~ Subsidiary will ~~they permit any Restricted Subsidiary to,~~ make or ~~pay~~agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any ~~Junior Financing~~Subordinated Indebtedness that is required pursuant to Section 6.01 to be subordinated to the payment of the Obligations, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, ~~cancellation~~ defeasance, cancelation or termination of ~~any Junior Financing~~such Subordinated Indebtedness, except: (i) ~~payment of~~ regularly scheduled interest and principal payments ~~as, in the form of payment~~ as and when due in respect of ~~any~~ such Subordinated Indebtedness, other than payments ~~in respect of any Junior Financing~~ prohibited by the subordination provisions thereof; (ii) refinancings of ~~Junior Financing~~ such Subordinated Indebtedness with the proceeds of ~~other Junior Financing~~ Refinancing Indebtedness permitted in respect thereof under Section 6.01; (iii) payments of or in respect of such Subordinated Indebtedness made solely with Qualified Equity Interests in the Borrower or the conversion of such Subordinated Indebtedness into Qualified Equity Interests of the Borrower; (iv) prepayments of intercompany Indebtedness permitted hereby owed by the Borrower or any Subsidiary to the Borrower or any Subsidiary; provided that, for the avoidance of doubt, no prepayment of any Indebtedness owed by any Loan Party to any Subsidiary that is not a Loan Party shall be inpermitted so long as an Event of Default shall have occurred and be continuing or would result therefrom; and (v) so long as no Event of Default shall have occurred and be continuing or would result therefrom, the Borrower may on any date make payments of (including prepayments thereof) or in respect of any such Subordinated Indebtedness (other than any intercompany Indebtedness) not otherwise permitted hereunder so long as, at the time of the making of such payment, the Leverage Ratio, calculated on a Pro Forma Basis as of the date of making thereof, is not in excess of 2.75 to 1.00.

Appears in 2 contracts

Sources: Credit Agreement (Aspen Technology Inc /De/), 364 Day Bridge Credit Agreement (Aspen Technology Inc /De/)

Restricted Payments; Certain Payments of Indebtedness. (a) Neither ~~Holdings, Intermediate Holdings~~ Parent nor ~~any Borrower~~ Borrowers will, nor will they permit any Restricted ~~Subsidiary~~Subsidiary of a Borrower to, to pay or make, directly or indirectly, any Restricted Payment, except: (i) ~~Each~~ each Borrower and each Restricted Subsidiary of a Borrower may make Restricted Payments to ~~Intermediate Holdings,~~ a Borrower or any ~~other Restricted Subsidiary; provided~~ Subsidiary of a Borrower that is a Loan Party (and, in the case of any such ~~Restricted Payment by a~~ Restricted Subsidiary that is not a wholly-owned ~~Subsidiary of a Borrower~~Restricted Subsidiary, ~~such Restricted Payment is made to Intermediate Holdings, such Borrower, any Restricted Subsidiary and~~ to each other owner of Equity Interests of such Restricted Subsidiary ratably based on their relative ownership interests of the relevant class of Equity Interests); (ii) ~~payments or distributions~~ to ~~satisfy dissenters’ or appraisal rights~~the extent constituting a Restricted Payment, ~~pursuant to or in connection with~~ any Borrower and any Restricted Subsidiary of a ~~consolidation, amalgamation, merger or transfer of assets~~ Borrower may consummate any transaction permitted by Section 7.03 and Section 7.04 (other than ~~with respect to the Transactions~~Section 7.04(j), (m), (n), (q) ~~that complies with Section 6.03~~and (t)); (iii) ~~Holdings and any Intermediate Holdings may declare and make dividend payments or other distributions payable solely in~~ to the extent constituting a Restricted Payment, the conversion of Convertible Notes into Equity Interests ~~of such Person~~pursuant to the terms thereof; (iv) ~~Restricted Payments~~ payments to Parent to enable Parent to make repurchases, redemptions or reductions in number of shares issued (including, by utilization of the “net share” concept) by Parent of any Equity Interests in Parent, as applicable, made in connection with ~~or in order~~ (I) the surrender of shares by employees to ~~consummate~~ (x) facilitate the ~~Transactions (including, without limitation~~payment by such employees of the taxes associated with compensation received by such employees under Parent’s stock-based compensation plans and, (Ay) ~~cash payments~~ to ~~holders~~ satisfy the purchase price of ~~Equity Interests~~ nonqualified stock options and (II) the deduction by Parent, of ~~Target as provided by the Acquisition Agreement, (B) Restricted Payments to direct and indirect parent companies of Holdings to finance~~ a portion of restricted stock or performance shares previously (i.e. prior to the ~~consideration~~ date of the deduction) granted to employees under Parent’s stock-based compensation plans to facilitate the payment by such employees of the taxes associated with the vesting of such restricted stock and performance shares, in an amount not to exceed (for ~~the Acquisition~~ both clauses (I) and (C) other payments with respect to working capital adjustments or otherwise, to the extent contemplated by the Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (ivII)), together with all Restricted Payments made pursuant to Section 7.08(a)(xiv), $2,000,000 in the aggregate in any fiscal year; provided, in each case, that prior to and after giving effect to such repurchases, redemptions or reductions no Default or Event of Default exists or is continuing; (v) repurchases of Equity Interests in Holdings (or Restricted Payments by Holdings to allow repurchases of Equity Interest in any direct or indirect parent of Holdings) or Intermediate Holdings deemed to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price of such stock options or warrants or other incentive interest; (vi) Restricted Payments to Holdings which Holdings Borrowers may use to redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted stock units or stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) (or make Restricted Payments in cash to ~~allow any~~ Parent to the extent of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests) held by current or former officers, managers, consultants, directors and employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), Holdings, the ~~Borrowers and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise~~ conditions set forth in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, profits interest, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that the aggregate amount of Restricted Payments permitted by this clause (~~vi) after the Effective Date, together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu thereof, shall not exceed the sum of (~~A) the greater of $15.0 million and 5.0% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings (which subsequent to an IPO shall be increased to the greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings), (B) ~~the amount in any fiscal year equal to the cash proceeds of key man life insurance policies received by Holdings, the Borrowers~~ or ~~the Restricted Subsidiaries after the Effective Date,~~ (C) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year may be carried forward to succeeding fiscal years; (vii) Holdings and any Intermediate Holdings may make Restricted Payments in cashbelow: (A) ~~without duplication~~ with respect to any taxable year a Borrower is member (or treated as a disregarded entity of a member) of a consolidated, combined, or unitary income tax group (“Tax Group”) with Parent as the corporate parent of such Tax Group that is responsible under applicable law for the income or similar Taxes of Borrower and any ~~Permitted Tax Distribution~~Restricted Subsidiary of such Borrower, such Borrower may make cash distributions to Parent the proceeds of which shall be used by ~~Holdings or any Intermediate Holdings~~ Parent to pay (the income or ~~to make~~ similar Taxes of such Borrower and any Restricted Subsidiary of such Borrower and the Tax Group; provided that Restricted Payments pursuant to ~~allow any direct or indirect parent~~ this subclause (A) shall not exceed the amount of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, and local income or ~~foreign~~ similar Taxes ~~(as applicable) of~~ such ~~Tax Group~~ Borrowers would have paid for such taxable ~~period that are attributable to the~~ year and any prior taxable year had they solely filed a consolidated, unitary, or combined income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (a)(vii)(A) shall not exceed the Tax liability that Holdings and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers or their Restricted Subsidiariestax return among themselves; (B) the proceeds of which shall be used by ~~Holdings or any Intermediate Holdings~~ Parent to pay ~~(or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay)~~ (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) ), that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by ~~directors~~ directors, officers, members of management, managers, employees or ~~officers~~ consultants of ~~Holdings (or any parent thereof or any Intermediate Holdings)~~ Parent attributable to the ownership or operations of ~~Holdings~~any Borrower and any Restricted Subsidiary of a Borrower, ~~the Borrowers~~ and ~~the Restricted Subsidiaries,~~ (3) franchise and similar Taxes, and other fees and expenses ~~(x) due and payable by any of Holdings, the Borrowers and the Restricted Subsidiaries and (y) otherwise permitted~~ required to be paid by Holdings, the Borrowers and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the Borrowers or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x);maintain its organizational existence; and (C) the proceeds of which shall be used by ~~Holdings or any Intermediate Holdings~~ Parent to ~~pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes~~satisfy its obligations under the Convertible Notes, and other fees and expenses, required to maintain its organizational existence; (D) the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(m); provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) Holdings or any Intermediate Holdings shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to Holdings, the Borrowers or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with Holdings, the Borrowers or any of the Restricted Subsidiaries to the extent such ~~merger, amalgamation or consolidation is~~ payments are permitted ~~in Section 6.03) in order to consummate such Investment, in each case in accordance with~~ under the ~~requirements of Sections 5.11 and 5.12~~Intercreditor Agreement; (Fvi) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrowers and the Restricted Subsidiaries; and[reserved]; (Gvii) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful)[reserved]; (viii) ~~in addition~~ to the ~~foregoing~~ extent constituting a Restricted ~~Payments~~Payment, payments of the ~~Borrowers and any Intermediate Holdings may make additional Restricted Payments~~ Convertible Notes made pursuant to ~~any Intermediate Holdings and Holdings,~~ an exchange for or out of the proceeds of ~~which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any~~ Debt constituting a Permitted Holdings Debt, in an aggregate amount, when taken together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii), not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as no Event of Default shall have occurred and be continuing (or, in the case Refinancing of the ~~use of the Starter Basket that is Not Otherwise Applied, no Event of Default~~ Convertible Notes permitted under Section ~~7.01(a~~7.01(xxiii)~~, (b), (h) or (i)), the Available Amount that is Not Otherwise Applied plus (C) the Available Equity Amount that is Not Otherwise Applied~~; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; (xi) ~~Holdings~~ Parent may, and Borrowers may make Restricted Payments to Parent to enable Parent to (aA) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof ~~or any Permitted Acquisition (or other similar Investment)~~ and (bB) honor any conversion request by a holder of convertible ~~Indebtedness~~ Debt and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible ~~Indebtedness~~ Debt in accordance with its terms, in both cases of (A) and (B), in an amount not to exceed $250,000 in the aggregate (or $350,000 in the aggregate so long as no Event of Default has occurred and is continuing); (xii) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO[reserved]; (xiii) any Restricted Payment made on the Effective Date required to consummate the Plan of Reorganization; (xiv) payments made ~~or expected to be made~~ by ~~Holdings~~Parent, any Borrower or any Restricted Subsidiary of a Borrower (including payments to Parent to enable Parent to make such payments) in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled ~~Affiliates, Immediate Family Members~~ Affiliates or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar ~~taxes;~~ taxes (~~xiv) additional~~ including payments to Parent in respect of the foregoing), in an amount not to exceed, together with all Restricted ~~Payments; provided that after giving effect~~ Payments made pursuant to ~~such Restricted Payment (A) on a Pro Forma Basis~~Section 7.08(a)(iv), $2,000,000 in the ~~Total Leverage Ratio is less than or equal to 5.00 to 1.0 and (B) there is no continuing Event of Default~~aggregate in any fiscal year; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments)[reserved]; (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make Restricted Payments in cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a). (b) Neither Holdings, Intermediate Holdings nor any Borrower will, nor will they permit any Restricted Subsidiary to, make or pay, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, except: (i) payment of regularly scheduled interest and principal payments as, in the form of payment and when due in respect of any Indebtedness, other than payments in respect of any Junior Financing prohibited by the subordination provisions thereof; (ii) refinancings of Junior Financing Indebtedness with proceeds of other Junior Financing Indebtedness permitted to be in

Appears in 2 contracts

Sources: Forbearance Agreement and Fourth Amendment to Loan and Security Agreement (Endurant Capital Management LP), Forbearance Agreement and Fourth Amendment to Loan and Security Agreement (DG Capital Management, LLC)

Restricted Payments; Certain Payments of Indebtedness. (a) ~~Neither Holdings~~The Parent Borrower will not, ~~Intermediate Holdings nor any Borrower will, nor~~ and will ~~they~~ not permit any Restricted ~~Subsidiary~~Subsidiary to, ~~to pay~~ declare or make, directly or indirectly, any Restricted Payment, except: (i) ~~Each~~ such Borrower may declare and ~~each Restricted Subsidiary may make Restricted Payments~~ pay dividends with respect to Intermediate Holdings, a Borrower or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a wholly-owned Subsidiary of a Borrower, such Restricted Payment is made to Intermediate Holdings, such Borrower, any Restricted Subsidiary and to each other owner of its Equity Interests payable solely in additional shares of ~~such Restricted Subsidiary based on their relative ownership interests of the relevant class of~~ its Equity Interests; (ii) ~~payments or distributions to satisfy dissenters’ or appraisal rights, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of assets (other than~~ Restricted Subsidiaries may declare and pay Restricted Payments with respect to their Equity Interests (provided that if such Restricted Subsidiary is not directly or indirectly wholly owned by the ~~Transactions) that complies with Section 6.03~~Parent Borrower, such dividends must be made on a pro rata basis to the holders of its Equity Interests or on a greater than ratable basis to the extent such greater payments are made solely to the Parent Borrower or a Restricted Subsidiary); (iii) ~~Holdings~~ to the extent constituting Restricted Payments, the Parent Borrower and ~~any Intermediate Holdings~~ its Restricted Subsidiaries may ~~declare and make dividend payments~~ enter into transactions expressly permitted by Sections 6.03, 6.04, 6.05 or ~~other distributions payable solely in the Equity Interests of such Person~~6.07; (iv) ~~Restricted Payments made~~ repurchases by the Parent Borrower of partial interests in its Equity Interests for nominal amounts which are required to be repurchased in connection with ~~or in order to consummate~~ the Transactions (including, without limitation, (A) cash payments to holders of Equity Interests of Target as provided by the Acquisition Agreement, (B) Restricted Payments to direct and indirect parent companies of Holdings to finance a portion of the consideration for the Acquisition and (C) other payments with respect to working capital adjustments or otherwise, to the extent contemplated by the Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv)); (v) repurchases of Equity Interests in Holdings (or Restricted Payments by Holdings to allow repurchases of Equity Interest in any direct or indirect parent of Holdings) or Intermediate Holdings deemed to occur upon exercise of stock options or warrants ~~or other incentive interests if such~~ to permit the issuance of only whole shares of Equity ~~Interests represent a portion of the exercise price of such stock options or warrants or other incentive interest~~Interests; (viv) ~~Restricted Payments to Holdings which Holdings~~ the Parent Borrower may ~~use to redeem~~pay for the repurchase, ~~acquire, retire~~ retirement or ~~repurchase its~~ other acquisition or retirement for value of Equity Interests (of the Parent Borrower or any ~~options, warrants, restricted stock units or~~ Parent Company (including related stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interestssimilar securities) held by ~~current~~ any future, present or former ~~officers~~director, ~~managers~~officer, ~~consultants~~member of management, ~~directors and employees~~ employee or consultant of any Parent Company, the Parent Borrower or any of its Subsidiaries (or ~~their respective spouses, former spouses, successors, executors, administrators~~the estate, heirs, ~~legatees~~ family members, spouse, former spouse, domestic partner or ~~distributees~~former domestic partner of any of the foregoing); provided that (A) at the time of ~~Holdings (or~~ any ~~direct or indirect parent thereof), Holdings, the Borrowers and the Restricted Subsidiaries, upon the death, disability~~such repurchase, retirement or ~~termination~~ other acquisition or retirement for value no Event of ~~employment of any such Person~~ Default has occurred and is continuing or ~~otherwise in accordance with any stock option or stock appreciation rights plan~~would result therefrom, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, profits interest, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that (B) the aggregate amount of Restricted Payments ~~permitted by~~ made under this clause (~~vi) after the Effective Date, together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m~~v) in ~~lieu thereof, shall~~ any Fiscal Year does not exceed (x) $15,000,000 (the ~~sum of~~ “Yearly Limit”) plus (Ay) the ~~greater~~ portion of ~~$15.0 million~~ the Yearly Limit from each of the immediately preceding four (4) Fiscal Years which was not expended by the Parent Borrower for Restricted Payments in such Fiscal Years (the “Carryover Amount” and ~~5.0% of Consolidated EBITDA~~ in calculating the Carryover Amount for any Fiscal Year, the ~~most recently ended Test Period in any~~ Yearly Limit applicable to the previous fiscal ~~year of Holdings (which subsequent to an IPO~~ years shall be ~~increased~~ deemed to ~~the greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period~~ have been utilized first by any Restricted Payments made under this clause (v) in ~~any fiscal year of Holdings),~~ such Fiscal Year) plus (Bz) ~~the~~ an amount ~~in any fiscal year~~ equal to ~~the cash proceeds of key man life insurance policies received by Holdings, the Borrowers or the Restricted Subsidiaries after the Effective Date, (C)~~ the cash proceeds from the sale of Equity Interests ~~(other than Disqualified Equity Interests)~~ to directors, officers, members of ~~Holdings (to the extent contributed to Holdings in the form~~ management, employees or consultants of ~~common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings~~any Parent Company, the ~~cash proceeds from~~ Parent Borrower or of its Subsidiaries (or the ~~sale~~ estate, heirs, family members, spouse or former spouse of any of the foregoing) in such Fiscal Year; (vi) the repurchase of Equity Interests of the Parent Borrower (or of any ~~direct or indirect~~ Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle Company) that occurs ~~after~~ upon the ~~Effective Date~~cashless exercise of stock options, to warrants or other convertible securities as a result of the ~~extent~~ Parent Borrower or such Parent Company accepting such options, warrants or other convertible securities as satisfaction of the ~~cash proceeds from the sale~~ exercise price of such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year may be carried forward to succeeding fiscal yearsInterests; (vii) ~~Holdings~~ the Parent Borrower and its Restricted Subsidiaries may pay (or may make Restricted Payments to allow a Parent Company to pay) cash payments in lieu of fractional shares in connection with (i) any ~~Intermediate Holdings~~ dividend, split or combination of its Equity Interests or any Permitted Acquisition (or similar Investment) or (ii) the exercise of warrants, options or other securities convertible into or exchangeable for Equity Interests of the Parent Borrower or any of its Subsidiaries; (viii) repurchase of Equity Interests deemed to occur upon the non-cash exercise of Equity Interests to pay Taxes; (ix) the Parent Borrower and its Restricted Subsidiaries may make Restricted Payments in ~~cash:~~ an aggregate amount not to exceed the Available Amount; provided that (A) ~~without duplication~~ no Event of Default shall exist or result therefrom and (B) the Total Net Leverage Ratio on a Pro Forma Basis as of the end of the most recent Test Period is less than or equal to 4.50:1.00, in each case determined, at the election of the Parent Borrower, at the time of (x) declaration of such Restricted Payment or (y) the making or consummation, as applicable, of such Restricted Payment; (x) the Parent Borrower and its Restricted Subsidiaries may make Restricted Payments in an aggregate amount in any Fiscal Year not to exceed the greater of $30,000,000 and 20% of Adjusted EBITDA (as determined at the time any such Restricted Payment is made (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period on or prior to the date of determination), it being agreed that the Parent Borrower shall be permitted to carry forward unused amounts to subsequent Fiscal Years; provided that as of the date of any ~~Permitted Tax Distribution~~such Restricted Payment and after giving effect thereto, the Parent Borrower shall be in compliance with the Financial Covenant on a Pro Forma Basis for the most recently ended Test Period and no Event of Default shall exist or result therefrom; (xi) the Parent Borrower and its Restricted Subsidiaries may make Restricted Payments if the Total Net Leverage Ratio on a Pro Forma Basis as of the end of the most recent Test Period is less than or equal to 3.75:1.00; provided that no Event of Default shall exist or result therefrom; (xii) [Reserved] (xiii) Restricted Payments made on or after the Closing Date relating to the Transactions; (xiv) any Borrower may make Restricted Payments in an amount not to exceed the amount of Excluded Contributions previously received by the Parent Borrower Not Otherwise Applied; (xv) the Parent Borrower and its Restricted Subsidiaries may make additional Restricted Payments to any Parent Company the proceeds of which shall be used by ~~Holdings or~~ any ~~Intermediate Holdings~~ Parent Company to (i)(x) pay Taxes (or including franchise Taxes) and (y) make payments to ~~make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for any taxable period for which Holdings and/or any~~ the holders of its ~~Subsidiaries are members~~ Equity Interests, which aggregate amount in the case of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (~~a)(vii)(A~~i) shall not exceed the ~~Tax liability~~ amount of Taxes that ~~Holdings and/or~~ would be due as if the Parent Borrower and its Restricted Subsidiaries ~~(as applicable) would have incurred were~~ had computed such Taxes ~~determined~~ as if ~~such entity(ies) were~~ the Parent Borrower and its Restricted Subsidiaries filed a ~~stand-alone taxpayer~~ consolidated, combined, unitary or ~~a stand-alone group; and provided~~similar type return with Parent Borrower as the consolidated parent, ~~further, that Restricted Payments under this subclause (A) in respect of any Taxes~~ without regard to tax deductions attributable to any Parent Company; provided clause (i) shall only apply in the ~~income~~ event that the Parent Borrower files a consolidated, combined, unitary or similar type tax return with any Parent Company, (ii) pay other fees and expenses required to maintain its (or any of ~~any Unrestricted Subsidiaries~~ its direct or indirect parents’) corporate existence, in each case of ~~Holdings may be made only~~ clauses (i) and (ii), to the extent ~~that~~ such ~~Unrestricted Subsidiaries have made cash payments for such purpose to Holdings~~Taxes, ~~the Borrowers~~ fees or their Restricted Subsidiaries; (B) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof or any Intermediate Holdings) attributable to the ownership or operations of ~~Holdings,~~ the ~~Borrowers~~ Parent Borrower and ~~the Restricted~~ its Subsidiaries, provided that any such distributions attributable to Taxes of an Unrestricted Subsidiary shall not exceed any corresponding payments actually made by such Unrestricted Subsidiary to the Parent Borrower or any Restricted Subsidiary for such purpose, (3iii) pay customary salary, bonus, severance and other benefits payable to, and indemnities provided on behalf of, directors, officers, employees, members of management and consultants of such Persons and (iv) pay costs, fees and expenses related to any equity (xincluding after a Qualifying IPO, Public Company Costs) ~~due and payable~~ or debt offering permitted by ~~any~~ this Agreement (whether or not successful); provided that in the case of ~~Holdings, the Borrowers and the Restricted Subsidiaries~~ clauses (iii) and (~~y) otherwise permitted~~ iv), such amount shall be solely for the account of such items that relate to ~~be paid by Holdings,~~ Parent Company’s ownership and management of the ~~Borrowers~~ Parent Borrower and ~~the~~ its Restricted ~~Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the Borrowers or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x)~~Subsidiaries; (Cxvi) the ~~proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to~~ Parent Borrower may make Restricted Payments to ~~allow~~ any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence; (D) the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E) Parent Company to finance any Investment permitted to be made pursuant to Section ~~6.04 other than Section 6.04(m)~~6.04; provided that (1A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2B) ~~Holdings or any Intermediate Holdings~~ such Persons shall, ~~immediately~~ promptly following the closing thereof, cause (x1) all property acquired (whether assets or Equity ~~Interests but not including any loans or advances made pursuant to Section 6.04(b)~~Interests) to be contributed to ~~Holdings,~~ the ~~Borrowers~~ Parent Borrower or ~~the~~ a Restricted ~~Subsidiaries~~ Subsidiary or (y2) the merger, amalgamation, consolidation or sale of all or substantially all assets (to the extent permitted in Section 6.03) of the Person formed or acquired ~~to merge~~ into ~~or consolidate with Holdings,~~ the Borrowers or ~~any of the~~ a Restricted ~~Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03)~~ Subsidiary in order to consummate such Investment, in each ~~case~~ case, in accordance with the requirements of ~~Sections 5.11~~ Section 5.10 and 5.12; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrowers and the Restricted SubsidiariesSection 6.04; and (Gxvii) the ~~proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to~~ Parent Borrower its Restricted Subsidiaries may make Restricted Payments ~~to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity offering, debt offering or other non~~from the Net Proceeds of Permitted Sale-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful); (viii) in addition to the foregoing Restricted Payments, the Borrowers and any Intermediate Holdings may make additional Restricted Payments to any Intermediate Holdings and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt, Leaseback Transactions in an aggregate ~~amount, when taken together with the aggregate~~ amount ~~of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii),~~ not to exceed $125,000,000 if the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as no Event of Default shall have occurred and be continuing (or, in the case of the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h) or (i)), the Available Amount that is Not Otherwise Applied plus (C) the Available Equity Amount that is Not Otherwise Applied; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; (xi) Holdings may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiii) payments made or expected to be made by Holdings, any Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) Total Net Leverage Ratio on a Pro Forma ~~Basis,~~ Basis as of the ~~Total Leverage Ratio~~ end of the most recent Test Period is less than or equal to 5.00 to 1.0 and (B) there is no continuing Event of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make Restricted Payments in cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a)4.00:1.00. (b) ~~Neither Holdings, Intermediate Holdings nor any~~ Each Borrower ~~will~~will not, nor will ~~they~~ it permit any of its Restricted ~~Subsidiary~~ Subsidiaries to, make ~~or pay~~any payment, directly or indirectly, ~~any payment or other distribution (whether in cash, securities or other property) of or~~ in respect of ~~principal~~ any purchase, redemption, retirement, acquisition, cancellation or termination of ~~or interest on~~ any Junior ~~Financing~~Indebtedness prior to the scheduled maturity thereof (it being understood that payments of regularly scheduled principal, interest, mandatory prepayments, mandatory offers to purchase, fees, expenses and indemnification obligations shall be permitted) (such Indebtedness, collectively, “Restricted Indebtedness”), or any other payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any ~~Junior Financing~~Restricted Indebtedness or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoing, except: (i) ~~payment~~ refinancings of ~~regularly scheduled interest and principal payments as, in~~ Restricted Indebtedness to the ~~form of payment and when due in respect of any Indebtedness, other than payments in respect of any Junior Financing prohibited~~ extent permitted by ~~the subordination provisions thereof~~Section 6.01; (ii) ~~refinancings~~ payments or other distributions in respect of ~~Junior Financing~~ principal or interest on, or payment or other distribution on account of the purchase, redemption, retirement, acquisition, cancellation or termination of, Restricted Indebtedness, if the Total Net Leverage Ratio on a Pro Forma Basis as of the end of the most recent Test Period is less than or equal to 3.75:1.00 and no Event of Default exists or would result from the making of such payment or distribution; (iii) payments or other distributions in respect of the purchase, redemption, retirement, acquisition, cancellation or termination of, Restricted Indebtedness, in an aggregate amount not to exceed $5,000,000; provided that at the time of any such payment or other distribution, no Event of Default shall exist or result therefrom; (iv) payments or other distributions in respect of the purchase, redemption, retirement, acquisition, cancellation or termination of, Restricted Indebtedness, in an aggregate amount not exceed to the Available Amount; provided that as of the date of any such payment and after giving effect thereto (A) no Event of Default shall exist or result therefrom and (B) the Total Net Leverage Ratio on a Pro Forma Basis as of the end of the most recent Test Period is less than or equal to 4.50:1.00; provided that, with respect to any such purchase, redemption, retirement, acquisition, cancellation or termination of, Restricted Indebtedness the notice of which is irrevocable, such conditions shall, at the election of the Parent Borrower, be tested at the time of the delivery of notice with ~~proceeds~~ respect to such purchase, redemption, retirement, acquisition, cancellation or termination; provided, however, that notwithstanding the foregoing, the absence of ~~other Junior Financing~~ an Event of Default shall be a condition to the consummation of any such purchase, redemption, retirement, acquisition, cancellation or termination; (v) payment-in-kind interest with respect to Restricted Indebtedness permitted by this Agreement; (vi) payments as part of an “applicable high yield discount obligation” catch up payment with respect to Restricted Indebtedness permitted by this Agreement; and (vii) the conversion of any Restricted Indebtedness to Equity Interests (other than Disqualified Equity Interests) or the prepayment of Restricted Indebtedness in an amount not to exceed the amount of Excluded Contributions previously received by the Parent Borrower Not Otherwise Applied. Notwithstanding the foregoing, the making of any dividend, payment or other distribution or the consummation of any irrevocable redemption within one hundred and eighty (180) days after the date of declaration of such dividend, payment or other distribution or giving of the redemption notice, as applicable, will not be inprohibited if, at the date of declaration or notice such dividend, payment or other distribution or redemption would have complied with the terms of this Agreement.

Appears in 2 contracts

Sources: Credit Agreement (Krispy Kreme, Inc.), Credit Agreement (Krispy Kreme, Inc.)

Restricted Payments; Certain Payments of Indebtedness. (a) ~~Neither Holdings~~The Borrower will not, ~~Intermediate Holdings nor any Borrower will, nor~~ and will ~~they~~ not permit any Restricted ~~Subsidiary~~Subsidiary to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, except: (i) ~~Each Borrower and~~ each Restricted Subsidiary may make Restricted Payments to ~~Intermediate Holdings, a~~ the Borrower ~~or any~~ and to its other Restricted Subsidiaries (and, in the case of a Restricted Payment by a non-wholly owned Restricted Subsidiary, to the Borrower and any of its other Restricted Subsidiaries and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests); (ii) the Borrower and each Restricted Subsidiary may declare and make dividend payments or other distributions payable solely in the Equity Interests of such Person; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a ~~wholly-owned~~ Wholly Owned Subsidiary of a the Borrower, such Restricted Payment is made to ~~Intermediate Holdings, such~~ the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests; (iiiii) ~~payments or distributions~~ Restricted Payments made on the Effective Date to ~~satisfy dissenters’ or appraisal rights, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of assets (other than with respect to~~ consummate the Transactions~~) that complies with Section 6.03; (iii) Holdings and any Intermediate Holdings may declare and make dividend payments or other distributions payable solely in the Equity Interests of such Person~~; (iv) Restricted Payments made in connection with or in order to consummate the Transactions (including, without limitation, (A) cash payments to holders of Equity Interests of Target as provided by the Acquisition Agreement, (B) Restricted Payments to direct and indirect parent companies of Holdings to finance a portion of the consideration for the Acquisition and (C) other payments with respect to working capital adjustments or otherwise, to the extent contemplated by the Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv)); (v) repurchases of Equity Interests in Holdings (or any Restricted ~~Payments by Holdings to allow repurchases of Equity Interest in any direct or indirect parent of Holdings) or Intermediate Holdings~~ Subsidiary deemed to occur upon exercise of stock options or warrants ~~or other incentive interests~~ if such Equity Interests represent a portion of the exercise price or withholding taxes payable in connection with the exercise of such ~~stock~~ options or ~~warrants or other incentive interest~~warrants; (viv) Restricted Payments to Holdings which Holdings may use to redeem, acquire, ~~retire~~ retire, repurchase or ~~repurchase~~ settle its Equity Interests (or any ~~options, warrants, restricted stock units~~ options or warrants or stock appreciation rights ~~or other equity-linked interests~~ issued with respect to any of such Equity Interests) (or make Restricted Payments to allow any of the Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests) held by current or former officers, managers, consultants, directors and employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (only to the extent attributable to the Borrower) (or any direct or indirect parent thereof), ~~Holdings,~~ the ~~Borrowers~~ Borrower and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, ~~profits interest,~~ employment termination agreement or any other employment agreements or equity holders’ ~~agreement; provided that the~~ agreement in an aggregate amount ~~of Restricted Payments permitted by this clause (vi)~~ after the Effective ~~Date,~~ Date together with the aggregate amount of loans and advances to Holdings made pursuant to Section ~~6.04(m~~6.04(l) in lieu ~~thereof, shall~~ of Restricted Payments permitted by this clause (v) not to exceed ~~the sum of (A) the greater~~ $3,500,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years subject to a maximum of $~~15.0 million and 5.0% of Consolidated EBITDA for the most recently ended Test Period in~~ 5,000,000 any ~~fiscal~~ calendar year ~~of Holdings~~ (~~which subsequent to an IPO shall be increased~~ without giving effect to the ~~greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings~~following proviso)~~, (B) the~~ ; provided that such amount in any ~~fiscal~~ calendar year ~~equal~~ may be increased by an amount not to exceed the cash proceeds of key man life insurance policies received by ~~Holdings,~~ the ~~Borrowers~~ Borrower or ~~the~~ its Restricted Subsidiaries (or by Holdings and contributed to Borrower) after the Effective Date, ; (Cvi) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year may be carried forward to succeeding fiscal years;[Reserved] (vii) ~~Holdings~~ the Borrower and ~~any Intermediate Holdings~~ the Restricted Subsidiaries may make Restricted Payments in ~~cash~~cash to Holdings and any Intermediate Parent: (A) without duplication of any Permitted Tax Distribution, the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for any taxable period for which ~~Holdings~~ Borrower and/or any of its Subsidiaries are members of a consolidated, combined or ~~unitary~~ similar income tax group for U.S. federal and/or applicable ~~state,~~ state or local ~~or foreign~~ income ~~Tax~~ tax purposes of which a direct or indirect parent of ~~Holdings~~ Borrower is the common parent (a “Tax Group”), the proceeds of which shall be used by Holdings (or any direct or indirect equity holder of Holdings) or any Intermediate Parent to pay the portion of any U.S. federal, ~~state,~~ state or local ~~or foreign~~ income Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of ~~Holdings~~ Borrower and/or its Subsidiaries; , provided that (i) the amount of such Restricted Payments ~~made pursuant to this clause (a)(vii)(A)~~ for any taxable period shall not exceed the ~~Tax liability~~ amount of such Taxes that ~~Holdings~~ Borrower and/or ~~its Subsidiaries (~~such Subsidiaries, as applicable) , would have ~~incurred were~~ paid had Borrower and/or such ~~Taxes determined~~ Subsidiaries, as ~~if such entity(ies) were~~ applicable, been a stand-alone taxpayer (or a stand-alone group; ) and ~~provided, further, that~~ (ii) Restricted Payments ~~under this subclause (A)~~ in respect of any Taxes attributable to the income of ~~any~~ an Unrestricted ~~Subsidiaries of Holdings may~~ Subsidiary shall be ~~made~~ permitted only to the extent that such Unrestricted ~~Subsidiaries have~~ Subsidiary has made cash payments for such purpose to ~~Holdings, the Borrowers~~ Borrower or ~~their~~ any of its Restricted Subsidiaries; (B) the proceeds of which shall be used by Holdings or any Intermediate ~~Holdings~~ Parent to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, ~~accounting, tax reporting~~ accounting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, in an aggregate amount together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (2a)(vii)(B) not to exceed $1,500,000 in any fiscal year plus any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent ~~thereof or any Intermediate Holdings~~thereof) attributable to the ownership or operations of ~~Holdings,~~ the ~~Borrowers~~ Borrower and the Restricted Subsidiaries, (32) fees and expenses (x) due and payable by the Borrower or any of ~~Holdings, the Borrowers and~~ the Restricted Subsidiaries and (y) otherwise permitted to be paid by ~~Holdings,~~ the ~~Borrowers and the~~ Borrower or such Restricted ~~Subsidiaries~~ Subsidiary under this Agreement and (43) ~~payments that~~ so long as no Event of Default under Section 7.01(a), (b), (h) or (i) shall have occurred and be continuing or would ~~otherwise be permitted~~ result therefrom, amounts due and payable pursuant to ~~be paid directly by Holdings,~~ any investor management agreement entered into with the ~~Borrowers~~ Sponsor on or after the ~~Restricted Subsidiaries~~ Effective Date in an aggregate amount not to exceed 2.0% of Consolidated EBITDA for the most recently ended Test Period for which financial statements have been delivered pursuant to Section ~~6.09(iii~~5.01(a) or (xb); (C) the proceeds of which shall be used by Holdings or any Intermediate ~~Holdings~~ Parent to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its ~~organizational~~ corporate existence; (D~~) the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E~~) to finance any Investment permitted to be made pursuant to Section ~~6.04 other than Section 6.04(m)~~6.04; provided that (1A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2B) Holdings or any Intermediate ~~Holdings~~ Parent shall, immediately following the closing thereof, cause (x1) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to ~~Holdings,~~ the ~~Borrowers~~ Borrower or the Restricted Subsidiaries or (y2) the Person formed or acquired to merge into or consolidate with ~~Holdings,~~ the ~~Borrowers~~ Borrower or any of the Restricted Subsidiaries to the extent such ~~merger, amalgamation~~ merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrowers and the Restricted Subsidiaries; and (GE) the proceeds of which shall be used by Holdings or any Intermediate ~~Holdings~~ Parent to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any unsuccessful equity ~~offering,~~ or debt offering ~~or other non-ordinary course transaction not prohibited~~ permitted by this Agreement ~~(whether or not such offering or other transaction is successful)~~so long as attributable to the Borrower and the Restricted Subsidiaries; (viii) in addition to the foregoing Restricted ~~Payments~~Payments and so long as (1) no Default or Event of Default shall have occurred and be continuing or would result therefrom, (2) the Borrower shall be in compliance with the Financial Performance Covenant on a Pro Forma Basis as of the end of the most recent Test Period (regardless of whether such Financial Performance Covenant is applicable at such time) and (3) solely with respect to clause (a) of the definition of “Available Amount Basket,” the Total Leverage Ratio on a Pro Forma Basis as of the end of the most recent Test Period shall be no greater than 5.00:1.00, the ~~Borrowers and any Intermediate Holdings~~ Borrower may make additional Restricted Payments to any Intermediate ~~Holdings~~ Parent and Holdings~~, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt~~, in an aggregate amount, ~~when taken~~ together with the aggregate amount of ~~loans~~ (1) prepayments, redemptions, purchases, defeasances and ~~advances to Holdings~~ other payments in respect of Subordinated Indebtedness made pursuant to Section ~~6.04(m~~6.08(b)(iv) and (2) loans and advances made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (viii), not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as no Event of Default shall have occurred and be continuing (or, in the case of the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h) or (i)), the Available ~~Amount that is Not Otherwise Applied plus (C) the Available Equity Amount that is Not Otherwise Applied~~Amount; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; (xi) Holdings may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiii) payments made or expected to be made by Holdings, any Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to 5.00 to 1.0 and (B) there is no continuing Event of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make Restricted Payments in cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a). (b) ~~Neither Holdings~~The Borrower will not, ~~Intermediate Holdings nor any Borrower will, nor~~ and will ~~they~~ not permit any other Restricted Subsidiary to, make or ~~pay~~agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any ~~Junior Financing~~Subordinated Indebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any ~~Junior Financing~~Subordinated Indebtedness, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoing, except: (i) payment of regularly scheduled interest and principal payments as, in the form of payment and when due in respect of any Indebtedness, other than payments in respect of any ~~Junior Financing~~ Subordinated Indebtedness prohibited by the subordination provisions thereof; (ii) refinancings of ~~Junior Financing~~ Indebtedness to the extent permitted by Section 6.01; (iii) the conversion of any Subordinated Indebtedness to Equity Interests (other than Disqualified Equity Interests) of Holdings or any of its direct or indirect parent companies or any Intermediate Parent; and (iv) so long as (1) no Default or Event of Default shall have occurred and be continuing or would result therefrom, (2) the Borrower shall be in compliance with ~~proceeds~~ the Financial Performance Covenant on a Pro Forma Basis as of the end of the most recent Test Period (regardless of whether such Financial Performance Covenant is applicable at such time) and (3) solely with respect to clause (a) of the definition of “Available Amount Basket,” the Total Leverage Ratio on a Pro Forma Basis as of the end of the most recent Test Period shall be no greater than 5.00:1.00, prepayments, redemptions, purchases, defeasances and other ~~Junior Financing~~ payments in respect of any Subordinated Indebtedness prior to their scheduled maturity in an aggregate amount, together with the aggregate amount of (1) Restricted Payments made pursuant to clause (a)(viii) and (2) loans and advances made pursuant to Section 6.04(l) in lieu thereof not to exceed the Available Amount. Notwithstanding anything set forth in Section 6.08(b) above, any prepayments of term loans under the Second Lien Credit Agreement made on or prior to the Second Restatement Effective Date shall be permitted ~~to be in~~hereunder.

Appears in 2 contracts

Sources: First Lien Credit Agreement (NEP Group, Inc.), First Lien Credit Agreement (NEP Group, Inc.)

Restricted Payments; Certain Payments of Indebtedness. (a) ~~Neither Holdings, Intermediate Holdings nor any~~ The Borrower ~~will~~will not, nor will ~~they~~ it permit any ~~Restricted Subsidiary~~Subsidiary to, ~~to pay~~ declare or make~~, directly or indirectly~~, any Restricted Payment, except: (i) ~~Each~~ the Borrower may declare and pay dividends with respect to its common stock payable solely in additional shares of its common stock, and, with respect to its preferred stock, payable solely in additional shares of such preferred stock or in shares of its common stock; (ii) Subsidiaries may declare and pay distributions ratably with respect to their capital stock, membership or partnership interests or other similar Equity Interests; (iii) [reserved]; (iv) the Borrower and ~~each Restricted Subsidiary~~ the Subsidiaries may (A) purchase or pay cash in lieu of fractional shares of its Equity Interests arising out of stock dividends, splits, or business combinations or in connection with issuance of Qualified Equity Interests of the Borrower pursuant to mergers, consolidations or other acquisitions permitted by this Agreement, (B) pay cash in lieu of fractional shares upon the exercise of warrants, options or other securities convertible into or exercisable for Qualified Equity Interests of the Borrower, and (C) make payments in connection with the retention of Qualified Equity Interests in payment of withholding Taxes in connection with equity-based compensation plans to the extent that net share settlement arrangements are deemed to be repurchases; (v) the Borrower may make Restricted Payments to ~~Intermediate Holdings, a Borrower~~ the direct or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a wholly-owned Subsidiary of a Borrower, such Restricted Payment is made to Intermediate Holdings, such Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests indirect equity holders of the relevant class of Equity Interests; (ii) payments or distributions to satisfy dissenters’ or appraisal rights, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of assets (other than with respect to the Transactions) that complies with Section 6.03; (iii) Holdings and any Intermediate Holdings may declare and make dividend payments or other distributions payable solely in the Equity Interests of such Person; (iv) Restricted Payments made in connection with or in order to consummate the Transactions (including, without limitation, (A) cash payments to holders of Equity Interests of Target as provided by the Acquisition Agreement, (B) Restricted Payments to direct and indirect parent companies of Holdings to finance a portion of the consideration for the Acquisition and (C) other payments with respect to working capital adjustments or otherwise, Borrower to the extent contemplated by the Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv)); (v) repurchases of Equity Interests in Holdings (or Restricted Payments by Holdings to allow repurchases of Equity Interest in any direct or indirect parent of Holdings) or Intermediate Holdings deemed to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price of such stock options or warrants or other incentive interest; (vi) Restricted Payments to Holdings which Holdings may use to redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted stock units or stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests) held by current or former officers, managers, consultants, directors and employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), Holdings, the Borrowers and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, profits interest, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that the aggregate amount of Restricted Payments permitted by this clause (vi) after the Effective Date, together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu thereof, shall not exceed the sum of (A) the greater of $15.0 million and 5.0% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings (which subsequent to an IPO shall be increased to the greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings), (B) the amount in any fiscal year equal to the cash proceeds of key man life insurance policies received by Holdings, the Borrowers or the Restricted Subsidiaries after the Effective Date, (C) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests tax liabilities are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year may be carried forward to succeeding fiscal years; (vii) Holdings and any Intermediate Holdings may make Restricted Payments in cash: (A) without duplication of any Permitted Tax Distribution, the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (a)(vii)(A) shall not exceed the Tax liability that Holdings and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers or their Restricted Subsidiaries; (B) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof or any Intermediate Holdings) attributable to the ownership or operations of ~~Holdings~~the Borrower, the Borrowers and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of Holdings, the Borrowers and the Restricted Subsidiaries and (y) otherwise permitted to be paid by Holdings, the Borrowers and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the Borrowers or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x); (C) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any its direct or indirect ~~parent of Holdings to pay) franchise~~ Subsidiaries and ~~similar Taxes~~any Subsidiary, and other fees and expenses, required to maintain its organizational existence; (D) the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(m); provided that (1A) the amount of such Restricted ~~Payment~~ Payments shall not exceed the tax liabilities that the Borrower and the direct or indirect Subsidiaries would be ~~made substantially concurrently with~~ required to pay in respect of Federal, state and local taxes were the ~~closing of such Investment~~ Borrower and ~~(2) Holdings~~ the direct or any Intermediate Holdings shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to Holdings, the Borrowers or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with Holdings, the Borrowers or any of the Restricted indirect Subsidiaries to pay such Taxes as stand-alone taxpayers less any tax payable directly by the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings Borrower or any direct or indirect ~~parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrowers and the Restricted Subsidiaries;~~ Subsidiary and (G) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful); (viii) in addition to the foregoing Restricted Payments, the Borrowers and any Intermediate Holdings may make additional Restricted Payments to any Intermediate Holdings and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt, in an aggregate amount, when taken together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii), not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as no Event of Default shall have occurred and be continuing (or, in the case of the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h) or (i)), the Available Amount that is Not Otherwise Applied plus (C) the Available Equity Amount that is Not Otherwise Applied; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; (xi) Holdings may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiii) payments made or expected to be made by Holdings, any Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to 5.00 to 1.0 and (B) there is no continuing Event of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make Restricted Payments in cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a). (b) Neither Holdings, Intermediate Holdings nor any Borrower will, nor will they permit any Restricted Subsidiary to, make or pay, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, except: (i) payment of regularly scheduled interest and principal payments as, in the form of payment and when due in respect of any Indebtedness, other than payments in respect of any Junior Financing prohibited by the subordination provisions thereof; (ii) refinancings of Junior Financing Indebtedness with proceeds of other Junior Financing Indebtedness permitted to be in

Appears in 2 contracts

Sources: Credit Agreement (Tempus AI, Inc.), Credit Agreement (Tempus Labs, Inc.)

Restricted Payments; Certain Payments of Indebtedness. ~~(a) Neither Holdings~~Each Loan Party shall not, ~~Intermediate Holdings nor any Borrower will, nor will they~~ and shall not permit any ~~Restricted Subsidiary, to pay~~ of its Subsidiaries through any manner or ~~make~~means or through any other Person to, directly or indirectly~~, any Restricted Payment, except~~: (ia) ~~Each Borrower and each Restricted Subsidiary may make Restricted Payments to Intermediate Holdings~~declare or pay any dividends, ~~a Borrower or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a wholly-owned Subsidiary of a Borrower~~purchase, such Restricted Payment is made to Intermediate Holdings, such Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests; (ii) payments or distributions to satisfy dissenters’ or appraisal rights, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of assets (other than with respect to the Transactions) that complies with Section 6.03; (iii) Holdings and any Intermediate Holdings may declare and make dividend payments or other distributions payable solely in the Equity Interests of such Person; (iv) Restricted Payments made in connection with or in order to consummate the Transactions (including, without limitation, (A) cash payments to holders of Equity Interests of Target as provided by the Acquisition Agreement, (B) Restricted Payments to direct and indirect parent companies of Holdings to finance a portion of the consideration for the Acquisition and (C) other payments with respect to working capital adjustments or otherwise, to the extent contemplated by the Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv)); (v) repurchases of Equity Interests in Holdings (or Restricted Payments by Holdings to allow repurchases of Equity Interest in any direct or indirect parent of Holdings) or Intermediate Holdings deemed to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price of such stock options or warrants or other incentive interest; (vi) Restricted Payments to Holdings which Holdings may use to redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted stock units or stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, defease or otherwise acquire ~~or repurchase their~~ for value any of its Equity Interests~~) held by current~~ , return any capital to its stockholders, partners or ~~former officers, managers, consultants, directors and employees~~ members (or ~~their respective spouses~~the equivalent Persons thereof) as such, ~~former spouses~~make any distribution of assets, ~~successors~~obligations, ~~executors~~Equity Interests, ~~administrators~~other Securities or other property to its stockholders, ~~heirs, legatees~~ partners or ~~distributees) of Holdings~~ members (or ~~any direct or indirect parent~~ the equivalent Persons thereof), ~~Holdings~~or purchase, ~~the Borrowers and the Restricted Subsidiaries~~redeem, ~~upon the death~~retire, ~~disability, retirement or termination of employment of any such Person~~ defease or otherwise acquire for value any Equity Interests in ~~accordance with any stock option or stock appreciation rights plan~~such Loan Party, ~~any management~~based on their ownership interest in such Subsidiary, director and/or employee stock ownership or incentive plan, stock subscription plan, profits interest, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that except (i) payments in the aggregate amount of Restricted Payments permitted by this clause (vi) after the Effective Date, together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu thereof, shall not exceed the sum of (A) the greater of $15.0 million and 5.0% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings (which subsequent to an IPO shall be increased to the greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings), (B) the amount in any fiscal year equal to the cash proceeds of key man life insurance policies received by Holdings, the Borrowers or the Restricted Subsidiaries after the Effective Date, (C) the cash proceeds from the sale form of Equity Interests (other than Disqualified Equity Interests) of ~~Holdings~~ the Borrower, (ii) Subsidiaries of the Borrower may declare and pay dividends ratably with respect to ~~the extent contributed to Holdings in the form of common~~ their Equity Interests ~~or Qualified Equity Interests) and,~~ ratably to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year may be carried forward to succeeding fiscal years; (vii) Holdings and any Intermediate Holdings may make Restricted Payments in cash: (A) without duplication of any Permitted Tax Distribution, the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (a)(vii)(A) shall not exceed the Tax liability that Holdings and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers or their Restricted Subsidiaries; (B) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of businessequityholders, (2iii) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof or any Intermediate Holdings) attributable to the ownership or operations of Holdings, the Borrowers and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of Holdings, the Borrowers and the Restricted Subsidiaries and (y) otherwise permitted to be paid by Holdings, the Borrowers and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the Borrowers or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x); (C) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence; (D) the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(m); provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) Holdings or any Intermediate Holdings shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to Holdings, the Borrowers or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with Holdings, the Borrowers or any of the Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrowers and the Restricted Subsidiaries; and (G) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful); (viii) in addition to the foregoing Restricted Payments, the Borrowers and any Intermediate Holdings may make additional Restricted Payments to any Intermediate Holdings and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt, in an aggregate amount, when taken together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii), not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as no Event of Default shall have occurred and be continuing (or, in the case of the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h) or (i)), the Available Amount that is Not Otherwise Applied plus (C) the Available Equity Amount that is Not Otherwise Applied; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the ~~exercise~~ conversion of ~~stock options~~ Securities of the Borrower into Equity Interests (other than Disqualified Equity Interests) and the ~~vesting of restricted stock and restricted stock units; (xi) Holdings may (a) pay~~ payment in cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection ~~with any~~ therewith, (iv) so long as no Default or Event of Default has occurred and is continuing, payments made from the Net Cash Proceeds of the issuance of Equity Interests (other than Disqualified Equity Interests) by the Borrower within 180 days of such ~~conversion and may make~~ issuance; (v) payments ~~on convertible Indebtedness in accordance with its terms; (xii)~~ by the ~~declaration and payment of Restricted Payment on Holdings’ common stock (or~~ Borrower to allow the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum cash in lieu of the ~~net cash proceeds~~ issuance of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of fractional shares upon the market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiii) payments made or expected to be made by Holdings, any Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or ~~required withholding~~ upon the conversion or ~~similar taxes; (xiv) additional Restricted Payments~~exchange of its Equity Interests; provided ~~that after giving effect~~ such payments are not made for the purpose of evading the restrictions of this Section 6.4; (vi) payments to ~~such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than~~ satisfy dissenters’ rights pursuant to or ~~equal to 5.00 to 1.0 and (B) there is no continuing Event of Default; (xv) Restricted Payments constituting or otherwise made~~ in connection with a merger, amalgamation, consolidation or ~~relating~~ transfer of assets not otherwise prohibited by this Agreement; (vii) payments to redeem or retire any ~~IPO Reorganization Transactions~~ warrants held by any Lender or Affiliate thereof, (~~limited, in the case of~~ viii) payments pursuant to ~~a tax receivable agreement~~stock compensation or similar plans in the Ordinary Course, or to ~~Permitted Tax Receivable Payments); (xvi) the distribution~~repurchase, ~~by dividend~~ redeem or ~~otherwise, of shares of~~ otherwise acquire Equity Interests ofof a Loan Party or its Subsidiaries held by any former employees, officers, directors or ~~Indebtedness owed~~ consultants, not to ~~Holdings~~exceed $1,000,000 in any Fiscal Year, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends with unused amounts in ~~respect of JV Preferred Equity Interests issued in accordance with Section 6.01~~ any Fiscal Year being carried over to the ~~extent~~ next succeeding Fiscal Year (subject to a maximum of $2,500,000 of such ~~dividends are included~~ payments in any Fiscal Year), (ix) regularly scheduled interest payments with respect to the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make Restricted Payments in cash to Holdings to permit Holdings to makeConvertible Notes, and ~~Holdings may make, Restricted Payments in respect of Permitted~~ (x) Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a).; or (b) ~~Neither Holdings, Intermediate Holdings nor~~ make any ~~Borrower will, nor will they permit any Restricted Subsidiary to, make or pay, directly or indirectly, any payment~~ voluntary prepayment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest ~~on any Junior Financing~~on, or redeem, repurchase, retire or otherwise acquire, any ~~payment or other distribution (whether in cash~~Indebtedness for borrowed money, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, except: except (i) ~~payment~~ payments to the Agent or the Lenders in respect of ~~regularly~~ the Obligations, (ii) regular scheduled payments of interest and principal ~~payments as, in the form of payment~~ as and when due (to the extent not prohibited by applicable subordination provisions in ~~respect~~ favor of the Agent), and (iii) the conversion of any ~~Indebtedness, other than payments in respect of any Junior Financing prohibited by the subordination provisions thereof; (ii) refinancings of Junior Financing~~ Indebtedness ~~with proceeds of other Junior Financing Indebtedness permitted to be in~~into common Equity Interests.

Appears in 2 contracts

Sources: Term Loan Agreement (Sorrento Therapeutics, Inc.), Term Loan Agreement (Sorrento Therapeutics, Inc.)

Restricted Payments; Certain Payments of Indebtedness. (a) Neither ~~Holdings, Intermediate~~ Holdings nor ~~any~~ the Borrower will, nor will they permit any Restricted ~~Subsidiary~~Subsidiary to, to pay or make, directly or indirectly, any Restricted Payment, except: (i) ~~Each~~ the Borrower and each Restricted Subsidiary may make Restricted Payments to ~~Intermediate Holdings, a~~ the Borrower or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a wholly-owned Subsidiary of a the Borrower, such Restricted Payment is made to ~~Intermediate Holdings, such~~ the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests; (ii) ~~payments or distributions~~ Restricted Payments to satisfy appraisal or other dissenters’ ~~or appraisal~~ rights, pursuant to or in connection with a consolidation, amalgamation, ~~merger or~~ merger, transfer of assets ~~(other than with respect to the Transactions)~~ or acquisition that complies with Section ~~6.03~~6.03 or Section 6.04; (iii) ~~Holdings and any Intermediate~~ Holdings may declare and make dividend payments or other distributions payable solely in the Equity Interests of such Person; (iv) Restricted Payments made in connection with or in order to consummate the Transactions (including, without limitation, (A) cash payments to holders of Equity ~~Interests~~ Interests, restricted stock units, options or other equity-linked interests of Target (or any Parent Entity) as provided by the Acquisition Agreement, (B) Restricted Payments (x) to direct and indirect parent companies of Holdings to finance a portion of the consideration for the Acquisition and (y) to holders of Equity Interests of the Target (immediately prior to giving effect to the Acquisition) in connection with, or as a result of, their exercise of appraisal rights and the settlement of any claims or actions (whether actual, contingent or potential) with respect thereto, in each case, with respect to the Transactions and (C) other payments with respect to working capital adjustments or ~~otherwise,~~ otherwise to the extent contemplated by the Acquisition Agreement~~); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis~~ , including any payments in respect of ~~this clause (iv)~~any warranty and indemnity insurance policy); (v) repurchases of Equity Interests in Holdings (or Restricted Payments by Holdings to allow repurchases of Equity ~~Interest~~ Interests in any direct or indirect parent of Holdings) ~~or Intermediate Holdings~~ deemed to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price of such stock options or warrants or other incentive interest; (vi) Restricted Payments to Holdings which Holdings may use to redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted stock units or stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) (or to make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity ~~Interests~~Interests or other such interests) held by current or former officers, managers, consultants, directors and employees (or their respective Affiliates, spouses, former spouses, other Permitted Transferees, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), ~~Holdings,~~ the ~~Borrowers~~ Borrower and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, profits interest, employment termination agreement or any other employment agreements or equity holders’ agreement; provided ~~that~~ that, except with respect to non-discretionary repurchases, the aggregate amount of Restricted Payments permitted by this clause (vi) after the Effective Date, together with the aggregate amount of loans and advances to Holdings (or any direct or indirect parent thereof) made pursuant to Section 6.04(m) in lieu thereof, shall not exceed the sum of (Aa) the greater of $~~15.0 million~~ 11,000,000 and ~~5.0~~7.5% of Consolidated EBITDA (provided that, after the occurrence of an IPO, such amount shall be the greater of $22,000,000 and 15% of Consolidated EBITDA) for the most recently ended Test Period in any fiscal year of ~~Holdings~~ the Borrower (~~which subsequent~~ net of any proceeds from the reissuance or resale of such Equity Interests to ~~an IPO shall be increased to~~ another Person received by Holdings, the ~~greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in~~ Borrower or any ~~fiscal year of Holdings~~Restricted Subsidiary), (Bb) the amount in any fiscal year equal to the cash proceeds of key man life insurance policies received by Holdings, the ~~Borrowers~~ Borrower or the Restricted Subsidiaries after the Effective Date, and (Cc) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket ~~hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision~~hereunder; provided that any unused portion of the preceding basket calculated pursuant to clauses (Aa) and (Bb) above for any fiscal year may be carried forward to succeeding fiscal years; provided, further, that any Indebtedness Incurred or Investments or payments made in reliance upon the Available RP Capacity Amount utilizing the unused amounts available pursuant to this Section 6.08(a)(vi) shall reduce the amounts available pursuant to this Section 6.08(a)(vi); (vii) ~~Holdings and~~ Holdings, the Borrower and/or any ~~Intermediate Holdings~~ Restricted Subsidiary may make Restricted Payments in cash: (A) ~~without duplication~~ the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof) attributable to the ownership or operations of Holdings, the Borrower and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of Holdings, the Borrower and the Restricted Subsidiaries and (y) otherwise permitted to be paid by Holdings, the Borrower and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the Borrower or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x); (B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence; (C) the proceeds of which shall be used by Holdings (or any other direct or indirect parent thereof) to make Restricted Payments of the type permitted by Section 6.08(a)(iv), Section 6.08(a)(vi) or Section 6.08(a)(xi); (D) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(m); provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) Holdings shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to the Borrower or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (E) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrower and the Restricted Subsidiaries; and (F) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful); (viii) additional Restricted Payments (including Restricted Payments to Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments, to make any payments in respect of any Permitted ~~Tax Distribution~~Holdings Debt or otherwise) (A) in an aggregate amount not to exceed, at the time of making any such Restricted Payment and when taken together with the aggregate amount of loans and advances to Holdings (or any direct or indirect parent thereof) made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii) and the aggregate amount of any other Restricted Payments made utilizing this clause (A), the greater of $43,000,000 and 30% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment, (B) so long as, immediately after giving effect to any such Restricted Payment, no Event of Default under Section 7.01(a), (b), (h) or (i) has occurred and is continuing, in an amount not to exceed the Available Amount that is Not Otherwise Applied and (C) in an amount not to exceed the Available Equity Amount that is Not Otherwise Applied; provided that any Indebtedness Incurred or Investments or payments made in reliance upon the Available RP Capacity Amount utilizing the unused amounts available pursuant to this Section 6.08(a)(viii) shall reduce the amounts available pursuant to this Section 6.08(a)(viii); (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) (a) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases, in each case, in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units and (b) payments or other adjustments to outstanding Equity Interests in accordance with any management equity plan, stock option plan or any other similar employee benefit plan, agreement or arrangement in connection with any Restricted Payment; (xi) Holdings or any Restricted Subsidiary may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment of Restricted Payments on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, in an annual amount for each fiscal year of Holdings equal to the sum of (a) an amount equal to 6.0% of the net cash proceeds of such IPO (and any subsequent public offerings) received by or contributed to Holdings and/or its Subsidiaries, other than public offerings with respect to common stock registered on Form S-8 and (b) an amount equal to 7.0% of the market capitalization of the IPO Entity at the time of such IPO; provided that any Indebtedness Incurred or Investments or payments made in reliance upon the Available RP Capacity Amount utilizing the unused amounts available pursuant to this Section 6.08(a)(xii) shall reduce the amounts available pursuant to this Section 6.08(a)(xii); (xiii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to 5.00 to 1.00 and (B) there is no continuing Event of Default under Section 7.01(a), (b), (h) or (i); (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions; (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, the Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, the Borrower or any Restricted Subsidiary may make Restricted Payments in cash, the proceeds of which shall be used by ~~Holdings or any Intermediate~~ Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (~~a)(vii)(A~~a)(xviii) shall not exceed the Tax liability that Holdings and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this ~~subclause~~ clause (Aa)(xviii) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to ~~Holdings,~~ the ~~Borrowers~~ Borrower or their Restricted Subsidiaries; (B) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof or any Intermediate Holdings) attributable to the ownership or operations of Holdings, the Borrowers and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of Holdings, the Borrowers and the Restricted Subsidiaries and (y) otherwise permitted to be paid by Holdings, the Borrowers and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the Borrowers or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x); (C) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence; (D) the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(m); provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) Holdings or any Intermediate Holdings shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to Holdings, the Borrowers or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with Holdings, the Borrowers or any of the Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrowers and the Restricted Subsidiaries; and (G) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful); (viii) in addition to the foregoing Restricted Payments, the Borrowers and any Intermediate Holdings may make additional Restricted Payments to any Intermediate Holdings and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt, in an aggregate amount, when taken together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii), not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as no Event of Default shall have occurred and be continuing (or, in the case of the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h) or (i)), the Available Amount that is Not Otherwise Applied plus (C) the Available Equity Amount that is Not Otherwise Applied; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; (xi) Holdings may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiii) payments made or expected to be made by Holdings, any Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to 5.00 to 1.0 and (B) there is no continuing Event of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make Restricted Payments in cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (~~xviii~~xvii) ~~above~~above (or any sub-clause therein), the ~~Borrowers~~ Borrower will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a). (b) Neither Holdings, Intermediate Holdings nor any Borrower will, nor will they permit any Restricted Subsidiary to, make or pay, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, except: (i) payment of regularly scheduled interest and principal payments as, in the form of payment and when due in respect of any Indebtedness, other than payments in respect of any Junior Financing prohibited by the subordination provisions thereof; (ii) refinancings of Junior Financing Indebtedness with proceeds of other Junior Financing Indebtedness permitted to be incircu

Appears in 2 contracts

Sources: First Lien Credit Agreement (First Advantage Corp), First Lien Credit Agreement (First Advantage Corp)

Appears in 2 contracts

Sources: Second Lien Credit Agreement (NEP Group, Inc.), Second Lien Credit Agreement (NEP Group, Inc.)

Restricted Payments; Certain Payments of Indebtedness. (a) Neither ~~Holdings, Intermediate~~ Holdings nor ~~any Borrower will~~the Company will declare or make, ~~nor will they permit any Restricted Subsidiary,~~ or agree to pay or make, directly or indirectly, any Restricted Payment, except: (i) ~~Each Borrower and each Restricted Subsidiary~~ Holdings may make (A) Restricted Payments ~~to Intermediate Holdings, a Borrower or any other Restricted Subsidiary; provided that~~ payable solely in the case of any such Restricted Payment by a Restricted Subsidiary that is not a wholly-owned Subsidiary of a Borrower, such Restricted Payment is made to Intermediate Holdings, such Borrower, any Restricted Subsidiary and to each other owner of Qualified Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests; (ii) payments or distributions to satisfy dissenters’ or appraisal rights, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of assets (other than with respect to the Transactions) that complies with Section 6.03; (iii) Holdings and any Intermediate Holdings may declare and make dividend payments or other distributions payable solely in the Equity Interests of such Person; (iv) Restricted Payments made in connection with or in order to consummate the Transactions (including, without limitation, (A) cash payments to holders of Equity Interests of Target as provided by the Acquisition AgreementHoldings, (B) Restricted Payments ~~to direct and indirect parent companies~~ from the Net Cash Proceeds of the issuance by Holdings of Qualified Equity Interests or a substantially contemporaneous capital contribution in respect of Qualified Equity Interests of Holdings ~~to finance a portion of the consideration for the Acquisition~~ and (C) ~~other payments with respect to working capital adjustments or otherwise, to~~ Restricted Payments from the ~~extent contemplated by~~ proceeds of Restricted Payments permitted under this Section 6.08 that are received from the ~~Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv))~~Company; (vii) ~~repurchases of~~ the Company may make Restricted Payments payable solely in Qualified Equity Interests of the Company and may make Restricted Payments from the Net Cash Proceeds of the issuance by the Company of Qualified Equity Interests or a substantially contemporaneous capital contribution in respect of Qualified Equity Interests of the Company; (iii) the Company may make Restricted Payments to Holdings (and Holdings may make Restricted Payments to any direct or indirect parent thereof) the proceeds of which are used to purchase, repurchase, retire, redeem or otherwise acquire the Equity Interests of Holdings (or ~~Restricted Payments by Holdings to allow repurchases~~ of ~~Equity Interest in~~ any such direct or indirect parent of Holdings) or ~~Intermediate Holdings deemed to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion~~ of the ~~exercise price~~ Company (following a Qualified Public Offering of ~~such stock options or warrants or other incentive interest;~~ the Company) (~~vi) Restricted Payments to Holdings which Holdings may use to redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted stock units or~~ including related stock appreciation rights or ~~other equity-linked interests issued with respect to~~ similar securities) held by any future, present or former employee, director, officer, manager or consultant (or their respective Controlled Investment Affiliates or Immediate Family Members) of Holdings, the Company, any of ~~such Equity Interests) (~~its Subsidiaries or ~~make Restricted Payments to allow~~ any of ~~Holdings’~~ its direct or indirect parent companies pursuant to ~~so redeem~~any management equity plan or stock option plan or any other management or employee benefit plan or agreement, ~~retire~~or any stock subscription or shareholder agreement (including, ~~acquire or repurchase their Equity Interests) held~~ for the avoidance of doubt, any principal and interest payable on any notes issued by ~~current or former officers~~the Holdings, ~~managers, consultants, directors and employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (~~the Company or any direct or indirect parent ~~thereof~~company of Holdings in connection with such purchase, repurchase, retirement, redemption or other acquisition), including any Equity Interest rolled over by management of the Holdings, the ~~Borrowers~~ Company or any direct or indirect parent company of Holdings in connection with the Transactions and, the RTD Transactions and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, profits interest, employment termination agreement or any other employment agreements or equity holders’ agreementHercules Transactions; provided that the aggregate amount of Restricted Payments ~~permitted by~~ made under this clause does not exceed $5,000,000 for any fiscal year (~~vi)~~ which amount shall be increased to $10,000,000 on and after the ~~Effective Date~~date of a Qualified Public Offering); provided, ~~together with~~ further, that each of the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu thereof, shall not exceed the sum of (A) the greater of $15.0 million and 5.0% of Consolidated EBITDA for the most recently ended Test Period amounts in any fiscal year ~~of Holdings (which subsequent to an IPO shall~~ under this clause may be increased by an amount not to ~~the greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings),~~ exceed: (~~B) the amount in any fiscal year equal to the cash proceeds of key man life insurance policies received by Holdings, the Borrowers or the Restricted Subsidiaries after the Effective Date, (C~~A) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of ~~Holdings (to~~ the ~~extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests)~~ Company and, to the extent contributed to ~~Holdings~~the Company, the cash proceeds from the sale of Equity Interests of Holdings or any direct or indirect ~~Parent Entity or management investment vehicle~~parent company of Holdings, in each case to any future, present or former employees, directors, ~~managers~~ officers, managers, or consultants (or their respective Controlled Investment Affiliates or Immediate Family Members) of Holdings, the Company, any of its Subsidiaries or any of its direct or indirect ~~Parent Entity or management investment vehicle~~ parent companies that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests ~~are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and~~ have not otherwise been applied to the payment of Restricted Payments by virtue of ~~the Available Equity Amount~~ clause (i) or ~~are otherwise applied to increase any other basket hereunder and~~ (Dii) of this Section 6.08(a); plus (B) the ~~aggregate~~ cash proceeds of key man life insurance policies received by Holdings, the Company or its Subsidiaries after the Effective Date; less (C) the amount ~~required to be paid under~~ of any Restricted Payments previously made with the ~~▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to~~ cash proceeds described in clauses (A) and (B) ~~above for any fiscal year may be carried forward to succeeding fiscal years; (vii) Holdings and any Intermediate Holdings may make Restricted Payments in cash: (A) without duplication~~ of any Permitted Tax Distribution, the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (a)(vii)(A) shall not exceed the Tax liability that Holdings and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone groupiii); and provided, further, that ~~Restricted Payments under this subclause (A) in respect~~ cancellation of ~~any Taxes attributable~~ Indebtedness owing to the ~~income~~ Company from any future, present or former employees, directors, officers, managers, or consultants of ~~any Unrestricted Subsidiaries of Holdings may be made only to~~ the ~~extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers~~ Company (or their ~~Restricted Subsidiaries; (B) the proceeds of which shall be used by Holdings~~ respective Controlled Investment Affiliates or ~~any Intermediate Holdings to pay (or to make Restricted Payments to allow~~ Immediate Family Members), any direct or indirect parent company of ~~Holdings to pay) (1) its operating expenses incurred in~~ the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (Company or any ~~parent thereof~~ of the Company’s Subsidiaries in connection with a repurchase of Equity Interests of the Company or any ~~Intermediate Holdings) attributable~~ of its direct or indirect parent companies will not be deemed to ~~the ownership~~ constitute a Restricted Payment for purposes of this covenant or ~~operations~~ any other provision of Holdings, the Borrowers and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of Holdings, the Borrowers and the Restricted Subsidiaries and (y) otherwise permitted to be paid by Holdings, the Borrowers and the Restricted Subsidiaries under this ~~Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the Borrowers or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x)~~Agreement; (Civ) non-cash repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants; (v) the ~~proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to~~ Company may make Restricted Payments to ~~allow any direct or indirect parent of~~ Holdings ~~to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence;~~ (D) the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(m); provided that (1) such Restricted Payment shall be made substantially concurrently together with the closing of such Investment and (2) Holdings or any Intermediate Holdings shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section ~~6.04(b~~6.04(q)) ~~to be contributed to Holdings, the Borrowers or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with Holdings, the Borrowers~~ in amounts required for Holdings or any direct or indirect parent company of ~~the Restricted Subsidiaries~~ Holdings to pay, in each case, without duplication, (A) franchise and excise taxes and other fees, taxes and expenses required to maintain their corporate existence; (B) foreign, federal, state, provincial, municipal and local income and similar taxes, to the extent such ~~merger~~income taxes are attributable to the income of the Company and its Subsidiaries and, ~~amalgamation or consolidation is permitted~~ to the extent of the amount actually received from its Unrestricted Subsidiaries, in ~~Section 6.03) in order~~ amounts required to ~~consummate~~ pay such ~~Investment,~~ taxes to the extent attributable to the income of such Unrestricted Subsidiaries; provided that in each case the amount of such payments in ~~accordance with~~ any fiscal year does not exceed the ~~requirements~~ amount that the Company and its Subsidiaries would be required to pay in respect of ~~Sections 5.11~~ foreign, federal, state, provincial, municipal and ~~5.12~~local taxes for such fiscal year were the Company, its Restricted Subsidiaries and its Unrestricted Subsidiaries (to the extent described above) to pay such taxes separately from any such parent company; (FC) ~~the proceeds of which shall be used to pay~~ customary salary, bonus and other benefits payable to employees, directors, officers and ~~employees~~ managers of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of ~~Holdings~~the Company and its Subsidiaries, including the ~~Borrowers~~ Company’s proportionate share of such amounts relating to such parent entity being a public company; (D) general corporate operating and overhead costs and expenses of Holdings or any direct or indirect parent company of Holdings not in excess of $2,000,000 in any fiscal year, to the ~~Restricted~~ extent such costs and expenses are attributable to the ownership or operation of the Company and its Subsidiaries, including the Company’s proportionate share of such amounts relating to such parent entity being a public company; (E) fees and expenses other than to Affiliates of the Company related to any unsuccessful equity or debt offering of such parent company; (F) amounts payable pursuant to the Management Services Agreements, (including any amendment thereto so long as any such amendment is not materially disadvantageous in the good faith judgment of the board of directors of the Company to the Lenders when taken as a whole, as compared to the Management Services Agreement as in effect on the Effective Date), solely to the extent such amounts are not paid directly by the Company or its Subsidiaries; and (G) cash payments in lieu of issuing fractional shares in connection with the ~~proceeds~~ exercise of ~~which shall be used by Holdings~~ warrants, options or ~~any Intermediate Holdings to pay (~~other securities convertible into or ~~to make Restricted Payments to allow~~ exchangeable for Equity Interests of Holdings, the Company or any direct or indirect parent ~~thereof~~ company of Holdings. (vi) to ~~pay~~the extent constituting Restricted Payments, Holdings and the Company may enter into and consummate the Transactions and, the RTD Transactions and the Hercules Transactions; (vii) ~~fees~~ to the extent constituting Restricted Payments, Holdings and ~~expenses related to~~ the Company may enter into and consummate transactions expressly permitted by any ~~equity offering, debt offering~~ provision of Section 6.03 or 6.09 (other ~~non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful~~than Section 6.09(e)); (viii) the Company may make Restricted Payments to Holdings to finance any investment permitted to be made pursuant to Section 6.04 (other than Section 6.04(m)); provided that (A) such Restricted Payment shall be made substantially concurrently with the closing of such investment and (B) Holdings shall, immediately following the closing thereof, cause (i) all property acquired (whether assets or Equity Interests) to be contributed to the Company or its Subsidiaries or (ii) the merger or amalgamation (to the extent permitted in Section 6.03) of the Person formed or acquired into the Company or its Subsidiaries in order to consummate such investment; (ix) Holdings may make Restricted Payments with the proceeds of the issuance of Indebtedness of Holdings permitted by Section 6.01 (other than (x) Section 6.01(c) and (y) any such Indebtedness Guaranteed by or secured directly or indirectly by the assets of the Company or any of its Subsidiaries); (x) in addition to the foregoing Restricted Payments, Holdings and the ~~Borrowers and any Intermediate Holdings~~ Company may make additional Restricted Payments to any Intermediate Holdings and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt, in an aggregate amount, when taken together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii), not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as no Event of Default shall have occurred and be continuing (or, in the case of the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h) or (i)), the Available Amount that is Not Otherwise Applied plus (C) the Available Equity Amount that is Not Otherwise Applied; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity InterestsPayments; provided that ~~such new Equity Interests contain terms and provisions at least as advantageous to~~ each of the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock unitsPayment Conditions is satisfied; (xi) ~~Holdings may~~ the distribution, as a dividend or otherwise (~~a) pay cash in lieu~~ and the declaration of ~~fractional Equity Interests in connection with~~ such dividend), of shares of capital stock of, or Indebtedness owed to the Company or a Subsidiary by, any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its termsUnrestricted Subsidiary; (xii) other Restricted Payments by Holdings and the ~~declaration~~ Company which, together with investments, loans and ~~payment~~ advances made pursuant to Section 6.04(w) and Restricted Debt Payments made pursuant to Section 6.08(b)(vii), do not exceed $25,000,000 in the aggregate; provided that, at the time such Restricted Payments are made and after giving effect thereto, no Liquidity Event or Event of Default exists or has occurred and is continuing; and (xiii) to the extent constituting Restricted ~~Payment on Holdings’ common stock~~ Payments, Holdings and the Company may make any non-compete, bonus or “earn-out” payments payable to former stockholders of Holdings (or ~~the payment of Restricted Payments to~~ any direct or indirect parent ~~company of Holdings~~ thereof) or the Company pursuant to ~~fund a payment of dividends~~ agreements in effect on ~~such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of~~ the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO;Effective Date; and (~~xiii~~xiv) Holdings and the Company may make Restricted Payments in respect of any payments made or expected to be made by Holdings, ~~any Borrower~~ the Company or any ~~Restricted~~ Subsidiary or any direct or indirect parent company of Holdings in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective ~~controlled Affiliates,~~ Controlled Investment Affiliates or Immediate Family ~~Members or Permitted Transferees~~Members) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to 5.00 to 1.0 and (B) there is no continuing Event of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make Restricted Payments in cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a). (b) ~~Neither Holdings, Intermediate Holdings nor any Borrower~~ No Loan Party will, nor will ~~they~~ it permit any ~~Restricted~~ Subsidiary to, make or ~~pay~~agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of on the Senior Secured Notes, the Senior Subordinated Notes, any other Subordinated Indebtedness or ~~interest on~~ any ~~Junior Financing~~Indebtedness that refinances, extends, refunds, replaces or renews any such Indebtedness (collectively, “Restricted Indebtedness”), or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any ~~Junior Financing~~Restricted Indebtedness (collectively, “Restricted Debt Payments”), except: (i) ~~payment of regularly scheduled interest~~ extensions, refinancings, refundings, replacements and ~~principal payments as, in the form of payment and when due in respect~~ renewals of any ~~Indebtedness, other than payments in respect of any Junior Financing prohibited~~ such Restricted Indebtedness to the extent permitted by ~~the subordination provisions thereof~~Section 6.01; (ii) ~~refinancings~~ payment of ~~Junior Financing~~ secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness (other than Borrowing Base Assets) so long as such sale is permitted by Section 6.05 (other than sales, transfers and dispositions under Section 6.05(j)); (iii) payment of Restricted Indebtedness in exchange for or with proceeds of any substantially contemporaneous issuance of Qualified Equity Interests or substantially contemporaneous capital contribution in respect of Qualified Equity Interests of Holdings or the Company; (iv) payment of Restricted Indebtedness under the Senior Secured Notes (or any extensions, renewals, refinancing, refundings or replacements thereof permitted under Section 6.01(g) and Section 6.02(w)), with the Net Cash Proceeds of any sale, transfer or other ~~Junior Financing~~ disposition of any Noteholder First Lien Collateral, or, in the case of any such extensions, refinancings, refundings, renewals or replacements, any property or assets in respect of which the security interest of the holders thereunder has priority over the security interest of the Agent, for the benefit of the Secured Parties, in such property or assets, pursuant to the Intercreditor Agreement or another intercreditor agreement in form and substance reasonably satisfactory to the Agent that is no less favorable to the Secured Parties than the Intercreditor Agreement; (v) payment of Restricted Indebtedness ~~permitted~~ with the Net Cash Proceeds of Qualified Equity Interests of Holdings or the Company; (vi) other Restricted Debt Payments; provided that each of the Payment Conditions is satisfied (it being understood and agreed that, if an irrevocable notice or contractual obligation is given in, made or arises in respect of any Restricted Debt Payment, the foregoing conditions only need to be insatisfied at the time of the giving of such irrevocable notice or entering into (or effectiveness of) any such contractual obligation); and (vii) other Restricted Debt Payments which, together with any investments, loans or advances made pursuant to Section 6.04(w) and Restricted Payments made pursuant to Section 6.08(a)(xii), do not exceed $25,000,000 in the aggregate; provided that, at the time such Restricted Debt Payments are made and after giving effect thereto, no Liquidity Event or Event of Default exists or has occurred and is continuing.

Appears in 2 contracts

Sources: Credit Agreement (ATD Corp), Credit Agreement (ATD Corp)

Restricted Payments; Certain Payments of Indebtedness. (a) ~~Neither Holdings~~The Borrower will not, ~~Intermediate Holdings nor any Borrower will, nor~~ and will ~~they~~ not permit any ~~Restricted Subsidiary~~Subsidiary to, to pay or make, directly or indirectly, any Restricted Payment, except: (i) ~~Each Borrower and~~ each ~~Restricted~~ Subsidiary may make Restricted Payments to ~~Intermediate Holdings, a~~ the Borrower or any other ~~Restricted~~ Subsidiary; provided that in the case of any such Restricted Payment by a ~~Restricted~~ Subsidiary that is not a wholly-owned Subsidiary of a the Borrower, such Restricted Payment is made to ~~Intermediate Holdings, such~~ the Borrower, any ~~Restricted~~ Subsidiary and to each other owner of Equity Interests of such ~~Restricted~~ Subsidiary based on their relative ownership interests of the relevant class of Equity Interests; (ii) ~~payments or distributions~~ Restricted Payments to satisfy appraisal or other dissenters’ ~~or appraisal~~ rights, pursuant to or in connection with a consolidation, amalgamation, ~~merger or~~ merger, transfer of assets ~~(other than with respect to the Transactions)~~ or acquisition that complies with Section ~~6.03~~6.03 or Section 6.04; (iii) ~~Holdings and any Intermediate Holdings~~ the Borrower may declare and make dividend payments or other distributions payable solely in the Equity Interests of ~~such Person~~the Borrower; (iv) Restricted Payments made in connection with or in order to consummate the Transactions (including, without limitation, (A) cash payments to holders of Equity Interests of Target as provided by the Acquisition Agreement, (B) Restricted Payments to direct and indirect parent companies of Holdings to finance a portion of the consideration for the Acquisition and (C) other payments with respect to working capital adjustments or otherwise, to the extent contemplated by the Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv))[reserved]; (v) repurchases of Equity Interests in ~~Holdings~~ the Borrower (or Restricted Payments by ~~Holdings~~ the Borrower to allow repurchases of Equity ~~Interest~~ Interests in Holdings or any direct or indirect parent of Holdings) , including, for the avoidance of doubt, Parent), or ~~Intermediate Holdings~~ any Subsidiary deemed to occur upon exercise of ~~stock~~ equity options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price of such ~~stock~~ equity options or warrants or other incentive ~~interest~~interests; (vi) Restricted Payments to Holdings which Holdings may use to redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted stock units or stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) (or to make Restricted Payments to allow any of Holdings’ direct or indirect parent ~~companies~~ companies, including, for the avoidance of doubt, Parent to so redeem, retire, acquire or repurchase their Equity ~~Interests~~Interests or other such interests) held by current or former officers, managers, consultants, directors and employees and other service providers (or their respective Affiliates, spouses, former spouses, other Permitted Transferees, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), ~~Holdings,~~ the ~~Borrowers~~ Borrower and the ~~Restricted~~ Subsidiaries, upon the death, disability, retirement or termination of employment or engagement of any such Person or otherwise in accordance with any ~~stock~~ equity option or ~~stock~~ equity appreciation rights plan, any management, director and/or employee ~~stock~~ equity ownership or incentive plan, ~~stock~~ equity subscription plan, profits interest, employment termination agreement or any other employment or service agreements with any director, officer or consultant or partnership or equity holders’ agreement; provided ~~that~~ that, except with respect to non-discretionary repurchases, the aggregate amount of Restricted Payments permitted by this clause (vi) after the Effective Date, together with the aggregate amount of loans and advances to Holdings (or any direct or indirect parent thereof) made pursuant to Section ~~6.04(m~~6.04(xiii) in lieu thereof, shall ~~not~~ not, in any fiscal year of the Borrower, exceed the sum of (Aa) $15,000,000 (net of any proceeds from the ~~greater~~ reissuance or resale of ~~$15.0 million and 5.0% of Consolidated EBITDA for~~ such Equity Interests to another Person received by Holdings, the ~~most recently ended Test Period in~~ Borrower or any fiscal year of Holdings (which subsequent to an IPO shall be increased to the greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of HoldingsSubsidiary), (Bb) the amount ~~in any fiscal year~~ equal to the cash proceeds of key man life insurance policies received by Holdings, the ~~Borrowers~~ Borrower or the ~~Restricted~~ Subsidiaries after the Effective Date, and (Cc) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts or the Fourth Amendment Equity Contribution and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket ~~hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision~~hereunder; provided that any unused portion of the preceding basket calculated pursuant to clauses (Aa) and (Bb) above for any fiscal year may be carried forward to succeeding fiscal years; provided, further, that any Investments or payments made in reliance upon the Available RP Capacity Amount utilizing the unused amounts available pursuant to this Section 6.08(a)(vi) shall reduce the amounts available pursuant to this Section 6.08(a)(vi); (vii) ~~Holdings~~ the Borrower and ~~any Intermediate Holdings~~ the Subsidiaries may make Restricted Payments ~~in cash~~to Holdings and any Parent Entity: (A) without duplication of any Permitted Tax Distribution, the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (a)(vii)(A) shall not exceed the Tax liability that Holdings and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers or their Restricted Subsidiaries; (B) the proceeds of which shall be used by ~~Holdings or any Intermediate~~ Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent ~~thereof or any Intermediate Holdings~~thereof) attributable to the ownership or operations of Holdings, the ~~Borrowers~~ Borrower and the ~~Restricted~~ Subsidiaries, (3) fees and expenses (x) due and payable by any of Holdings, the ~~Borrowers~~ Borrower and the ~~Restricted~~ Subsidiaries and (y) otherwise ~~permitted~~ not prohibited to be paid by Holdings, the ~~Borrowers~~ Borrower and the ~~Restricted~~ Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the ~~Borrowers~~ Borrower or the ~~Restricted~~ Subsidiaries pursuant to Section ~~6.09(iii~~5.19(iii) or (x); (CB) the proceeds of which shall be used by ~~Holdings or any Intermediate~~ Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence; (DC) the proceeds of which shall be used by Holdings (or any other direct or indirect parent thereof) to make Restricted Payments of the type permitted by Section ~~6.08(a)(iv~~6.08(a)(vi) or Section ~~6.08(a)(vi~~6.08(a)(xi); (ED) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section ~~6.04(m~~6.04(xiii); provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) Holdings or any ~~Intermediate Holdings~~ Parent Entity shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section ~~6.04(b~~6.04(ii)) to be contributed to ~~Holdings,~~ the ~~Borrowers~~ Borrower or the ~~Restricted~~ Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with ~~Holdings,~~ the ~~Borrowers~~ Borrower or any of the ~~Restricted~~ Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in by Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (FE) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to ~~officers~~ officers, employees and ~~employees~~ other service providers of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the ~~Borrowers~~ Borrower and the ~~Restricted~~ Subsidiaries; and (GF) the proceeds of which shall be used by ~~Holdings or any Intermediate~~ Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful); (viii) ~~in addition to the foregoing~~ Restricted ~~Payments, the Borrowers and any Intermediate Holdings may make additional~~ Payments (including Restricted Payments to ~~any Intermediate Holdings and~~ Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings ~~or by any Intermediate Holdings~~ to make any payments in respect of any ~~Permitted Holdings Debt,~~ Indebtedness of Holdings) (A) in an aggregate ~~amount~~amount not to exceed, at the time of making any such Restricted Payment and when taken together with the aggregate amount of loans and advances to Holdings (or any direct or indirect parent thereof) made pursuant to Section ~~6.04(m~~6.04(xiii) in lieu of Restricted Payments permitted by this clause (viii), ~~not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed~~ the greater of $~~75.0 million~~ 25,000,000 and 254.0% of Consolidated ~~EBITDA for~~ Total Assets as of the last day of the most recently ended Test Period ~~after giving~~ as of such time determined on a Pro Forma ~~Effect to the making of such Restricted Payment~~ Basis, plus (B) ~~so long as no Event of Default shall have occurred and be continuing (or, in~~ the ~~case of the use of the Starter Basket~~ Available Amount that is Not Otherwise ~~Applied~~Applied (provided that, with respect to any Restricted Payment made in reliance on clause (b) of the definition of “Available Amount” pursuant to this clause (B), no Event of Default under Section 7.01(a), (b), (h) or (i~~)), the Available Amount that is Not Otherwise Applied~~ ) shall be continuing or would result therefrom) plus (C) the Available Equity Amount that is Not Otherwise Applied; provided that any Investments made in reliance upon the Available RP Capacity Amount utilizing the unused amounts available pursuant to this Section 6.08(a)(viii) shall reduce the amounts available pursuant to this Section 6.08(a)(viii); (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (xa) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, ~~manager~~ manager, consultant or ~~consultant~~ other service provider and any repurchases of Equity Interests in consideration of such payments including deemed ~~repurchases~~ repurchases, in each case, in connection with the exercise of ~~stock~~ equity options and the vesting of restricted ~~stock~~ equity and restricted ~~stock units~~equity units and (b) payments or other adjustments to outstanding Equity Interests in accordance with any management equity plan, equity option plan or any other similar employee benefit plan, agreement or arrangement in connection with any Restricted Payment; (xi) ~~Holdings~~ the Borrower or any Subsidiary may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any acquisition, any Permitted Acquisition (or other similar ~~Investment)~~ Investment and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) ~~the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of~~ Restricted Payments in an annual amount not to ~~any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to~~ exceed the sum of (a) 6.0% ~~per annum~~ of the net cash proceeds ~~of such IPO~~ received by or contributed to ~~Intermediate Parent~~ the Borrower from the SPAC Transactions or ~~Parent, other than public~~ a Qualifying IPO and any follow-on offerings ~~with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and~~ plus (b) 7.0% of the market capitalization of ~~Intermediate~~ Parent on the date of the declaration of a Restricted Payment in reliance on this clause (xii); provided that any Investments or ~~Parent at~~ payments made in reliance upon the ~~time of such IPO~~Available RP Capacity Amount utilizing the unused amounts available pursuant to this Section 6.08(a)(xii) shall reduce the amounts available pursuant to this Section 6.08(a)(xii); (xiii) payments made or expected to be made by Holdings, ~~any~~ the Borrower or any ~~Restricted~~ Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, ~~manager~~ manager, consultant or ~~consultant~~ other service provider (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that ~~after giving effect to such Restricted Payment~~ either (A) ~~on a Pro Forma Basis,~~ the Liquidity is equal to or greater than $350,000,000 or (B) the Total Leverage Ratio is less than or equal to ~~5.00~~ 4.00 to ~~1.0 and (B) there is no continuing Event of Default~~1.00, in either case after giving effect to such Restricted Payment on a Pro Forma Basis; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments)[reserved]; (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments)[reserved]; (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense[reserved]; and (xviii) ~~Holdings, Intermediate Holdings, any~~ the Borrower ~~or any Restricted Subsidiary~~ may make Restricted Payments in cash to Holdings or any direct or indirect equity holder of Holdings in amounts, as reasonably determined by the Borrower in good faith, sufficient to permit Holdings (or any successor to ~~make~~Holdings) to make pro rata distributions to its equity holders (based on their percentage interests in Holdings) in amounts that will permit each such equity holder of Holdings to receive an amount equal to its Tax Distribution Amount (determined solely by reference to tax items of Holdings that are attributable to the Borrower and its Subsidiaries). Notwithstanding the foregoing, from and ~~Holdings may make~~after the Third Amendment Effective Date, (A) no Restricted Payments shall permitted to be made pursuant to Section 6.08(a)(viii), (xii) or (xiv) (nor may any Restricted Payment be reclassified to any such provision) and (B) the aggregate amount of Restricted Payments permitted to be made pursuant to Section 6.08(a)(vi) shall not exceed $2,000,000 and such Restricted Payments shall be solely in respect of ~~Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in~~ Equity Interests that vested prior to the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a)Third Amendment Effective Date. (b) ~~Neither Holdings~~The Borrower will not, ~~Intermediate Holdings nor any Borrower will, nor~~ and will ~~they~~ not permit any ~~Restricted~~ Subsidiary to, make or pay, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) ~~of or in respect~~ of principal of or interest on any Junior Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, prepayment, defeasance, acquisition, cancellation or termination of any Junior ~~Financing~~Financing more than one year prior to the scheduled maturity date thereof (any such payment, a “Restricted Debt Payment”), except: (i) payment of regularly scheduled interest and principal payments as, in the form of payment and when due in respect of any Indebtedness, other than payments in respect of any Junior Financing prohibited by the subordination provisions thereof; (ii) refinancings of Junior Financing Indebtedness with proceeds of of, or in exchange for, other Junior Financing Indebtedness permitted to be inincurred under Section 6.01; (iii) the conversion of any Junior Financing to Equity Interests (other than Disqualified Equity Interests) of Holdings or any of its direct or indirect parent companies; (iv) Restricted Debt Payments in an aggregate amount not to exceed the sum of (A) an amount at the time of making any such Restricted Debt Payment and when taken together with the aggregate amount of loans and advances to Holdings (or any direct or indirect parent thereof) made pursuant to Section 6.04(xiii) in lieu of Restricted Debt Payments permitted by this clause (iv) and any other Restricted Debt Payments made utilizing this subclause (A), the greater of $15,000,000 and 2.0% of Consolidated Total Assets as of the last day of the most recently ended Test Period as of such time determined on a Pro Forma Basis plus (B) the Available Amount (provided that with respect to any Restricted Debt Payments made out of amounts under clause (b) of the definition of “Available Amount” pursuant to this clause (B), no Event of Default under Section 7.01(a), (b), (h) or (i) shall have occurred or be continuing or would result therefrom) that is Not Otherwise Applied plus (C) the Available Equity Amount that is Not Otherwise Applied plus (D) the Available RP Capacity Amount; and (v) Restricted Debt Payments (including prior to their scheduled maturity); provided that after giving effect to such Restricted Debt Payment on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to 4.00 to 1.00. Notwithstanding the foregoing, from and after the Third Amendment Effective Date, no Restricted Payments shall

Appears in 2 contracts

Sources: Revolving Credit Agreement (Vacasa, Inc.), Revolving Credit Agreement (Vacasa, Inc.)

Restricted Payments; Certain Payments of Indebtedness. (a) ~~Neither Holdings, Intermediate Holdings nor any~~ The Borrower ~~will~~will not, nor will ~~they~~ it permit any of its Restricted ~~Subsidiary~~Subsidiaries, to pay or make, directly or indirectly, any Restricted Payment, except: (i) ~~Each~~ the Borrower and each Restricted Subsidiary may make Restricted Payments to ~~Intermediate Holdings, a~~ the Borrower or any ~~other~~ Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a wholly-owned Subsidiary of a the Borrower, such Restricted Payment is made to ~~Intermediate Holdings, such~~ the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests; (ii) payments or distributions to satisfy dissenters’ or appraisal rights, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of assets ~~(other than with respect to the Transactions)~~ that complies with Section 6.03; (iii) ~~Holdings~~ the Borrower and ~~any Intermediate Holdings~~ each Restricted Subsidiary may declare and make dividend payments or other distributions payable solely in the Equity Interests of such Person; (iv) any Restricted ~~Payments~~ Payment on or after the Effective Date made in connection with or as a result of the Transactions and the fees and expenses related thereto or used to fund amounts owed in ~~order to consummate~~ connection with the Transactions (~~including~~including dividends or distributions to any direct or indirect parent company of the Borrower to permit payment by such parent company of such amounts), ~~without limitation~~including the settlement of claims or actions in connection with or as a result of the Acquisition or to satisfy indemnity or other similar obligations or any other earnouts, ~~(A) cash~~ purchase price adjustments, working capital adjustments and any other payments ~~to holders~~ under or as a result of ~~Equity Interests of Target as provided by~~ the Acquisition Agreement, (B) Restricted Payments to direct and indirect parent companies of Holdings to finance a portion of the consideration for the Acquisition and (C) other payments with respect to working capital adjustments or otherwise, to the extent contemplated by the Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv)); (va) repurchases of Equity Interests in ~~Holdings~~ the Borrower (or Restricted Payments by ~~Holdings~~ the Borrower to allow repurchases of Equity Interest in any direct or indirect parent of ~~Holdings~~the Borrower) or ~~Intermediate Holdings~~ any Restricted Subsidiary of the Borrower deemed to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price of such stock options or warrants or other incentive ~~interest~~interest and (b) the extent constituting Restricted Payments, the acquisition of Equity Interests held by joint venture partners pursuant to put and call or similar arrangements under any joint venture or similar agreement; (vi) Restricted Payments to ~~Holdings~~ the Borrower which ~~Holdings~~ the Borrower may use to redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted stock units or stock appreciation rights ~~or other equity-linked interests~~ issued with respect to any of such Equity Interests) (or make Restricted Payments to allow any of ~~Holdings’~~ the Borrower’s direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests) held by current or former officers, managers, consultants, independent contractors, directors ~~and~~ or employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of ~~Holdings~~ the Borrower (or any direct or indirect parent thereof), ~~Holdings,~~ the ~~Borrowers~~ Borrower and ~~the~~ its Restricted Subsidiaries, upon the death, disability, ~~retirement~~ retirement, resignation or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, ~~profits interest,~~ employment termination agreement or any other employment agreements or equity holders’ agreement; provided that the aggregate amount of Restricted Payments permitted by this clause (vi) after the Effective ~~Date, together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu thereof,~~ Date shall not exceed the sum of (A) the greater of $~~15.0 million~~ 25,000,000 and ~~5.0~~2.7% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of ~~Holdings (which subsequent to an IPO shall be increased to~~ the ~~greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings)~~Borrower, (B) the amount in any fiscal year equal to the cash proceeds of key man life insurance policies received by ~~Holdings,~~ the ~~Borrowers~~ Borrower or the Restricted Subsidiaries after the Effective Date, (C) the amount of any cash bonuses otherwise payable to future, present or former employees, directors, officers, managers, members, partners or consultants (or their respective Controlled Investment Affiliates or Immediate Family Members) of the Borrower, any of its Subsidiaries or any Parent Entity that are foregone in exchange for the receipt of Equity Interests of the Borrower or any Parent Entity pursuant to any compensation arrangement, including any deferred compensation plan and (D) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of ~~Holdings (to~~ the ~~extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests)~~ Borrower and, to the extent contributed to ~~Holdings~~the Borrower, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of ~~Holdings~~the Borrower, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests are ~~contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are~~ not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket ~~hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision~~hereunder; provided that any unused portion of the preceding basket ~~calculated pursuant to clauses (A) and (B)~~ above for any fiscal year may be carried forward to any succeeding fiscal ~~years~~year at the election of the Borrower; provided further that that cancellation of Indebtedness owing to the Borrower or any of its Restricted Subsidiaries from any future, present or former employees, directors, officers, managers or consultants (or their respective Controlled Investment Affiliates or Immediate Family Members, or any Permitted Transferee thereof) of the Borrower, any of its Restricted Subsidiaries or any Parent Entity in connection with a repurchase of Equity Interests of the Borrower or any Parent Entity is not a Restricted Payment under this covenant or any other provision of this Agreement; (vii) ~~Holdings and any Intermediate Holdings~~ Borrower may make Restricted Payments to any direct or indirect parent of Borrower (including Parent) in cash: (A) ~~without duplication of any Permitted Tax Distribution,~~ the proceeds of which shall be used by ~~Holdings or any Intermediate Holdings~~ the Borrower to pay (or to make Restricted Payments to allow any direct or indirect parent of ~~Holdings~~ the Borrower to pay), for any taxable period for which ~~Holdings~~ the Borrower and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of ~~Holdings~~ the Borrower is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of ~~Holdings~~ the Borrower and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (a)(vii)(A) shall not exceed the Tax liability that ~~Holdings~~ the Borrower and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a ~~stand-~~stand alone taxpayer or ~~a stand-~~stand alone group; and provided, further, that Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers or their Restricted Subsidiaries; (B) the proceeds of which shall be used by ~~Holdings or any Intermediate Holdings~~ the Borrower to pay (or to make Restricted Payments to allow any direct or indirect parent of ~~Holdings~~ the Borrower to pay) ) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax ~~reporting~~ reporting, management fees, service fees, rent and building costs and systems costs and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of ~~Holdings~~ the Borrower (or any parent ~~thereof or any Intermediate Holdings~~thereof) attributable to the ownership or operations of ~~Holdings,~~ the ~~Borrowers~~ Borrower and ~~the~~ its Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of ~~Holdings,~~ the ~~Borrowers~~ Borrower and ~~the~~ its Restricted Subsidiaries and (y) otherwise permitted to be paid by ~~Holdings,~~ the ~~Borrowers~~ Borrower and ~~the~~ its Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by ~~Holdings,~~ the ~~Borrowers~~ Borrower or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x); (C) the proceeds of which shall be used by ~~Holdings or any Intermediate Holdings~~ the Borrower to pay (or to make Restricted Payments to allow any direct or indirect parent of ~~Holdings~~ the Borrower to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence; (D) the proceeds of which shall be used by ~~Holdings~~ the Borrower to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E) ~~to finance~~ any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(m); provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) ~~Holdings or any Intermediate Holdings shall, immediately following~~ the ~~closing thereof,~~ Borrower shall cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to ~~Holdings,~~ the ~~Borrowers~~ Borrower or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with ~~Holdings,~~ the ~~Borrowers~~ Borrower or any of ~~the~~ its Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (F) the proceeds of which shall be used to pay customary salary, incentive compensation, bonus and other benefits payable to officers and employees of ~~Holdings~~ the Borrower or any direct or indirect parent company of ~~Holdings~~ the Borrower to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of ~~Holdings,~~ the ~~Borrowers~~ Borrower and ~~the~~ its Restricted Subsidiaries; and (G) the proceeds of which shall be used by ~~Holdings or any Intermediate Holdings~~ the Borrower to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity offering, debt offering or other non-ordinary course transaction permitted or not prohibited by this Agreement (whether or not such offering or other transaction is successful); (viii) in addition to the foregoing Restricted Payments, the ~~Borrowers~~ Borrower and any ~~Intermediate Holdings~~ Restricted Subsidiary may make additional Restricted Payments to ~~any Intermediate Holdings and Holdings~~Parent, the proceeds of which may be utilized by ~~Holdings~~ Parent to make additional Restricted ~~Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt~~Payments, in an aggregate ~~amount, when taken together with the aggregate~~ amount ~~of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii),~~ not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this ~~clause~~ subclause (A) and amounts utilized under Section 6.08(b)(iv)(A), not to exceed the greater of $~~75.0 million~~ 300,000,000 and 2533.0% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment ~~plus (B)~~ so long as ~~no Event of Default shall have occurred and be continuing (or, in the case of the use of the Starter Basket that is Not Otherwise Applied,~~ no Event of Default under Section 7.01(a), (b), (h) or (i))) shall have occurred and be continuing or would result therefrom, plus (B) the Available Amount that is Not Otherwise Applied so long as no Event of Default under Section 7.01(a), (b), (h) or (i) shall have occurred and be continuing or would result therefrom, plus (C) the Available Equity Amount that is Not Otherwise Applied; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock ~~options~~ options, and the vesting of restricted stock and restricted stock units; (xi) ~~Holdings~~ the Borrower may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment or distributions on, or the purchase, redemption, defeasance or other acquisition or retirement for value of, the Borrower’s of Restricted Payment on ~~Holdings’~~ the Borrower’s common stock (or the payment of dividends or distributions of Restricted Payments to any direct or indirect parent company of ~~Holdings~~ the Borrower to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to ~~Intermediate Parent or Parent~~the Borrower, other than public offerings with respect to ~~Intermediate Parent’s or~~ Parent’s common stock registered on Form S-8 and any public sale constituting an Excluded Contribution and (b) 7.0% of the market capitalization of ~~Intermediate Parent or Parent~~ the Borrower at the time of such IPO; (xiii) payments made or expected to be made by ~~Holdings, any~~ the Borrower or any of its Restricted ~~Subsidiary~~ Subsidiaries in respect of withholding or similar taxes payable upon exercise of Equity Interests or any other equity award (including restricted stock units in connection with the Transactions) by any future, present or former employee, director, officer, manager or consultant (or their respective ~~controlled Affiliates,~~ Controlled Investment Affiliates or Immediate Family ~~Members~~ Members, or any Permitted ~~Transferees~~Transferees or any legatee or distribute thereof) of the Borrower, any of its Restricted Subsidiaries or any Parent Entity and ~~any~~ repurchases or withholdings of Equity Interests ~~deemed to occur upon~~ in connection with the exercise or vesting of any stock or other equity options or, warrants or ~~warrants~~ other incentive interests or the grant, vesting or delivery of equity awards if such Equity Interests represent all or a portion of the exercise price thereof or payments in lieu of the issuance of fractional Equity Interests, or withholding obligations with respect to, such ~~options or~~ options, warrants or ~~required withholding~~ other incentive interests or ~~similar taxes~~other Equity Interests or equity awards; (xiv) additional Restricted Payments; provided that after giving effect to any such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to ~~5.00~~ 3.80 to ~~1.0~~ 1.00 and (B) there is no continuing Event of ~~Default~~Default under Section 7.01(a), (b), (h) or (i); (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to ~~Holdings~~Parent, a the Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (~~xvii~~xvi) the declaration and payment of dividends in respect of JV Disqualified Equity Interest of the Borrower or any of its Restricted Subsidiaries or any class or series of Preferred ~~Equity Interests~~ Stock of any Restricted Subsidiary, in each case issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense~~; and~~; (xvii) to the extent constituting Restricted Payments, the acquisition of Equity Interests held by joint venture partners pursuant to put and call or similar arrangements under any joint venture or similar agreement; (xviii) ~~Holdings~~payments, ~~Intermediate Holdings~~distributions or other Restricted Payments made in connection with transactions among the Borrower and any of its Restricted Subsidiaries, on the one hand, and Parent and any of its direct or indirect Subsidiaries and/or any joint venture partners, customers and/or clients, on the other hand entered into in the ordinary course of business or consistent with industry or past practice, including, without limitation, any cash management and treasury activities and any shared services, offices or facilities including back office, accounting, books and records keeping or similar functions, and shared production or other facilities, branch offices and other shared spaces, and licensing or similar arrangements related thereto; (xix) payments of dividends or distributions of Restricted Payments directly or indirectly by Parent, the Borrower or any of its Restricted Subsidiary may make Restricted Payments in cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a). (b) Neither Holdings, Intermediate Holdings nor any Borrower will, nor will they permit any Restricted Subsidiary to, make or pay, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account Subsidiaries of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, except: (i) payment of regularly scheduled interest and principal payments as, in the form of payment and when due in respect of any Indebtedness, other than payments in respect of any Junior Financing prohibited by the subordination provisions thereof; (ii) refinancings of Junior Financing Indebtedness with proceeds of other Junior Financing Indebtedness permitted to be inassets

Appears in 2 contracts

Sources: Seventh Amendment to Seventh Amended and Restated Credit Agreement (Sinclair Broadcast Group, LLC), Credit Agreement (Sinclair Broadcast Group Inc)

Restricted Payments; Certain Payments of Indebtedness. (a) Neither Holdings, Intermediate Holdings nor any Borrower will, nor will they permit any Restricted ~~Subsidiary,~~ Subsidiary to pay or make, directly or indirectly, any Restricted Payment, except: (i) ~~Each Borrower~~ The Borrowers and each Restricted Subsidiary may make Restricted Payments to Intermediate Holdings, ~~a Borrower~~ the Borrowers or any other Restricted ~~Subsidiary; provided that~~ Subsidiary (and, in the case of any such ~~Restricted Payment by a Restricted~~ Subsidiary that is not a wholly-owned ~~Subsidiary of a Borrower~~Subsidiary, ~~such Restricted Payment is made to Intermediate Holdings, such Borrower, any Restricted Subsidiary and~~ to each other owner of Equity Interests of such ~~Restricted~~ Subsidiary based on their relative ownership interests of the relevant class of Equity Interests); (ii) ~~payments~~ Intermediate Holdings, any Intermediate Parent, any Borrower or ~~distributions~~ any Restricted Subsidiary may make Restricted Payments in cash to ~~satisfy dissenters’ or appraisal rights~~Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of (A) Permitted Tax Distributions and (B) Key Employee Distributions (provided that, in any fiscal year, the amount of Key Employee Distributions made pursuant to ~~or in connection with a consolidation, amalgamation, merger or transfer of assets~~ this clause (~~other than with respect~~ ii)(B) does not exceed an amount equal to (x) $25,000,000 divided by (y) 1.0 minus the ~~Transactions) that complies with Section 6.03~~Tax Rate); (iii) ~~Holdings~~ Holdings, any Intermediate Parent and ~~any~~ Intermediate Holdings may declare and make dividend payments or other distributions payable solely in the Equity Interests of such Person; (iv) Restricted Payments made in connection with or in order to consummate the Transactions (~~including, without limitation, (A) cash payments to holders of Equity Interests of Target as provided by the Acquisition Agreement, (B)~~ including Restricted Payments (x) to direct and indirect parent companies of ~~Holdings~~ WME to finance a portion of the consideration for the ~~Acquisition~~ Acquisition, (y) to holders of Equity Interests of the Target (immediately prior to giving effect to the Acquisition) and (Cz) post-closing purchase price or other ~~payments with respect to working capital~~ adjustments ~~or otherwise, to the extent~~ contemplated by the Acquisition Agreement~~); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv)~~); (v) repurchases of Equity Interests in Holdings (or Restricted Payments by Holdings to allow repurchases of Equity Interest in any direct or indirect parent of Holdings) or Intermediate Holdings deemed to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price of such stock options or warrants or other incentive ~~interest~~interests; (vi) Restricted Payments to Holdings which Holdings may use to redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted ~~stock units or~~ stock, stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests) held by current or former officers, managers, consultants, directors and employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), Intermediate Holdings, the Borrowers and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, ~~profits interest,~~ employment termination agreement or any other employment agreements or equity holders’ agreement; provided ~~that~~ that, the aggregate amount of Restricted Payments permitted by this clause (vi) after the Effective Date, together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu thereof, shall not exceed the sum of (A) the greater of $15.0 million and 5.0% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings (which subsequent to an IPO shall be increased to the greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings), (B) the amount in any fiscal year equal to the cash proceeds of key man life insurance policies received by Holdings, the Borrowers or the Restricted Subsidiaries after the Effective Date, (C) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year may be carried forward to succeeding fiscal years; (vii) Holdings and any Intermediate Holdings may make Restricted Payments in cash: (A) without duplication of any Permitted Tax Distribution, the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (a)(vii)(A) shall not exceed the Tax liability that Holdings and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers or their Restricted Subsidiaries; (B) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof or any Intermediate Holdings) attributable to the ownership or operations of Holdings, the Borrowers and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of Holdings, the Borrowers and the Restricted Subsidiaries and (y) otherwise permitted to be paid by Holdings, the Borrowers and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the Borrowers or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x); (C) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence; (D) the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(m); provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) Holdings or any Intermediate Holdings shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to Holdings, the Borrowers or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with Holdings, the Borrowers or any of the Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrowers and the Restricted Subsidiaries; and (G) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful); (viii) in addition to the foregoing Restricted Payments, the Borrowers and any Intermediate Holdings may make additional Restricted Payments to any Intermediate Holdings and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt, in an aggregate amount, when taken together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii), not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as no Event of Default shall have occurred and be continuing (or, in the case of the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h) or (i)), the Available Amount that is Not Otherwise Applied plus (C) the Available Equity Amount that is Not Otherwise Applied; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; (xi) Holdings may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiii) payments made or expected to be made by Holdings, any Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to 5.00 to 1.0 and (B) there is no continuing Event of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make Restricted Payments in cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a). (b) Neither Holdings, Intermediate Holdings nor any Borrower will, nor will they permit any Restricted Subsidiary to, make or pay, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, except: (i) payment of regularly scheduled interest and principal payments as, in the form of payment and when due in respect of any Indebtedness, other than payments in respect of any Junior Financing prohibited by the subordination provisions thereof; (ii) refinancings of Junior Financing Indebtedness with proceeds of other Junior Financing Indebtedness permitted to be inclause

Appears in 2 contracts

Sources: First Lien Credit Agreement (Endeavor Group Holdings, Inc.), First Lien Credit Agreement (Endeavor Group Holdings, Inc.)

Restricted Payments; Certain Payments of Indebtedness. (a) ~~Neither Holdings, Intermediate Holdings nor any~~ The Borrower ~~will~~will not, nor will ~~they~~ it permit any Restricted ~~Subsidiary~~Subsidiary to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, except: (i) ~~Each~~ the Restricted Subsidiaries may declare and pay dividends or make other distributions ratably with respect to their Equity Interests; (ii) the Borrower may declare and ~~each~~ pay dividends with respect to its Equity Interests payable solely in shares of Qualified Equity Interests; (iii) the Borrower may make Restricted ~~Subsidiary~~ Payments, not exceeding, taken together with the aggregate principal amount of all Indebtedness incurred under Section 6.01(xiv) during such fiscal year, $20,000,000 during any fiscal year, pursuant to and in accordance with stock option plans or other benefit plans approved by Holdings’, any direct or indirect parent’s of Holdings or the Borrower’s board of directors for former or current management, directors, Franchisees or employees of Holdings, any direct or indirect parent of Holdings, the Borrower or any of the Restricted Subsidiaries; (iv) the Borrower may make Restricted Payments to ~~Intermediate~~ Holdings at such times and in such amounts (A) not exceeding $5,000,000 during any fiscal year, as shall be necessary to permit Holdings or any direct or indirect parent of Holdings to discharge its general corporate and overhead (including franchise taxes and directors fees and, following the completion of an IPO, costs and expenses necessary for or incidental to Holdings’s or any direct or indirect parent of Holdings continued existence as a public company) expenses incurred in the ordinary course and other permitted liabilities, (B) as shall be necessary to pay the Tax liabilities of Holdings or any direct or indirect parent of Holdings directly attributable to (or arising as a result of) the operations of the Borrower and the Subsidiaries and (C) to the extent of amounts paid by Unrestricted Subsidiaries to the Borrower or any ~~other~~ Restricted Subsidiary; , as shall be necessary to pay the Tax liabilities of or allocable to Unrestricted Subsidiaries, provided, however, that (1) the amount of Restricted Payments pursuant to clause (B) of this clause (iv) shall not exceed the amount that the Borrower and the Restricted Subsidiaries would be required to pay in respect of Federal, State and local taxes were the Borrower and the Restricted Subsidiaries to pay such taxes as stand-alone taxpayers and (2) all Restricted Payments made to Holdings pursuant to this clause (iv) are used by Holdings or any direct or indirect parent of Holdings for the purposes specified herein within five Business Days after Holdings’s or such parent’s receipt thereof; (v) the Borrower may make Restricted Payments to the extent necessary to permit Holdings or any direct or indirect parent of Holdings to make payments of or on account of (A) management, consulting, investment banking and advisory fees and (B) reimbursement of out-of-pocket costs and expenses incurred in connection with management, consulting, investment banking and advisory services, in each case to the Sponsors or Sponsor Affiliates to the extent permitted by Section 6.09, provided that no Default shall have occurred and be continuing or would result therefrom; (vi) on or after July 1, 2011, the Borrower may declare and pay dividends and distributions to Holdings up to an amount not to exceed the Available Amount, provided that (x) at the time of any such dividend, distribution, repurchase, redemption or retirement, no Default shall have occurred and be continuing or would result therefrom, (y) at the time of such dividend, distribution, repurchase, redemption or retirement and after giving effect thereto and to any borrowing in connection therewith, the Borrower complies, on a Pro Forma Basis, with the covenants set out in Sections 6.12 and 6.13 and (z) in the case of any such Restricted Payment by in an amount in excess of $15,000,000, the Borrower has delivered to the Administrative Agent a ~~Restricted Subsidiary that is not a wholly-owned Subsidiary~~ certificate of a ~~Borrower~~Financial Officer, ~~such Restricted Payment is made to Intermediate Holdings~~together with all relevant financial information reasonably requested by the Administrative Agent, ~~such Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests~~ demonstrating the calculation of the ~~relevant class of Equity Interests~~Available Amount; (iivii) ~~payments or distributions~~ [Reserved.] (viii) the Borrower may make Restricted Payments to ~~satisfy dissenters’ or appraisal rights~~Holdings in such amounts as shall be necessary to pay out-of-pocket legal, ~~pursuant to or~~ accounting and filing fees, costs and expenses incurred in connection with a ~~consolidation, amalgamation, merger or transfer~~ proposed offering of assets (other than with respect to the Transactions) that complies with Section 6.03; (iii) Holdings and any Intermediate Holdings may declare and make dividend payments or other distributions payable solely in the Qualified Equity Interests of ~~such Person; (iv) Restricted Payments made in connection with~~ Holdings or in order to consummate the Transactions (including, without limitation, (A) cash payments to holders of Equity Interests of Target as provided by the Acquisition Agreement, (B) Restricted Payments to direct and indirect parent companies of Holdings to finance a portion of the consideration for the Acquisition and (C) other payments with respect to working capital adjustments or otherwise, to the extent contemplated by the Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv)); (v) repurchases of Equity Interests in Holdings (or Restricted Payments by Holdings to allow repurchases of Equity Interest in any direct or indirect parent of Holdings) , provided that no Default shall have occurred and be continuing or Intermediate Holdings deemed to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price of such stock options or warrants or other incentive interestwould result therefrom; (viix) [Reserved.] (x) [Reserved.] (xi) the Borrower may make Restricted Payments to Holdings ~~which Holdings may use~~ in an amount necessary to redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted stock units or stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests) held by current or former officers, managers, consultants, directors and employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), Holdings, the Borrowers and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, profits interest, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that the aggregate amount of Restricted Payments permitted by this clause (vi) after the Effective Date, together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu thereof, shall not exceed the sum of (A) the greater of $15.0 million and 5.0% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings (which subsequent to an IPO shall be increased to the greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings), (B) the amount in any fiscal year equal to the cash proceeds of key man life insurance policies received by Holdings, the Borrowers or the Restricted Subsidiaries after the Effective Date, (C) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year may be carried forward to succeeding fiscal years; (vii) Holdings and any Intermediate Holdings may make Restricted Payments in cash: (A) without duplication of any Permitted Tax Distribution, the proceeds of which shall be used by enable Holdings or ~~any Intermediate Holdings to pay (or to make Restricted Payments to allow~~ any direct or indirect parent of Holdings to ~~pay), for~~ make required payments in respect of Disqualified Equity Interests or Subordinated Debt issued by Holdings or any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of ~~Holdings is~~ Holdings, provided that (i) such payments are permitted (x) in the ~~common parent~~ case of Disqualified Equity Interests, by another clause of this Section 6.08 or (~~a “Tax Group”)~~y) in the case of Subordinated Debt, ~~the portion of any U.S. federal, state, local or foreign Taxes~~ by paragraph (~~as applicable~~b) of this Section 6.08 and (ii) Holdings or such ~~Tax Group for~~ parent promptly applies such ~~taxable period that are attributable to~~ proceeds in the income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (a)(vii)(A) shall not exceed the Tax liability that Holdings and/or its Subsidiaries (as applicable) would have incurred were manner required by such ~~Taxes determined as if such entity(ies) were a stand-alone taxpayer~~ Disqualified Equity Interests or a stand-alone group; and provided, further, that Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers or their Restricted SubsidiariesSubordinated Debt; (Bxii) the ~~proceeds of which shall be used by Holdings~~ Borrower or any ~~Intermediate Holdings~~ Restricted Subsidiary may acquire, redeem or retire any Equity Interests of any other Subsidiary provided that such acquisition, redemption or retirement is permitted pursuant to ~~pay~~ Sections 6.03 and 6.04; and (xiii) substantially concurrently with an IPO, and in any event, no later than 30 Business Days following the issue or transfer of Equity Interests pursuant to such IPO, the Borrower may make Restricted Payments to ~~allow~~ Holdings to the extent necessary to permit Holdings or any direct or indirect parent of Holdings to ~~pay) (1) its operating expenses incurred in~~ make the ~~ordinary course~~ payment of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof or any Intermediate Holdings) attributable to the ownership or operations of Holdings, the Borrowers and the Restricted Subsidiaries, (3) fees ~~and expenses (x) due and payable by any of Holdings, the Borrowers and the Restricted Subsidiaries and (y) otherwise~~ permitted to be paid by Holdings, the Borrowers and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the Borrowers or the Restricted Subsidiaries pursuant to Section ~~6.09(iii) or (x~~6.09(ix)(B); (C) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence; (D) the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(m); provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) Holdings or any Intermediate Holdings shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to Holdings, the Borrowers or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with Holdings, the Borrowers or any of the Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrowers and the Restricted Subsidiaries; and (G) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful); (viii) in addition to the foregoing Restricted Payments, the Borrowers and any Intermediate Holdings may make additional Restricted Payments to any Intermediate Holdings and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt, in an aggregate amount, when taken together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii), not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as no ~~Event of~~ Default shall have occurred and be continuing ~~(or, in the case of the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h)~~ or (i)), the Available Amount that is Not Otherwise Applied plus (C) the Available Equity Amount that is Not Otherwise Applied; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; (xi) Holdings may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) would result therefrom and (bB) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiii) payments made or expected to be made by Holdings, any Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) payment and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect ~~to such Restricted Payment (A)~~ thereto, the Borrower complies, on a Pro Forma Basis, with the ~~Total Leverage Ratio is less than or equal to 5.00 to 1.0~~ covenants set out in Sections 6.12 and (B) there is no continuing Event of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make Restricted Payments in cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a)6.13. (b) ~~Neither Holdings, Intermediate Holdings nor any~~ The Borrower ~~will~~will not, nor will ~~they~~ it permit any Restricted Subsidiary to, make or ~~pay~~agree to pay or make, directly or ~~indirectly~~indirectly (other than agreeing to customary provisions in respect of repayment and repurchase upon asset sales in the Senior Note Documents or any Subordinated Debt Documents), any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on the Senior Notes or any ~~Junior Financing~~Subordinated Debt, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, ~~cancellation~~ cancelation or termination of the Senior Notes or any ~~Junior Financing~~Subordinated Debt, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoing, except: (i) payment of regularly scheduled interest, any accrued and unpaid interest and original issue discount, if any, on the Senior Notes and any Subordinated Debt to the extent needed under the Code and applicable United States Treasury Regulations so as to cause the Senior Notes and any Subordinated Debt to not be treated as having been issued with “significant original issue discount” within the meaning of Section 163(i)(2) of the Code, and principal payments as, in the form of payment and when due in respect of the Senior Notes and any ~~Indebtedness~~Subordinated Debt, payments due upon a change of control under the Senior Notes or any Subordinated Debt or upon acceleration of the maturity of the Senior Notes or any Subordinated Debt, in each case other than payments in respect of ~~any Junior Financing~~ Subordinated Debt prohibited by the subordination provisions thereof; (ii) refinancings of ~~Junior Financing~~ Indebtedness to the extent permitted by Section 6.01; (iii) payment or other distribution in respect of principal or interest on, or payment or other distribution on account of the purchase, redemption, retirement, acquisition, cancelation or termination of, the Senior Notes or any Subordinated Debt, in each case in exchange for, or out of the Net Proceeds of, the substantially concurrent sale of Qualified Equity Interests of Holdings or any direct or indirect parent of Holdings; and (iv) on or after July 1, 2011, payments or other distributions in an amount not to exceed the Available Amount, provided that (x) at the time of any such payment or other distribution, no Default shall have occurred and be continuing or would result therefrom, (y) at the time of such payment or other distribution and after giving effect thereto and to any borrowing in connection therewith, the Borrower complies, on a Pro Forma Basis, with ~~proceeds~~ the covenants set out in Sections 6.12 and 6.13 and (z) in the case of any such payment or other ~~Junior Financing Indebtedness permitted~~ distribution in an amount in excess of $15,000,000, the Borrower has delivered to ~~be in~~the Administrative Agent a certificate of a Financial Officer, together with all relevant financial information reasonably requested by the Administrative Agent, demonstrating the calculation of the Available Amount.

Appears in 2 contracts

Sources: Credit Agreement (Burger King Holdings Inc), Credit Agreement (Burger King Holdings Inc)

Restricted Payments; Certain Payments of Indebtedness. (a) ~~Neither Holdings, Intermediate Holdings nor any Borrower~~ No Loan Party will, nor will ~~they~~ it permit any ~~Restricted Subsidiary~~Subsidiary of it to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, ~~except:~~except that (i) ~~Each Borrower and each Restricted Subsidiary may make Restricted Payments to Intermediate Holdings, a Borrower~~ Any Loan Party or any Subsidiary of a Loan Party may declare and pay cash dividends or make other ~~Restricted Subsidiary~~distributions of property to a Loan Party; provided that ~~in the case of~~ any such Restricted ~~Payment~~ Payments made to Holdings under this clause (i) shall be used only (A) (x) to pay general corporate, overhead and similar expenses incurred by Holdings in the ordinary course of business, or the amount of any indemnification claims made by any director or officer of Holdings, (y) to pay franchise taxes and other fees, taxes and expenses required to maintain the corporate existence of Holdings and (z) to pay taxes that are due and payable by Holdings as the parent of a ~~Restricted Subsidiary~~ consolidated group that includes Holdings and its Subsidiaries (including Unrestricted Subsidiaries); (B) so long as (1) no Event of Default has occurred and is continuing or would arise therefrom and (2) the Lead Borrower is not ~~a wholly-owned~~ prohibited under the Senior Initial Loan Facility or the Term Loan Financing Facility from making such payments to Holdings, to make payments in connection with the repurchase of Capital Stock of Holdings or any Subsidiary of ~~a Borrower~~it (including payments of principal and interest in respect of notes issued by Holdings to stockholders in connection therewith), provided that such ~~Restricted Payment~~ payments are otherwise permitted under this SECTION 6.06; (C) so long as (1) no Event of Default under SECTION 7.01(a), SECTION 7.01(b) (but only with respect to clause (i) thereof as it relates to non-payment of interest), SECTION 7.01(h) or SECTION 7.01(i) has occurred and is ~~made~~ continuing or would arise therefrom and (2) the Lead Borrower is not prohibited under the Senior Initial Loan Facility or the Term Loan Financing Facility from making such payments to ~~Intermediate~~ Holdings, ~~such Borrower, any Restricted Subsidiary~~ to pay interest as and ~~to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests~~ when due in respect of the ~~relevant class of Equity Interests~~Holdco Initial Loan Facility Indebtedness; and (D) to partially redeem or prepay Holdco Initial Loan Facility Indebtedness to the extent necessary to make an AHYDO “catch-up” payment thereon; (ii) ~~payments or distributions to satisfy dissenters’ or appraisal rights~~The Loan Parties and their Subsidiaries may make Restricted Payments for the purpose of paying amounts owing under the Advisory Agreement, ~~pursuant to or in connection with a consolidation, amalgamation, merger or transfer of assets (other than with respect~~ to the ~~Transactions) that complies with Section 6.03~~extent permitted under SECTION 6.07; (iii) ~~Holdings~~ The Loan Parties and ~~any Intermediate Holdings~~ their Subsidiaries may ~~declare and~~ make ~~dividend payments or other distributions payable solely in~~ Restricted Payments on the ~~Equity Interests of such Person~~Closing Date to consummate the VH Acquisition; (iv) The Loan Parties and their Subsidiaries may make Restricted Payments ~~made in connection with or in order to consummate the Transactions (including, without limitation, (A) cash payments to holders~~ consisting of ~~Equity Interests of Target as provided by the Acquisition Agreement, (B) Restricted Payments to direct and indirect parent companies of Holdings to finance a portion~~ Permitted Dispositions of the ~~consideration for the Acquisition~~ type described, and ~~(C) other payments with respect to working capital adjustments or otherwise,~~ subject to the ~~extent contemplated by~~ limitations contained, in the ~~Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv))~~definition thereof; (v) The Loan Parties and their Subsidiaries may make Restricted Payments constituting repurchases of ~~Equity Interests~~ Capital Stock of Holdings or any Subsidiary of it in ~~Holdings (or Restricted Payments by Holdings to allow repurchases of Equity Interest in any direct or indirect parent of Holdings) or Intermediate Holdings deemed to occur upon~~ connection with the exercise of stock options or warrants ~~or other incentive interests~~ if such ~~Equity Interests~~ equity interests represent a portion of the exercise price of such ~~stock options~~ option or ~~warrants or other incentive interest; (vi) Restricted Payments to Holdings which Holdings may use to redeem, acquire, retire or repurchase its Equity Interests (or any options,~~ warrants, restricted stock units or stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests) held by current or former officers, managers, consultants, directors and employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), Holdings, the Borrowers and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, profits interest, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that the aggregate amount of Restricted Payments permitted by this clause (vi) after the Effective Date, together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu thereof, shall not exceed the sum of (A) the greater of $15.0 million and 5.0% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings (which subsequent to an IPO shall be increased to the greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings), (B) the amount in any fiscal year equal to the cash proceeds of key man life insurance policies received by Holdings, the Borrowers or the Restricted Subsidiaries after the Effective Date, (C) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year may be carried forward to succeeding fiscal years; (vii) Holdings and any Intermediate Holdings may make Restricted Payments in cash: (A) without duplication of any Permitted Tax Distribution, the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (~~a)(vii)(A~~v) shall not exceed $5,000,000 in any Fiscal Year of the ~~Tax liability that~~ Lead Borrower; (vi) Holdings ~~and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that~~ may make Restricted Payments ~~under this subclause~~ constituting other repurchases of Capital Stock of Holdings or any Subsidiary of it, provided that such payments, in the aggregate with any payments made pursuant to clause (vii) below, shall not exceed $3,000,000 in any Fiscal Year (and provided further that, (A) in ~~respect~~ the event the entire $3,000,000 is not utilized in any Fiscal Year under clauses (vi) and (vii) of ~~any Taxes attributable~~ this SECTION 6.06, one hundred percent (100%) of such unutilized portion may be carried forward to the ~~income~~ next succeeding Fiscal Year of ~~any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to~~ Holdings, ~~the Borrowers or their Restricted Subsidiaries;~~ (B) ~~the proceeds of which~~ Restricted Payments made pursuant to this clause during any Fiscal Year shall be ~~used by Holdings or any Intermediate Holdings~~ deemed made, first, in respect of amounts carried over from the prior Fiscal Year pursuant to ~~pay~~ clause (~~or to make Restricted Payments to allow any direct or indirect parent~~ A) above and, second, in respect of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof or any Intermediate Holdings) attributable to the ownership or operations of Holdings, the Borrowers and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of Holdings, the Borrowers and the Restricted Subsidiaries amounts permitted for such Fiscal Year as provided above and (yC) ~~otherwise permitted to~~ the amount of excess capacity that may be paid by Holdings, the Borrowers and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the Borrowers or the Restricted Subsidiaries carried over from a prior Fiscal Year pursuant to ~~Section 6.09(iii~~clause (A) ~~or (x~~above shall be calculated without taking into account any amounts carried over to such prior Fiscal Year); (Cvii) ~~the proceeds~~ Holdings may make payments of ~~which shall be used by Holdings or any Intermediate Holdings~~ principal and interest in respect of notes issued to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence; (D) the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(m); provided that (1) such Restricted Payment shall be made substantially concurrently stockholders in connection with the ~~closing~~ repurchase of such Investment and (2) Holdings or any Intermediate Holdings shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to Holdings, the Borrowers or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with Holdings, the Borrowers or any shares of the Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees Capital Stock of Holdings or any ~~direct or indirect parent company~~ Subsidiary of ~~Holdings~~ it, provided that such payments, in the aggregate with any payments made pursuant to clause (vi) above, shall not exceed $3,000,000 in any Fiscal Year, (and provided further that, (A) in the event the entire $3,000,000 is not utilized in any Fiscal Year under clauses (vi) and (vii) of this SECTION 6.06, one hundred percent (100%) of such unutilized portion may be carried forward to the ~~extent such salaries, bonuses and other benefits are attributable to the ownership or operation~~ next succeeding Fiscal Year of Holdings, (B) Restricted Payments made pursuant to this clause during any Fiscal Year shall be deemed made, first, in respect of amounts carried over from the ~~Borrowers~~ prior Fiscal Year pursuant to clause (A) above and, second, in respect of amounts permitted for such Fiscal Year as provided above and (C) the ~~Restricted Subsidiaries~~amount of excess capacity that may be carried over from a prior Fiscal Year pursuant to clause (A) above shall be calculated without taking into account any amounts carried over to such prior Fiscal Year); and (Gviii) so long as the ~~proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to~~ Payment Conditions are satisfied, the Loan Parties and their Subsidiaries may in each Fiscal Year make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful); (viii) in addition to the foregoing Restricted Payments, the Borrowers and any Intermediate Holdings may make additional Restricted Payments to any Intermediate Holdings and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt, in an aggregate amount, ~~when taken together with~~ without duplication, not exceeding the amount set forth below for such Fiscal Year: 2007 $ 1,000,000 2008 $ 5,000,000 2009 $ 10,000,000 2010 $ 15,000,000 2011 $ 20,000,000 2012 $ 20,000,000 2013 $ 20,000,000 ; provided, that (a) to the extent the capacity to make Restricted Payments pursuant to this clause (viii) for any Fiscal Year exceeds the aggregate amount of ~~loans and advances~~ Restricted Payments made during such Fiscal Year, such excess capacity may be carried over to ~~Holdings~~ the next succeeding Fiscal Year, (b) Restricted Payments made pursuant to ~~Section 6.04(m) in lieu of Restricted Payments permitted by~~ this clause ~~(viii)~~during any Fiscal Year shall be deemed made, not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as no Event of Default shall have occurred and be continuing (orfirst, in the case of the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h) or (i)), the Available Amount that is Not Otherwise Applied plus (C) the Available Equity Amount that is Not Otherwise Applied; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with amounts carried over from the ~~exercise of stock options and the vesting of restricted stock and restricted stock units; (xi) Holdings may~~ prior Fiscal Year pursuant to clause (a) ~~pay cash~~ above and, second, in ~~lieu~~ respect of ~~fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment)~~ amounts permitted for such Fiscal Year as provided above and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xiic) the ~~declaration and payment~~ amount of ~~Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments~~ excess capacity that may be carried over from a prior Fiscal Year pursuant to ~~any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of~~ clause (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiii) payments made or expected to above shall be ~~made by Holdings,~~ calculated without taking into account any Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect amounts carried over to such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to 5.00 to 1.0 and (B) there is no continuing Event of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make Restricted Payments in cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a)prior Fiscal Year. (b) ~~Neither Holdings, Intermediate Holdings nor any Borrower~~ No Loan Party will, nor will ~~they~~ it permit any ~~Restricted~~ Subsidiary of it to, make or ~~pay, directly~~ agree to pay or ~~indirectly,~~ make any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any ~~Junior Financing~~Specified Indebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any ~~Junior Financing~~Specified Indebtedness, except: (i) ~~payment~~ payments in Capital Stock (as long as no Change in Control would result therefrom) and payments of ~~regularly~~ interest in-kind of the Loan Parties and their Subsidiaries; (A) scheduled payments of principal and interest ~~and principal payments as, in the form of payment~~ as and when due and (B) as long as the Payment Conditions are satisfied, prepayments in ~~respect~~ whole or in part of ~~any~~ the Senior Initial Loan Facility Indebtedness, ~~other than payments~~ Additional Borrower Unsecured Senior Notes and the Holdco Initial Loan Facility Indebtedness in ~~respect of~~ a principal amount not exceeding $10,000,000 in the aggregate in any ~~Junior Financing prohibited by~~ Fiscal Year and not exceeding $25,000,000 in the ~~subordination provisions thereof~~aggregate since the Closing Date; (iiiii) ~~refinancings~~ prepayment in whole or in part of ~~Junior~~ the Senior Initial Loan Facility, Additional Borrower Unsecured Senior Notes, the Holdco Initial Loan Facility or the Term Loan Financing ~~Indebtedness~~ Facility with the proceeds of any equity securities issued or capital contributions received by any Loan Party or any Subsidiary for the purpose of making such payment or prepayment; (iv) (A) mandatory prepayments by the Lead Borrower as required under the Senior Initial Loan Agreement as in effect on the Closing Date or any Senior Initial Loan Agreement, Senior Note Indenture or supplemental indenture, so long as such Senior Initial Loan Agreement, Senior Note Indenture or supplemental indenture contains terms regarding mandatory prepayments no less favorable to the obligors thereunder than the Senior Initial Loan Agreement in effect on the Closing Date, (B) mandatory prepayments by Holdings as required under the Holdco Initial Loan Agreement as in effect on the Closing Date or any Holdco Initial Loan Agreement, Holdco Note Indenture or supplemental indenture, so long as such Holdco Initial Loan Agreement, Holdco Note Indenture or supplemental indenture contains terms regarding mandatory prepayments no less favorable to Holdings than the Holdco Initial Loan Agreement in effect on the Closing Date and (C) mandatory prepayments by the Lead Borrower as required under the Additional Borrower Unsecured Senior Notes so long as the terms thereof regarding mandatory prepayments are no less favorable to the Lead Borrower than those in the Senior Note Indenture on the Second Amendment Effective Date; (v) partial redemption or prepayment by Holdings of the Holdco Initial Loan Facility Indebtedness to the extent necessary to make an AHYDO “catch-up” payment thereon; (vi) any repayment purchase, redemption, repurchase, defeasance or other ~~Junior~~ acquisition or retirement of any Indebtedness constituting Senior Initial Loan Facility Indebtedness (including, without limitation, Senior Initial Loans and any Senior Notes) made by exchange for, or out of the proceeds of the substantially concurrent issuance or sale of, Indebtedness of the Lead Borrower incurred in compliance with Section 6.01; (vii) any repayment purchase, redemption, repurchase, defeasance or other acquisition or retirement of any Indebtedness constituting Holdco Initial Loan Facility Indebtedness (including, without limitation, Holdco Initial Loans and any Holdco Notes) made by exchange for, or out of the proceeds of the substantially concurrent issuance or sale of, Indebtedness of Holdings incurred in compliance with Sections 6.01 and 6.03; (viii) any repayment, purchase, redemption, repurchase, defeasance or other acquisition or retirement of any Indebtedness constituting Additional Borrower Unsecured Senior Notes made by exchange for, or out of the proceeds of the substantially concurrent issuance or sale of, Indebtedness of the Borrowers incurred in compliance with Section 6.01; (ix) any prepayments or repayments of Indebtedness under the Term Loan Financing Facility as long as (A) immediately before and after giving pro forma effect thereto, no Event of Default shall have occurred and be continuing and (B) either (1) (x) on a pro forma basis giving effect thereto, on each day during the thirty (30) day period immediately preceding such prepayment or repayment and on the date thereof after giving effect thereto, Excess Availability shall be greater than the lesser of (I) $65,625,000 and (II) seventeen and one half percent (17.5%) of the Total Commitments and (y) immediately before and after giving pro forma effect thereto, the Consolidated Fixed Charge Coverage Ratio shall be at least 1.0 to 1.0 or (2) on a pro forma basis giving effect thereto, on each day during the thirty (30) day period immediately preceding such prepayment or repayment and on the date thereof after giving effect thereto, Excess Availability shall be greater than the lesser of (x) $93,750,000 and (y) twenty-five percent (25%) of the Total Commitments; and (x) any prepayments or repayments of Indebtedness ~~permitted to be in~~under the Term Loan Financing Facility with a Permitted Refinancing thereof.

Appears in 2 contracts

Sources: Credit Agreement (Music123, Inc.), Credit Agreement (Music123, Inc.)

Restricted Payments; Certain Payments of Indebtedness. (a) Neither ~~Holdings, Intermediate~~ Holdings nor ~~any~~ the Borrower will, nor will they permit any ~~Restricted Subsidiary~~other Subsidiary to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, except: (i) ~~Each~~ each subsidiary of the Borrower and ~~each Restricted Subsidiary~~ US Bidco may make Restricted Payments to ~~Intermediate Holdings~~the Borrower, a to US Bidco and to other subsidiaries of the Borrower ~~or any other Restricted Subsidiary; provided that~~ and US Bidco (and, in the case of ~~any such~~ a Restricted Payment by ~~a Restricted Subsidiary~~ any such subsidiary that is not a wholly-owned ~~Subsidiary~~ subsidiary of a Holdings, to the Borrower, ~~such Restricted Payment is made to Intermediate Holdings, such Borrower,~~ US Bidco and any ~~Restricted Subsidiary~~ other subsidiary of the Borrower and US Bidco and to each other owner of Equity Interests of such ~~Restricted Subsidiary~~ subsidiary based on their relative ownership interests of the relevant class of Equity Interests); (ii) payments or distributions to satisfy dissenters’ or appraisal rights, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of assets (other than with respect to the Transactions) that complies with Section 6.03; (iii) Holdings and ~~any Intermediate Holdings~~ each Subsidiary may declare and make dividend payments or other distributions payable solely in the Equity Interests of such Person, provided that in the case of any such Restricted Payment by a Subsidiary that is not a wholly-owned subsidiary of Holdings, such Restricted Payment is made to Holdings, any Subsidiary and to each other owner of Equity Interests of such Subsidiary based on their relative ownership interests of the relevant class of Equity Interests; (iii) Restricted Payments made on the Effective Date to consummate the Transactions; (iv) Restricted Payments made in connection with or in order to consummate the Transactions (including, without limitation, (A) cash payments to holders of Equity Interests of Target as provided by the Acquisition Agreement, (B) Restricted Payments to direct and indirect parent companies of Holdings to finance a portion of the consideration for the Acquisition and (C) other payments with respect to working capital adjustments or otherwise, to the extent contemplated by the Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv)); (v) repurchases of Equity Interests in Holdings (or Restricted Payments by Holdings to allow repurchases of Equity Interest in any direct or indirect parent of Holdings) or ~~Intermediate Holdings~~ any Subsidiary deemed to occur upon exercise of stock options or warrants ~~or other incentive interests~~ if such Equity Interests represent a portion of the exercise price of such ~~stock~~ options or ~~warrants or other incentive interest~~warrants; (viv) ~~Restricted Payments to Holdings which~~ Holdings may ~~use to~~ redeem, acquire, retire or repurchase its Equity Interests (or any ~~options, warrants, restricted stock units~~ options or warrants or stock appreciation rights ~~or other equity-linked interests~~ issued with respect to any of such Equity Interests) (or make Restricted Payments to allow any of the Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests) held by current or former officers, managers, consultants, directors and employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof~~), Holdings, the Borrowers~~ ) and the ~~Restricted~~ Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, ~~profits interest,~~ employment termination agreement or any other employment agreements or equity holders’ agreement~~; provided that the aggregate amount of Restricted Payments permitted by this clause~~ ; (vi) ~~after the Effective Date, together with the aggregate amount~~ without duplication of ~~loans and advances to Holdings made pursuant to~~ Section ~~6.04(m~~6.08(a)(vii)(G) in lieu thereof, shall not exceed the sum of (A) the greater of $15.0 million and 5.0% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings (which subsequent to an IPO shall be increased to the greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings), (B) the amount in any fiscal year equal to the cash proceeds of key man life insurance policies received by Holdingsbelow, the ~~Borrowers or the~~ Subsidiaries may make Restricted ~~Subsidiaries after the Effective Date, (C) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (~~Payments to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of allow any direct or indirect ~~Parent Entity or management investment vehicle,~~ equity owner of Holdings to pay Taxes incurred by such owner in ~~each case~~ any taxable period which are attributable to ~~any future, present or former employees, directors, managers or consultants~~ the income of ~~Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle~~ Holdings and the Subsidiaries; provided that ~~occurs after the Effective Date,~~ Restricted Payments made pursuant to this clause (a)(vi) shall only be made to the extent that the ~~cash proceeds from~~ liability of the ~~sale~~ equity owner receiving payment under this clause (a)(vi) for such Taxes exceeds the amount of distributions received by such ~~Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied~~ equity owner, other than any distributions received by such equity owner pursuant to the ~~payment~~ other provisions of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year may be carried forward to succeeding fiscal yearsthis Section 6.08; (vii) the Subsidiaries may make Restricted Payments in cash to Holdings and any Intermediate Parent and, where applicable, Holdings may make Restricted Payments in cash: (A) ~~without duplication of any Permitted Tax Distribution,~~ the proceeds of which shall be used by Holdings or any Intermediate ~~Holdings~~ Parent to pay ~~(or~~ its Tax liability to ~~make Restricted Payments to allow any direct or indirect parent~~ the relevant jurisdiction in respect of ~~Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a~~ consolidated, ~~combined~~ combined, unitary or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are affiliated returns attributable to the income of Holdings ~~and/or its~~ and the Subsidiaries; provided that Restricted Payments made pursuant to this clause (a)(vii)(A) shall (i) not exceed the Tax liability that ~~Holdings and/or~~ the payee receiving payment under this clause (a)(vii)(A) and its ~~Subsidiaries (as applicable)~~ subsidiaries would ~~have incurred~~ incur were such Taxes determined as if such ~~entity(ies)~~ payee and its subsidiaries were a stand-alone taxpayer ~~or a stand-alone group;~~ and ~~provided, further, that Restricted Payments under this subclause~~ (Aii) ~~in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may~~ only be made ~~only~~ to the extent that such ~~Unrestricted Subsidiaries have made cash payments~~ payee’s liability for such ~~purpose~~ Taxes exceeds the amount of distributions received by such payee, other than distributions received by such payee or pursuant to ~~Holdings,~~ the ~~Borrowers or their Restricted Subsidiaries~~other provisions of this Section 6.08; (B) the proceeds of which shall be used by Holdings or any Intermediate ~~Holdings~~ Parent to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, ~~accounting, tax reporting~~ accounting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, ~~(2)~~ in an aggregate amount not to exceed $2,000,000 in any fiscal year plus any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof or any Intermediate ~~Holdings~~Parent) attributable to the ownership or operations of ~~Holdings, the Borrowers~~ Holdings and the ~~Restricted~~ Subsidiaries, (32) fees and expenses (x) due and payable by any of ~~Holdings,~~ the ~~Borrowers and the Restricted~~ Subsidiaries and (y) otherwise permitted to be paid by ~~Holdings, the Borrowers and the Restricted Subsidiaries~~ such Subsidiary under this Agreement and (43) ~~payments that would otherwise be~~ fees and expenses due and payable pursuant to the Investor Management Agreement permitted to be paid ~~directly by Holdings, the Borrowers or the Restricted Subsidiaries~~ pursuant to Section ~~6.09(iii) or (x~~6.09(iv); (C) the proceeds of which shall be used by Holdings or any Intermediate ~~Holdings~~ Parent to pay ~~(or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay)~~ franchise ~~and similar Taxes,~~ taxes and other ~~fees~~ fees, taxes and ~~expenses,~~ expenses required to maintain its ~~organizational~~ corporate existence; (D) the proceeds of which shall be used by Holdings to make Restricted Payments permitted by ~~Section 6.08(a)(iv~~clause (a)(iv) or ~~Section 6.08(a)(vi~~(a)(v); (E) to finance any Investment permitted to be made pursuant to Section ~~6.04 other than Section 6.04(m);~~ 6.04, provided that (1A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2B) ~~Holdings or any Intermediate~~ Holdings shall, immediately following the closing thereof, cause (x1) all property acquired (whether assets or Equity ~~Interests but not including any loans or advances made pursuant to Section 6.04(b)~~Interests) to be contributed to ~~Holdings,~~ the ~~Borrowers or the Restricted~~ Subsidiaries (other than any Intermediate Parent) or (y2) the Person formed or acquired to merge into or consolidate with ~~Holdings, the Borrowers or~~ any of the ~~Restricted~~ Subsidiaries (other than any Intermediate Parent and to the extent such ~~merger, amalgamation~~ merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrowers and the Restricted Subsidiaries; and (G) the proceeds of which shall be used by ~~Holdings or any Intermediate~~ Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any unsuccessful equity ~~offering,~~ or debt offering ~~or other non-ordinary course transaction not prohibited~~ permitted by this ~~Agreement~~ Agreement; (~~whether~~ G) the proceeds of which shall be used by Holdings to make Restricted Payments to allow any direct or ~~not~~ indirect equity owner of Holdings to pay Taxes incurred by such ~~offering or~~ owner in any taxable period which are attributable to the income of Holdings and the Subsidiaries; provided that Restricted Payments made pursuant to this clause (a)(vii)(G) shall only be made to the extent that the liability of the equity owner receiving payment under this clause (a)(vii)(G) for such Taxes exceeds the amount of distributions received by such equity owner, other ~~transaction is successful~~than any distributions received by such equity owner pursuant to the other provisions of this Section 6.08; and (H) the proceeds of which shall be used to make payments permitted by clause(b)(iv);; and (viii) in addition to the foregoing Restricted ~~Payments~~Payments and so long as no Default shall have occurred and be continuing or would result therefrom, the ~~Borrowers~~ Borrower and any Intermediate ~~Holdings~~ Parent may make additional Restricted Payments to any Intermediate Parent and Holdings ~~and Holdings,~~ the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate ~~Holdings~~ Parent to make any payments in respect of any Permitted Holdings Debt, in an aggregate amount, ~~when taken~~ together with the aggregate amount of (1) prepayments, redemptions, purchases, defeasances and other payments in respect of Junior Financings made pursuant to Section 6.08(b)(iv) and (2) loans and advances to Holdings made pursuant to Section ~~6.04(m~~6.04(l) in lieu of Restricted Payments permitted by this clause (viii), not to exceed $15,000,000 (or, if the ~~sum~~ Leverage Ratio as of the last day of the immediately preceding fiscal quarter of Holdings (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to ~~the making of~~ such additional Restricted ~~Payment~~ Payments) is 3.00 to 1.00 or less, $25,000,000) plus (By) ~~so long as no Event of Default shall have occurred and be continuing (or, in~~ the ~~case~~ aggregate amount of the ~~use~~ Net Proceeds of the ~~Starter Basket~~ issuance of, or contribution in respect of existing, Qualified Equity Interests (other than any such issuance or contribution made pursuant to Section 7.03) that are Not Otherwise Applied, plus (z) if the Leverage Ratio as of the last day of the immediately preceding fiscal quarter of Holdings (after giving Pro Forma Effect to such additional Restricted Payments) is 3.00 to 1.00 or less, the amount of Cumulative Excess Cash Flow that is Not Otherwise Applied~~, no Event of Default under Section 7.01(a), (b), (h) or (i)), the Available Amount that is Not Otherwise Applied plus (C) the Available Equity Amount that is Not Otherwise Applied;~~; and (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; , provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; (xi) Holdings may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiii) payments made or expected to be made by Holdings, any Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to 5.00 to 1.0 and (B) there is no continuing Event of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make Restricted Payments in cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a). (b) Neither ~~Holdings, Intermediate~~ Holdings nor ~~any~~ the Borrower will, nor will they permit any ~~Restricted~~ other Subsidiary to, make or ~~pay~~agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoing, except: (i) payment of regularly scheduled interest and principal payments as, in the form of payment and when due in respect of any Indebtedness, other than payments in respect of any Junior Financing prohibited by the subordination provisions thereof; (ii) refinancings of Indebtedness to the extent permitted by Section 6.01; (iii) the conversion of any Junior Financing ~~Indebtedness~~ to Equity Interests (other than Disqualified Equity Interests) of Holdings or any of its direct or indirect parents; and (iv) prepayments, redemptions, purchases, defeasances and other payments in respect of Junior Financings prior to their scheduled maturity in an aggregate amount, together with ~~proceeds~~ the aggregate amount of (1) Restricted Payments made pursuant to clause(a)(vii) and (2) loans and advances to Holdings made pursuant to Section 6.04(l) not to exceed the sum of (x) $15,000,000 (or, if the Leverage Ratio as of the last day of the immediately preceding fiscal quarter of Holdings (after giving Pro Forma Effect to such additional prepayments, redemptions, purchases, defeasances and other ~~Junior Financing Indebtedness permitted~~ payments) is 3.00 to ~~be in~~1.00 or less, $25,000,000) plus (y) the amount of the Net Proceeds of issuances of, or contributions in respect of existing, Qualified Equity Interests (other than issuances or contributions made pursuant to Section 7.03) that are Not Otherwise Applied plus (z) if the Leverage Ratio as of the last day of the immediately preceding fiscal quarter of Holdings (after giving Pro Forma Effect to such additional prepayments, redemptions, purchases, defeasances and other payments) is 3.00 to 1.00 or less, the amount of Cumulative Excess Cash Flow that is Not Otherwise Applied.

Appears in 2 contracts

Sources: Credit Agreement (Skype S.a r.l.), Credit Agreement (Skype S.a r.l.)

Restricted Payments; Certain Payments of Indebtedness. (a) Neither ~~Holdings, Intermediate~~ Holdings nor ~~any~~ the Borrower will, nor will they permit any Restricted ~~Subsidiary~~Subsidiary to, to pay or make, directly or indirectly, any Restricted Payment, except: (i) ~~Each~~ the Borrower and each Restricted Subsidiary may make Restricted Payments to ~~Intermediate Holdings, a~~ the Borrower or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a wholly-owned Subsidiary of a the Borrower, such Restricted Payment is made to ~~Intermediate Holdings, such~~ the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests; (ii) ~~payments or distributions~~ Restricted Payments to satisfy appraisal or other dissenters’ ~~or appraisal~~ rights, pursuant to or in connection with a consolidation, amalgamation, ~~merger or~~ merger, transfer of assets ~~(other than with respect to the Transactions)~~ or acquisition that complies with Section ~~6.03~~6.03 or Section 6.04; (iii) ~~Holdings and any Intermediate~~ Holdings may declare and make dividend payments or other distributions payable solely in the Equity Interests of such Person; (iv) Restricted Payments made in connection with or in order to consummate the Transactions (including, without limitation, (A) cash payments to holders of Equity ~~Interests~~ Interests, restricted stock units, options or other equity-linked interests of Target (or any Parent Entity) as provided by the Acquisition Agreement, (B) Restricted Payments (x) to direct and indirect parent companies of Holdings to finance a portion of the consideration for the Acquisition and (y) to holders of Equity Interests of the Target (immediately prior to giving effect to the Acquisition) in connection with, or as a result of, their exercise of appraisal rights and the settlement of any claims or actions (whether actual, contingent or potential) with respect thereto, in each case, with respect to the Transactions and (C) other payments with respect to working capital adjustments or ~~otherwise,~~ otherwise to the extent contemplated by the Acquisition Agreement~~); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis~~ , including any payments in respect of ~~this clause (iv)~~any warranty and indemnity insurance policy); (v) repurchases of Equity Interests in Holdings (or Restricted Payments by Holdings to allow repurchases of Equity ~~Interest~~ Interests in any direct or indirect parent of Holdings) ~~or Intermediate Holdings~~ deemed to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price of such stock options or warrants or other incentive interest; (vi) Restricted Payments to Holdings which Holdings may use to redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted stock units or stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) (or to make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity ~~Interests~~Interests or other such interests) held by current or former officers, managers, consultants, directors and employees (or their respective Affiliates, spouses, former spouses, other Permitted Transferees, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), ~~Holdings,~~ the ~~Borrowers~~ Borrower and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, profits interest, employment termination agreement or any other employment agreements or equity holders’ agreement; provided ~~that~~ that, except with respect to non-discretionary repurchases, the aggregate amount of Restricted Payments permitted by this clause (vi) after the Effective Date, together with the aggregate amount of loans and advances to Holdings (or any direct or indirect parent thereof) made pursuant to Section 6.04(m) in lieu thereof, shall not exceed the sum of (Aa) the greater of $~~15.0 million~~ 11,000,000 and ~~5.0~~7.5% of Consolidated EBITDA (provided that, after the occurrence of an IPO, such amount shall be the greater of $22,000,000 and 15% of Consolidated EBITDA) for the most recently ended Test Period in any fiscal year of ~~Holdings~~ the Borrower (~~which subsequent~~ net of any proceeds from the reissuance or resale of such Equity Interests to ~~an IPO shall be increased to~~ another Person received by Holdings, the ~~greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in~~ Borrower or any ~~fiscal year of Holdings~~Restricted Subsidiary), (Bb) the amount in any fiscal year equal to the cash proceeds of key man life insurance policies received by Holdings, the ~~Borrowers~~ Borrower or the Restricted Subsidiaries after the Effective Date, and (Cc) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket ~~hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision~~hereunder; provided that any unused portion of the preceding basket calculated pursuant to clauses (Aa) and (Bb) above for any fiscal year may be carried forward to succeeding fiscal years; provided, further, that any Indebtedness Incurred or Investments or payments made in reliance upon the Available RP Capacity Amount utilizing the unused amounts available pursuant to this Section 6.08(a)(vi) shall reduce the amounts available pursuant to this Section 6.08(a)(vi); (vii) ~~Holdings and~~ Holdings, the Borrower and/or any ~~Intermediate Holdings~~ Restricted Subsidiary may make Restricted Payments in cash: (A) ~~without duplication~~ the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof) attributable to the ownership or operations of Holdings, the Borrower and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of Holdings, the Borrower and the Restricted Subsidiaries and (y) otherwise permitted to be paid by Holdings, the Borrower and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the Borrower or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x); (B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence; (C) the proceeds of which shall be used by Holdings (or any other direct or indirect parent thereof) to make Restricted Payments of the type permitted by Section 6.08(a)(iv), Section 6.08(a)(vi) or Section 6.08(a)(xi); (D) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(m); provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) Holdings shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to the Borrower or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (E) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrower and the Restricted Subsidiaries; and (F) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful); (viii) additional Restricted Payments (including Restricted Payments to Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments, to make any payments in respect of any Permitted ~~Tax Distribution~~Holdings Debt or otherwise) (A) in an aggregate amount not to exceed, at the time of making any such Restricted Payment and when taken together with the aggregate amount of loans and advances to Holdings (or any direct or indirect parent thereof) made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii) and the aggregate amount of any other Restricted Payments made utilizing this clause (A), the greater of $43,000,000 and 30% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment, (B) so long as, immediately after giving effect to any such Restricted Payment, no Event of Default under Section 7.01(a), (b), (h) or (i) has occurred and is continuing, in an amount not to exceed the Available Amount that is Not Otherwise Applied and (C) in an amount not to exceed the Available Equity Amount that is Not Otherwise Applied; provided that any Indebtedness Incurred or Investments or payments made in reliance upon the Available RP Capacity Amount utilizing the unused amounts available pursuant to this Section 6.08(a)(viii) shall reduce the amounts available pursuant to this Section 6.08(a)(viii); (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (a) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases, in each case, in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units and (b) payments or other adjustments to outstanding Equity Interests in accordance with any management equity plan, stock option plan or any other similar employee benefit plan, agreement or arrangement in connection with any Restricted Payment; (xi) Holdings or any Restricted Subsidiary may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment of Restricted Payments on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, in an annual amount for each fiscal year of Holdings equal to the sum of (a) an amount equal to 6.0% of the net cash proceeds of such IPO (and any subsequent public offerings) received by or contributed to Holdings and/or its Subsidiaries, other than public offerings with respect to common stock registered on Form S-8 and (b) an amount equal to 7.0% of the market capitalization of the IPO Entity at the time of such IPO; provided that any Indebtedness Incurred or Investments or payments made in reliance upon the Available RP Capacity Amount utilizing the unused amounts available pursuant to this Section 6.08(a)(xii) shall reduce the amounts available pursuant to this Section 6.08(a)(xii); (xiii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to 5.00 to 1.00 and (B) there is no continuing Event of Default under Section 7.01(a), (b), (h) or (i); (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions; (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, the Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, the Borrower or any Restricted Subsidiary may make Restricted Payments in cash, the proceeds of which shall be used by ~~Holdings or any Intermediate~~ Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (~~a)(vii)(A~~a)(xviii) shall not exceed the Tax liability that Holdings and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this ~~subclause~~ clause (Aa)(xviii) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to ~~Holdings,~~ the ~~Borrowers~~ Borrower or their Restricted Subsidiaries; (B) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof or any Intermediate Holdings) attributable to the ownership or operations of Holdings, the Borrowers and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of Holdings, the Borrowers and the Restricted Subsidiaries and (y) otherwise permitted to be paid by Holdings, the Borrowers and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the Borrowers or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x); (C) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence; (D) the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(m); provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) Holdings or any Intermediate Holdings shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to Holdings, the Borrowers or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with Holdings, the Borrowers or any of the Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrowers and the Restricted Subsidiaries; and (G) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful); (viii) in addition to the foregoing Restricted Payments, the Borrowers and any Intermediate Holdings may make additional Restricted Payments to any Intermediate Holdings and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt, in an aggregate amount, when taken together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii), not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as no Event of Default shall have occurred and be continuing (or, in the case of the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h) or (i)), the Available Amount that is Not Otherwise Applied plus (C) the Available Equity Amount that is Not Otherwise Applied; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; (xi) Holdings may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiii) payments made or expected to be made by Holdings, any Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to 5.00 to 1.0 and (B) there is no continuing Event of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make Restricted Payments in cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (~~xviii~~xvii) ~~above~~above (or any sub-clause therein), the ~~Borrowers~~ Borrower will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a). (b) Neither Holdings, Intermediate Holdings nor any Borrower will, nor will they permit any Restricted Subsidiary to, make or pay, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, except: (i) payment of regularly scheduled interest and principal payments as, in the form of payment and when due in respect of any Indebtedness, other than payments in respect of any Junior Financing prohibited by the subordination provisions thereof; (ii) refinancings of Junior Financing Indebtedness with proceeds of other Junior Financing Indebtedness permitted to be incircumsta

Appears in 2 contracts

Sources: First Lien Credit Agreement (First Advantage Corp), First Lien Credit Agreement (First Advantage Corp)

Restricted Payments; Certain Payments of Indebtedness. (a) ~~Neither Holdings~~The Borrower will not, ~~Intermediate Holdings nor any Borrower will, nor~~ and will ~~they~~ not permit any Restricted ~~Subsidiary~~Subsidiary to, to pay or make, directly or indirectly, any Restricted Payment, except: (i) ~~Each Borrower and~~ each Restricted Subsidiary may make Restricted Payments to ~~Intermediate Holdings, a~~ the Borrower or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a wholly-owned Subsidiary of a the Borrower, such Restricted Payment is made to ~~Intermediate Holdings, such~~ the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests; (ii) ~~payments or distributions~~ Restricted Payments to satisfy appraisal or other dissenters’ ~~or appraisal~~ rights, pursuant to or in connection with a consolidation, amalgamation, ~~merger or~~ merger, transfer of assets ~~(other than with respect to the Transactions)~~ or acquisition that complies with Section ~~6.03~~6.03 or Section 6.04; (iii) ~~Holdings and any Intermediate Holdings~~ the Borrower may declare and make dividend payments or other distributions payable solely in the Equity Interests of ~~such Person~~the Borrower; (iv) Restricted Payments made in connection with or in order to consummate the Transactions (including, without limitation, (A) cash payments to holders of Equity Interests of Target as provided by the Acquisition Agreement, (B) Restricted Payments to direct and indirect parent companies of Holdings to finance a portion of the consideration for the Acquisition and (C) other payments with respect to working capital adjustments or otherwise, to the extent contemplated by the Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv))[reserved]; (v) repurchases of Equity Interests in ~~Holdings~~ the Borrower (or Restricted Payments by ~~Holdings~~ the Borrower to allow repurchases of Equity ~~Interest~~ Interests in Holdings or any direct or indirect parent of Holdings) , including, for the avoidance of doubt, Vacasa, Inc.), or ~~Intermediate Holdings~~ any Restricted Subsidiary deemed to occur upon exercise of ~~stock~~ equity options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price of such ~~stock~~ equity options or warrants or other incentive ~~interest~~interests; (vi) Restricted Payments to Holdings which Holdings may use to redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted stock units or stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) (or to make Restricted Payments to allow any of Holdings’ direct or indirect parent ~~companies~~ companies, including, for the avoidance of doubt, Vacasa, Inc. to so redeem, retire, acquire or repurchase their Equity ~~Interests~~Interests or other such interests) held by current or former officers, managers, consultants, directors and employees and other service providers (or their respective Affiliates, spouses, former spouses, other Permitted Transferees, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), ~~Holdings,~~ the ~~Borrowers~~ Borrower and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment or engagement of any such Person or otherwise in accordance with any ~~stock~~ equity option or ~~stock~~ equity appreciation rights plan, any management, director and/or employee ~~stock~~ equity ownership or incentive plan, ~~stock~~ equity subscription plan, profits interest, employment termination agreement or any other employment or service agreements with any director, officer or consultant or partnership or equity holders’ agreement; provided ~~that~~ that, except with respect to non-discretionary repurchases, the aggregate amount of Restricted Payments permitted by this clause (vi) after the Effective Date, together with the aggregate amount of loans and advances to Holdings (or any direct or indirect parent thereof) made pursuant to Section ~~6.04(m~~6.04(xiii) in lieu thereof, shall ~~not~~ not, in any fiscal year of the Borrower, exceed the sum of (Aa) $15,000,000 (net of any proceeds from the ~~greater~~ reissuance or resale of ~~$15.0 million and 5.0% of Consolidated EBITDA for~~ such Equity Interests to another Person received by Holdings, the ~~most recently ended Test Period in~~ Borrower or any fiscal year of Holdings (which subsequent to an IPO shall be increased to the greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of HoldingsRestricted Subsidiary), (Bb) the amount ~~in any fiscal year~~ equal to the cash proceeds of key man life insurance policies received by Holdings, the ~~Borrowers~~ Borrower or the Restricted Subsidiaries after the Effective Date, and (Cc) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket ~~hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision~~hereunder; provided that any unused portion of the preceding basket calculated pursuant to clauses (Aa) and (Bb) above for any fiscal year may be carried forward to succeeding fiscal years; provided, further, that any Indebtedness incurred or Investments or payments made in reliance upon the Available RP Capacity Amount utilizing the unused amounts available pursuant to this Section 6.08(a)(vi) shall reduce the amounts available pursuant to this Section 6.08(a)(vi); (vii) ~~Holdings~~ the Borrower and ~~any Intermediate Holdings~~ the Restricted Subsidiaries may make Restricted Payments ~~in cash~~to Holdings and any Parent Entity: (A) without duplication of any Permitted Tax Distribution, the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (a)(vii)(A) shall not exceed the Tax liability that Holdings and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers or their Restricted Subsidiaries; (B) the proceeds of which shall be used by ~~Holdings or any Intermediate~~ Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent ~~thereof or any Intermediate Holdings~~thereof) attributable to the ownership or operations of Holdings, the ~~Borrowers~~ Borrower and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of Holdings, the ~~Borrowers~~ Borrower and the Restricted Subsidiaries and (y) otherwise ~~permitted~~ not prohibited to be paid by Holdings, the ~~Borrowers~~ Borrower and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the ~~Borrowers~~ Borrower or the Restricted Subsidiaries pursuant to Section ~~6.09(iii~~5.19(iii) or (x); (CB) the proceeds of which shall be used by ~~Holdings or any Intermediate~~ Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence; (DC) the proceeds of which shall be used by Holdings (or any other direct or indirect parent thereof) to make Restricted Payments of the type permitted by Section ~~6.08(a)(iv~~6.08(a)(vi) or Section ~~6.08(a)(vi~~6.08(a)(xi); (ED) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section ~~6.04(m~~6.04(xiii); provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) Holdings or any ~~Intermediate Holdings~~ Parent Entity shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section ~~6.04(b~~6.04(ii)) to be contributed to ~~Holdings,~~ the ~~Borrowers~~ Borrower or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with ~~Holdings,~~ the ~~Borrowers~~ Borrower or any of the Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in by Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (FE) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to ~~officers~~ officers, employees and ~~employees~~ other service providers of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the ~~Borrowers~~ Borrower and the Restricted Subsidiaries; and (GF) the proceeds of which shall be used by ~~Holdings or any Intermediate~~ Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful); (viii) ~~in addition to the foregoing~~ Restricted ~~Payments, the Borrowers and any Intermediate Holdings may make additional~~ Payments (including Restricted Payments to ~~any Intermediate Holdings and~~ Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings ~~or by any Intermediate Holdings~~ to make any payments in respect of any ~~Permitted Holdings Debt,~~ Indebtedness of Holdings) (A) following the consummation of the SPAC Transactions in an aggregate ~~amount~~amount not to exceed, at the time of making any such Restricted Payment and when taken together with the aggregate amount of loans and advances to Holdings (or any direct or indirect parent thereof) made pursuant to Section ~~6.04(m~~6.04(xiii) in lieu of Restricted Payments permitted by this clause (viii), ~~not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed~~ the greater of $~~75.0 million~~ 25,000,000 and 254.0% of Consolidated ~~EBITDA for~~ Total Assets as of the last day of the most recently ended Test Period ~~after giving~~ as of such time determined on a Pro Forma ~~Effect to the making of such Restricted Payment~~ Basis, plus (B) ~~so long as no Event of Default shall have occurred and be continuing (or, in~~ the ~~case of the use of the Starter Basket~~ Available Amount that is Not Otherwise ~~Applied~~Applied (provided that, with respect to any Restricted Payment made in reliance on clause (b) of the definition of “Available Amount” pursuant to this clause (B), no Event of Default under Section 7.01(a), (b), (h) or (i~~)), the Available Amount that is Not Otherwise Applied~~ ) shall be continuing or would result therefrom) plus (C) the Available Equity Amount that is Not Otherwise Applied; provided that any Indebtedness incurred or Investments made in reliance upon the Available RP Capacity Amount utilizing the unused amounts available pursuant to this Section 6.08(a)(viii) shall reduce the amounts available pursuant to this Section 6.08(a)(viii); (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (xa) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, ~~manager~~ manager, consultant or ~~consultant~~ other service provider and any repurchases of Equity Interests in consideration of such payments including deemed ~~repurchases~~ repurchases, in each case, in connection with the exercise of ~~stock~~ equity options and the vesting of restricted ~~stock~~ equity and restricted ~~stock units~~equity units and (b) payments or other adjustments to outstanding Equity Interests in accordance with any management equity plan, equity option plan or any other similar employee benefit plan, agreement or arrangement in connection with any Restricted Payment; (xi) ~~Holdings~~ the Borrower or any Restricted Subsidiary may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any acquisition, any Permitted Acquisition (or other similar ~~Investment)~~ Investment and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) ~~the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of~~ Restricted Payments in an annual amount not to ~~any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to~~ exceed the sum of (a) 6.0% ~~per annum~~ of the net cash proceeds ~~of such IPO~~ received by or contributed to ~~Intermediate Parent~~ the Borrower from the SPAC Transactions or ~~Parent, other than public~~ a Qualifying IPO and any follow-on offerings ~~with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and~~ plus (b) 7.0% of the market capitalization of ~~Intermediate~~ Parent on the date of the declaration of a Restricted Payment in reliance on this clause (xii); provided that any Indebtedness incurred or ~~Parent at~~ Investments or payments made in reliance upon the ~~time of such IPO~~Available RP Capacity Amount utilizing the unused amounts available pursuant to this Section 6.08(a)(xii) shall reduce the amounts available pursuant to this Section 6.08(a)(xii); (xiii) payments made or expected to be made by Holdings, ~~any~~ the Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, ~~manager~~ manager, consultant or ~~consultant~~ other service provider (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) following the consummation of the SPAC Transactions, additional Restricted Payments; provided that ~~after giving effect to such Restricted Payment~~ either (A) ~~on a Pro Forma Basis,~~ the Liquidity is equal to or greater than $350,000,000 or (B) the Total Leverage Ratio is less than or equal to ~~5.00~~ 4.00 to ~~1.0 and (B) there is no continuing Event of Default~~1.00, in either case after giving effect to such Restricted Payment on a Pro Forma Basis; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments)[reserved]; (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a the Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted ~~Subsidiaries,~~ Subsidiaries the primary assets of which are Permitted ~~Investments~~Investments (except to the extent that such Permitted Investments constitute the proceeds of any sale of the assets or equity of any Unrestricted Subsidiary)); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense[reserved]; and (xviii) ~~Holdings, Intermediate Holdings, any~~ the Borrower ~~or any Restricted Subsidiary~~ may make Restricted Payments in cash to Holdings or any direct or indirect equity holder of Holdings in amounts, as reasonably determined by the Borrower in good faith, sufficient to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a proposed Restricted Payment (or ~~a portion thereof~~any successor to Holdings) ~~meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled~~ to ~~classify or later reclassify~~ make pro rata distributions to its equity holders (based on ~~circumstances existing on~~ their percentage interests in Holdings) in amounts that will permit each such equity holder of Holdings to receive an amount equal to its Tax Distribution Amount (determined solely by reference to tax items of Holdings that are attributable to the ~~date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a~~Borrower and its Subsidiaries). (b) ~~Neither Holdings~~The Borrower will not, ~~Intermediate Holdings nor any Borrower will, nor~~ and will ~~they~~ not permit any Restricted Subsidiary to, make or pay, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) ~~of or in respect~~ of principal of or interest on any Junior Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, prepayment, defeasance, acquisition, cancellation or termination of any Junior ~~Financing~~Financing more than one year prior to the scheduled maturity date thereof (any such payment, a “Restricted Debt Payment”), except: (i) payment of regularly scheduled interest and principal payments as, in the form of payment and when due in respect of any Indebtedness, other than payments in respect of any Junior Financing prohibited by the subordination provisions thereof; (ii) refinancings of Junior Financing Indebtedness with proceeds of of, or in exchange for, other Junior Financing Indebtedness permitted to be inincurred under Section 6.01; (iii) the conversion of any Junior Financing to Equity Interests (other than Disqualified Equity Interests) of Holdings or any of its direct or indirect parent companies; (iv) Restricted Debt Payments in an aggregate amount not to exceed the sum of (A) an amount at the time of making any such Restricted Debt Payment and when taken together with the aggregate amount of loans and advances to Holdings (or any direct or indirect parent thereof) made pursuant to Section 6.04(xiii) in lieu of Restricted Debt Payments permitted by this clause (iv) and any other Restricted Debt Payments made utilizing this subclause (A), the greater of $15,000,000 and 2.0% of Consolidated Total Assets as of the last day of the most recently ended Test Period as of such time determined on a Pro Forma Basis plus (B) the Available Amount (provided that with respect to any Restricted Debt Payments made out of amounts under clause (b) of the definition of “Available Amount” pursuant to this clause (B), no Event of Default under Section 7.01(a), (b), (h) or (i) shall have occurred or be continuing or would result therefrom) that is Not Otherwise Applied plus (C) the Available Equity Amount that is Not Otherwise Applied plus (D) the Available RP Capacity Amount; and (v) Restricted Debt Payments (including prior to their scheduled maturity

Appears in 2 contracts

Sources: Credit Agreement (Vacasa, Inc.), Revolving Credit Agreement (Vacasa, Inc.)

Restricted Payments; Certain Payments of Indebtedness. (a) ~~Neither Holdings, Intermediate Holdings nor any~~ The Borrower ~~will~~will not, nor will ~~they~~ it permit any ~~Restricted Subsidiary~~Subsidiary to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, except: (i) ~~Each~~ the Borrower may declare and ~~each Restricted Subsidiary may make Restricted Payments~~ pay dividends with respect to ~~Intermediate Holdings, a Borrower or any other Restricted Subsidiary; provided that~~ its Equity Interests payable solely in additional Equity Interests in the ~~case of any such Restricted Payment by a Restricted Subsidiary that is not a wholly-owned Subsidiary of a~~ Borrower, such Restricted Payment is made to Intermediate Holdings, such Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests; (ii) ~~payments or distributions to satisfy dissenters’ or appraisal rights, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of assets (other than~~ Subsidiaries may declare and pay dividends ratably with respect to ~~the Transactions) that complies with Section 6.03~~their capital stock; (iii) ~~Holdings~~ the Borrower may make Restricted Payments, not exceeding $5,000,000 from and ~~any Intermediate Holdings may declare~~ after the date hereof, pursuant to and ~~make dividend payments~~ in accordance with stock option plans, equity purchase programs or agreements or other ~~distributions payable solely~~ benefit plans, in each case for management or employees or former employees of the ~~Equity Interests of such Person~~Borrower and the Subsidiaries; (iv) ~~Restricted Payments made~~ the Borrower may pay the Closing Date Dividend; (v) the Borrower may pay cash dividends in ~~connection with or in order~~ respect of Qualified Borrower Preferred Stock issued pursuant to ~~consummate the Transactions~~ clauses (~~including, without limitation,~~ b) and (Ac) ~~cash payments to holders of Equity Interests of Target as provided by the Acquisition Agreement, (B) Restricted Payments to direct and indirect parent companies of Holdings to finance a portion~~ of the ~~consideration for the Acquisition and (C) other payments with respect to working capital adjustments or otherwise, to the extent contemplated by the Acquisition Agreement)~~definition thereof; provided that ~~the earnout contemplated by Exhibit F~~ such dividends in respect of Qualified Borrower Preferred Stock issued pursuant to ~~the Acquisition Agreement shall not be permitted on the basis of this~~ clause (ivc) of the definition thereof may only be made after the fiscal year ending December 31, 2016 and only with Excess Cash Flow not otherwise required to be used to prepay Term Loans pursuant to Section 2.11(d)) (without duplication of amounts used pursuant to Section 6.08(a)(vii) or amounts included in the Available Amount and used pursuant to Sections 6.04(s) or 6.08(b)(vii)); (v) repurchases of Equity Interests in Holdings (or Restricted Payments by Holdings to allow repurchases of Equity Interest in any direct or indirect parent of Holdings) or Intermediate Holdings deemed to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price of such stock options or warrants or other incentive interest; (vi) Restricted Payments to Holdings which Holdings may use to redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted stock units or stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests) held by current or former officers, managers, consultants, directors and employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), Holdings, the Borrowers and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, profits interest, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that the aggregate amount of Restricted Payments permitted by this clause (vi) after the Effective Date, together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu thereof, shall not exceed the sum of (A) the greater of $15.0 million and 5.0% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings (which subsequent to an IPO shall be increased to the greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings), (B) the amount in any fiscal year equal to the cash proceeds of key man life insurance policies received by Holdings, the Borrowers or the Restricted Subsidiaries after the Effective Date, (C) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year may be carried forward to succeeding fiscal years[reserved]; (vii) ~~Holdings~~ the Borrower may make payments in respect of the repurchase, retirement or other acquisition of Equity Interests of the Borrower or any Subsidiary using the portion of Excess Cash Flow not subject to mandatory prepayment pursuant to Section 2.11(d) (without duplication of amounts used pursuant to Section 6.08(a)(v) or amounts included in the Available Amount and ~~any Intermediate Holdings~~ used pursuant to Sections 6.04(s) or 6.08(b)(vii)); (viii) the Borrower may make Restricted Payments; provided that (x) if after giving effect to such Restricted Payments (and any Indebtedness incurred in ~~cash:~~ connection therewith (~~A) without duplication of any Permitted Tax Distribution,~~ but disregarding the proceeds of ~~which shall be used by Holdings or~~ any ~~Intermediate Holdings to pay (or to make Restricted Payments to allow~~ such Indebtedness in calculating Unrestricted Domestic Cash) and any ~~direct or indirect parent~~ related repayment of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”Indebtedness), the ~~portion~~ Net Leverage Ratio at the time of ~~any U.S. federal, state, local or foreign Taxes~~ the making such payments (~~as applicable)~~ the date of the making of such ~~Tax Group for such taxable period that are attributable~~ payments, the “RP Date”) would be (1) less than or equal to 2.25 to 1.00, but greater than 2.00 to 1.00, the ~~income~~ aggregate amount of ~~Holdings and/or its Subsidiaries; provided that~~ Restricted Payments made pursuant to this clause (~~a)(vii)(A~~viii) during the period from the date 12 months prior to the RP Date through (and including) the RP Date (such period, the “RP Period”) shall not exceed the Tax liability that Holdings and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers or their Restricted Subsidiaries; (B) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business$40,000,000, (2) ~~any reasonable and customary indemnification claims made by directors~~ less than or ~~officers of Holdings (or any parent thereof or any Intermediate Holdings) attributable~~ equal to ~~the ownership or operations of Holdings~~2.75 to 1.00, but greater than 2.25 to 1.00, the ~~Borrowers and~~ aggregate amount of Restricted Payments made pursuant to this clause (viii) during the ~~Restricted Subsidiaries~~RP Period shall not exceed $25,000,000, (3) ~~fees and expenses (x) due and payable by any of Holdings~~less than or equal to 3.25 to 1.00 but greater than 2.75 to 1.00, the ~~Borrowers and~~ aggregate amount of Restricted Payments made pursuant to this clause (viii) during the ~~Restricted Subsidiaries and (y) otherwise permitted to be paid by Holdings, the Borrowers and the Restricted Subsidiaries under this Agreement~~ RP Period shall not exceed $15,000,000 and (4) ~~payments that would otherwise be permitted~~ greater than 3.25 to ~~be paid directly by Holdings~~1.00, the Borrowers or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x); (C) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence; (D) the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(m); provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) Holdings or any Intermediate Holdings shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to Holdings, the Borrowers or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with Holdings, the Borrowers or any of the Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrowers and the Restricted Subsidiaries; and (G) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful); (viii) in addition to the foregoing Restricted Payments, the Borrowers and any Intermediate Holdings may make additional Restricted Payments to any Intermediate Holdings and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt, in an aggregate amount, when taken together with the aggregate amount of ~~loans and advances to Holdings~~ Restricted Payments made pursuant to ~~Section 6.04(m~~this clause (viii) ~~in lieu~~ during the RP Period shall not exceed $10,000,000; provided further that at the time of ~~Restricted Payments permitted by~~ any payment pursuant to this clause (viii), not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as no Default or Event of Default shall have occurred and be continuing (or, in the case of the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h) or (i)), the Available Amount that is Not Otherwise Applied plus (C) the Available Equity Amount that is Not Otherwise Applied;continuing.; and (ix) ~~redemptions~~ the Borrower may make payments in ~~whole or in part~~ respect of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected purchase price adjustment required to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with under the exercise of stock options and the vesting of restricted stock and restricted stock units; (xi) Holdings may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiii) payments made or expected to be made by Holdings, any Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to 5.00 to 1.0 and (B) there is no continuing Event of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make Restricted Payments in cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a)Westfalia Purchase Agreement. (b) ~~Neither Holdings, Intermediate Holdings nor any~~ The Borrower ~~will~~will not, nor will ~~they~~ it permit any ~~Restricted~~ Subsidiary to, make or ~~pay~~agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any ~~Junior Financing~~Indebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any ~~Junior Financing~~Indebtedness, except: (i) payment of ~~regularly scheduled interest and principal payments as, in~~ Indebtedness created under the ~~form of payment and when due in respect of any Indebtedness, other than payments in respect of any Junior Financing prohibited by the subordination provisions thereof~~Loan Documents; ~~(ii) refinancings of Junior Financing Indebtedness with proceeds of other Junior Financing Indebtedness permitted to be in~~

Appears in 2 contracts

Sources: Credit Agreement (Horizon Global Corp), Credit Agreement (Horizon Global Corp)

Restricted Payments; Certain Payments of Indebtedness. (a) ~~Neither Holdings, Intermediate Holdings nor any Borrower~~ No Loan Party will, nor will ~~they~~ it permit any ~~Restricted Subsidiary~~Subsidiary of it to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, ~~except:~~except that (i) ~~Each Borrower and each Restricted Subsidiary may make Restricted Payments to Intermediate Holdings, a Borrower~~ Any Loan Party or any Subsidiary of a Loan Party may declare and pay cash dividends or make other ~~Restricted Subsidiary~~distributions of property to a Loan Party; provided that ~~in the case of~~ any such Restricted ~~Payment~~ Payments made to Holdings under this clause (i) shall be used only (A)(x) to pay general corporate overhead and similar expenses incurred by Holdings in the ordinary course of business, or the amount of any indemnification claims made by any director or officer of Holdings, (y) to pay franchise taxes and other fees, taxes and expenses required to maintain the corporate existence of Holdings and (z) to pay taxes that are due and payable by Holdings as the parent of a ~~Restricted Subsidiary~~ consolidated group that includes Holdings and its Subsidiaries (including Unrestricted Subsidiaries); (B) so long as (1) no Event of Default has occurred and is continuing or would arise therefrom and (2) the Borrower is not ~~a wholly-owned~~ prohibited under the Senior Initial Loan Facility or the ABL Facility from making such payments to Holdings, to make payments in connection with the repurchase of Capital Stock of Holdings or any Subsidiary of ~~a Borrower~~it (including payments of principal and interest in respect of notes issued by Holdings to stockholders in connection therewith), provided that such ~~Restricted Payment~~ payments are otherwise permitted under this SECTION 6.06; (C) so long as (1) no Event of Default under SECTION 7.01(a), SECTION 7.01(b) (but only with respect to clause (i) thereof as it relates to non-payment of interest), SECTION 7.01(h) or SECTION 7.01(i) has occurred and is ~~made~~ continuing or would arise therefrom and (2) the Borrower is not prohibited under the Senior Initial Loan Facility or the ABL Facility from making such payments to ~~Intermediate~~ Holdings, ~~such Borrower, any Restricted Subsidiary~~ to pay interest as and ~~to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests~~ when due in respect of the ~~relevant class of Equity Interests~~Holdco Initial Loan Facility Indebtedness; and (D) to partially redeem or prepay Holdco Initial Loan Facility Indebtedness to the extent necessary to make an AHYDO “catch-up” payment thereon; (ii) ~~payments or distributions to satisfy dissenters’ or appraisal rights~~The Loan Parties and their Subsidiaries may make Restricted Payments for the purpose of paying amounts owing under the Advisory Agreement, ~~pursuant to or in connection with a consolidation, amalgamation, merger or transfer of assets (other than with respect~~ to the ~~Transactions) that complies with Section 6.03~~extent permitted under SECTION 6.07; (iii) ~~Holdings~~ The Loan Parties and ~~any Intermediate Holdings~~ their Subsidiaries may ~~declare and~~ make ~~dividend payments or other distributions payable solely in~~ Restricted Payments on the ~~Equity Interests of such Person~~Closing Date to consummate the VH Acquisition; (iv) The Loan Parties and their Subsidiaries may make Restricted Payments ~~made in connection with or in order to consummate the Transactions (including, without limitation, (A) cash payments to holders~~ consisting of ~~Equity Interests of Target as provided by the Acquisition Agreement, (B) Restricted Payments to direct and indirect parent companies of Holdings to finance a portion~~ Permitted Dispositions of the ~~consideration for the Acquisition~~ type described, and ~~(C) other payments with respect to working capital adjustments or otherwise,~~ subject to the ~~extent contemplated by~~ limitations contained, in the ~~Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv))~~definition thereof; (v) The Loan Parties and their Subsidiaries may make Restricted Payments constituting repurchases of ~~Equity Interests~~ Capital Stock of Holdings or any Subsidiary of it in ~~Holdings (or Restricted Payments by Holdings to allow repurchases of Equity Interest in any direct or indirect parent of Holdings) or Intermediate Holdings deemed to occur upon~~ connection with the exercise of stock options or warrants ~~or other incentive interests~~ if such ~~Equity Interests~~ equity interests represent a portion of the exercise price of such ~~stock options~~ option or ~~warrants or other incentive interest; (vi) Restricted Payments to Holdings which Holdings may use to redeem, acquire, retire or repurchase its Equity Interests (or any options,~~ warrants, restricted stock units or stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests) held by current or former officers, managers, consultants, directors and employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), Holdings, the Borrowers and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, profits interest, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that the aggregate amount of Restricted Payments permitted by this clause (vi) after the Effective Date, together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu thereof, shall not exceed the sum of (A) the greater of $15.0 million and 5.0% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings (which subsequent to an IPO shall be increased to the greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings), (B) the amount in any fiscal year equal to the cash proceeds of key man life insurance policies received by Holdings, the Borrowers or the Restricted Subsidiaries after the Effective Date, (C) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year may be carried forward to succeeding fiscal years; (vii) Holdings and any Intermediate Holdings may make Restricted Payments in cash: (A) without duplication of any Permitted Tax Distribution, the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (~~a)(vii)(A~~v) shall not exceed $5,000,000 in any Fiscal Year of the ~~Tax liability that~~ Borrower; (vi) Holdings ~~and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that~~ may make Restricted Payments ~~under this subclause~~ constituting other repurchases of Capital Stock of Holdings or any Subsidiary of it, provided that such payments, in the aggregate with any payments made pursuant to clause (vii) below, shall not exceed $3,000,000 in any Fiscal Year (and provided further that (A) in ~~respect~~ the event the entire $3,000,000 is not utilized in any Fiscal Year under clauses (vi) and (vii) of ~~any Taxes attributable~~ this SECTION 6.06, one hundred percent (100%) of such unutilized portion may be carried forward to the ~~income~~ next succeeding Fiscal Year of ~~any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to~~ Holdings, ~~the Borrowers or their Restricted Subsidiaries;~~ (B) ~~the proceeds of which~~ Restricted Payments made pursuant to this clause during any Fiscal Year shall be ~~used by Holdings or any Intermediate Holdings~~ deemed made, first, in respect of amounts carried over from the prior Fiscal Year pursuant to ~~pay~~ clause (~~or to make Restricted Payments to allow any direct or indirect parent~~ A) above and, second, in respect of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof or any Intermediate Holdings) attributable to the ownership or operations of Holdings, the Borrowers and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of Holdings, the Borrowers and the Restricted Subsidiaries amounts permitted for such Fiscal Year as provided above and (yC) ~~otherwise permitted to~~ the amount of excess capacity that may be paid by Holdings, the Borrowers and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the Borrowers or the Restricted Subsidiaries carried over from a prior Fiscal Year pursuant to ~~Section 6.09(iii~~clause (A) ~~or (x~~above shall be calculated without taking into account any amounts carried over to such prior Fiscal Year); (Cvii) ~~the proceeds~~ Holdings may make payments of ~~which shall be used by Holdings or any Intermediate Holdings~~ principal and interest in respect of notes issued to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence; (D) the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(m); provided that (1) such Restricted Payment shall be made substantially concurrently stockholders in connection with the ~~closing~~ repurchase of such Investment and (2) Holdings or any Intermediate Holdings shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to Holdings, the Borrowers or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with Holdings, the Borrowers or any shares of the Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees Capital Stock of Holdings or any ~~direct or indirect parent company~~ Subsidiary of ~~Holdings~~ it, provided that such payments, in the aggregate with any payments made pursuant to clause (vi) above, shall not exceed $3,000,000 in any Fiscal Year, (and provided further that, (A) in the event the entire $3,000,000 is not utilized in any Fiscal Year under clauses (vi) and (vii) of this SECTION 6.06, one hundred percent (100%) of such unutilized portion may be carried forward to the ~~extent such salaries, bonuses and other benefits are attributable to the ownership or operation~~ next succeeding Fiscal Year of Holdings, (B) Restricted Payments made pursuant to this clause during any Fiscal Year shall be deemed made, first, in respect of amounts carried over from the ~~Borrowers~~ prior Fiscal Year pursuant to clause (A) above and, second, in respect of amounts permitted for such Fiscal Year as provided above and (C) the ~~Restricted Subsidiaries~~amount of excess capacity that may be carried over from a prior Fiscal Year pursuant to clause (A) above shall be calculated without taking into account any amounts carried over to such prior Fiscal Year; and (G) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful); (viii) in addition to the foregoing Restricted Payments, the Borrowers and any Intermediate Holdings may make additional Restricted Payments to any Intermediate Holdings and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt, in an aggregate amount, when taken together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii), not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as no Event of Default shall have occurred and be ~~continuing (or, in the case of the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h) or (i))~~continuing, the ~~Available Amount that is Not Otherwise Applied plus (C) the Available Equity Amount that is Not Otherwise Applied; (ix) redemptions~~ Loan Parties and their Subsidiaries may in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; (xi) Holdings may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiii) payments made or expected to be made by Holdings, any Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to 5.00 to 1.0 and (B) there is no continuing Event of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may each Fiscal Year make Restricted Payments in ~~cash~~ an aggregate amount, without duplication, not exceeding the amount set forth below for such Fiscal Year: 2007 $ 1,000,000 2008 $ 5,000,000 2009 $ 10,000,000 2010 $ 15,000,000 2011 $ 20,000,000 2012 $ 20,000,000 2013 $ 20,000,000 ; provided, that (a) to ~~Holdings~~ the extent the capacity to ~~permit Holdings to make, and Holdings may make,~~ make Restricted Payments pursuant to this clause (vi) for any Fiscal Year exceeds the aggregate amount of Restricted Payments made during such Fiscal Year, such excess capacity may be carried over to the next succeeding Fiscal Year, (b) Restricted Payments made pursuant to this clause during any Fiscal Year shall be deemed made, first, in respect of ~~Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a)~~amounts carried over from the prior Fiscal Year pursuant to clause (a) above and, second, in respect of amounts permitted for such Fiscal Year as provided above and (c) the ~~event~~ amount of excess capacity that may be carried over from a ~~proposed Restricted Payment~~ prior Fiscal Year pursuant to clause (~~or a portion thereof~~a) ~~meets the criteria of clauses (i) through (xviii) above, the Borrowers will~~ above shall be ~~entitled~~ calculated without taking into account any amounts carried over to ~~classify or later reclassify (based on circumstances existing on the date of~~ such ~~reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a)~~prior Fiscal Year. (b) ~~Neither Holdings, Intermediate Holdings nor any Borrower~~ No Loan Party will, nor will ~~they~~ it permit any ~~Restricted~~ Subsidiary of it to, make or ~~pay, directly~~ agree to pay or ~~indirectly,~~ make any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any ~~Junior Financing~~Specified Indebtedness of the type described in clause (a)(i), clause (a)(ii), clause (a)(iii) or, with respect to the types of Specified Indebtedness described in clauses (a)(i), (a)(ii) and (a)(iii), clause (b) of the definition of Specified Indebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any ~~Junior Financing~~such Specified Indebtedness, except: (i) ~~payment of regularly scheduled interest and principal payments as, in the form of payment and when due in respect of any Indebtedness, other than~~ payments in ~~respect~~ Capital Stock (as long as no Change in Control would result therefrom) and payments of ~~any Junior Financing prohibited by~~ interest in-kind of the ~~subordination provisions thereof~~Loan Parties and their Subsidiaries; (ii) ~~refinancings~~ (A) scheduled payments of ~~Junior~~ principal and interest as and when due and (B) as long as no Specified Default then exists or would arise therefrom, prepayments in whole or in part of the Senior Initial Loan Facility Indebtedness, Additional Borrower Unsecured Senior Notes and the Holdco Initial Loan Facility Indebtedness in a principal amount not exceeding $10,000,000 in the aggregate in any Fiscal Year and not exceeding $25,000,000 in the aggregate since the Closing Date; (iii) prepayment in whole or in part of the Senior Initial Loan Facility, Additional Borrower Unsecured Senior Notes, the Holdco Initial Loan Facility or the Term Loan Financing ~~Indebtedness~~ Facility with the proceeds of any equity securities issued or capital contributions received by any Loan Party or any Subsidiary for the purpose of making such payment or prepayment; (iv) (A) mandatory prepayments by the Borrower as required under the Senior Initial Loan Agreement as in effect on the Closing Date or any Senior Initial Loan Agreement, Senior Note Indenture or supplemental indenture, so long as such Senior Initial Loan Agreement, Senior Note Indenture or supplemental indenture contains terms regarding mandatory prepayments no less favorable to the obligors thereunder than the Senior Initial Loan Agreement in effect on the Closing Date, (B) mandatory prepayments by Holdings as required under the Holdco Initial Loan Agreement as in effect on the Closing Date or any Holdco Initial Loan Agreement, Holdco Note Indenture or supplemental indenture, so long as such Holdco Initial Loan Agreement, Holdco Note Indenture or supplemental indenture contains terms regarding mandatory prepayments no less favorable to Holdings than the Holdco Initial Loan Agreement in effect on the Closing Date and (C) mandatory prepayments by the Borrower as required under the Additional Borrower Unsecured Senior Notes so long as the terms thereof regarding mandatory prepayments are no less favorable to the Borrower than those in the Senior Note Indenture on the First Amendment Effective Date; (v) partial redemption or prepayment by Holdings of the Holdco Initial Loan Facility Indebtedness to the extent necessary to make an AHYDO “catch-up” payment thereon; (vi) any repayment, purchase, redemption, repurchase, defeasance or other ~~Junior Financing~~ acquisition or retirement of any Indebtedness ~~permitted to be in~~constituting Senior Initial Loan Facility Indebtedness (including, without limitation, Senior Initial Loans and any Senior Notes) made by exchange for, or out of the proceeds of the substantially concurrent issuance or sale of, Indebtedness of the Borrower incurred in compliance with Section 6.01; (vii) any repayment, purchase, redemption, repurchase, defeasance or other acquisition or retirement of any Indebtedness constituting Holdco Initial Loan Facility Indebtedness (including, without limitation, Holdco Initial Loans and any Holdco Notes) made by exchange for, or out of the proceeds of the substantially concurrent issuance or sale of, Indebtedness of Holdings incurred in compliance with Sections 6.01 and 6.03; and (viii) any repayment, purchase, redemption, repurchase, defeasance or other acquisition or retirement of any Indebtedness constituting Additional Borrower Unsecured Senior Notes made by exchange for, or out of the proceeds of the substantially concurrent issuance or sale of, Indebtedness of the Borrower incurred in compliance with Section 6.01.

Appears in 2 contracts

Sources: Credit Agreement (Music123, Inc.), Credit Agreement (Music123, Inc.)

Restricted Payments; Certain Payments of Indebtedness. (a) ~~Neither Holdings, Intermediate Holdings nor any Borrower~~ No Loan Party will, nor will ~~they~~ it permit any ~~Restricted Subsidiary~~Subsidiary of it to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, ~~except:~~except that (i) ~~Each Borrower and each Restricted Subsidiary may make Restricted Payments to Intermediate Holdings, a Borrower~~ Any Loan Party or any Subsidiary of a Loan Party may declare and pay cash dividends or make other ~~Restricted Subsidiary~~distributions of property to a Loan Party; provided that ~~in the case of~~ any such Restricted ~~Payment~~ Payments made to Holdings under this clause (i) shall be used only (A)(x) to pay general corporate overhead and similar expenses incurred by Holdings in the ordinary course of business, or the amount of any indemnification claims made by any director or officer of Holdings, (y) to pay franchise taxes and other fees, taxes and expenses required to maintain the corporate existence of Holdings and (z) to pay taxes that are due and payable by Holdings as the parent of a ~~Restricted Subsidiary~~ consolidated group that includes Holdings and its Subsidiaries (including Unrestricted Subsidiaries); (B) so long as (1) no Event of Default has occurred and is continuing or would arise therefrom and (2) the Borrower is not ~~a wholly-owned~~ prohibited under the Senior Initial Loan Facility or the ABL Facility from making such payments to Holdings, to make payments in connection with the repurchase of Capital Stock of Holdings or any Subsidiary of ~~a Borrower~~it (including payments of principal and interest in respect of notes issued by Holdings to stockholders in connection therewith), provided that such ~~Restricted Payment~~ payments are otherwise permitted under this SECTION 6.06; (C) so long as (1) no Event of Default under SECTION 7.01(a), SECTION 7.01(b) (but only with respect to clause (i) thereof as it relates to non-payment of interest), SECTION 7.01(h) or SECTION 7.01(i) has occurred and is ~~made~~ continuing or would arise therefrom and (2) the Borrower is not prohibited under the Senior Initial Loan Facility or the ABL Facility from making such payments to ~~Intermediate~~ Holdings, ~~such Borrower, any Restricted Subsidiary~~ to pay interest as and ~~to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests~~ when due in respect of the ~~relevant class of Equity Interests~~Holdco Initial Loan Facility Indebtedness; and (D) to partially redeem or prepay Holdco Initial Loan Facility Indebtedness to the extent necessary to make an AHYDO “catch-up” payment thereon; (ii) ~~payments or distributions to satisfy dissenters’ or appraisal rights~~The Loan Parties and their Subsidiaries may make Restricted Payments for the purpose of paying amounts owing under the Advisory Agreement, ~~pursuant to or in connection with a consolidation, amalgamation, merger or transfer of assets (other than with respect~~ to the ~~Transactions) that complies with Section 6.03~~extent permitted under SECTION 6.07; (iii) ~~Holdings~~ The Loan Parties and ~~any Intermediate Holdings~~ their Subsidiaries may ~~declare and~~ make ~~dividend payments or other distributions payable solely in~~ Restricted Payments on the ~~Equity Interests of such Person~~Closing Date to consummate the VH Acquisition; (iv) The Loan Parties and their Subsidiaries may make Restricted Payments ~~made in connection with or in order to consummate the Transactions (including, without limitation, (A) cash payments to holders~~ consisting of ~~Equity Interests of Target as provided by the Acquisition Agreement, (B) Restricted Payments to direct and indirect parent companies of Holdings to finance a portion~~ Permitted Dispositions of the ~~consideration for the Acquisition~~ type described, and ~~(C) other payments with respect to working capital adjustments or otherwise,~~ subject to the ~~extent contemplated by~~ limitations contained, in the ~~Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv))~~definition thereof; (v) The Loan Parties and their Subsidiaries may make Restricted Payments constituting repurchases of ~~Equity Interests~~ Capital Stock of Holdings or any Subsidiary of it in ~~Holdings (or Restricted Payments by Holdings to allow repurchases of Equity Interest in any direct or indirect parent of Holdings) or Intermediate Holdings deemed to occur upon~~ connection with the exercise of stock options or warrants ~~or other incentive interests~~ if such ~~Equity Interests~~ equity interests represent a portion of the exercise price of such ~~stock options~~ option or ~~warrants or other incentive interest; (vi) Restricted Payments to Holdings which Holdings may use to redeem, acquire, retire or repurchase its Equity Interests (or any options,~~ warrants, restricted stock units or stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests) held by current or former officers, managers, consultants, directors and employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), Holdings, the Borrowers and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, profits interest, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that the aggregate amount of Restricted Payments permitted by this clause (vi) after the Effective Date, together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu thereof, shall not exceed the sum of (A) the greater of $15.0 million and 5.0% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings (which subsequent to an IPO shall be increased to the greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings), (B) the amount in any fiscal year equal to the cash proceeds of key man life insurance policies received by Holdings, the Borrowers or the Restricted Subsidiaries after the Effective Date, (C) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year may be carried forward to succeeding fiscal years; (vii) Holdings and any Intermediate Holdings may make Restricted Payments in cash: (A) without duplication of any Permitted Tax Distribution, the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (~~a)(vii)(A~~v) shall not exceed $2,000,000 in any Fiscal Year of the ~~Tax liability that~~ Borrower; (vi) Holdings ~~and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that~~ may make Restricted Payments ~~under this subclause~~ constituting other repurchases of Capital Stock of Holdings or any Subsidiary of it, provided that such payments, in the aggregate with any payments made pursuant to clause (vii) below, shall not exceed $3,000,000 in any Fiscal Year (and provided further that (A) in ~~respect~~ the event the entire $3,000,000 is not utilized in any Fiscal Year under clauses (vi) and (vii) of ~~any Taxes attributable~~ this SECTION 6.06, one hundred percent (100%) of such unutilized portion may be carried forward to the ~~income~~ next succeeding Fiscal Year of ~~any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to~~ Holdings, ~~the Borrowers or their Restricted Subsidiaries;~~ (B) ~~the proceeds of which~~ Restricted Payments made pursuant to this clause during any Fiscal Year shall be ~~used by Holdings or any Intermediate Holdings~~ deemed made, first, in respect of amounts carried over from the prior Fiscal Year pursuant to ~~pay~~ clause (~~or to make Restricted Payments to allow any direct or indirect parent~~ A) above and, second, in respect of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof or any Intermediate Holdings) attributable to the ownership or operations of Holdings, the Borrowers and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of Holdings, the Borrowers and the Restricted Subsidiaries amounts permitted for such Fiscal Year as provided above and (yC) ~~otherwise permitted to~~ the amount of excess capacity that may be paid by Holdings, the Borrowers and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the Borrowers or the Restricted Subsidiaries carried over from a prior Fiscal Year pursuant to ~~Section 6.09(iii~~clause (A) ~~or (x~~above shall be calculated without taking into account any amounts carried over to such prior Fiscal Year); (Cvii) ~~the proceeds~~ Holdings may make payments of ~~which shall be used by Holdings or any Intermediate Holdings~~ principal and interest in respect of notes issued to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence; (D) the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(m); provided that (1) such Restricted Payment shall be made substantially concurrently stockholders in connection with the ~~closing~~ repurchase of such Investment and (2) Holdings or any Intermediate Holdings shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to Holdings, the Borrowers or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with Holdings, the Borrowers or any shares of the Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees Capital Stock of Holdings or any ~~direct or indirect parent company~~ Subsidiary of ~~Holdings~~ it, provided that such payments, in the aggregate with any payments made pursuant to clause (vi) above, shall not exceed $3,000,000 in any Fiscal Year, (and provided further that, (A) in the event the entire $3,000,000 is not utilized in any Fiscal Year under clauses (vi) and (vii) of this SECTION 6.06, one hundred percent (100%) of such unutilized portion may be carried forward to the ~~extent such salaries, bonuses and other benefits are attributable to the ownership or operation~~ next succeeding Fiscal Year of Holdings, (B) Restricted Payments made pursuant to this clause during any Fiscal Year shall be deemed made, first, in respect of amounts carried over from the ~~Borrowers~~ prior Fiscal Year pursuant to clause (A) above and, second, in respect of amounts permitted for such Fiscal Year as provided above and (C) the ~~Restricted Subsidiaries~~amount of excess capacity that may be carried over from a prior Fiscal Year pursuant to clause (A) above shall be calculated without taking into account any amounts carried over to such prior Fiscal Year; and (G) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful); (viii) in addition to the foregoing Restricted Payments, the Borrowers and any Intermediate Holdings may make additional Restricted Payments to any Intermediate Holdings and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt, in an aggregate amount, when taken together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii), not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as no Event of Default shall have occurred and be ~~continuing (or, in the case of the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h) or (i))~~continuing, the ~~Available Amount that is Not Otherwise Applied plus (C) the Available Equity Amount that is Not Otherwise Applied; (ix) redemptions~~ Loan Parties and their Subsidiaries may in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; (xi) Holdings may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiii) payments made or expected to be made by Holdings, any Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to 5.00 to 1.0 and (B) there is no continuing Event of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may each Fiscal Year make Restricted Payments in ~~cash~~ an aggregate amount not exceeding the amount set forth below for such Fiscal Year: 2007 $ 1,000,000 2008 $ 5,000,000 2009 $ 10,000,000 2010 $ 15,000,000 2011 $ 20,000,000 2012 $ 20,000,000 2013 $ 20,000,000 ; provided, that (a) to ~~Holdings~~ the extent the capacity to ~~permit Holdings to make, and Holdings may make,~~ make Restricted Payments pursuant to this clause (vi) for any Fiscal Year exceeds the aggregate amount of Restricted Payments made during such Fiscal Year, such excess capacity may be carried over to the next succeeding Fiscal Year, (b) Restricted Payments made pursuant to this clause during any Fiscal Year shall be deemed made, first, in respect of ~~Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a)~~amounts carried over from the prior Fiscal Year pursuant to clause (a) above and, second, in respect of amounts permitted for such Fiscal Year as provided above and (c) the ~~event~~ amount of excess capacity that may be carried over from a ~~proposed Restricted Payment~~ prior Fiscal Year pursuant to clause (~~or a portion thereof~~a) ~~meets the criteria of clauses (i) through (xviii) above, the Borrowers will~~ above shall be ~~entitled~~ calculated without taking into account any amounts carried over to ~~classify or later reclassify (based on circumstances existing on the date of~~ such ~~reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a)~~prior Fiscal Year. (b) ~~Neither Holdings, Intermediate Holdings nor any Borrower~~ No Loan Party will, nor will ~~they~~ it permit any ~~Restricted~~ Subsidiary of it to, make or ~~pay, directly~~ agree to pay or ~~indirectly,~~ make any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any ~~Junior Financing~~Specified Indebtedness of the type described in clauses (a)(i), clause (a)(ii) or, with respect to the types of Specified Indebtedness described in clauses (a)(i) and (a)(ii), clause (b) of the definition of Specified Indebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any ~~Junior Financing~~such Specified Indebtedness, except: (i) ~~payment~~ payments in Capital Stock (as long as no Change in Control would result therefrom) and payments of ~~regularly~~ interest in-kind of the Loan Parties and their Subsidiaries; (A) scheduled payments of principal and interest ~~and principal payments as, in the form of payment~~ as and when due and (B) as long as no Specified Default then exists or would arise therefrom, prepayments in ~~respect~~ whole or in part of the Senior Initial Loan Facility Indebtedness and the Holdco Initial Loan Facility Indebtedness in a principal amount not exceeding $10,000,000 in the aggregate in any ~~Indebtedness, other than payments~~ Fiscal Year and not exceeding $25,000,000 in ~~respect of any Junior Financing prohibited by~~ the ~~subordination provisions thereof~~aggregate since the Closing Date; (iiiii) ~~refinancings~~ prepayment in whole or in part of ~~Junior~~ the Senior Initial Loan Facility, the Holdco Initial Loan Facility or the Term Loan Financing ~~Indebtedness~~ Facility with the proceeds of any equity securities issued or capital contributions received by any Loan Party or any Subsidiary for the purpose of making such payment or prepayment; (iv) (A) mandatory prepayments by the Lead Borrower as required under the Senior Initial Loan Agreement as in effect on the Closing Date or any Senior Initial Loan Agreement, Senior Note Indenture or supplemental indenture, so long as such Senior Initial Loan Agreement, Senior Note Indenture or supplemental indenture contains terms regarding mandatory prepayments no less favorable to the obligors thereunder than the Senior Initial Loan Agreement in effect on the Closing Date and (B) mandatory prepayments by Holdings as required under the Holdco Initial Loan Agreement as in effect on the Closing Date or any Holdco Initial Loan Agreement, Holdco Note Indenture or supplemental indenture, so long as such Holdco Initial Loan Agreement, Holdco Note Indenture or supplemental indenture contains terms regarding mandatory prepayments no less favorable to Holdings than the Holdco Initial Loan Agreement in effect on the Closing Date; (v) partial redemption or prepayment by Holdings of the Holdco Initial Loan Facility Indebtedness to the extent necessary to make an AHYDO “catch-up” payment thereon; (vi) any repayment, purchase, redemption, repurchase, defeasance or other ~~Junior Financing~~ acquisition or retirement of any Indebtedness ~~permitted to be in~~constituting Senior Initial Loan Facility Indebtedness (including, without limitation, Senior Initial Loans and any Senior Notes) made by exchange for, or out of the proceeds of the substantially concurrent issuance or sale of, Indebtedness of the Borrower incurred in compliance with Section 6.01; and (vii) any repayment, purchase, redemption, repurchase, defeasance or other acquisition or retirement of any Indebtedness constituting Holdco Initial Loan Facility Indebtedness (including, without limitation, Holdco Initial Loans and any Holdco Notes) made by exchange for, or out of the proceeds of the substantially concurrent issuance or sale of, Indebtedness of Holdings incurred in compliance with Sections 6.01 and 6.03.

Appears in 2 contracts

Sources: Credit Agreement (Music123, Inc.), Credit Agreement (Music123, Inc.)

Restricted Payments; Certain Payments of Indebtedness. (a) ~~Neither Holdings~~The Borrower will not, ~~Intermediate Holdings nor any Borrower will, nor~~ and will ~~they~~ not permit any Restricted ~~Subsidiary~~Subsidiary to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, except: (i) ~~Each Borrower and~~ each Restricted Subsidiary may make Restricted Payments to ~~Intermediate Holdings, a~~ the Borrower or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a ~~wholly-owned Subsidiary of a Borrower~~Wholly Owned Subsidiary, such Restricted Payment is made to ~~Intermediate Holdings, such~~ the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests; (ii) ~~payments or distributions to satisfy dissenters’ or appraisal rights, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of assets (other than with respect to~~ the ~~Transactions) that complies with Section 6.03; (iii) Holdings~~ Borrower and ~~any Intermediate Holdings~~ each Restricted Subsidiary may declare and make dividend payments or other distributions payable solely in the Equity Interests of such Person; (iviii) Restricted Payments made ~~in connection with or in order~~ to consummate the Transactions (including, without limitation, (A) cash payments to holders of Equity Interests of Target as provided by the Acquisition Agreement, (B) Restricted Payments to direct and indirect parent companies of Holdings to finance a portion of the consideration for the Acquisition and (C) other payments with respect to working capital adjustments or otherwise, to the extent contemplated by the Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv))Transactions; (viv) repurchases of Equity Interests in ~~Holdings (~~the Borrower or any Restricted ~~Payments by Holdings to allow repurchases of Equity Interest in any direct or indirect parent of Holdings) or Intermediate Holdings~~ Subsidiary deemed to occur upon exercise of stock options or warrants ~~or other incentive interests~~ if such Equity Interests represent a portion of the exercise price or withholding taxes payable in connection with the exercise of such ~~stock~~ options or warrants or other incentive ~~interest~~interests; (viv) Restricted Payments to ~~Holdings~~ the Borrower, which ~~Holdings~~ the Borrower may use to redeem, acquire, ~~retire~~ retire, repurchase or ~~repurchase~~ settle its Equity Interests (or any options, warrants, restricted stock ~~units~~ or stock appreciation rights or ~~other equity-linked interests~~ similar securities issued with respect to any of such Equity Interests) (or ~~make Restricted Payments~~ Indebtedness or to ~~allow any~~ service Indebtedness incurred by the Borrower to finance the redemption, acquisition, retirement, repurchase or settlement of ~~Holdings’ direct~~ such Equity Interest or ~~indirect parent companies to so redeem~~Indebtedness, ~~retire, acquire~~ held directly or ~~repurchase their Equity Interests) held~~ indirectly by current or former officers, managers, consultants, ~~directors and~~ members of the Board of Directors, employees or independent contractors (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of ~~Holdings (or any direct or indirect parent thereof), Holdings,~~ the ~~Borrowers~~ Borrower and ~~the~~ its Restricted Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, ~~profits interest,~~ employment termination agreement or any other employment agreements or equity holders’ ~~agreement; provided that the~~ agreement in an aggregate amount ~~of Restricted Payments permitted by this clause (vi)~~ after the ~~Effective Date,~~ Agreement Date together with the aggregate amount of loans and advances to ~~Holdings~~ the Borrower made pursuant to Section ~~6.04(m~~7.4(m) in lieu ~~thereof, shall~~ of Restricted Payments permitted by this clause (v) not to exceed ~~the sum of (A) the greater~~ $75,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years subject to a maximum of $~~15.0 million and 5.0% of Consolidated EBITDA for the most recently ended Test Period~~ 150,000,000 in any ~~fiscal~~ calendar year ~~of Holdings~~ (~~which subsequent to an IPO shall be increased~~ without giving effect to the ~~greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings~~following proviso)~~, (B) the~~ ; provided that such amount in any ~~fiscal~~ calendar year ~~equal~~ may be increased by (1) an amount not to exceed the cash proceeds of key man life insurance policies received by ~~Holdings,~~ the ~~Borrowers~~ Borrower or the Restricted Subsidiaries after the ~~Effective~~ Agreement Date, or (C2) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests amount of any ~~direct or indirect Parent Entity or management investment vehicle~~bona fide cash bonuses otherwise payable to members of the Board of Directors, ~~in each case to any future~~consultants, ~~present or former~~ officers, employees~~, directors~~, managers or ~~consultants~~ independent contractors of ~~Holdings, any of its Subsidiaries~~ the Borrower or any ~~direct~~ Restricted Subsidiary that are foregone in return for the receipt of Equity Interests, the fair market value of which is equal to or ~~indirect Parent Entity or management investment vehicle that occurs after~~ less than the ~~Effective Date, to the extent the cash proceeds from the sale~~ amount of such ~~Equity Interests are contributed to Holdings~~ cash bonuses, which, if not used in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year year, may be carried forward to ~~succeeding~~ any subsequent fiscal ~~years~~year; provided further that cancellation of Indebtedness owing to the Borrower or any Restricted Subsidiary from members of the Board of Directors, consultants, officers, employees, managers or independent contractors (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of the Borrower or any Restricted Subsidiary in connection with a repurchase of Equity Interests of the Borrower will not be deemed to constitute a Restricted Payment for purposes of this Section 7.7 or any other provisions of this Agreement. (vi) other Restricted Payments made by the Borrower; provided that, at the time of making such Restricted Payments, after giving effect to such Restricted Payment, Payment Conditions are satisfied; (vii) ~~Holdings and~~ any ~~Intermediate Holdings~~ Restricted Subsidiary may make Restricted Payments in ~~cash~~cash to the Borrower: (A) ~~without duplication of~~ as distributions by any ~~Permitted Tax Distribution,~~ Restricted Subsidiary to the ~~proceeds of which shall be used by Holdings or any Intermediate Holdings~~ Borrower in amounts required for the Borrower to pay ~~(or~~ with respect to ~~make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for~~ any taxable period ~~for~~ in which ~~Holdings~~ the Borrower and/or any of its Subsidiaries ~~are~~ is a member of (or is a flow-through entity for U.S. federal income tax purposes owned directly or indirectly by one or more such members of of) a consolidated, ~~combined~~ combined, unitary or ~~unitary~~ similar tax group ~~for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent~~ (a “Tax Group”)) of which the Borrower is the common parent, ~~the portion of any~~ U.S. federal, ~~state,~~ state and local or and foreign ~~Taxes (as applicable) of such Tax Group for such taxable period~~ taxes that are attributable to the taxable income of ~~Holdings~~ the Borrower and/or its Subsidiaries; provided that ~~Restricted Payments~~ for each taxable period, the amount of such payments made ~~pursuant to this clause (a)(vii)(A)~~ in respect of such taxable period in the aggregate shall not exceed the ~~Tax liability~~ amount of such taxes that ~~Holdings and/or~~ the Borrower and its Subsidiaries ~~(as applicable)~~ would have ~~incurred were such Taxes determined as~~ been required to pay if ~~such entity(ies)~~ they were a stand-alone ~~taxpayer or a~~ Tax Group with the Borrower as the corporate common parent of such stand-alone ~~group; and provided~~Tax Group (collectively, further, that Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers or their Restricted Subsidiaries“Tax Distributions”); (B) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof or any Intermediate Holdings) attributable to the ownership or operations of Holdings, the Borrowers and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of Holdings, the Borrowers and the Restricted Subsidiaries and (y) otherwise permitted to be paid by Holdings, the Borrowers and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the Borrowers or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x); (C) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence; (D) the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E) to finance any Investment made by the Borrower that, if made by the Borrower, would be permitted to be made pursuant to Section ~~6.04 other than Section 6.04(m)~~7.4; provided that (1A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2B) ~~Holdings or any Intermediate Holdings~~ the Borrower shall, immediately following the closing thereof, cause (x1) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section ~~6.04(b~~7.4(b)) to be contributed to ~~Holdings,~~ the ~~Borrowers~~ Borrower or ~~the~~ its Restricted Subsidiaries or (y2) the Person formed or acquired to merge into or consolidate with ~~Holdings,~~ the ~~Borrowers~~ Borrower or any of the Restricted Subsidiaries to the extent such ~~merger, amalgamation~~ merger or consolidation is permitted in Section ~~6.03~~7.3) in order to consummate such Investment, in each case in accordance with the requirements of Sections ~~5.11~~ 6.12 and ~~5.12~~6.13; (FC) the proceeds of which shall be used to pay (or to make Restricted Payments to allow the Borrower to pay) fees and expenses related to any equity or debt offering; (D) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of ~~Holdings or any direct or indirect parent company of Holdings~~ the Borrower to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of ~~Holdings,~~ the ~~Borrowers~~ Borrower and ~~the~~ its Restricted Subsidiaries; and (GE) the proceeds of which shall be used ~~by Holdings or any Intermediate Holdings to pay (or~~ to make ~~Restricted Payments to allow any direct or indirect parent thereof to pay~~payments permitted by clause (b)(iv) ~~fees~~ and ~~expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement~~ (~~whether or not such offering or other transaction is successful)~~b)(v) of Section 7.7; (viii) in addition to the foregoing Restricted Payments, the Borrowers and any Intermediate Holdings may make additional Restricted Payments to any Intermediate Holdings and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt, in an aggregate amount, when taken together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii), not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as no Event of Default ~~shall have occurred and be continuing (or~~exists or would result therefrom, the Borrower may make additional Restricted Payments, in ~~the case of the use of the Starter Basket that is Not Otherwise Applied~~an aggregate amount, ~~no Event of Default under Section 7.01(a), (b), (h) or (i)), the Available Amount that is Not Otherwise Applied plus (C)~~ not to exceed the Available Equity Amount that is Not Otherwise ~~Applied~~Applied as in effect immediately prior to the time of making of such Restricted Payment; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; (xi) ~~Holdings~~ the Borrower may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiii) payments made or expected to be made by ~~Holdings, any~~ the Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled ~~Affiliates, Immediate Family Members~~ Affiliates or ~~Permitted Transferees~~permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to 5.00 to 1.0 and (B) there is no continuing Event of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvixiii) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to ~~Holdings, a~~ the Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (~~xvii~~xiv) the declaration and payment of ~~dividends in respect~~ Restricted Payments on the Borrower’s common stock, following consummation of ~~JV Preferred Equity Interests issued in accordance with Section 6.01~~ any public offering after the date hereof, of up to 6.0% per annum of the net cash proceeds of such public offering received by or contributed to the ~~extent such dividends are included~~ Borrower, other than public offerings registered on Form S-8; (xv) additional Restricted Payments in an amount not to exceed the ~~calculation~~ greater of $25,000,000 and 20.0% of Consolidated ~~Interest Expense~~EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment; and (~~xviii~~xvi) ~~Holdings, Intermediate Holdings, any~~ the declaration and payment of regular cash dividends on common stock of the Borrower ~~or any Restricted Subsidiary may make Restricted Payments~~ in ~~cash~~ an aggregate amount not to ~~Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect~~ exceed 2.0% of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a)Market Capitalization per fiscal year. (b) ~~Neither Holdings~~The Borrower will not, ~~Intermediate Holdings nor any Borrower will, nor~~ and will ~~they~~ not permit any Restricted Subsidiary to, make or ~~pay~~agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any ~~Junior~~ Restricted Debt Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any ~~Junior~~ Restricted Debt Financing, or any other payment (including any payment under any Hedge Agreement) that has a substantially similar effect to any of the foregoing, except: (i) payment of regularly scheduled interest and principal ~~payments as~~payments, ~~in the form~~ mandatory offers to repay, repurchase or redeem, mandatory prepayments of principal premium and interest, and payment of fees, expenses and ~~when due in~~ indemnification obligations, with respect ~~of any Indebtedness~~to such Restricted Debt Financing, other than payments in respect of any ~~Junior~~ Restricted Debt Financing prohibited by the subordination provisions thereof; (ii) refinancings of ~~Junior~~ Indebtedness to the extent permitted by Section 7.1; (iii) the conversion of any Restricted Debt Financing to Equity Interests (other than Disqualified Equity Interests) of the Borrower, and any payment that is intended to prevent any Restricted Debt Financing from being treated as an “applicable high yield discount obligation” within the meaning of Section 163(i)(1) of the Code; (iv) prepayments, redemptions, repurchases, defeasances and other payments in respect of Restricted Debt Financings prior to their scheduled maturity in an aggregate amount, not to exceed the sum of (A) an amount at the time of making any such prepayment, redemption, repurchase, defeasance or other payment and together with any other prepayments, redemptions, repurchases, defeasances and other payments made utilizing this subclause (A) not to exceed the greater of $25,000,000 and 20.0% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such prepayment, redemption, purchase, defeasance or other payment plus (B) the Available Equity Amount that is Not Otherwise Applied as in effect immediately prior to the time of making of such Investment; (v) payments made in connection with the Transactions; (vi) prepayments, redemptions, purchases, defeasances and other payments in respect of Restricted Debt Financings prior to their scheduled maturity; provided that after giving effect to such prepayment, redemption, repurchase, defeasance or other payment, Payment Conditions are satisfied; and (vii) prepayments of Restricted Debt Financing owed to the Borrower or a Restricted Subsidiary or prepayments of Permitted Refinancing of such Indebtedness with the proceeds of any other ~~Junior Financing Indebtedness permitted to be in~~Restricted Debt Financing.

Appears in 2 contracts

Sources: Credit Agreement (Installed Building Products, Inc.), Credit Agreement (Installed Building Products, Inc.)

Restricted Payments; Certain Payments of Indebtedness. (a) ~~Neither Holdings~~The Borrower will not, ~~Intermediate Holdings nor any Borrower will, nor~~ and will ~~they~~ not permit any Restricted ~~Subsidiary~~Subsidiary to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, except: (i) ~~Each Borrower and~~ each Restricted Subsidiary may make Restricted Payments to ~~Intermediate Holdings, a~~ (x) the Borrower or any ~~other~~ Restricted Subsidiary; , provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a ~~wholly-owned Subsidiary of a Borrower~~Wholly Owned Subsidiary, such Restricted Payment is made to ~~Intermediate Holdings, such~~ a Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity ~~Interests~~Interests and (y) Holdings to the extent the proceeds of such Restricted Payments are contributed or loaned or advanced to another Restricted Subsidiary; (ii) ~~payments or distributions to satisfy dissenters’ or appraisal rights, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of assets (other than with respect to~~ the ~~Transactions) that complies with Section 6.03; (iii) Holdings~~ Borrower and ~~any Intermediate Holdings~~ each Restricted Subsidiary may declare and make dividend payments or other distributions payable solely in the Equity Interests of such Person; (iviii) Restricted Payments made in connection with ~~or in order to consummate~~ the Transactions (including, without limitation, (A) cash payments to holders of Equity Interests of Target as provided by the Acquisition Agreement, (B) Restricted Payments to direct and indirect parent companies of Holdings to finance a portion of the consideration for the Acquisition and (C) other payments with respect to working capital adjustments or otherwise, to the extent contemplated by the Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv))Transactions; (viv) repurchases of Equity Interests in Holdings (or ~~Restricted Payments by Holdings to allow repurchases of Equity Interest in~~ any direct or indirect parent of Holdings) ), any Intermediate Parent, the Borrower or ~~Intermediate Holdings~~ any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants ~~or other incentive interests~~ if such Equity Interests represent a portion of the exercise price or withholding Taxes payable in connection with the exercise of such ~~stock~~ options or warrants or other incentive ~~interest~~interests; (viv) Restricted Payments to Holdings or any Intermediate Parent, which Holdings or such Intermediate Parent may use to redeem, acquire, ~~retire~~ retire, repurchase or ~~repurchase~~ settle its Equity Interests (or any options, warrants, restricted stock ~~units~~ or stock appreciation rights or ~~other equity-linked interests~~ similar securities issued with respect to any of such Equity Interests) or Indebtedness or to service Indebtedness incurred by Holdings or any Intermediate Parent or any direct or indirect parent companies of Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest or Indebtedness (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity ~~Interests)~~ Interests or their Indebtedness or to service Indebtedness incurred by Holdings or an Intermediate Parent to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or Indebtedness or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests or Indebtedness), held directly or indirectly by current or former officers, managers, consultants, ~~directors and~~ members of the Board of Directors, employees or independent contractors (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), ~~Holdings~~any Intermediate Parent, the ~~Borrowers~~ Borrower and ~~the~~ its Restricted Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, ~~profits interest,~~ employment termination agreement or any other employment agreements or equity holders’ ~~agreement; provided that the~~ agreement in an aggregate amount ~~of Restricted Payments permitted by this clause (vi)~~ after the Effective ~~Date,~~ Date together with the aggregate amount of loans and advances to Holdings or an Intermediate Parent made pursuant to Section 6.04(m) in lieu ~~thereof, shall~~ of Restricted Payments permitted by this clause (v) not to exceed ~~the sum of (A) the greater~~ $15,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years subject to a maximum of $~~15.0 million and 5.0% of Consolidated EBITDA for the most recently ended Test Period~~ 35,000,000 in any ~~fiscal~~ calendar year ~~of Holdings~~ (~~which subsequent to an IPO shall be increased~~ without giving effect to the ~~greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings~~following proviso)~~, (B) the~~ ; provided that such amount in any ~~fiscal~~ calendar year ~~equal~~ may be increased by (1) an amount not to exceed the cash proceeds of key man life insurance policies received by ~~Holdings,~~ the ~~Borrowers~~ Borrower (or by Holdings (or any direct or indirect parent thereof) or an Intermediate Parent and contributed to the Borrower) or the Restricted Subsidiaries after the Effective Date, or (C2) the amount of any bona fide cash ~~proceeds from~~ bonuses otherwise payable to members of the ~~sale~~ Board of Directors, consultants, officers, employees, managers or independent contractors of Holdings, an Intermediate Parent, the Borrower or any Restricted Subsidiary that are foregone in return for the receipt of Equity ~~Interests~~ Interests, the Fair Market Value of which is equal to or less than the amount of such cash bonuses, which, if not used in any year, may be carried forward to any subsequent fiscal year; provided further that cancellation of Indebtedness owing to the Borrower or any Restricted Subsidiary from members of the Board of Directors, consultants, officers, employees, managers or independent contractors (~~other than Disqualified Equity Interests~~or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of ~~Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to~~ Holdings, any Intermediate Parent, the ~~cash proceeds from the sale~~ Borrower or any Restricted Subsidiary in connection with a repurchase of Equity Interests of ~~any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of~~ Holdings, any ~~of its Subsidiaries~~ Intermediate Parent or the Borrower (or any direct or indirect ~~Parent Entity~~ parent thereof) will not be deemed to constitute a Restricted Payment for purposes of this Section 6.07 or ~~management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale~~ any other provisions of ~~such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of~~ this Agreement. (vi) other Restricted Payments made by ~~virtue~~ the Borrower; provided that, at the time of ~~the Available Equity Amount~~ making such Restricted Payments, (x) no Event of Default shall have occurred and be continuing or ~~are otherwise applied to increase any other basket hereunder~~ would result therefrom and (Dy) on a Pro Forma Basis, the ~~aggregate amount required~~ Senior Secured Net Leverage Ratio is equal to ~~be paid under~~ or less than 6.00 to 1.00 for the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year may be carried forward to succeeding fiscal yearsmost recently ended Test Period; (vii) ~~Holdings~~ the Borrower and any ~~Intermediate Holdings~~ Restricted Subsidiary may make Restricted Payments in ~~cash~~cash to the Borrower, Holdings and any Intermediate Parent: (A) ~~without duplication of any Permitted Tax Distribution,~~ as distributions by the ~~proceeds of which shall be used by Holdings~~ Borrower or any ~~Intermediate~~ Restricted Subsidiary to the Borrower or Holdings ~~to pay~~ (or ~~to make Restricted Payments to allow~~ any direct or indirect parent of Holdings) in amounts required for Holdings (or any direct or indirect parent of Holdings) to ~~pay), for~~ pay with respect to any taxable period ~~for~~ in which ~~Holdings~~ the Borrower and/or any of its Subsidiaries ~~are members~~ is a member of (or the Borrower is a disregarded entity for U.S. federal income tax purposes wholly owned by a member of) a consolidated, ~~combined~~ combined, unitary or ~~unitary~~ similar tax group (a “Tax Group”) for U.S. federal and/or applicable ~~state~~foreign, state or local ~~or foreign~~ income ~~Tax~~ tax purposes of which a Holdings or any other direct or indirect parent of Holdings is the common ~~parent (a “Tax Group”)~~parent, ~~the portion of any U.S. federal, state, local or foreign~~ Taxes ~~(as applicable) of such Tax Group for such taxable period~~ that are attributable to the ~~income~~ taxable income, revenue, receipts, gross receipts, gross profits, capital or margin of ~~Holdings~~ the Borrower and/or its Subsidiaries; provided ~~that Restricted Payments~~ that, for each taxable period, the amount of such payments made ~~pursuant to this clause (a)(vii)(A)~~ in respect of such taxable period in the aggregate shall not exceed the ~~Tax liability~~ amount of such Taxes that ~~Holdings and/or~~ the Borrower and its Subsidiaries ~~(as applicable)~~ would have ~~incurred were such Taxes determined as~~ been required to pay if ~~such entity(ies)~~ they were a stand-alone ~~taxpayer or a~~ Tax Group with the Borrower as the corporate common parent of such stand-alone ~~group; and provided~~Tax Group (collectively, further, that Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers or their Restricted Subsidiaries“Tax Distributions”); (B) the proceeds of which shall be used by Holdings or any Intermediate ~~Holdings~~ Parent to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, ~~accounting, tax reporting~~ accounting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by ~~directors~~ members of the Board of Directors or ~~officers~~ officers, employees, directors, managers, consultants or independent contractors of Holdings (or any parent ~~thereof~~ thereof) or any Intermediate ~~Holdings)~~ Parent attributable to the ownership or operations of Holdings, the ~~Borrowers~~ Borrower and ~~the~~ its Restricted Subsidiaries, (3) fees and expenses (x) due and payable by ~~any of Holdings,~~ the ~~Borrowers~~ Borrower and ~~the~~ its Restricted Subsidiaries and (y) otherwise permitted to be paid by ~~Holdings,~~ the ~~Borrowers~~ Borrower and ~~the~~ any Restricted Subsidiaries under this ~~Agreement and~~ Agreement, (4) ~~payments~~ to the extent constituting a Restricted Payment, amounts due and payable pursuant to any investor management agreement entered into with the Sponsor after the Effective Date in an aggregate amount not to exceed 2.5 % of Consolidated EBITDA for the most recently ended Test Period delivered pursuant to Section 5.01(a) as of the time of such Restricted Payment and (5) amounts that would otherwise be permitted to be paid ~~directly by Holdings, the Borrowers or the Restricted Subsidiaries~~ pursuant to Section ~~6.09(iii~~6.08 (iii) or (xxi); (C) the proceeds of which shall be used by Holdings (or any Intermediate ~~Holdings to pay (~~Parent or ~~to make Restricted Payments to allow~~ any direct or indirect parent of ~~Holdings~~ Holdings) to ~~pay)~~ pay franchise and similar Taxes, and other fees and expenses, required to maintain its ~~organizational~~ corporate or other legal existence; (D) ~~the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E)~~ to finance any Investment made by Holdings or any Intermediate Parent that, if made by the Borrower, would be permitted to be made pursuant to Section ~~6.04 other than Section 6.04(m)~~6.04; provided that (1A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2B) Holdings (or any direct or indirect parent thereof) or any Intermediate ~~Holdings~~ Parent shall, immediately following the closing thereof, cause (x1) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to ~~Holdings,~~ the ~~Borrowers~~ Borrower or ~~the~~ its Restricted Subsidiaries or (y2) the Person formed or acquired to merge into or amalgamate or consolidate with ~~Holdings,~~ the ~~Borrowers~~ Borrower or any of the Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof or any Intermediate Parent thereof to pay) fees and expenses related to any equity or debt offering not prohibited by this Agreement; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings or any Intermediate Parent to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the ~~Borrowers~~ Borrower and ~~the~~ its Restricted Subsidiaries; and (G) the proceeds of which shall be used ~~by Holdings or any Intermediate Holdings to pay (or~~ to make ~~Restricted Payments to allow any direct or indirect parent thereof to pay~~payments permitted by clause (b)(iv) ~~fees~~ and ~~expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement~~ (~~whether or not such offering or other transaction is successful)~~b)(v) of Section 6.07; (viii) in addition to the foregoing Restricted ~~Payments, the Borrowers~~ Payments and any Intermediate Holdings may make additional Restricted Payments to any Intermediate Holdings and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt, in an aggregate amount, when taken together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii), not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as (x) no Event of Default shall have occurred and be continuing or would result therefrom and (ory) on a Pro Forma Basis, the Total Net Leverage Ratio does not exceed 7.50 to 1.00 for the most recently ended Test Period, the Borrower may make additional Restricted Payments, in an aggregate amount not to exceed the ~~case~~ sum of ~~the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a),~~ (~~b), (h~~A) ~~or (i)),~~ the Available Amount that is Not Otherwise Applied as in effect immediately prior to the time of making of such Restricted Payment, plus (CB) the Available Equity Amount that is Not Otherwise ~~Applied~~Applied as in effect immediately prior to the time of making of such Restricted Payment; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; ~~provided~~ provided, that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; (xi) payments to Holdings ~~may~~ or any Intermediate Parent to permit it to (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiii) payments made or expected to be made by Holdings, any Intermediate Parent, the Borrower or any Restricted Subsidiary in respect of withholding or similar ~~taxes~~ Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled ~~Affiliates, Immediate Family Members~~ Affiliates or ~~Permitted Transferees~~permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar ~~taxes~~Taxes; (xiii) [reserved]; (xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to 5.00 to 1.0 and (B) there is no continuing Event of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of a Restricted Payment on Holdings’ or the Borrower’s common stock (or the payment of Restricted Payments to Holdings or any direct or indirect parent company of Holdings to fund a payment of dividends ~~in respect~~ on such company’s common stock), following consummation of ~~JV Preferred Equity Interests issued in accordance with Section 6.01~~ an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the ~~extent such dividends are included in~~ Borrower, other than public offerings with respect to the ~~calculation of Consolidated Interest Expense~~IPO Entity’s common stock registered on Form S-8; and (~~xviii~~xv) ~~Holdings, Intermediate Holdings,~~ any ~~Borrower~~ distributions or ~~any Restricted Subsidiary may make Restricted Payments in cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect~~ payments of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a)Securitization Fees. (b) ~~Neither Holdings~~The Borrower will not, ~~Intermediate Holdings nor any Borrower will, nor~~ and will ~~they~~ not permit any Restricted Subsidiary to, make or ~~pay~~agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoing, except: (i) payment of regularly scheduled interest and principal ~~payments as~~payments, ~~in the form~~ mandatory offers to repay, repurchase or redeem, mandatory prepayments of principal premium and interest, and payment of fees, expenses and ~~when due in~~ indemnification obligations, with respect ~~of any Indebtedness~~to such Junior Financing, other than payments in respect of any Junior Financing prohibited by the subordination provisions thereof; (ii) refinancings of Indebtedness to the extent permitted by Section 6.01; (iii) the conversion of any Junior Financing ~~Indebtedness with proceeds~~ to Equity Interests (other than Disqualified Equity Interests) of ~~other~~ Holdings or any of its direct or indirect parent companies or any Intermediate Parent or the Borrower, and any payment that is intended to prevent any Junior Financing ~~Indebtedness permitted~~ from being treated as an “applicable high yield discount obligation” within the meaning of Section 163(i)(1) of the Code; (iv) prepayments, redemptions, repurchases, defeasances and other payments in respect of Junior Financings prior to their scheduled maturity in an aggregate amount, not to exceed the sum of (A) an amount at the time of making any such prepayment, redemption, repurchase, defeasance or other payment and together with any other prepayments, redemptions, repurchases, defeasances and other payments made utilizing this subclause (A) not to exceed the greater of (1) $60,000,000 and (2) 15% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such prepayment, redemption, purchase, defeasance or other payment, plus (B) (1) so long as no Event of Default shall have occurred and shall be incontinuing or would result therefrom and (2) on a Pro Forma Basis, the Total Net Leverage Ratio does not exceed 7.50 to 1.00 for the most recently ended Test Period (x) the Available Amount that is Not Otherwise Applied as in effect immediately prior to the time of making of such Investment plus (y) the Available Equity Amount that is Not Otherwise Applied as in effect immediately prior to the time of making of such Investment; (v) payme

Appears in 2 contracts

Sources: Credit Agreement (Sotera Health Co), Credit Agreement (Sotera Health Topco, Inc.)

Restricted Payments; Certain Payments of Indebtedness. (a) ~~Neither Holdings~~The Borrower will not, ~~Intermediate Holdings nor any Borrower will, nor~~ and will ~~they~~ not permit any Restricted ~~Subsidiary~~Subsidiary to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, except: (i) ~~Each Borrower and~~ each Restricted Subsidiary may make Restricted Payments to ~~Intermediate Holdings, a~~ the Borrower or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a ~~wholly-owned Subsidiary of a Borrower~~Wholly Owned Subsidiary, such Restricted Payment is made to ~~Intermediate Holdings, such~~ the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests; (ii) ~~payments or distributions to satisfy dissenters’ or appraisal rights, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of assets (other than with respect to~~ the ~~Transactions) that complies with Section 6.03; (iii) Holdings~~ Borrower and ~~any Intermediate Holdings~~ each Restricted Subsidiary may declare and make dividend payments or other distributions payable solely in the Equity Interests of such Person; (iviii) Restricted Payments made ~~in connection with or in order~~ to consummate the Transactions (including, without limitation, (A) cash payments to holders of Equity Interests of Target as provided by the Acquisition Agreement, (B) Restricted Payments to direct and indirect parent companies of Holdings to finance a portion of the consideration for the Acquisition and (C) other payments with respect to working capital adjustments or otherwise, to the extent contemplated by the Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv))Transactions; (viv) repurchases of Equity Interests in ~~Holdings~~ the Borrower (or ~~Restricted Payments by Holdings to allow repurchases of Equity Interest in~~ any direct or indirect parent of ~~Holdings~~the Borrower) or ~~Intermediate Holdings~~ any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants ~~or other incentive interests~~ if such Equity Interests represent a portion of the exercise price or withholding taxes payable in connection with the exercise of such ~~stock~~ options or warrants or other incentive ~~interest~~interests; (viv) Restricted Payments to ~~Holdings~~ the Borrower, which ~~Holdings~~ the Borrower may use to redeem, acquire, ~~retire~~ retire, repurchase or ~~repurchase~~ settle its Equity Interests (or any options, warrants, restricted stock ~~units~~ or stock appreciation rights or ~~other equity-linked interests~~ similar securities issued with respect to any of such Equity Interests) or Indebtedness or to service Indebtedness incurred by the Borrower or any direct or indirect parent companies of the Borrower to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest or Indebtedness (or make Restricted Payments to allow any of ~~Holdings’~~ the Borrower’s direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity ~~Interests)~~ Interests or their Indebtedness or to service Indebtedness incurred by the Borrower to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or Indebtedness or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests or Indebtedness), held directly or indirectly by current or former officers, managers, consultants, ~~directors and~~ members of the Board of Directors, employees or independent contractors (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of ~~Holdings~~ the Borrower (or any direct or indirect parent thereof~~), Holdings, the Borrowers~~ ) and ~~the~~ its Restricted Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, ~~profits interest,~~ employment termination agreement or any other employment agreements or equity holders’ ~~agreement; provided that the~~ agreement in an aggregate amount ~~of Restricted Payments permitted by this clause (vi)~~ after the Effective ~~Date,~~ Date together with the aggregate amount of loans and advances to ~~Holdings~~ the Borrower made pursuant to Section 6.04(m) in lieu ~~thereof, shall~~ of Restricted Payments permitted by this clause (v) not to exceed ~~the sum of (A) the greater~~ $75,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years subject to a maximum of $~~15.0 million and 5.0% of Consolidated EBITDA for the most recently ended Test Period~~ 150,000,000 in any ~~fiscal~~ calendar year ~~of Holdings~~ (~~which subsequent to an IPO shall be increased~~ without giving effect to the ~~greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings~~following proviso)~~, (B) the~~ ; provided that such amount in any ~~fiscal~~ calendar year ~~equal~~ may be increased by (1) an amount not to exceed the cash proceeds of key man life insurance policies received by ~~Holdings,~~ the ~~Borrowers~~ Borrower (or any direct or indirect parent thereof and contributed to the Borrower) or the Restricted Subsidiaries after the Effective Date, or (C2) the amount of any bona fide cash ~~proceeds from~~ bonuses otherwise payable to members of the ~~sale~~ Board of Directors, consultants, officers, employees, managers or independent contractors of the Borrower or any Restricted Subsidiary that are foregone in return for the receipt of Equity ~~Interests~~ Interests, the fair market value of which is equal to or less than the amount of such cash bonuses, which, if not used in any year, may be carried forward to any subsequent fiscal year; provided further that cancellation of Indebtedness owing to the Borrower or any Restricted Subsidiary from members of the Board of Directors, consultants, officers, employees, managers or independent contractors (~~other than Disqualified Equity Interests~~or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of ~~Holdings (to~~ the ~~extent contributed to Holdings~~ Borrower or any Restricted Subsidiary in ~~the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale~~ connection with a repurchase of Equity Interests of ~~any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries~~ the Borrower (or any direct or indirect ~~Parent Entity~~ parent thereof) will not be deemed to constitute a Restricted Payment for purposes of this Section 6.07 or ~~management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale~~ any other provisions of ~~such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of~~ this Agreement. (vi) other Restricted Payments made by ~~virtue of~~ the ~~Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision~~Borrower; provided ~~that any unused portion~~ that, at the time of making such Restricted Payments, on a Pro Forma Basis, the ~~preceding basket calculated pursuant~~ Total Net Leverage Ratio is equal to ~~clauses (A) and (B) above for any fiscal year may be carried forward~~ or less than 4.00 to ~~succeeding fiscal years~~1.00; (vii) ~~Holdings~~ the Borrower and ~~any Intermediate Holdings~~ its Restricted Subsidiaries may make Restricted Payments in ~~cash:~~cash to the Borrower (or any direct or indirect parent thereof): (A) ~~without duplication~~ as distributions by any Restricted Subsidiary to the Borrower (or any direct or indirect parent of the Borrower) in amounts required for the Borrower (or any ~~Permitted~~ direct or indirect parent of the Borrower) to pay with respect to any taxable period in which the Borrower and/or any of its Subsidiaries is a member of (or is a flow-through entity for U.S. federal income tax purposes owned directly or indirectly by one or more such members of) a consolidated, combined, unitary or similar tax group (a “Tax ~~Distribution~~Group”) of which the Borrower or any other direct or indirect parent of the Borrower is the common parent, U.S. federal, state and local and foreign taxes that are attributable to the taxable income of the Borrower and/or its Subsidiaries; provided that for each taxable period, the amount of such payments made in respect of such taxable period in the aggregate shall not exceed the amount of such taxes that the Borrower and its Subsidiaries would have been required to pay if they were a stand-alone Tax Group with the Borrower as the corporate common parent of such stand-alone Tax Group (collectively, “Tax Distributions”); (B) the proceeds of which shall be used by ~~Holdings~~ any direct or ~~any Intermediate Holdings~~ indirect parent of the Borrower to pay (or to make Restricted Payments to allow any direct or indirect parent of ~~Holdings~~ the Borrower to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (a)(vii)(A) shall not exceed the Tax liability that Holdings and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers or their Restricted Subsidiaries; ~~(B) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay)~~ (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, ~~accounting, tax reporting~~ accounting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by ~~directors~~ members of the Board of Directors or ~~officers~~ officers, employees, directors, managers, consultants or independent contractors of ~~Holdings~~ the Borrower (or any parent ~~thereof or any Intermediate Holdings~~thereof) attributable to the ownership or operations of ~~Holdings,~~ the ~~Borrowers and the~~ Borrower’s Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of ~~Holdings,~~ the ~~Borrowers~~ Borrower and ~~the~~ its Restricted Subsidiaries and (y) otherwise permitted to be paid by ~~Holdings,~~ the ~~Borrowers~~ Borrower and ~~the~~ its Restricted Subsidiaries under this ~~Agreement and~~ Agreement, (4) ~~payments~~ to the extent constituting a Restricted Payment, amounts due and payable pursuant to any investor management agreement entered into with the Investors after the Effective Date in an aggregate amount not to exceed the amount permitted to be paid pursuant to Section 5.17(iv) and (5) amounts that would otherwise be permitted to be paid ~~directly by Holdings, the Borrowers or the Restricted Subsidiaries~~ pursuant to Section ~~6.09(iii~~5.17(iii) or (xxi); (C) the proceeds of which shall be used by ~~Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow~~ any direct or indirect parent of ~~Holdings~~ the Borrower to ~~pay)~~ pay franchise and similar Taxes, and other fees and expenses, required to maintain its ~~organizational~~ corporate or other legal existence; (D) ~~the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E)~~ to finance any Investment made by the Borrower (or any direct or indirect parent of the Borrower) that, if made by the Borrower, would be permitted to be made pursuant to Section ~~6.04 other than Section 6.04(m)~~6.04; provided that (1A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2B) ~~Holdings~~ the Borrower (or any ~~Intermediate Holdings~~ direct or indirect parent of the Borrower) shall, immediately following the closing thereof, ~~cause~~ cause (x1) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to ~~Holdings,~~ the ~~Borrowers~~ Borrower or ~~the~~ its Restricted Subsidiaries or (y2) the Person formed or acquired to merge into or consolidate with ~~Holdings,~~ the ~~Borrowers~~ Borrower or any of the Restricted Subsidiaries to the extent such ~~merger, amalgamation~~ merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow the Borrower or any direct or indirect parent thereof to pay) fees and expenses related to any equity or debt offering; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of ~~Holdings~~ the Borrower or any direct or indirect parent company of ~~Holdings~~ the Borrower to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of ~~Holdings,~~ the ~~Borrowers~~ Borrower and ~~the~~ its Restricted Subsidiaries; and (G) the proceeds of which shall be used ~~by Holdings or any Intermediate Holdings to pay (or~~ to make ~~Restricted Payments to allow any direct or indirect parent thereof to pay~~payments permitted by clause (b)(iv) ~~fees~~ and ~~expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement~~ (~~whether or not such offering or other transaction is successful)~~b)(v) of Section 6.07; (viii) in addition to the foregoing Restricted Payments, the ~~Borrowers and any Intermediate Holdings~~ Borrower may make additional Restricted Payments to any Intermediate Holdings and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings DebtPayments, in an aggregate amount, when taken together with the aggregate amount of loans and advances ~~to Holdings~~ previously made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii), not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as no Event of Default shall have occurred and be continuing (or, in the case of the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h) or (i)), the Available Amount that is Not Otherwise Applied as in effect immediately prior to the time of making of such Restricted Payment; provided that amounts pursuant to clause (b) of the definition of “Available Amount” may only be used to fund a Restricted Payment pursuant to this clause (viii)(A) to the extent that the Interest Coverage Ratio on a Pro Forma Basis after giving effect thereto is at least 2.00 to 1.00, plus (CB) the Available Equity Amount that is Not Otherwise ~~Applied~~Applied as in effect immediately prior to the time of making of such Restricted Payment; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; (xi) ~~Holdings~~ the Borrower may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiii) payments made or expected to be made by ~~Holdings, any~~ the Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled ~~Affiliates, Immediate Family Members~~ Affiliates or ~~Permitted Transferees~~permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to 5.00 to 1.0 and (B) there is no continuing Event of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvixiii) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to ~~Holdings, a~~ the Borrower (or any direct or indirect parent thereof) or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (~~xvii~~xiv) the declaration and payment of Restricted Payments on the Borrower’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of the Borrower to fund a payment of dividends ~~in respect~~ on such company’s common stock), following consummation of ~~JV Preferred Equity Interests issued in accordance with Section 6.01~~ any public offering, of up to 6.0% per annum of the net cash proceeds of such public offering received by or contributed to the ~~extent such dividends are included in the calculation~~ Borrower, other than public offerings registered on Form S-8; (xv) any distributions or payments of ~~Consolidated Interest Expense~~Securitization Fees; and (~~xviii~~xvi) ~~Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make~~ additional Restricted Payments in ~~cash~~ an amount not to ~~Holdings~~ exceed the greater of $60,000,000 and 15.0% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to ~~permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in~~ the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date making of such ~~reclassification) such~~ Restricted ~~Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a)~~Payment. (b) ~~Neither Holdings~~The Borrower will not, ~~Intermediate Holdings nor any Borrower will, nor~~ and will ~~they~~ not permit any Restricted Subsidiary to, make or ~~pay~~agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoing, except: (i) payment of regularly scheduled interest and principal ~~payments as~~payments, ~~in the form~~ mandatory offers to repay, repurchase or redeem, mandatory prepayments of principal premium and interest, and payment of fees, expenses and ~~when due in~~ indemnification obligations, with respect ~~of any Indebtedness~~to such Junior Financing, other than payments in respect of any Junior Financing prohibited by the subordination provisions thereof; (ii) refinancings of Indebtedness to the extent permitted by Section 6.01; (iii) the conversion of any Junior Financing ~~Indebtedness with proceeds~~ to Equity Interests (other than Disqualified Equity Interests) of ~~other~~ the Borrower or any of its direct or indirect parent companies, and any payment that is intended to prevent any Junior Financing ~~Indebtedness permitted~~ from being treated as an “applicable high yield discount obligation” within the meaning of Section 163(i)(1) of the Code; (iv) prepayments, redemptions, repurchases, defeasances and other payments in respect of Junior Financings prior to their scheduled maturity in an aggregate amount, not to exceed the sum of (A) an amount at the time of making any such prepayment, redemption, repurchase, defeasance or other payment and together with any other prepayments, redemptions, repurchases, defeasances and other payments made utilizing this subclause (A) not to exceed the greater of $60,000,000 and 15.0% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such prepayment, redemption, purchase, defeasance or other payment plus (B) (x) the Available Amount that is Not Otherwise Applied as in effect immediately prior to the time of making of such Investment; provided that amounts pursuant to clause (b) of the definition of “Available Amount” may only be inused to fund any such prepayment, redemption, purchase, defeasance or other payment pursuant to this clause (iv)(B)(x) to the extent that the Interest Coverage Ratio on a Pro Forma Basis after giving effect thereto is at least 2.00 to 1.00 plus (y) the Available Equity Amount that is Not Otherwise Applied as in effect immediately prior to the time of making of such Investment; (v) payments made in connection with the Transactions; (vi) prepayments, redemptions, purchases, defeasances and other payments in respect of Junior Financing prior to their scheduled maturity; provided that after giving effect to such prepayment, redemption, repurchase, defeasance or other payment, on a Pro Forma Basis, the Total Net Leverage Ratio is less than or equal to 4.00 to 1.00; and (vii) prepayment of Junior Financing owed to the Borrower or a Restricted

Appears in 2 contracts

Sources: Credit Agreement (Builders FirstSource, Inc.), Term Loan Credit Agreement (Builders FirstSource, Inc.)

Restricted Payments; Certain Payments of Indebtedness. (a) ~~Neither Holdings~~CCSC will not, ~~Intermediate Holdings nor any Borrower will, nor~~ and will ~~they~~ not permit any ~~Restricted Subsidiary~~Subsidiary to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, ~~except:~~ or incur any obligation (contingent or otherwise) to do so, except (i) ~~Each Borrower~~ Subsidiaries may declare and ~~each Restricted Subsidiary~~ pay dividends ratably with respect to their Equity Interests, (ii) CCSC may make Restricted Payments ~~to Intermediate Holdings~~at such times and in such amounts, ~~a Borrower or~~ not exceeding $1,000,000 during any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a wholly-owned Subsidiary of a Borrower, such Restricted Payment is made to Intermediate Holdings, such Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests; (ii) payments or distributions to satisfy dissenters’ or appraisal rightsFiscal Year, pursuant to and in accordance with stock option plans or ~~in connection with a consolidation, amalgamation, merger~~ other benefit plans for management or ~~transfer~~ employees of ~~assets (other than with respect to the Transactions) that complies with Section 6.03;~~ CCSC and its Subsidiaries and (iii) Holdings and any Intermediate Holdings may declare and make dividend payments or other distributions payable solely in the Equity Interests of such Person; (iv) Restricted Payments made in connection with or in order CCSC may, subject to consummate the Transactions (including, without limitation, (A) cash payments to holders of Equity Interests of Target as provided by the Acquisition Agreement, (B) Restricted Payments to direct and indirect parent companies of Holdings to finance a portion of the consideration for the Acquisition and (C) other payments with respect to working capital adjustments or otherwise, to the extent contemplated by the Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv)); (v) repurchases of Equity Interests in Holdings (or Restricted Payments by Holdings to allow repurchases of Equity Interest in any direct or indirect parent of Holdings) or Intermediate Holdings deemed to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price of such stock options or warrants or other incentive interest; (vi) Restricted Payments to Holdings which Holdings may use to redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted stock units or stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests) held by current or former officers, managers, consultants, directors and employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereofSection 6.01(b), Holdings, the Borrowers and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, profits interest, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that the aggregate amount of Restricted Payments permitted by this clause (vi) after the Effective Date, together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu thereof, shall not exceed the sum of (A) the greater of $15.0 million and 5.0% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings (which subsequent to an IPO shall be increased to the greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings), (B) the amount in any fiscal year equal to the cash proceeds of key man life insurance policies received by Holdings, the Borrowers or the Restricted Subsidiaries after the Effective Date, (C) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year may be carried forward to succeeding fiscal years; (vii) Holdings and any Intermediate Holdings may make Restricted Payments in cash: (A) without duplication of any Permitted Tax Distribution, the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (a)(vii)(A) shall not exceed the Tax liability that Holdings and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers or their Restricted Subsidiaries; (B) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof or any Intermediate Holdings) attributable to the ownership or operations of Holdings, the Borrowers and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of Holdings, the Borrowers and the Restricted Subsidiaries and (y) otherwise permitted to be paid by Holdings, the Borrowers and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the Borrowers or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x); (C) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence; (D) the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(m); provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) Holdings or any Intermediate Holdings shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to Holdings, the Borrowers or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with Holdings, the Borrowers or any of the Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrowers and the Restricted Subsidiaries; and (G) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful); (viii) in addition to the foregoing Restricted Payments, the Borrowers and any Intermediate Holdings may make additional Restricted Payments to any Intermediate Holdings and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt, in an aggregate amount, when taken together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii), not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as no Event of Default shall have occurred and be continuing (or, in the case of the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h) or (i)), the Available Amount that is Not Otherwise Applied plus (C) the Available Equity Amount that is Not Otherwise Applied; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; (xi) Holdings may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiii) payments made or expected to be made by Holdings, any Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to 5.00 to 1.0 and (B) there is no continuing Event of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvi) the distribution, by dividend or otherwise, consisting solely of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make Restricted Payments in cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a)its capital stock. (b) ~~Neither Holdings~~CCSC will not, ~~Intermediate Holdings nor any Borrower will, nor~~ and will ~~they~~ not permit any ~~Restricted~~ Subsidiary to, make or ~~pay~~agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any ~~Junior Financing~~Indebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, ~~cancellation~~ cancelation or termination of any ~~Junior Financing~~Indebtedness, except: (i) payment of Indebtedness created under the Loan Documents; (ii) payment of regularly scheduled interest and principal payments ~~as, in the form of payment~~ as and when due in respect of any Indebtedness~~, other than payments in respect of any Junior Financing prohibited by the subordination provisions thereof~~; (iiiii) refinancings of ~~Junior Financing~~ Indebtedness ~~with proceeds~~ to the extent permitted by Section 6.01; (iv) payment of ~~other Junior Financing~~ secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness; (v) payment by Loan Parties of Indebtedness owed to Loan Parties and payment by Subsidiaries which are not Loan Parties of Indebtedness owed to CCSC and its Subsidiaries; (vi) payment of Indebtedness under revolving credit facilities permitted under clause (ix) of Section 6.01(a); (vii) repurchases of any Public Debt that is scheduled to ~~be in~~mature prior to December 8, 2003; and (viii) payment of Indebtedness created pursuant to any Permitted Receivables Financing.

Appears in 2 contracts

Sources: Credit Agreement (Crown Cork & Seal Co Inc), Credit Agreement (Crown Cork & Seal Co Inc)

Restricted Payments; Certain Payments of Indebtedness. (a) ~~Neither Holdings, Intermediate Holdings nor any Borrower will, nor~~ No Loan Party will ~~they permit any Restricted Subsidiary, to pay~~ declare or make, directly or indirectly, any Restricted Payment, ~~except:~~except that (i) ~~Each Borrower and each~~ any Loan Party or any Restricted Subsidiary of a Loan Party may ~~make~~ declare and pay Restricted Payments to ~~Intermediate Holdings,~~ a ~~Borrower~~ Loan Party or ~~any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by~~ a Restricted Subsidiary that is ~~not a wholly-owned Subsidiary of a Borrower, such Restricted Payment is made to Intermediate Holdings, such Borrower, any Restricted Subsidiary and to each other owner of Equity Interests~~ the direct parent of such Restricted Subsidiary ~~based on their relative ownership interests~~ and a pro rata Restricted Payment to any third party in respect of ~~the relevant class of Equity Interests~~non-wholly owned Restricted Subsidiaries; (ii) ~~payments~~ any Loan Party may declare, make and pay Restricted Payments to Holdings or ~~distributions~~ Parent (or any other direct or indirect parent of the Lead Borrower) (w) to ~~satisfy dissenters’~~ pay general corporate and overhead expenses incurred by Holdings, Parent or ~~appraisal rights~~Burlington Stores, ~~pursuant~~ Inc. in the ordinary course of business or the amount of any indemnification claims made by any director or officer of Holdings, the Parent or Burlington Stores, Inc., (x) to pay franchise taxes and other fees, taxes and expenses required to maintain the corporate existence of Holdings, Parent or ~~in connection with~~ Burlington Stores, Inc. (or any other direct or indirect Parent of the Lead Borrower), or (y) to pay taxes that are due and payable by Holdings as the parent of a ~~consolidation~~consolidated group that includes Parent, ~~amalgamation~~Burlington Stores, ~~merger or transfer of assets (other than with respect to the Transactions) that complies with Section 6.03~~Inc., and its Restricted Subsidiaries; (iii) ~~Holdings and any Intermediate Holdings may declare and make dividend payments or other distributions payable solely in the Equity Interests of such Person~~[reserved]; (iv) Restricted Payments necessary to consummate Investments permitted pursuant to Section 6.04; (v) the Loan Parties may declare and make Restricted Payments with respect to its Capital Stock payable solely in shares of Capital Stock of the Loan Parties that is not Disqualified Capital Stock; (vi) the Lead Borrower may make payments (or may make Restricted Payments to any parent, the proceeds of which will be used to make payments) at such times and in such amounts as are necessary to make payments of or on account of (1) monitoring or management or similar fees or transaction fees and (2) reimbursement of out-of-pocket costs, expenses and indemnities, in each case to the extent permitted by Section 6.07(l) (assuming the Lead Borrower was party thereto); (vii) as long as no Event of Default exists or would arise therefrom, the Loan Parties may make a Restricted Payment as consideration for the acquisition of additional Capital Stock in any Restricted Subsidiary from minority shareholders that are not Affiliates; provided that the amount of Restricted Payments permitted pursuant to this clause (vii) shall not exceed $50,000,000 in any Fiscal Year; (viii) the Loan Parties may make additional Restricted Payments to the extent that such Restricted Payments are made with (A) Net Proceeds received by the Lead Borrower (or any parent entity) after the Second Amendment Effective Date from the issuance or sale of Capital Stock of the Lead Borrower that is not Disqualified Capital Stock (or any parent entity) or (B) proceeds of an equity contribution initially made to Parent, in each case to the extent such proceeds have been contributed to the common equity of the Lead Borrower and have not been applied pursuant to clause (bb) of the definition of “Permitted Investment” or utilized to also increase the Available Amount (as defined in the Term Loan Agreement); (ix) the Loan Parties may make Restricted Payments to the Parent (or any parent entity) to pay cash in lieu of fractional Capital Stock in connection with (a) any dividend, split or combination thereof or any Acquisition, Investment or other transaction otherwise permitted hereunder, and (b) any conversion request by a holder of convertible Indebtedness (to the extent such conversion request is paid solely in ~~order~~ shares of Capital Stock of the Parent (or any parent entity) that is not Disqualified Capital Stock); (x) the Loan Parties and the Restricted Subsidiaries may make Restricted Payments consisting of Capital Stock in any Unrestricted Subsidiary, whether pursuant to ~~consummate~~ a distribution, dividend or any other transaction not prohibited hereunder; (xi) the ~~Transactions (including, without limitation, (A) cash payments to holders of Equity Interests of Target as provided by the Acquisition Agreement, (B)~~ Loan Parties may make Restricted Payments to its direct ~~and~~ or indirect parent ~~companies~~ to declare and pay regular quarterly dividends on its common stock (or similar Capital Stock of ~~Holdings~~ its direct or indirect parent) in an amount not to ~~finance a portion~~ exceed 6% per year of the ~~consideration for~~ aggregate net cash proceeds of the ~~Acquisition and (C) other payments with respect to working capital adjustments~~ initial public offering of such parent that were actually received by or ~~otherwise,~~ contributed to the ~~extent contemplated by~~ Capital Stock of the ~~Acquisition Agreement~~Lead Borrower in or from such initial public offering; (xii) the making of any Restricted Payment within 60 days after the date of declaration thereof, if at the date of both such declaration and payment such Restricted Payment would have complied with another provision of this Section 6.06(a); provided that the ~~earnout contemplated by Exhibit F~~ making of such Restricted Payment will reduce capacity for Restricted Payments pursuant to ~~the Acquisition Agreement shall not be permitted on the basis of this clause (iv))~~such other provision when so made; (vxiii) the Loan Parties may make Restricted Payments consisting of Permitted Dispositions of the type described, and subject to the limitations contained, in the definition thereof; (xiv) Restricted Payments made (A) in respect of working capital adjustments or purchase price adjustments pursuant to any Permitted Acquisition or other permitted Investments and (B) to satisfy indemnity and other similar obligations under Permitted Acquisitions or other Permitted Investments; (xv) Restricted Payments to the Specified Captive Insurance Company (or to the direct or indirect parent of any Loan Party, the proceeds of which are promptly contributed or distributed, directly or indirectly, to the Specified Captive Insurance Company), in an aggregate amount not to exceed in each twelve month period, the greater of (x) $35,000,000 and (y) 1.5% of Consolidated Total Assets; (xvi) the Loan Parties and their Restricted Subsidiaries may make Restricted Payments constituting repurchases of ~~Equity Interests~~ Capital Stock in ~~Holdings~~ Parent, Holdings, Burlington Stores, Inc. or any Restricted Subsidiary (or ~~Restricted Payments by Holdings~~ distributions to ~~allow repurchases of Equity Interest in~~ Parent, Holdings, or Burlington Stores, Inc. or any direct or indirect parent of ~~Holdings~~the Lead Borrower for such purpose) ~~or Intermediate Holdings deemed to occur upon~~ in connection with the exercise of stock options or warrants ~~or other incentive interests~~ if such ~~Equity Interests represent~~ Capital Stock represents a portion of the exercise price of such ~~stock options~~ option or ~~warrants or other incentive interest; (vi) Restricted Payments to Holdings which Holdings may use to redeem, acquire, retire or repurchase its Equity Interests (or any options,~~ warrants, restricted stock units or stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests) held by current or former officers, managers, consultants, directors and employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), Holdings, the Borrowers and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, profits interest, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that the aggregate amount of Restricted Payments permitted by this clause (vi) after the Effective Date, together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu thereof, shall not exceed the sum of (A) the greater of $15.0 million and 5.0% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings (which subsequent to an IPO shall be increased to the greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings), (B) the amount in any fiscal year equal to the cash proceeds of key man life insurance policies received by Holdings, the Borrowers or the Restricted Subsidiaries after the Effective Date, (C) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year may be carried forward to succeeding fiscal years; (vii) Holdings and any Intermediate Holdings may make Restricted Payments in cash: (A) without duplication of any Permitted Tax Distribution, the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (~~a)(vii)(A~~xvi) shall not exceed ~~the Tax liability that Holdings and/or its Subsidiaries~~ $10,000,000 in any Fiscal Year (~~as applicable) would have incurred were such Taxes determined as if such entity(ies) were~~ with unused amounts from any Fiscal Year available for carry-forward to future Fiscal Years subject to a ~~stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this subclause (A)~~ maximum amount of $20,000,000 in ~~respect of~~ any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers or their Restricted Subsidiaries; (B) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof or any Intermediate Holdings) attributable to the ownership or operations of Holdings, the Borrowers and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of Holdings, the Borrowers and the Restricted Subsidiaries and (y) otherwise permitted to be paid by Holdings, the Borrowers and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the Borrowers or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x); (C) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence; (D) the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(mFiscal Year); provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) Holdings or any Intermediate Holdings shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to Holdings, the Borrowers or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with Holdings, the Borrowers or any of the Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrowers and the Restricted Subsidiaries; and (G) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful); (viii) in addition to the foregoing Restricted Payments, the Borrowers and any Intermediate Holdings may make additional Restricted Payments to any Intermediate Holdings and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt, in an aggregate amount, when taken together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii), not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as no Event of Default shall have occurred and be continuing (or, in the case of the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h) or (i)), the Available Amount that is Not Otherwise Applied plus (C) the Available Equity Amount that is Not Otherwise Applied; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; (xi) Holdings may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiii) payments made or expected to be made by Holdings, any Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to 5.00 to 1.0 and (B) there is no continuing Event of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary Loan Parties may make other Restricted Payments in cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in if the ~~event that a proposed Restricted~~ Payment (or a portion thereof) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a)Conditions are satisfied. (b) ~~Neither Holdings, Intermediate Holdings nor any Borrower will, nor~~ No Loan Party will ~~they permit any Restricted Subsidiary to,~~ pay or make ~~or pay, directly or indirectly,~~ any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any ~~Junior Financing~~Indebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any ~~Junior Financing~~Indebtedness, except: (i) ~~payment~~ payments or distributions in Capital Stock (as long as no Change in Control would result therefrom) and payments of ~~regularly scheduled~~ interest in-kind of the Loan Parties and their Subsidiaries; (ii) payments of principal and interest in respect of any Subordinated Indebtedness (subject to applicable subordination provisions relating thereto); (iii) (A) payments ~~as, in the form~~ of ~~payment~~ principal (including mandatory prepayments) and interest as and when due in respect of any ~~Indebtedness,~~ Permitted Indebtedness (other than Subordinated Indebtedness), (B) as long as the Payment Conditions are satisfied, prepayments of Permitted Indebtedness (other than the Term Loan Financing Facility or Subordinated Indebtedness) and (C) payments in respect of the Obligations or of any ~~Junior Financing prohibited by the subordination provisions thereof~~Indebtedness owed to a Loan Party; (iiiv) ~~refinancings~~ prepayment in whole or in part of ~~Junior~~ the Term Loan Financing Facility or any other Permitted Indebtedness or any Permitted Refinancing of any of the foregoing, in each case with the proceeds of any equity securities issued or capital contributions received by any Loan Party or any Subsidiary; (v) prepayment in whole or in part of the Term Loan Financing Facility from any Permitted Refinancing thereof or any refinancing with the proceeds of Qualifying Secured Debt or Qualifying Other Debt; (vi) AHYDO catch-up payments relating to Permitted Indebtedness of the Loan Parties; (vii) prepayment in whole or in part of the Term Loan Financing Facility; (viii) other ~~Junior Financing~~ payments or other distributions so long as the Payment Conditions are satisfied; (ix) [reserved]; (x) payments either of (A) cash to shareholders, or (B) principal and interest in respect of notes issued to stockholders, in each case, in connection with the repurchase of shares of Capital Stock of the Parent owned by such shareholder, provided that such payments shall not exceed $5,000,000 in the aggregate in any Fiscal Year, provided that, in the event the entire $5,000,000 is not utilized in any Fiscal Year, one hundred percent (100%) of such unutilized portion may be carried forward to succeeding Fiscal Years of the Parent; and (xi) refinancings, replacements and renewals of Indebtedness to the extent permitted ~~to be in~~under this Agreement.

Appears in 2 contracts

Sources: Credit Agreement (Burlington Stores, Inc.), Credit Agreement (Burlington Stores, Inc.)

Restricted Payments; Certain Payments of Indebtedness. (a) ~~Neither~~ None of Holdings, ~~Intermediate Holdings nor~~ the Parent Borrower, any Subsidiary Term Borrower or any Foreign Subsidiary Borrower will, nor will they permit any ~~Restricted Subsidiary~~Subsidiary to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, except: (i) ~~Each Borrower~~ Holdings may declare and ~~each Restricted Subsidiary may make Restricted Payments~~ pay dividends with respect to ~~Intermediate Holdings, a Borrower or any other Restricted Subsidiary; provided that~~ its Equity Interests payable solely in the case of any such Restricted Payment by a Restricted Subsidiary that is not a wholly-owned Subsidiary of a Borrower, such Restricted Payment is made to Intermediate Holdings, such Borrower, any Restricted Subsidiary and to each other owner of additional Equity Interests of ~~such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests~~Holdings; (ii) ~~payments or distributions to satisfy dissenters’ or appraisal rights, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of assets (other than~~ Subsidiaries may declare and pay dividends ratably with respect to ~~the Transactions) that complies with Section 6.03~~their capital stock; (iii) the Parent Borrower may make payments to Holdings to permit it to make, and ~~any Intermediate~~ Holdings may ~~declare~~ make, Restricted Payments, not exceeding $5,000,000 during the term of this Agreement, in each case pursuant to and ~~make dividend payments~~ in accordance with stock option plans, equity purchase programs or agreements or other ~~distributions payable solely~~ benefit plans, in each case for management or employees or former employees of the ~~Equity Interests of such Person~~Parent Borrower and the Subsidiaries; (iv) ~~Restricted Payments made~~ the Parent Borrower may pay dividends to Holdings at such times and in ~~connection with or in order~~ such amounts as shall be necessary to ~~consummate the Transactions~~ permit Holdings to discharge and satisfy its obligations that are permitted hereunder (~~including, without limitation,~~ including (A) ~~cash payments to holders of Equity Interests of Target as provided by the Acquisition Agreement~~state and local taxes and other governmental charges, ~~(B) Restricted Payments to direct~~ and ~~indirect parent companies of Holdings to finance a portion of the consideration for the Acquisition~~ administrative and (C) other payments with respect to working capital adjustments or otherwise, to the extent contemplated by the Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv)); (v) repurchases of Equity Interests in Holdings (or Restricted Payments by Holdings to allow repurchases of Equity Interest in any direct or indirect parent of Holdings) or Intermediate Holdings deemed to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price of such stock options or warrants or other incentive interest; (vi) Restricted Payments to Holdings which Holdings may use to redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted stock units or stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests) held by current or former officers, managers, consultants, directors and employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), Holdings, the Borrowers and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, profits interest, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that the aggregate amount of Restricted Payments permitted by this clause (vi) after the Effective Date, together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu thereof, shall not exceed the sum of (A) the greater of $15.0 million and 5.0% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings (which subsequent to an IPO shall be increased to the greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings), (B) the amount in any fiscal year equal to the cash proceeds of key man life insurance policies received by Holdings, the Borrowers or the Restricted Subsidiaries after the Effective Date, (C) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount routine expenses required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year may be carried forward to succeeding fiscal years; (vii) Holdings and any Intermediate Holdings may make Restricted Payments in cash: (A) without duplication of any Permitted Tax Distribution, the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (a)(vii)(A) shall not exceed the Tax liability that Holdings and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers or their Restricted Subsidiaries; (B) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and ~~other corporate overhead costs and expenses~~ (~~including administrative, legal, accounting, tax reporting and similar expenses payable to third parties~~B) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof or any Intermediate Holdings) attributable to the ownership or operations of Holdings, the Borrowers and the Restricted Subsidiaries, (3) fees and expenses (x) due and cash dividends payable by ~~any~~ Holdings in respect of ~~Holdings, the Borrowers and the Restricted Subsidiaries~~ Qualified Holdings Preferred Stock issued pursuant to clauses (b) and (yc) ~~otherwise permitted~~ of the definition thereof, provided that dividends payable by the Parent Borrower to be paid by Holdings, the Borrowers and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the Borrowers or the Restricted Subsidiaries Holdings pursuant to ~~Section 6.09(iii) or~~ this clause (x); (C) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence; (D) the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(m); provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) Holdings or any Intermediate Holdings shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to Holdings, the Borrowers or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with Holdings, the Borrowers or any of the Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03iv) in order to ~~consummate such Investment~~satisfy cash dividends payable by Holdings in respect of Qualified Holdings Preferred Stock issued pursuant to clause (c) of the definition thereof may only be made after the fiscal year ending December 31, ~~in each case in accordance~~ 2006 with ~~the requirements of Sections 5.11 and 5.12; (F) the proceeds of which shall~~ Excess Cash Flow not otherwise required to be used to ~~pay customary salary, bonus and other benefits payable~~ prepay Tranche B Term Loans pursuant to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrowers and the Restricted SubsidiariesSection 2.11(e)); and (Gv) the ~~proceeds of which shall be used by Holdings or any Intermediate~~ Parent Borrower may make payments to Holdings to ~~pay (or~~ permit it to ~~make Restricted Payments to allow any direct or indirect parent thereof to pay) fees~~ make, and expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful); (viii) in addition to the foregoing Restricted Payments, the Borrowers and any Intermediate Holdings may make additional Restricted Payments to any Intermediate Holdings and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt, in an aggregate amount, when taken together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by ~~this clause (viii~~Sections 6.09(d), ~~not to exceed the sum of~~ (Ae), (f), (g) ~~an amount~~ and (h); provided that, at the time of ~~making any~~ such ~~Restricted Payment~~ payment and ~~together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period~~ after giving ~~Pro Forma Effect to the making of such Restricted Payment plus (B) so long as~~ effect thereto, no Default or Event of Default shall have occurred and be continuing ~~(or~~and Holdings and the Parent Borrower are in compliance with Section 6.12; provided, ~~in the case~~ further, that any payments that are prohibited because of the ~~use~~ immediately preceding proviso shall accrue and may be made as so accrued upon the curing or waiver of ~~the Starter Basket that is Not Otherwise Applied~~such Default, no Event of Default ~~under Section 7.01(a), (b), (h)~~ or (i)), the Available Amount that is Not Otherwise Applied plus (C) the Available Equity Amount that is Not Otherwise Applied; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; (xi) Holdings may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiii) payments made or expected to be made by Holdings, any Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to 5.00 to 1.0 and (B) there is no continuing Event of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make Restricted Payments in cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a)noncompliance. (b) ~~Neither~~ None of Holdings, ~~Intermediate Holdings nor~~ the Parent Borrower, any Subsidiary Term Borrower or any Foreign Subsidiary Borrower will, nor will they permit any ~~Restricted~~ Subsidiary to, make or ~~pay~~agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any ~~Junior Financing~~Indebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any ~~Junior Financing~~Indebtedness, except: (i) payment of Indebtedness created under the Loan Documents; (ii) payment of regularly scheduled interest and principal payments ~~as, in the form of payment~~ as and when due in respect of any Indebtedness, other than payments in respect of ~~any Junior Financing~~ the subordinated Indebtedness prohibited by the subordination provisions thereof; (iiiii) refinancings of ~~Junior Financing~~ Indebtedness to the extent permitted by Section 6.01; (iv) payment of secured Indebtedness (other than Permitted Subordinated Notes Refinancing Indebtedness) out of the proceeds of any sale or transfer of the property or assets securing such Indebtedness; (v) payment in respect of Capital Lease Obligations in an aggregate amount not to exceed $25,000,000 during the term of this Agreement less the amount of Capital Expenditures made pursuant to Section 6.14(c)(i); (vi) payment in respect of (A) Existing Subordinated Notes using proceeds from (1) the issuance of Replacement Subordinated Notes or (2) Permitted Subordinated Notes Refinancing Indebtedness and (B) Existing Subordinated Notes and Permitted Subordinated Notes Refinancing Indebtedness using (1) any Net Proceeds from an IPO, (2) the portion of Excess Cash Flow not subject to mandatory prepayment pursuant to Section 2.11(e) or (3) any source of cash (to the extent not otherwise prohibited in this Agreement) up to an amount not to exceed (x) if, after giving effect to such payment, the Leverage Ratio would be less than 3.25 to 1.00, $50,000,000 and (y) otherwise, $15,000,000; and (vii) payment of Indebtedness with ~~proceeds~~ the Net Proceeds of ~~other Junior Financing Indebtedness~~ an issuance of Holdings’ Equity Interests subsequent to an IPO. (c) None of Holdings, the Parent Borrower or any Foreign Subsidiary Borrower will, nor will they permit any Subsidiary to, enter into or be party to, or make any payment under, any Synthetic Purchase Agreement unless (i) in the case of any Synthetic Purchase Agreement related to any Equity Interest of Holdings, the payments required to be made by Holdings are limited to amounts permitted to be inpaid under Section 6.08(a), (ii) in the case of any Synthetic Purchase Agreement related to any Restricted Indebtedness, the payments required to be made by Holdings, the Parent Borrower or the Subsidiaries thereunder are limited to the amount permitted under Section 6.08(b) and (iii) in the case of any Synthetic Purchase Agreement, the obligations of Holdings, the Parent Borrower and the Subsidiaries thereunder are subordinated to the Obligations on terms satisfactory to the Required Lenders.

Appears in 2 contracts

Sources: Credit Agreement (Trimas Corp), Credit Agreement (Trimas Corp)

Restricted Payments; Certain Payments of Indebtedness. (a) ~~Neither Holdings~~Holdings and the Borrower will not, ~~Intermediate Holdings nor any Borrower will, nor~~ and will ~~they~~ not permit any Restricted ~~Subsidiary~~Subsidiary to, ~~to pay~~ declare or ~~make, directly or indirectly,~~ make any Restricted Payment, except: (i) ~~Each~~ the Borrower and each Restricted Subsidiary may make Restricted Payments to ~~Intermediate~~ Holdings, a the Borrower or any ~~other~~ Restricted Subsidiary; , provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a ~~wholly-owned Subsidiary of a Borrower~~Wholly Owned Subsidiary, such Restricted Payment is made to ~~Intermediate~~ Holdings, ~~such~~ the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests; (ii) ~~payments or distributions to satisfy dissenters’ or appraisal rights~~Holdings, ~~pursuant to or in connection with a consolidation, amalgamation, merger or transfer of assets (other than with respect to~~ the ~~Transactions) that complies with Section 6.03; (iii) Holdings~~ Borrower and ~~any Intermediate Holdings~~ each Restricted Subsidiary may declare and make dividend payments or other distributions payable solely in the Equity Interests of such Person; (iviii) Restricted Payments made ~~in connection with or in order~~ to consummate the Transactions ~~(including, without limitation, (A) cash payments to holders of Equity Interests of Target as provided by the Acquisition Agreement, (B)~~ and Restricted Payments ~~to direct and indirect parent companies~~ constituting any part of ~~Holdings to finance~~ a portion of the consideration for the Acquisition and (C) other payments with respect to working capital adjustments or otherwise, to the extent contemplated by the Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv))Permitted Reorganization; (viv) repurchases of Equity Interests in any Holdings (Parent, Holdings, any Intermediate Parent, the Borrower or any Restricted ~~Payments by Holdings to allow repurchases of Equity Interest in any direct or indirect parent of Holdings) or Intermediate Holdings~~ Subsidiary deemed to occur upon exercise of stock options or warrants ~~or other incentive interests~~ if such Equity Interests represent a portion of the exercise price or withholding taxes payable in connection with the exercise of such ~~stock~~ options or warrants or other incentive ~~interest~~interests; (viv) Restricted Payments to any Holdings Parent, which such Holdings Parent may use to redeem, acquire, ~~retire~~ retire, repurchase or ~~repurchase~~ settle its Equity Interests (or any options, warrants, restricted stock ~~units~~ or stock appreciation rights or ~~other equity-linked interests~~ similar securities issued with respect to any of such Equity Interests) (or ~~make Restricted Payments~~ Indebtedness or to ~~allow any~~ service Indebtedness incurred by a Holdings Parent to finance the redemption, acquisition, retirement, repurchase or settlement of ~~Holdings’ direct~~ such Equity Interest or ~~indirect parent companies to so redeem~~Indebtedness, ~~retire, acquire~~ held directly or ~~repurchase their Equity Interests) held~~ indirectly by current or former officers, managers, consultants, ~~directors and~~ members of the Board of Directors, employees or independent contractors (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of a Holdings ~~(or any direct or indirect parent thereof)~~Parent, Holdings, any Intermediate Parent, the ~~Borrowers~~ Borrower and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, ~~profits interest,~~ employment termination agreement or any other employment agreements or equity holders’ ~~agreement; provided that the~~ agreement in an aggregate amount ~~of Restricted Payments permitted by this clause (vi)~~ after the Effective ~~Date,~~ Date together with the aggregate amount of loans and advances to any Holdings Parent made pursuant to Section ~~6.04(m~~6.04(l) in lieu ~~thereof, shall~~ of Restricted Payments permitted by this clause (v) not to exceed ~~the sum of~~ $10,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years (~~A) the greater~~ subject to a maximum of $~~15.0 million and 5.0% of Consolidated EBITDA for the most recently ended Test Period~~ 20,000,000 in any ~~fiscal year of Holdings~~ calendar year) (~~which subsequent to an IPO shall be increased~~ without giving effect to the ~~greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings~~following proviso)~~, (B) the~~ ; provided that such amount in any ~~fiscal~~ calendar year ~~equal~~ may be increased by (1) an amount not to exceed the cash proceeds of key man life insurance policies received by the Borrower, Holdings (or by any Holdings Parent and contributed to Holdings~~, the Borrowers~~ ) or the Restricted Subsidiaries after the Effective Date, or (C2) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests amount of any ~~direct or indirect Parent Entity or management investment vehicle~~bona fide cash bonuses otherwise payable to members of the Board of Directors, ~~in each case to any future~~consultants, ~~present or former~~ officers, employees~~, directors~~, managers or ~~consultants~~ independent contractors of any Holdings Parent, Holdings, ~~any of its Subsidiaries~~ an Intermediate Parent, the Borrower or any ~~direct~~ Restricted Subsidiary that are foregone in return for the receipt of Equity Interests, the fair market value of which is equal to or ~~indirect Parent Entity or management investment vehicle that occurs after~~ less than the ~~Effective Date, to the extent the cash proceeds from the sale~~ amount of such ~~Equity Interests are contributed to Holdings~~ cash bonuses, which, if not used in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year year, may be carried forward to ~~succeeding~~ any subsequent fiscal ~~years~~year; provided further that cancellation of Indebtedness owing to Holdings, the Borrower or any Restricted Subsidiary from members of the Board of Directors, consultants, officers, employees, managers or independent contractors (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of a Holdings Parent, Holdings, any Intermediate Parent, the Borrower or any Restricted Subsidiary in connection with a repurchase of Equity Interests of a Holdings Parent, Holdings, any Intermediate Parent or the Borrower will not be deemed to constitute a Restricted Payment for purposes of this Section 6.07 or any other provisions of this Agreement. (vi) other Restricted Payments made by Holdings; provided that, on the date of declaration of such Restricted Payments, (x) no Event of Default shall have occurred and be continuing or would result therefrom and (y) on a Pro Forma Basis, the Total Net Leverage Ratio is equal to or less than 3.25 to 1.00; (vii) Holdings ~~and any Intermediate Holdings~~ may make Restricted Payments in ~~cash~~cash to any Holdings Parent: (A) ~~without duplication~~ as distributions by Holdings, the Borrower or any Restricted Subsidiary to any Holdings Parent in amounts required for any Holdings Parent to pay with respect to any taxable period in which Holdings, the Borrower and/or any of the Subsidiaries is a member of a consolidated, combined, unitary or similar tax group (a “Tax Group”) of which such Holdings Parent is the common parent, any ~~Permitted~~ taxes that are attributable to the taxable income, revenue, receipts, gross receipts, gross profits, capital or margin of Holdings and/or its Subsidiaries; provided that, for each taxable period, the amount of such payments made in respect of such taxable period in the aggregate shall not exceed the amount of such taxes that Holdings and its Subsidiaries would have been required to pay if they were a stand-alone Tax ~~Distribution~~Group with Holdings as the corporate common parent of such stand-alone Tax Group (collectively, “Tax Distributions”); (B) the proceeds of which shall be used by a Holdings ~~or any Intermediate Holdings~~ Parent to pay (or to make Restricted Payments to allow any direct or indirect parent of such Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (a)(vii)(A) shall not exceed the Tax liability that Holdings and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers or their Restricted Subsidiaries; (B) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings Parent to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, ~~accounting, tax reporting~~ accounting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by ~~directors~~ members of the Board of Directors or ~~officers~~ officers, employees, directors, managers, consultants or independent contractors of any Holdings ~~(or any parent thereof or any Intermediate Holdings)~~ Parent attributable to the ownership or operations of Holdings, the ~~Borrowers~~ Borrower and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by ~~any of~~ Holdings, the ~~Borrowers~~ Borrower and the Restricted Subsidiaries and (y) otherwise permitted to be paid by Holdings, the ~~Borrowers~~ Borrower and ~~the~~ any Restricted Subsidiaries under this Agreement, (4) amounts due and payable pursuant to the Tax Receivable Agreement and (45) ~~payments~~ to satisfy indemnity and other obligations under acquisition or other agreements and (6) amounts that would otherwise be permitted to be paid ~~directly by Holdings, the Borrowers or the Restricted Subsidiaries~~ pursuant to Section ~~6.09(iii~~5.19(iii), (iv)(a)(ii) and/or (iv)(b), (viii), (xi) or (xxiv); (C) the proceeds of which shall be used by a Holdings ~~or any Intermediate Holdings~~ Parent to pay ~~(or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay)~~ franchise and similar Taxes, and other fees and expenses, required to maintain its ~~organizational~~ corporate or other legal existence; (D) ~~the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E)~~ to finance any Investment made by a Holdings Parent that, if made by Holdings or the Borrower, would be permitted to be made pursuant to Section ~~6.04 other than Section 6.04(m)~~6.04; provided that (1A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2B) such Holdings ~~or any Intermediate Holdings~~ Parent shall, immediately following the closing thereof, cause (x1) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to ~~Holdings, the Borrowers~~ Holdings or ~~the~~ its Restricted Subsidiaries or (y2) the Person formed or acquired to merge into or amalgamate or consolidate with Holdings, the ~~Borrowers~~ Borrower or any of the Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow a Holdings Parent to pay) (1) fees and expenses related to any actual or proposed equity or debt offering not prohibited by this Agreement and (2) advisory, refinancing, transaction and exit fees and expenses attributable to the business of Holdings and the Restricted Subsidiaries; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of any Holdings ~~or any direct or indirect parent company of Holdings~~ Parent to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the ~~Borrowers~~ Borrower and the Restricted Subsidiaries; and (G) the proceeds of which shall be used ~~by Holdings or any Intermediate Holdings to pay (or~~ to make ~~Restricted Payments to allow any direct or indirect parent thereof to pay~~payments permitted by clause (b)(iv) ~~fees~~ and ~~expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement~~ (~~whether or not such offering or other transaction is successful)~~b)(v) of Section 6.07; (viii) in addition to the foregoing Restricted Payments, ~~the Borrowers and any Intermediate~~ Holdings may make additional Restricted Payments to any Intermediate Holdings and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings DebtPayments, in an aggregate ~~amount, when taken together with the aggregate~~ amount ~~of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii),~~ not to exceed the sum of (A) ~~an amount at~~ the Available Amount that is Not Otherwise Applied as in effect immediately prior to the time of making ~~any~~ of such Restricted ~~Payment and together with any other Restricted Payment made utilizing this clause~~ Payment, plus (AB) ~~not to exceed~~ the ~~greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect~~ Available Equity Amount that is Not Otherwise Applied as in effect immediately prior to the time of making of such Restricted ~~Payment plus~~ Payment; provided that any amounts included in clause (Bb) of the definition of “Available Amount” may only be used for Restricted Payments so long as no Event of Default shall have occurred and be continuing ~~(or~~at the time of declaration of such Restricted Payment, ~~in the case of the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h) or (i)), the Available Amount that is Not Otherwise Applied~~ plus (C) the ~~Available Equity Amount that is Not Otherwise Applied~~unused portion of the basket set forth in Section 6.04(m) which would otherwise be available for Investments (with any such usage of such basket under this Section 6.07(a)(viii)(C) reducing the amount available under such other basket) plus (D) the unused portion of Section 6.07(b)(iv) which would otherwise be available for payments in respect of Junior Financing (with any such usage of such basket under the basket set forth in Section 6.07(a)(viii)(C) reducing the amount available under such other basket); (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; ~~provided~~ provided, that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; (xi) payments to any Holdings ~~may~~ Parent to permit it to (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiii) payments made or expected to be made by any Holdings Parent, Holdings, any Intermediate Parent, the Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled ~~Affiliates, Immediate Family Members~~ Affiliates or ~~Permitted Transferees~~permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to 5.00 to 1.0 and (B) there is no continuing Event of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvixiii) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to any Holdings Parent, Holdings, a any Intermediate Parent, the Borrower or a any Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments)) received as Permitted Investments from Holdings or a Restricted Subsidiary; (~~xvii~~xiv) the declaration and payment of a Restricted Payment on Holdings’ common stock (or the payment to any Holdings Parent to fund a payment of dividends on such company’s common stock), of up to an aggregate amount per annum not to exceed 3.5% of PubCo’s market capitalization; (xv) any distributions or payments of Securitization Fees, sales or contributions and other transfers of Securitization Assets and purchases of Securitization Assets, in ~~respect~~ each case in connection with a Qualified Securitization Facility; (xvi) Restricted Payments in an amount not to exceed the greater of ~~JV Preferred Equity Interests issued in accordance with Section 6.01~~ (A) $10,000,000 and (B) 15% of Consolidated EBITDA for the Test Period then last ended at the time of making such Restricted Payment; (xvii) to the extent ~~such dividends are included in~~ constituting Restricted Payments, Holdings, the ~~calculation of Consolidated Interest Expense~~Borrower and the Restricted Subsidiaries may consummate (1) transactions permitted pursuant to Section 6.03 and (2) make Investments permitted under Section 6.04; and (xviii) ~~Holdings, Intermediate Holdings, any Borrower or~~ any Restricted Subsidiary may make Restricted Payments in cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a ~~proposed~~ Restricted Payment in connection with the acquisition of additional Equity Interests in such Restricted Subsidiary from minority shareholders to the extent such acquisition would have been permitted (~~or a portion thereof~~and to the extent so permitted shall constitute such Investment) ~~meets~~ by the ~~criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date~~ parent company of such ~~reclassification) such~~ Restricted ~~Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this~~ Subsidiary pursuant to Section ~~6.08(a)~~6.04. (b) ~~Neither Holdings~~Holdings and the Borrower will not, ~~Intermediate Holdings nor any Borrower will, nor~~ and will ~~they~~ not permit any Restricted Subsidiary to, make ~~or pay, directly or indirectly,~~ any ~~payment~~ voluntary prepayment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior ~~Financing, or~~ Financing constituting Material Indebtedness (other than to the extent of any ~~payment or other distribution (whether~~ Retained Declined Proceeds applied in ~~cash, securities or other property~~compliance with Section 2.11(e)), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such Junior Financing, except: (i) payment of regularly scheduled interest and principal ~~payments as~~payments, ~~in the form~~ mandatory offers to repay, repurchase or redeem, mandatory prepayments of principal premium and interest, and payment of fees, expenses and ~~when due in~~ indemnification obligations, with respect ~~of any Indebtedness~~to such Junior Financing, other than payments in respect of any Junior Financing prohibited by the subordination provisions thereof; (ii) ~~refinancings~~ refinancings, supplements, substitutions, extensions, restructurings, exchanges or renewals of Indebtedness to the extent permitted by Section 6.01 and fees and expenses in connection therewith; (iii) the conversion of any Junior Financing to Equity Interests (other than Disqualified Equity Interests) of Holdings or any Holdings Parent, and any payment that is intended to prevent any Junior Financing from being treated as an “applicable high yield discount obligation” within the meaning of Section 163(i)(1) of the Code; (iv) prepayments, redemptions, repurchases, defeasances and other payments in respect of Junior Financing ~~Indebtedness~~ prior to their scheduled maturity in an aggregate amount, not to exceed the sum of (A) an amount, at the time of making any such prepayment, redemption, repurchase, defeasance or other payment and together with ~~proceeds~~ any other prepayments, redemptions, repurchases, defeasances and other payments made utilizing this subclause (A) not to exceed the greater of (1) $10,000,000 and (2) 15% of Consolidated EBITDA on a Pro Forma Basis for the most recently ended Test Period after giving Pro Forma Effect to the making of such prepayment, redemption, purchase, defeasance or other ~~Junior Financing Indebtedness permitted~~ payment, plus (B) (i) the Available Amount that is Not Otherwise Applied plus (ii) the Available Equity Amount that is Not Otherwise Applied, in each case, as in effect immediately prior to ~~be in~~the time of making of such Investment; provided that any amounts included in clause (b) of the definition of “Available

Appears in 2 contracts

Sources: Repricing Amendment (Simply Good Foods Co), Repricing Amendment (Simply Good Foods Co)

Restricted Payments; Certain Payments of Indebtedness. (a) Neither ~~Holdings, Intermediate~~ Holdings nor ~~any~~ the Borrower will, nor will they permit any ~~Restricted Subsidiary~~Subsidiary to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, except: (i) ~~Each~~ each of Holdings and the Borrower may declare and ~~each Restricted Subsidiary may make Restricted Payments~~ pay dividends with respect to ~~Intermediate Holdings~~its common stock payable solely in additional shares of its common stock, ~~a Borrower or any other Restricted Subsidiary; provided that~~ and, with respect to its preferred stock, payable solely in the case of any such Restricted Payment by a Restricted Subsidiary that is not a wholly-owned Subsidiary of a Borrower, such Restricted Payment is made to Intermediate Holdings, such Borrower, any Restricted Subsidiary and to each other owner of Equity Interests additional shares of such ~~Restricted Subsidiary based on their relative ownership interests~~ preferred stock or in shares of ~~the relevant class of Equity Interests~~its common stock; (ii) ~~payments or distributions to satisfy dissenters’ or appraisal rights, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of assets (other than~~ Subsidiaries may declare and pay dividends ratably with respect to ~~the Transactions) that complies with Section 6.03~~their capital stock, membership or partnership interests or other similar Equity Interests; (iii) Holdings ~~and any Intermediate Holdings~~ may declare and make dividend payments or other distributions payable solely in the Equity Interests of such Person; (iv) Restricted Payments made in connection with or in order to consummate the Transactions (including, without limitation, (A) cash payments to holders of Equity Interests of Target as provided by the Acquisition Agreement, (B) Restricted Payments to direct and indirect parent companies of Holdings to finance a portion of the consideration for the Acquisition and (C) other payments with respect to working capital adjustments or otherwise, to the extent contemplated by the Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv)); (v) repurchases of Equity Interests in Holdings (or Restricted Payments by Holdings to allow repurchases of Equity Interest in any direct or indirect parent of Holdings) or Intermediate Holdings deemed to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price of such stock options or warrants or other incentive interest; (vi) Restricted Payments to Holdings which Holdings may use to redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted stock units or stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) (or make Restricted Payments to allow ~~any of Holdings’ direct~~ a Parent to) purchase or ~~indirect parent companies~~ redeem (and the Borrower may declare and pay dividends or make other distributions to so redeem, retire, acquire or repurchase their Equity Interests) held by current or former officers, managers, consultants, directors and employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), Holdings, the ~~Borrowers and~~ proceeds of which are used by Holdings or a Parent to purchase or redeem) Equity Interests of Holdings or a Parent acquired by employees, consultants or directors of Holdings, the ~~Restricted Subsidiaries,~~ Borrower or any Subsidiary upon ~~the~~ such Person’s death, disability, retirement or termination of ~~employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan~~employment, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, profits interest, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that the aggregate amount of ~~Restricted Payments permitted by~~ such purchases or redemptions under this clause (viiii) ~~after the Effective Date, together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu thereof,~~ shall not exceed $10,000,000 during the ~~sum~~ term of (A) the greater of $15.0 million and 5.0% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings (which subsequent to an IPO shall be increased to the greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings), (B) the amount in any fiscal year equal to the cash proceeds of key man life insurance policies received by Holdings, the Borrowers or the Restricted Subsidiaries after the Effective Date, (C) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year may be carried forward to succeeding fiscal yearsthis Agreement; (~~vii~~iv) ~~Holdings and any Intermediate Holdings~~ the Borrower may make Restricted Payments ~~in cash: (A) without duplication of any Permitted Tax Distribution, the proceeds of which shall~~ to Holdings to be used by Holdings ~~or any Intermediate Holdings~~ solely to pay (or to make Restricted Payments to allow a Parent to pay) its franchise taxes and other fees required to maintain its corporate existence and to pay for general corporate and overhead expenses (including salaries and other compensation of employees) incurred by Holdings or a Parent in the ordinary course of its business, provided that such Restricted Payments shall not exceed $2,000,000 in any ~~direct or indirect parent of~~ fiscal year; (v) the Borrower may make Restricted Payments to Holdings in an amount necessary to enable Holdings to pay (or make Restricted Payments to allow a Parent to pay~~), for any taxable period for which Holdings and/or any of its Subsidiaries are members~~ ) the Taxes directly attributable to (or arising as a result of) the operations of a ~~consolidated~~Parent, ~~combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”)~~Holdings, the ~~portion~~ Borrower and the Subsidiaries, provided that (A) the amount of such Restricted Payments shall not exceed the amount that the Borrower and the Subsidiaries would be required to pay in respect of Federal, state and local taxes were the Borrower and the Subsidiaries to pay such taxes as stand-alone taxpayers (including any ~~U.S. federal~~interest or penalties thereon, ~~state, local or foreign Taxes (as~~ if applicable) ~~of such Tax Group for such taxable period that are attributable to the income of Holdings and/or its Subsidiaries; provided that~~ and (B) all Restricted Payments made to Holdings or a Parent pursuant to this clause (~~a)(vii)(A~~v) shall not exceed the Tax liability that Holdings and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers or their Restricted Subsidiaries; (B) the proceeds of which shall be are used by Holdings or ~~any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent~~ a Parent for the purposes specified herein within 20 days of ~~Holdings to pay) (1) its operating expenses incurred in~~ the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof or any Intermediate Holdings) attributable to the ownership or operations of Holdings, the Borrowers and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of Holdings, the Borrowers and the Restricted Subsidiaries and (y) otherwise permitted to be paid by Holdings, the Borrowers and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the Borrowers or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x)receipt thereof; (Cvi) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence; (D) the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(m); provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) Holdings or any Intermediate Holdings shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to Holdings, the Borrowers or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with Holdings, the Borrowers or any of the Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrowers and the Restricted Subsidiaries; and (G) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful); (viii) in addition to the foregoing Restricted Payments, the Borrowers and any Intermediate Holdings may make additional Restricted Payments to any Intermediate Holdings and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt, in an aggregate amount, when taken together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii), not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as no Event of Default shall have occurred and be continuing (or, in the case of the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h) or (i)), the Available Amount that is Not Otherwise Applied plus (C) the Available Equity Amount that is Not Otherwise Applied; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any cashless repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; (xi) Holdings may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiii) payments made or expected to be made by Holdings, any Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or ~~warrants or required withholding or similar taxes~~warrants; (~~xiv~~vii) the Borrower may make Restricted Payments to Holdings to make interest payments on Qualified Holdings Debt so long as (A) no Default or Event of Default has occurred and is continuing or would result therefrom and (B) the Leverage Ratio after giving pro forma effect thereto is equal to or less than 3.75 to 1.00; (viii) the Borrower may make Restricted Payments to Holdings (and Holdings may make Restricted Payments with such amounts received from the Borrower) to pay management, consulting and advisory fees to any Sponsor or Sponsor Affiliate to the extent permitted by Section 6.09; (ix) the Borrower and the Subsidiaries may make additional Restricted ~~Payments~~Payments (and Holdings may make Restricted Payments with such amounts received from the Borrower) in an aggregate amount not exceeding the Available Amount immediately prior to the time of the making of such Restricted Payment; ~~provided~~ provided, that (A) immediately prior to and after giving effect to such Restricted ~~Payment (A) on a Pro Forma Basis~~Payment, the ~~Total~~ Leverage Ratio is less than or equal to ~~5.00~~ 4.25 to ~~1.0~~ 1.00 and (B) ~~there is~~ no ~~continuing~~ Default or Event of ~~Default~~Default has occurred and is continuing or would result therefrom; (x) the Borrower may make Restricted Payments to Holdings to pay any nonrecurring fees, cash charges and cost expenses incurred in connection with the issuance of Equity Interests, in each case only lo the extent that such transaction is not consummated; (xi) payments to former stockholders of the Borrower in connection with the exercise of appraisal rights under applicable law; (xii) the payment of dividends described in Schedule 4.01(h); (xiii) the Borrower and its Subsidiaries may make additional Restricted Payments (and Holdings may make Restricted Payments with such amounts received from the Borrower) in an aggregate amount not to exceed $10,000,000, provided that no Default or Event of Default has occurred and is continuing or would result therefrom; (xiv) subject to the requirements of Section 2.11, Holdings may make Restricted Payments with the Net Proceeds received by Holdings from any issuance of any Equity Interests (or capital contribution in respect thereof) or Qualified Holdings Debt to the extent such Net Proceeds are not contributed or otherwise received by the Borrower or any of its Subsidiaries; provided that no Default or Event of Default has occurred and is continuing or would result therefrom; and (xv) ~~Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in~~ the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make Restricted Payments ~~in cash~~ to Holdings ~~to permit Holdings to make,~~ and Holdings may ~~make~~purchase or redeem the Specified Interests in accordance with the Stockholders Agreement in an aggregate amount not to exceed $20,000,000; provided, ~~Restricted Payments~~ that (A) no Default or Event of Default has occurred and is continuing or would result therefrom and (B) after giving effect thereto and any Borrowings to finance the payment thereof, the Borrower is in ~~respect of Permitted Tax Distributions. For purposes of determining~~ pro forma compliance with ~~this Section 6.08(a),~~ the financial covenants set forth in the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a)Sections 6.12 and 6.13. (b) ~~Neither Holdings, Intermediate Holdings nor any~~ The Borrower ~~will,~~ will not nor will ~~they~~ it permit any ~~Restricted~~ Subsidiary to, make or ~~pay~~agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest ~~on any Junior Financing~~on, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of of, any ~~Junior Financing~~Subordinated Indebtedness (other than intercompany loans among Subsidiaries and the Borrower), except: (i) payment of regularly scheduled interest and principal payments ~~as, in the form of payment~~ as and when due in respect of any Subordinated Indebtedness, other than ~~payments in respect of any Junior Financing~~ as prohibited by the subordination provisions thereof; (ii) ~~refinancings~~ the conversion or exchange of ~~Junior Financing~~ any Subordinated Indebtedness into, or redemption, repurchase, prepayment, defeasance or other retirement of any such Indebtedness with the Net Proceeds of the issuance by Holdings or a Parent of, (A) Equity Interests (or capital contributions in respect thereof) after the Closing Date to the extent not Otherwise Applied or (B) Qualified Holdings Debt, plus any fees and expenses in connection with such conversion, exchange, redemption, repurchase, prepayment, defeasance or other retirement; (iii) so long as no Default or Event of Default has occurred and is continuing or would result therefrom, the prepayment, repayment, redemption, defeasance, repurchase or other retirement of Subordinated Indebtedness (A) in an aggregate amount not to exceed the Available Amount; provided, that immediately prior to and after giving effect to such payments, the Leverage Ratio is less than or equal to 4.25 to 1.00, or (B) with proceeds received from the incurrence of Additional Subordinated Debt permitted by Section 6.01; and (iv) so long as no Default or Event of Default has occurred and is continuing or would result therefrom, the prepayment, redemption, defeasance, repurchase or other retirement of the Senior Subordinated Notes with the proceeds of ~~other Junior Financing Indebtedness permitted~~ an IPO. (c) Neither Holdings nor the Borrower will allow, at any time, less than 51 % of the Senior Subordinated Notes to be inheld by one or more of the Sponsor and the Sponsor Affiliates.

Appears in 2 contracts

Sources: Credit Agreement (AGA Medical Holdings, Inc.), Credit Agreement (AGA Medical Holdings, Inc.)

Restricted Payments; Certain Payments of Indebtedness. (a) ~~Neither Holdings~~The Borrower will not, ~~Intermediate Holdings nor any Borrower will, nor~~ and will ~~they~~ not permit any Restricted ~~Subsidiary~~Subsidiary to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, except: (i) ~~Each Borrower and~~ each Restricted Subsidiary may make Restricted Payments to ~~Intermediate Holdings, a~~ the Borrower or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a ~~wholly-owned Subsidiary of a Borrower~~Wholly Owned Subsidiary, such Restricted Payment is made to ~~Intermediate Holdings, such~~ the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests; (ii) ~~payments or distributions to satisfy dissenters’ or appraisal rights, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of assets (other than with respect to~~ the ~~Transactions) that complies with Section 6.03; (iii) Holdings~~ Borrower and ~~any Intermediate Holdings~~ each Restricted Subsidiary may declare and make dividend payments or other distributions payable solely in the Equity Interests of such Person; (iviii) Restricted Payments made ~~in connection with or in order~~ to consummate the Transactions (including, without limitation, (A) cash payments to holders of Equity Interests of Target as provided by the Acquisition Agreement, (B) Restricted Payments to direct and indirect parent companies of Holdings to finance a portion of the consideration for the Acquisition and (C) other payments with respect to working capital adjustments or otherwise, to the extent contemplated by the Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv))Transactions; (viv) repurchases of Equity Interests in ~~Holdings (~~the Borrower or any Restricted ~~Payments by Holdings to allow repurchases of Equity Interest in any direct or indirect parent of Holdings) or Intermediate Holdings~~ Subsidiary deemed to occur upon exercise of stock options or warrants ~~or other incentive interests~~ if such Equity Interests represent a portion of the exercise price or withholding taxes payable in connection with the exercise of such ~~stock~~ options or warrants or other incentive ~~interest~~interests; (viv) Restricted Payments to ~~Holdings~~ the Borrower, which ~~Holdings~~ the Borrower may use to redeem, acquire, ~~retire~~ retire, repurchase or ~~repurchase~~ settle its Equity Interests (or any options, warrants, restricted stock ~~units~~ or stock appreciation rights or ~~other equity-linked interests~~ similar securities issued with respect to any of such Equity Interests) (or ~~make Restricted Payments~~ Indebtedness or to ~~allow any~~ service Indebtedness incurred by the Borrower to finance the redemption, acquisition, retirement, repurchase or settlement of ~~Holdings’ direct~~ such Equity Interest or ~~indirect parent companies to so redeem~~Indebtedness, ~~retire, acquire~~ held directly or ~~repurchase their Equity Interests) held~~ indirectly by current or former officers, managers, consultants, ~~directors and~~ members of the Board of Directors, employees or independent contractors (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of ~~Holdings (or any direct or indirect parent thereof), Holdings,~~ the ~~Borrowers~~ Borrower and ~~the~~ its Restricted Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, ~~profits interest,~~ employment termination agreement or any other employment agreements or equity holders’ ~~agreement; provided that the~~ agreement in an aggregate amount ~~of Restricted Payments permitted by this clause (vi)~~ after the Effective ~~Date,~~ Date together with the aggregate amount of loans and advances to ~~Holdings~~ the Borrower made pursuant to Section 6.04(m) in lieu ~~thereof, shall~~ of Restricted Payments permitted by this clause (v) not to exceed ~~the sum of (A) the greater~~ $75,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years subject to a maximum of $~~15.0 million and 5.0% of Consolidated EBITDA for the most recently ended Test Period~~ 150,000,000 in any ~~fiscal~~ calendar year ~~of Holdings~~ (~~which subsequent to an IPO shall be increased~~ without giving effect to the ~~greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings~~following proviso)~~, (B) the~~ ; provided that such amount in any ~~fiscal~~ calendar year ~~equal~~ may be increased by (1) an amount not to exceed the cash proceeds of key man life insurance policies received by ~~Holdings,~~ the ~~Borrowers~~ Borrower or the Restricted Subsidiaries after the Effective Date, or (C2) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests amount of any ~~direct or indirect Parent Entity or management investment vehicle~~bona fide cash bonuses otherwise payable to members of the Board of Directors, ~~in each case to any future~~consultants, ~~present or former~~ officers, employees~~, directors~~, managers or ~~consultants~~ independent contractors of ~~Holdings, any of its Subsidiaries~~ the Borrower or any ~~direct~~ Restricted Subsidiary that are foregone in return for the receipt of Equity Interests, the fair market value of which is equal to or ~~indirect Parent Entity or management investment vehicle that occurs after~~ less than the ~~Effective Date, to the extent the cash proceeds from the sale~~ amount of such ~~Equity Interests are contributed to Holdings~~ cash bonuses, which, if not used in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year year, may be carried forward to ~~succeeding~~ any subsequent fiscal ~~years~~year; provided further that cancellation of Indebtedness owing to the Borrower or any Restricted Subsidiary from members of the Board of Directors, consultants, officers, employees, managers or independent contractors (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of the Borrower or any Restricted Subsidiary in connection with a repurchase of Equity Interests of the Borrower will not be deemed to constitute a Restricted Payment for purposes of this Section 6.07 or any other provisions of this Agreement. (vi) other Restricted Payments made by the Borrower; provided that, at the time of making such Restricted Payments, (i) no Default or Event of Default shall have occurred and be continuing or would result therefrom and (ii) on a Pro Forma Basis, the Total Net Leverage Ratio is equal to or less than 3.50 to 1.00; (vii) ~~Holdings and~~ any ~~Intermediate Holdings~~ Restricted Subsidiary may make Restricted Payments in ~~cash~~cash to the Borrower: (A) ~~without duplication of~~ as distributions by any ~~Permitted Tax Distribution,~~ Restricted Subsidiary to the ~~proceeds of which shall be used by Holdings or any Intermediate Holdings~~ Borrower in amounts required for the Borrower to pay ~~(or~~ with respect to ~~make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for~~ any taxable period ~~for~~ in which ~~Holdings~~ the Borrower and/or any of its Subsidiaries ~~are~~ is a member of (or is a flow-through entity for U.S. federal income tax purposes owned directly or indirectly by one or more such members of of) a consolidated, ~~combined~~ combined, unitary or ~~unitary~~ similar tax group ~~for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent~~ (a “Tax Group”)) of which the Borrower is the common parent, ~~the portion of any~~ U.S. federal, ~~state,~~ state and local or and foreign ~~Taxes (as applicable) of such Tax Group for such taxable period~~ taxes that are attributable to the taxable income of ~~Holdings~~ the Borrower and/or its Subsidiaries; provided that ~~Restricted Payments~~ for each taxable period, the amount of such payments made ~~pursuant to this clause (a)(vii)(A)~~ in respect of such taxable period in the aggregate shall not exceed the ~~Tax liability~~ amount of such taxes that ~~Holdings and/or~~ the Borrower and its Subsidiaries ~~(as applicable)~~ would have ~~incurred were such Taxes determined as~~ been required to pay if ~~such entity(ies)~~ they were a stand-alone ~~taxpayer or a~~ Tax Group with the Borrower as the corporate common parent of such stand-alone ~~group; and provided~~Tax Group (collectively, further, that Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers or their Restricted Subsidiaries“Tax Distributions”); (B) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof or any Intermediate Holdings) attributable to the ownership or operations of Holdings, the Borrowers and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of Holdings, the Borrowers and the Restricted Subsidiaries and (y) otherwise permitted to be paid by Holdings, the Borrowers and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the Borrowers or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x)[reserved]; (C) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence[reserved]; (D) ~~the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E)~~ to finance any Investment made by the Borrower that, if made by the Borrower, would be permitted to be made pursuant to Section ~~6.04 other than Section 6.04(m)~~6.04; provided that (1A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2B) ~~Holdings or any Intermediate Holdings~~ the Borrower shall, immediately following the closing thereof, cause (x1) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to ~~Holdings,~~ the ~~Borrowers~~ Borrower or ~~the~~ its Restricted Subsidiaries or (y2) the Person formed or acquired to merge into or consolidate with ~~Holdings,~~ the ~~Borrowers~~ Borrower or any of the Restricted Subsidiaries to the extent such ~~merger, amalgamation~~ merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow the Borrower to pay) fees and expenses related to any equity or debt offering; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of ~~Holdings or any direct or indirect parent company of Holdings~~ the Borrower to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of ~~Holdings,~~ the ~~Borrowers~~ Borrower and ~~the~~ its Restricted Subsidiaries; and (G) the proceeds of which shall be used ~~by Holdings or any Intermediate Holdings to pay (or~~ to make ~~Restricted Payments to allow any direct or indirect parent thereof to pay~~payments permitted by clause (b)(iv) ~~fees~~ and ~~expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement~~ (~~whether or not such offering or other transaction is successful)~~b)(v) of Section 6.07; (viii) in addition to the foregoing Restricted Payments, the ~~Borrowers and any Intermediate Holdings~~ Borrower may make additional Restricted Payments to any Intermediate Holdings and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings DebtPayments, in an aggregate amount, when taken together with the aggregate amount of loans and advances ~~to Holdings~~ previously made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii), not to exceed the sum of (A) ~~an amount at~~ the Available Amount that is Not Otherwise Applied as in effect immediately prior to the time of making ~~any~~ of such Restricted ~~Payment and together with any other~~ Payment; provided that amounts pursuant to clause (b) of the definition of “Available Amount” may only be used to fund a Restricted Payment ~~made utilizing~~ pursuant to this clause (Aviii)(A) ~~not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect~~ to the ~~making of such Restricted Payment plus (B) so long as~~ extent that no Event of Default shall have occurred and be continuing ~~(or~~or would result from such Restricted Payment, ~~in the case of the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h) or (i)), the Available Amount that is Not Otherwise Applied~~ plus (CB) the Available Equity Amount that is Not Otherwise ~~Applied~~Applied as in effect immediately prior to the time of making of such Restricted Payment; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; (xi) ~~Holdings~~ the Borrower may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiii) payments made or expected to be made by ~~Holdings, any~~ the Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled ~~Affiliates, Immediate Family Members~~ Affiliates or ~~Permitted Transferees~~permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to 5.00 to 1.0 and (B) there is no continuing Event of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvixiii) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to ~~Holdings, a~~ the Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (~~xvii~~xiv) the declaration and payment of ~~dividends in respect~~ Restricted Payments on the Borrower’s common stock, following consummation of ~~JV Preferred Equity Interests issued in accordance with Section 6.01~~ any public offering, of up to 6.0% per annum of the net cash proceeds of such public offering received by or contributed to the ~~extent such~~ Borrower, other than public offerings registered on Form S-8; (xv) the declaration and payment of regular cash dividends ~~are included~~ on common stock of the Borrower in an aggregate amount not to exceed the ~~calculation~~ greater of ~~Consolidated Interest Expense~~(x) $75,000,000 and (y) 2.0% of Market Capitalization per fiscal year; (xvi) any distributions or payments of Securitization Fees; and (~~xviii~~xvii) ~~Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make~~ additional Restricted Payments in ~~cash~~ an amount not to ~~Holdings~~ exceed the greater of $134,000,000 and 40.0% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to ~~permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in~~ the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date making of such ~~reclassification) such~~ Restricted ~~Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a)~~Payment. (b) ~~Neither Holdings~~The Borrower will not, ~~Intermediate Holdings nor any Borrower will, nor~~ and will ~~they~~ not permit any Restricted Subsidiary to, make or ~~pay~~agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any ~~Junior~~ Restricted Debt Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any ~~Junior~~ Restricted Debt Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoing, except: (i) payment of regularly scheduled interest and principal ~~payments as~~payments, ~~in the form~~ mandatory offers to repay, repurchase or redeem, mandatory prepayments of principal premium and interest, and payment of fees, expenses and ~~when due in~~ indemnification obligations, with respect ~~of any Indebtedness~~to such Restricted Debt Financing, other than payments in respect of any ~~Junior~~ Restricted Debt Financing prohibited by the subordination provisions thereof; (ii) refinancings of ~~Junior~~ Indebtedness to the extent permitted by Section 6.01; (iii) the conversion of any Restricted Debt Financing to Equity Interests (other than Disqualified Equity Interests) of the Borrower, and any payment that is intended to prevent any Restricted Debt Financing from being treated as an “applicable high yield discount obligation” within the meaning of Section 163(i)(1) of the Code; (iv) prepayments, redemptions, repurchases, defeasances and other payments in respect of Restricted Debt Financings prior to their scheduled maturity in an aggregate amount, not to exceed the sum of (A) an amount at the time of making any such prepayment, redemption, repurchase, defeasance or other payment and together with any other prepayments, redemptions, repurchases, defeasances and other payments made utilizing this subclause (A) not to exceed the greater of $134,000,000 and 40.0% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such prepayment, redemption, repurchase, defeasance or other payment plus (B) (x) the Available Amount that is Not Otherwise Applied as in effect immediately prior to the time of making of such prepayment, redemption, purchase, defeasance or other payment; provided that amounts pursuant to clause (b) of the definition of “Available Amount” may only be used to fund any such prepayment, redemption, purchase, defeasance or other payment pursuant to this clause (iv)(B)(x) to the extent that no Event of Default shall have occurred and be continuing or would result from such prepayment, redemption, purchase, defeasance or other payment plus (y) the Available Equity Amount that is Not Otherwise Applied as in effect immediately prior to the time of making of such Investment; (v) payments made in connection with the Transactions; (vi) prepayments, redemptions, purchases, defeasances and other payments in respect of Restricted Debt Financings prior to their scheduled maturity; provided that (i) no Default or Event of Default shall have occurred and be continuing or would result therefrom and (ii) after giving effect to such prepayment, redemption, repurchase, defeasance or other payment, on a Pro Forma Basis, the Total Net Leverage Ratio is less than or equal to 3.50 to 1.00; and (vii) prepayments of Restricted Debt Financing owed to the Borrower or a Restricted Subsidiary or prepayments of Permitted Refinancing of such Indebtedness with the proceeds of any other ~~Junior Financing Indebtedness permitted to be in~~Restricted Debt Financing.

Appears in 2 contracts

Sources: Term Loan Credit Agreement (Installed Building Products, Inc.), Term Loan Credit Agreement (Installed Building Products, Inc.)

Restricted Payments; Certain Payments of Indebtedness. (a) ~~Neither Holdings, Intermediate Holdings nor any Borrower~~ No Loan Party will, nor will ~~they~~ it permit any ~~Restricted Subsidiary~~Subsidiary to, declare or make, or agree to ~~pay~~ declare or make, directly or indirectly, any Restricted Payment, ~~except:~~ or incur any obligation (contingent or otherwise) to do so, except (i) ~~Each~~ each of Holdings and the Borrower may declare and ~~each Restricted Subsidiary~~ pay dividends with respect to its common stock payable solely in additional shares of its common stock, and, with respect to its preferred stock, payable solely in additional shares of such preferred stock or in shares of its common stock, (ii) Subsidiaries of Holdings may ~~make Restricted Payments~~ declare and pay dividends ratably with respect to ~~Intermediate Holdings, a Borrower~~ their Equity Interests to any Loan Party or any ~~other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a~~ wholly-owned Subsidiary of ~~a Borrower~~any Loan Party, ~~such~~ (iii) the Borrower may make Restricted ~~Payment is made~~ Payments or make distributions to ~~Intermediate~~ Holdings, ~~such Borrower~~to repurchase, ~~any Restricted Subsidiary and to each other owner of~~ redeem or otherwise acquire for value Equity Interests of Holdings held by officers, directors or employees or former officers, directors or employees (or their transferees, estates or beneficiaries under their estates) of Holdings or any of its Subsidiaries upon their death, disability, retirement, severance or termination of employment or service; provided that the aggregate consideration paid for all such ~~Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests;~~ redemptions and payments shall not exceed, in any fiscal year, $5,000,000 (~~ii) payments or distributions to satisfy dissenters’ or appraisal rights~~in each case, ~~pursuant to or~~ with unused amounts in ~~connection with a consolidation, amalgamation, merger or transfer of assets (other than with respect~~ any fiscal year being carried over to the Transactions) that complies with Section 6.03; (iii) Holdings and any Intermediate Holdings may declare and make dividend payments or other distributions payable solely in the Equity Interests of such Person; next succeeding fiscal year); (iv) Restricted Payments ~~made in connection with or in order~~ to consummate the Transactions (including, without limitation, (A) cash payments to holders of Equity Interests of Target as provided by the Acquisition Agreement, (B) Restricted Payments to direct and indirect parent companies of Holdings to finance a portion of the consideration for the Acquisition and (C) other payments with respect to working capital adjustments or otherwise, to the extent contemplated by the Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv)); (v) repurchases of Equity Interests in Holdings (or Restricted Payments by Holdings to allow repurchases of Equity Interest in any direct or indirect parent of Holdings) or Intermediate Holdings deemed to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price of such stock options or warrants or other incentive interest; (vi) Restricted Payments to Holdings which Holdings may use to redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted stock units or stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests) held by current or former officers, managers, consultants, directors and employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), Holdings, the Borrowers and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, profits interest, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that the aggregate amount of Restricted Payments permitted by this clause (vi) after the Effective Date, together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu thereof, shall not exceed the sum of (A) the greater of $15.0 million and 5.0% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings (which subsequent to an IPO shall be increased to the greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings), (B) the amount in any fiscal year equal to the cash proceeds of key man life insurance policies received by Holdings, the Borrowers or the Restricted Subsidiaries after the Effective Date, (C) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year may be carried forward to succeeding fiscal years; (vii) Holdings and any Intermediate Holdings may make Restricted Payments in cash: (A) without duplication of any Permitted Tax Distribution, the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are corporate and overhead expense attributable to the ~~income~~ preservation of ~~Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant~~ their existence (including expenses relating to ~~this clause (a)(vii)(A~~Holdings’ continuing operation as a public company) ~~shall not exceed~~ or ownership of the ~~Tax liability that Holdings and/or~~ Borrower and its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers or their Restricted Subsidiaries; (B) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, ; (2v) ~~any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof or any Intermediate Holdings) attributable~~ to the ~~ownership or operations~~ extent constituting Restricted Payments, Holdings and any of ~~Holdings, the Borrowers~~ its Subsidiaries may enter into and ~~the Restricted Subsidiaries, (3) fees and expenses (x) due and payable~~ consummate transactions expressly permitted by any provision of ~~Holdings~~Sections 6.03, ~~the Borrowers and the Restricted Subsidiaries and~~ 6.04 or 6.09; (y) otherwise permitted to be paid by Holdings, the Borrowers and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the Borrowers or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x); (Cvi) the ~~proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to~~ Borrower may make Restricted Payments or make distributions to Holdings, to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence; (D) the proceeds of which shall be used by Holdings to make ~~Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E)~~ regularly scheduled quarterly dividend payments to finance any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(m); provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) Holdings or any Intermediate Holdings shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to Holdings, the Borrowers or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with Holdings, the Borrowers or any of the Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrowers and the Restricted Subsidiaries; and (G) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful); (viii) in addition to the foregoing Restricted Payments, the Borrowers and any Intermediate Holdings may make additional Restricted Payments to any Intermediate Holdings and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt, its shareholders in an ~~aggregate amount, when taken together with the aggregate~~ amount ~~of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii),~~ not to exceed $1,500,000 in the ~~sum of (A) an amount at the time of making~~ aggregate during any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) fiscal quarter so long as no ~~Event of~~ Default shall have occurred and be continuing ~~(or, in~~ on the ~~case of the use of the Starter Basket~~ date that such dividend is Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h) or (i)), the Available Amount that is Not Otherwise Applied plus (C) the Available Equity Amount that is Not Otherwise Applied; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interestsdeclared to Holdings’ shareholders; provided that any such ~~new Equity Interests contain terms and provisions at least as advantageous~~ dividend declared by Holdings shall be made within thirty (30) days of the declaration thereof; (vii) the Loan Parties may make other Restricted Payments subject to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; (xi) Holdings may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum satisfaction of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiii) payments made or expected to be made by Holdings, any Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that Payment Conditions after giving effect to such Restricted ~~Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to 5.00 to 1.0~~ Payment; and (B) there is no continuing Event of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xviviii) the ~~distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a~~ Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make Restricted Payments ~~in cash~~ or make distributions to Holdings, to allow Holdings to ~~permit Holdings to make,~~ pay Taxes arising from the operations of Borrower and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a)its Subsidiaries. (b) ~~Neither Holdings, Intermediate Holdings nor any Borrower~~ No Loan Party will, nor will ~~they~~ it permit any ~~Restricted~~ Subsidiary to, make or ~~pay~~agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any ~~Junior Financing~~Indebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any ~~Junior Financing~~Indebtedness, except: (i) payment of Indebtedness created under the Loan Documents; (ii) payment of regularly scheduled interest and principal payments ~~as, in the form of payment~~ as and when due in respect of any ~~Indebtedness~~Indebtedness permitted under Section 6.01, other than payments in respect of ~~any Junior Financing~~ the Subordinated Indebtedness prohibited by the subordination provisions thereof; (iiiii) refinancings of ~~Junior Financing~~ Indebtedness to the extent permitted by Section 6.01; (iv) payment of secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness to the extent such sale or transfer is permitted by the terms of Section 6.05 and other mandatory prepayments of Term Loan Obligations in each case not prohibited by Intercreditor Agreement: (i) required to be made pursuant to the Term Loan Credit Agreement as in effect on the date hereof or (ii) other mandatory prepayments of Term Loan Obligations required to be made pursuant to the Term Loan Credit Agreement which are paid solely with the proceeds of Term Loan Priority Collateral; and (v) other ~~Junior Financing~~ payments in respect of Specified Indebtedness ~~permitted~~ so long as the relevant Payment Conditions are satisfied after giving effect to ~~be in~~such payment.

Appears in 1 contract

Sources: Credit Agreement (Global Brass & Copper Holdings, Inc.)

Restricted Payments; Certain Payments of Indebtedness. (a) ~~Neither Holdings, Intermediate Holdings nor any Borrower~~ No Loan Party will, nor will ~~they~~ it permit any of its Restricted ~~Subsidiary~~Subsidiaries to, ~~to pay~~ declare or make, directly or indirectly, any Restricted Payment, ~~except~~except that: (i) ~~Each Borrower and each~~ any Loan Party or any Restricted Subsidiary of a Loan Party may ~~make~~ declare and pay Restricted Payments to ~~Intermediate Holdings,~~ a ~~Borrower~~ Loan Party or ~~any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by~~ a Restricted Subsidiary that is ~~not a wholly-owned Subsidiary of a Borrower, such Restricted Payment is made to Intermediate Holdings, such Borrower, any Restricted Subsidiary and to each other owner of Equity Interests~~ the direct parent of such Restricted Subsidiary ~~based on their relative ownership interests~~ and a pro rata Restricted Payment to any third party in respect of ~~the relevant class of Equity Interests~~non-wholly owned Restricted Subsidiaries; (ii) Restricted Payments made to BCF Holdings or Parent (or any other direct or indirect parent of the Borrower) (w) to pay general corporate and overhead expenses incurred by BCF Holdings, Parent or Burlington Stores, Inc. in the ordinary course of business, or the amount of any indemnification claims made by any director or officer of BCF Holdings, Parent or Burlington Stores, Inc., (x) to pay franchise taxes and other fees, taxes and expenses required to maintain the corporate existence of BCF Holdings, Parent or Burlington Stores, Inc. (or any other direct or indirect Parent of the Borrower), (y) to pay taxes that are due and payable by BCF Holdings as the parent of a consolidated group that includes Parent and its Restricted Subsidiaries or (z) to make other payments ~~or distributions to satisfy dissenters’ or appraisal rights,~~ that BCF Holdings and Parent are not otherwise prohibited from making pursuant to or this Agreement (including to pay fees and expenses in connection with ~~a consolidation, amalgamation, merger~~ unsuccessful equity (or ~~transfer of assets (other than with respect to the Transactions~~debt offering) ~~that complies with Section 6.03~~permitted by this Agreement); (iii) ~~Holdings~~ the Loan Parties and ~~any Intermediate Holdings~~ their Restricted Subsidiaries may ~~declare and~~ make ~~dividend payments~~ Restricted Payments made prior to or ~~other distributions payable solely in~~ substantially concurrently with the ~~Equity Interests~~ initial public offering of ~~such Person~~Burlington Stores, Inc. for the purpose of paying amounts owing under the advisory agreement with the Sponsor, to the extent permitted under Section 6.07; (iv) the Loan Parties and their Restricted Subsidiaries may make Restricted Payments ~~made in connection with or in order to consummate the Transactions (including, without limitation, (A) cash payments to holders~~ consisting of ~~Equity Interests of Target as provided by the Acquisition Agreement, (B) Restricted Payments to direct and indirect parent companies of Holdings to finance a portion~~ Permitted Dispositions of the ~~consideration for the Acquisition~~ type described, and ~~(C) other payments with respect to working capital adjustments or otherwise,~~ subject to the ~~extent contemplated by~~ limitations contained, in the ~~Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv))~~definition thereof; (v) the Loan Parties and their Restricted Subsidiaries may make Restricted Payments constituting repurchases of ~~Equity Interests~~ Capital Stock in ~~Holdings~~ BCF Holdings, Burlington Stores, Inc. or any Restricted Subsidiary (or ~~Restricted Payments by~~ distributions to BCF Holdings ~~to allow repurchases of Equity Interest in~~ or Burlington Stores, Inc. or any direct or indirect ~~parent~~ Parent of ~~Holdings~~the Borrower for such purpose) ~~or Intermediate Holdings deemed to occur upon~~ in connection with the exercise of stock options or warrants ~~or other incentive interests~~ if such ~~Equity Interests represent~~ Capital Stock represents a portion of the exercise price of such ~~stock options~~ option or ~~warrants or other incentive interest; (vi) Restricted Payments to Holdings which Holdings may use to redeem, acquire, retire or repurchase its Equity Interests (or any options,~~ warrants, restricted stock units or stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests) held by current or former officers, managers, consultants, directors and employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), Holdings, the Borrowers and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, profits interest, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that the aggregate amount of Restricted Payments permitted by this clause (vi) after the Effective Date, together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu thereof, shall not exceed the sum of (A) the greater of $15.0 million and 5.0% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings (which subsequent to an IPO shall be increased to the greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings), (B) the amount in any fiscal year equal to the cash proceeds of key man life insurance policies received by Holdings, the Borrowers or the Restricted Subsidiaries after the Effective Date, (C) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year may be carried forward to succeeding fiscal years; (vii) Holdings and any Intermediate Holdings may make Restricted Payments in cash: (A) without duplication of any Permitted Tax Distribution, the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (~~a)(vii)(A~~iv) shall not exceed ~~the Tax liability that~~ $10,000,000 in any Fiscal Year of BCF Holdings ~~and/or its Subsidiaries~~ (~~as applicable) would have incurred were such Taxes determined as if such entity(ies) were~~ with unused amounts from any Fiscal Year available for carry-forward to future Fiscal Years subject to a ~~stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this subclause (A)~~ maximum amount of $20,000,000 in ~~respect of~~ any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers or their Restricted SubsidiariesFiscal Year); (Bvi) ~~the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay~~ [reserved]; (~~or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay~~vii) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof or any Intermediate Holdings) attributable to the ownership or operations of Holdings, the Borrowers and the Restricted Subsidiaries, (3) fees and expenses so long as (x) ~~due~~ no Event of Default has occurred and ~~payable by any of Holdings, the Borrowers and the Restricted Subsidiaries~~ is continuing or would result therefrom and (y) ~~otherwise permitted to be paid by Holdings,~~ the Borrowers and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the Borrowers or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x); (C) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence; (D) the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(m); provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) Holdings or any Intermediate Holdings shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to Holdings, the Borrowers or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with Holdings, the Borrowers or any Consolidated Leverage Ratio as of the ~~Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements~~ last day of Sections 5.11 and 5.12; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrowers and the Restricted Subsidiaries; and (G) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful); (viii) in addition to the foregoing Restricted Payments, the Borrowers and any Intermediate Holdings may make additional Restricted Payments to any Intermediate Holdings and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt, in an aggregate amount, when taken together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii), not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended ~~Test Period after giving Pro Forma Effect~~ Fiscal Quarter for which financial statements have been or are then required to ~~the making of such Restricted Payment plus (B) so long as no Event of Default shall~~ have ~~occurred and~~ been delivered hereunder would be continuing (or, in the case of the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h) or (i)), the Available Amount that is Not Otherwise Applied plus (C) the Available Equity Amount that is Not Otherwise Applied; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; (xi) Holdings may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiii) payments made or expected to be made by Holdings, any Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to ~~5.00~~ 3.5 to 1.0 and (B) there is no continuing Event of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings1.0, any ~~Borrower~~ Loan Party or any Restricted Subsidiary may make any Restricted Payment; (viii) so long as (x) no Event of Default has occurred and is continuing or would result therefrom and (y) on a Pro Forma Basis the Consolidated Interest Coverage Ratio is at least 2.00 to 1.00 for the most recently ended period of four Fiscal Quarters for which financial statements have been or were required to be delivered hereunder, any Loan Party and any of its Restricted Subsidiaries may make any Restricted Payments ~~in cash~~ from the portion of the Available Amount such Loan Party or such Restricted Subsidiary elects to ~~Holdings~~ apply pursuant to ~~permit Holdings to make,~~ this clause (viii); (ix) the Borrower and ~~Holdings~~ the Restricted Subsidiaries may ~~make,~~ declare and make Restricted Payments with respect to its Capital Stock payable solely in ~~respect~~ shares of ~~Permitted Tax Distributions. For purposes~~ Capital Stock of ~~determining compliance with this Section 6.08(a), in~~ the ~~event~~ Borrower that ~~a proposed Restricted Payment~~ is not Disqualified Capital Stock; (x) the Borrower may make payments (or ~~a portion thereof) meets the criteria of clauses (i) through (xviii) above~~may make Restricted Payments to any parent, the ~~Borrowers~~ proceeds of which will be ~~entitled~~ used to ~~classify or later reclassify (based on circumstances existing on the date of~~ make payments) at such ~~reclassification)~~ times and in such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a). (b) Neither Holdings, Intermediate Holdings nor any Borrower will, nor will they permit any Restricted Subsidiary to, amounts as are necessary to make ~~or pay, directly or indirectly, any payment or other distribution (whether in cash, securities or other property)~~ payments of or ~~in respect of principal of or interest on any Junior Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit,~~ on account of ~~the purchase, redemption, retirement, acquisition, cancellation~~ (1) monitoring or termination of any Junior Financing, except: (i) payment of regularly scheduled interest and principal payments as, in the form of payment and when due in respect of any Indebtedness, other than payments in respect of any Junior Financing prohibited by the subordination provisions thereof; (ii) refinancings of Junior Financing Indebtedness with proceeds of other Junior Financing Indebtedness permitted to be inmanagement or similar fees or transaction fees and

Appears in 1 contract

Sources: Credit Agreement (Burlington Stores, Inc.)

Restricted Payments; Certain Payments of Indebtedness. (a) ~~Neither Holdings, Intermediate Holdings nor any~~ The Borrower ~~will~~will not, nor will ~~they~~ it permit any Restricted ~~Subsidiary~~Subsidiary to, to pay or make, directly or indirectly, any Restricted Payment, except: (i) ~~Each Borrower and~~ each Restricted Subsidiary may make Restricted Payments to ~~Intermediate Holdings, a~~ the Borrower or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a ~~wholly-owned~~ Wholly Owned Subsidiary of a the Borrower, such Restricted Payment is made to ~~Intermediate Holdings, such~~ the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests; (ii) ~~payments~~ (x) Restricted Payments made in connection with or ~~distributions~~ in order to consummate the Transactions and the fees and expenses related thereto (including Restricted Payments in respect of post-closing purchase price or other adjustments contemplated by the Transaction Agreement) and (y) Restricted Payments in respect of working capital adjustments or purchase price adjustments and to satisfy ~~dissenters’ or appraisal rights, pursuant to~~ indemnity and other similar obligations under the Transaction Agreement or in connection with ~~a consolidation, amalgamation, merger~~ any Permitted Acquisition or ~~transfer of assets (~~other ~~than with respect to the Transactions) that complies with Section 6.03~~permitted Investment; (iii) ~~Holdings and any Intermediate Holdings~~ the Borrower may declare and make dividend payments or other distributions payable solely in the Equity Interests of ~~such Person~~the Borrower; (iv) Restricted Payments made in connection with or in order to consummate the Transactions (including, without limitation, (A) cash payments to holders of Equity Interests of Target as provided by the Acquisition Agreement, (B) Restricted Payments to direct and indirect parent companies of Holdings to finance a portion of the consideration for the Acquisition and (C) other payments with respect to working capital adjustments or otherwise, to the extent contemplated by the Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv)); (v) repurchases of Equity Interests in ~~Holdings~~ the Borrower (or Restricted Payments by ~~Holdings~~ the Borrower to allow repurchases of Equity Interest in any direct or indirect parent of ~~Holdings~~the Borrower) or ~~Intermediate Holdings~~ any Restricted Subsidiary deemed to occur upon exercise of ~~stock~~ equity options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price of such ~~stock~~ equity options or warrants or other incentive ~~interest~~interests; (viv) Restricted Payments to ~~Holdings~~ the Borrower which ~~Holdings~~ the Borrower may use to redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted stock units or stock appreciation rights or other ~~equity-~~equity linked interests issued with respect to any of such Equity Interests) (or make Restricted Payments to allow any of ~~Holdings’~~ the Borrower’s direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests) held by current or former officers, managers, consultants, ~~directors~~ directors, employees and ~~employees~~ other service providers (or ~~their~~ the respective ~~spouses~~Affiliates, ~~former spouses~~Immediate Family Members, other Permitted Transferees, successors, executors, administrators, heirs, legatees or ~~distributees~~distributees of any of the foregoing) of ~~Holdings~~ the Borrower (or any direct or indirect parent thereof~~), Holdings, the Borrowers~~ ) and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment or engagement of any such Person or otherwise in accordance with any ~~stock~~ equity option or ~~stock~~ equity appreciation rights plan, any management, director and/or employee ~~stock~~ equity ownership or incentive plan, ~~stock~~ equity subscription plan, profits interest, employment termination agreement or any other employment or service agreements with any director, officer or consultant or partnership or equity holders’ agreement; provided ~~that~~ that, except with respect to non-discretionary repurchases, the aggregate amount of Restricted Payments permitted by this clause (viv) after the Effective Date, together with the aggregate amount of loans and advances to ~~Holdings~~ the Borrower made pursuant to Section ~~6.04(m~~6.04(l) in lieu ~~thereof~~of Restricted Payments permitted by this clause (v), shall not exceed the sum of (A) (1) prior to the Conversion Date, $3,500,000, and (2) on and after the Conversion Date, the greater of $~~15.0 million~~ 3,500,000 and 5.0% of Consolidated EBITDA ~~for the most recently ended Test Period in any fiscal year of Holdings~~ (which subsequent to an IPO shall be increased to (1) prior to the Conversion Date, $7,000,000, and (2) on and after the Conversion Date, the greater of $~~30.0 million~~ 7,000,000 and 1010.0% of Consolidated ~~EBITDA~~ EBITDA) for the ~~most recently ended~~ Test Period then last ended determined on a Pro Forma Basis in any fiscal year of ~~Holdings~~the Borrower (net of any proceeds from the reissuance or resale of such Equity Interests to another Person received by the Borrower or any Restricted Subsidiary), (B) the amount in any fiscal year equal to the cash proceeds of key man life insurance policies received by ~~Holdings,~~ the ~~Borrowers~~ Borrower or the Restricted Subsidiaries after the Effective ~~Date,~~ Date and (C) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of ~~Holdings~~ the Borrower (to the extent contributed to ~~Holdings~~ the Borrower in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to ~~Holdings~~the Borrower, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of ~~Holdings~~the Borrower, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests are contributed to ~~Holdings~~ the Borrower in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket ~~hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision~~hereunder; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year may be carried forward to succeeding fiscal years; provided, further, that any Indebtedness incurred or Investments or payments made in reliance upon the Available RP Capacity Amount utilizing the unused amounts available pursuant to this Section 6.07(a)(v) shall reduce the amounts available pursuant to this Section 6.07(a)(v); (vi) [reserved]; (vii) ~~Holdings and any Intermediate Holdings~~ the Borrower may make Restricted Payments to any Parent Entity in cash: (A) without duplication of any Permitted Tax Distribution, the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (a)(vii)(A) shall not exceed the Tax liability that Holdings and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers or their Restricted Subsidiaries; (B) the proceeds of which shall be used by ~~Holdings or any Intermediate Holdings~~ such Parent Entity to pay ~~(or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay)~~ (1) its operating costs and expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) ~~that are reasonable and customary and~~ incurred in the ordinary course of business, (2) Transaction Costs and any ~~reasonable~~ fees and ~~customary~~ expenses of and indemnification claims made by directors or officers of ~~Holdings (or~~ any ~~parent thereof or any Intermediate Holdings)~~ Parent Entity attributable to the ownership or operations of ~~Holdings,~~ the ~~Borrowers~~ Borrower and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of ~~Holdings,~~ the ~~Borrowers~~ Borrower and the Restricted Subsidiaries and (y) otherwise permitted to be paid by ~~Holdings,~~ the ~~Borrowers~~ Borrower and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by ~~Holdings,~~ the ~~Borrowers~~ Borrower or the Restricted Subsidiaries pursuant to Section ~~6.09(iii~~6.08(iii) or (xxi); (CB) the proceeds of which shall be used by ~~Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow~~ any direct or indirect parent of ~~Holdings~~ the Borrower to ~~pay) franchise~~ pay franchise, excise and similar Taxes, and other fees and expenses, required to maintain its (or any of its direct or indirect parents’) organizational existence; (DC) the proceeds of which shall be used by ~~Holdings~~ any Parent Entity to make Restricted Payments permitted by Section ~~6.08(a)(iv~~6.07(a)(iv) or Section ~~6.08(a)(vi~~6.07(a)(v); (ED) to finance any Investment permitted to be made pursuant to Section 6.04 (other than Section ~~6.04(m~~6.04(l)); provided that (1A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2B) ~~Holdings or any Intermediate Holdings~~ such Parent Entity shall, immediately following the closing thereof, cause (x1) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to ~~Holdings,~~ the ~~Borrowers~~ Borrower or ~~the~~ a Restricted ~~Subsidiaries~~ Subsidiary or (y2) the Person formed or acquired to merge into or consolidate with ~~Holdings,~~ the ~~Borrowers~~ Borrower or any of the Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (FE) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to ~~officers~~ officers, employees and ~~employees~~ other service providers of ~~Holdings or~~ any direct or indirect parent company of ~~Holdings~~ the Borrower to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of ~~Holdings,~~ the ~~Borrowers~~ Borrower and the Restricted Subsidiaries~~; and~~; (GF) the proceeds of which shall be used by ~~Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow~~ any direct or indirect parent ~~thereof~~ of the Borrower to ~~pay)~~ pay fees and expenses related to any equity ~~offering,~~ or debt offering (including the SPAC Transactions) or other non-ordinary course financing transaction not prohibited by this Agreement (whether or not such offering or other financing transaction is successful); and (G) the proceeds of which shall be used to make payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07; (viii) in addition to the foregoing Restricted Payments, the ~~Borrowers and any Intermediate Holdings~~ Borrower may make additional Restricted Payments to any Intermediate Holdings and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt, in an aggregate amount, when taken together with the aggregate amount of loans and advances to ~~Holdings~~ any direct or indirect parent of the Borrower previously made pursuant to Section ~~6.04(m~~6.04(l) in lieu of Restricted Payments permitted by this clause (viii), not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment previously made utilizing this ~~clause~~ subclause (A) not to exceed (1) prior to the Conversion Date, $25,000,000, and (2) on and after the Conversion Date, the greater of $~~75.0 million~~ 25,000,000 and 2525.0% of Consolidated EBITDA for the ~~most recently ended~~ Test Period then last ended after giving Pro Forma Effect to the making of such Restricted Payment plus (B) ~~so long as no Event of Default shall have occurred and be continuing~~ the Available Amount that is Not Otherwise Applied (orprovided that, solely in the case of ~~the use~~ any usage of the ~~Starter Basket that is Not Otherwise Applied~~Builder Basket, no Event of Default under Section 7.01(a), (b), (h) or (i~~)), the Available Amount that is Not Otherwise Applied~~ ) shall have occurred and be continuing) plus (C) the Available Equity Amount that is Not Otherwise Applied; provided that any Indebtedness incurred or Investments or payments made in reliance upon the Available RP Capacity Amount utilizing the unused amounts available pursuant to this Section 6.07(a)(viii) shall reduce the amounts available pursuant to this Section 6.07(a)(viii); (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (xa) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, ~~manager~~ manager, consultant or ~~consultant~~ other service provider and any repurchases of Equity Interests in consideration of such payments including deemed ~~repurchases~~ repurchases, in each case, in connection with the exercise of ~~stock~~ equity options and the vesting of restricted ~~stock~~ equity and restricted equity units and (b) payments or other adjustments to outstanding Equity Interests in accordance with any management equity plan, stock ~~units~~option plan or any other similar employee benefit plan, agreement or arrangement in connection with any Restricted Payment; (xi) ~~Holdings~~ the Borrower may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the ~~declaration and payment of~~ Borrower may make Restricted ~~Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock)~~Payments, following consummation of an IPO, in an annual amount for each fiscal year of up the Borrower equal to the sum of (a) ~~6.0~~an amount equal to 7.0% ~~per annum~~ of the net cash proceeds of (x) such IPO (net, for the avoidance of doubt, of any equity redemptions made in connection with the SPAC Transactions) and (y) any subsequent public offerings, in each case, received by or contributed to ~~Intermediate Parent or Parent~~the Borrower and/or its Subsidiaries, other than public offerings with respect to ~~Intermediate Parent’s or Parent’s~~ common stock registered on Form S-8 and (b) ~~7.0~~an amount equal to 8.0% of the ~~market capitalization of Intermediate Parent or Parent~~ Market Capitalization at the time of ~~such IPO~~determination; provided that any Indebtedness incurred or Investments or payments made in reliance upon the Available RP Capacity Amount utilizing the unused amounts available pursuant to this Section 6.07(a)(xii) shall reduce the amounts available pursuant to this Section 6.07(a)(xii); (xiii) payments made or expected to be made by ~~Holdings, any~~ the Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, ~~manager~~ manager, consultant or ~~consultant~~ other service provider (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of ~~stock~~ equity options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) on and after the Conversion Date, additional Restricted Payments; provided ~~that~~ that, after giving effect to such Restricted Payment ~~(A)~~ on a Pro Forma ~~Basis,~~ Basis (A) the Total Leverage Ratio is less than or equal to 5.00 to ~~1.0~~ 1.00 and (B) there is no continuing Event of ~~Default~~Default under Section 7.01(a), (b), (h) or (i); (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization ~~Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments)~~Transactions; (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to ~~Holdings, a~~ the Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are cash or Permitted Investments); (xvii) the ~~declaration~~ Borrower may make Restricted Payments in cash, the proceeds of which shall be used by a Parent Entity to pay, for any taxable period for which the Borrower and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes (a “Tax Group”) of which a Parent Entity is the common parent, the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the activities of the Borrower and/or such Subsidiaries; provided that Restricted Payments made pursuant to this clause (a)(xvii) shall not exceed the Tax liability that the Borrower and/or such Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone Tax Group for all relevant taxable years; and ~~payment of dividends~~ provided, further, that Restricted Payments under this clause (a)(xvii) in respect of ~~JV Preferred Equity Interests issued in accordance with Section 6.01~~ any Taxes attributable to any Unrestricted Subsidiaries of the Borrower may be made only to the extent that such ~~dividends are included in the calculation of Consolidated Interest Expense~~Unrestricted Subsidiaries have made cash payments for such purpose to any Loan Party; and (xviii) ~~Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make~~ Restricted Payments to satisfy appraisal or other dissenters’ rights, pursuant to or in ~~cash to Holdings to permit Holdings to make~~connection with a consolidation, ~~and Holdings may make~~amalgamation, ~~Restricted Payments in respect~~ merger, transfer of ~~Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event~~ assets or acquisition that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with ~~this~~ Section ~~6.08(a)~~6.03 or Section 6.04. (b) ~~Neither Holdings, Intermediate Holdings nor any~~ The Borrower ~~will~~will not, nor will ~~they~~ it will permit any Restricted Subsidiary to, make or pay, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) ~~of or in respect~~ of principal of or interest on any Junior Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing (collectively, “Restricted Debt Payments”) prior to the date that is 12 months prior to the stated maturity date in respect of such Junior Financing, except: (i) payment of regularly scheduled interest and principal payments as, in the form of payment and when due in respect of any Indebtedness, other than payments in respect of any Junior Financing prohibited by the subordination provisions thereof; (ii) refinancings of ~~Junior Financing~~ Indebtedness ~~with proceeds of other Junior Financing Indebtedness~~ to the extent permitted ~~to be in~~by Section 6.01; (iii) the conver

Appears in 1 contract

Sources: Credit Agreement (Pathfinder Acquisition Corp)

Restricted Payments; Certain Payments of Indebtedness. (a) ~~Neither Holdings~~The Borrower will not, ~~Intermediate Holdings nor any Borrower will, nor~~ and will ~~they~~ not permit any Restricted ~~Subsidiary~~Subsidiary to, and Holdings will not permit Public Sector to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, except: (i) ~~Each Borrower and~~ each Restricted Subsidiary may make Restricted Payments to ~~Intermediate Holdings, a~~ the Borrower or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a ~~wholly-owned~~ Wholly Owned Subsidiary of a the Borrower, such Restricted Payment is made to ~~Intermediate Holdings, such~~ the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests; (ii) ~~payments or distributions to satisfy dissenters’ or appraisal rights, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of assets (other than with respect to~~ the ~~Transactions) that complies with Section 6.03; (iii) Holdings~~ Borrower and ~~any Intermediate Holdings~~ each Restricted Subsidiary may declare and make dividend payments or other distributions payable solely in the Equity Interests of such Person; (iviii) Restricted Payments made ~~in connection~~ on or substantially contemporaneously with ~~or in order~~ the Effective Date to consummate the ~~Transactions (including~~Transactions, ~~without limitation, (A) cash payments to holders of Equity Interests of Target as provided by the Acquisition Agreement, (B) Restricted Payments to direct and indirect parent companies of Holdings~~ including to finance ~~a portion~~ the payment of the consideration for the Acquisition and (C) other payments with respect to working capital adjustments or otherwise, to the extent contemplated by the Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv))Transaction Costs; (viv) repurchases of Equity Interests in Holdings (or ~~Restricted Payments by Holdings to allow repurchases of Equity Interest in~~ any direct or indirect parent of Holdings) ), any Intermediate Parent, the Borrower or ~~Intermediate Holdings~~ any Restricted Subsidiary deemed to occur upon exercise of stock ~~options~~ options, restricted stock units or warrants ~~or other incentive interests~~ if such Equity Interests represent a portion of the exercise price or withholding taxes payable in connection with the exercise of such ~~stock options~~ options, units or warrants or other incentive ~~interest~~interests; (viv) Restricted Payments to Holdings or any Intermediate Parent, which Holdings or such Intermediate Parent may use to redeem, acquire, ~~retire~~ retire, repurchase or ~~repurchase~~ settle its Equity Interests (or any options, warrants, restricted stock ~~units~~ or stock appreciation rights or ~~other equity-linked interests~~ similar securities issued with respect to any of such Equity Interests) or to service Indebtedness incurred by Holdings or any Intermediate Parent to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred by Holdings or any Intermediate Parent to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests) ), held directly or indirectly by current or former officers, managers, consultants, ~~directors and~~ members of the Board of Directors, employees or independent contractors (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), ~~Holdings~~any Intermediate Parent, the ~~Borrowers~~ Borrower and ~~the~~ its Restricted Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, ~~profits interest,~~ employment termination agreement or any other employment agreements or equity holders’ ~~agreement; provided that the~~ agreement in an aggregate amount ~~of Restricted Payments permitted by this clause (vi)~~ after the Effective Date, together with the aggregate amount of loans and advances to Holdings or any Intermediate Parent made pursuant to Section 6.04(m) in lieu ~~thereof~~of Restricted Payments permitted by this clause (v), ~~shall~~ not to exceed ~~the sum of (A)~~ the greater of $~~15.0 million~~ 20,000,000 and ~~5.0~~17.0% of Consolidated EBITDA ~~for the most recently ended Test Period~~ in any ~~fiscal~~ calendar year ~~of Holdings (which subsequent to an IPO shall be increased to the greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period~~ with unused amounts in any ~~fiscal~~ calendar year ~~of Holdings), (B) the~~ being carried over to succeeding calendar years; provided that such amount in any ~~fiscal~~ calendar year ~~equal~~ may be increased by (1) an amount not to exceed the cash proceeds of key man life insurance policies received by ~~Holdings,~~ the ~~Borrowers~~ Borrower (or by Holdings or an Intermediate Parent and contributed to the Borrower) or the Restricted Subsidiaries after the Effective Date, or (C2) the amount of any bona fide cash ~~proceeds~~ bonuses otherwise payable to members of the Board of Directors, consultants, officers, employees, managers or independent contractors of Holdings, an Intermediate Parent, the Borrower or any Restricted Subsidiary that are foregone in return for the receipt of Equity Interests, the fair market value of which is equal to or less than the amount of such cash bonuses, which, if not used in any year, may be carried forward to any subsequent fiscal year; provided further that cancellation of Indebtedness owning to the Borrower or any Restricted Subsidiary from members of the ~~sale~~ Board of Directors, consultants, officers, employees, managers or independent contractors (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings, any Intermediate Parent, the Borrower or any Restricted Subsidiary in connection with a repurchase of Equity Interests of Holdings, any Intermediate Parent or the Borrower will not be deemed to constitute a Restricted Payment for purposes of this Section 6.07 or any other provisions of this Agreement. (vi) the Borrower and its Restricted Subsidiaries may make Restricted Payments in cash to Holdings and any Intermediate Parent: (A) for the purpose of funding, without duplication (i) payments by Holdings or any Intermediate Parent (and any direct or indirect Subsidiary thereof with respect to which the Borrower is a Subsidiary) in respect of Taxes directly payable by such entities in respect of Delaware franchise taxes, Massachusetts excise tax, New York City and State fixed dollar minimum tax and any other ~~than Disqualified Equity Interests~~Taxes which are necessary to maintain the corporate existence of such entities such as franchise or similar taxes, fees and expenses, and (ii) of any income Taxes (including quarterly estimated tax payments) required to be paid by Holdings (and any Intermediate Parent on income attributable to the ~~extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests)~~ Borrower and its Restricted Subsidiaries (and, to the extent ~~contributed to Holdings~~permitted below, ~~the cash proceeds from the sale of Equity Interests of~~ its Unrestricted Subsidiaries) for any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provisiontaxable year; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year may be carried forward to succeeding fiscal years; (vii) Holdings and any Intermediate Holdings may make Restricted Payments in cash: (A) without duplication of any Permitted Tax Distribution, the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (a)(vii)(A) shall not exceed the Tax liability that Holdings and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this subclause (A) in amount with respect ~~of any Taxes attributable~~ to the income of any Unrestricted ~~Subsidiaries of Holdings may~~ Subsidiary for any taxable period shall be ~~made only~~ limited to the ~~extent that~~ amount actually paid with respect to such period by such Unrestricted Subsidiary to the Borrower or its Restricted Subsidiaries ~~have made cash payments~~ for the purpose of funding the payment of such ~~purpose to Holdings~~Taxes (collectively, ~~the Borrowers or their Restricted Subsidiaries~~“Tax Distributions”); (B) the proceeds of which shall be used by Holdings (or any direct or indirect parent of Holdings) or any Intermediate ~~Holdings~~ Parent to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, ~~accounting, tax reporting~~ accounting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by ~~directors~~ members of the Board of Directors or ~~officers~~ officers, employees, directors, managers, consultants or independent contractors of Holdings (or any direct or indirect parent ~~thereof~~ thereof) or any Intermediate ~~Holdings)~~ Parent attributable to the ownership or operations of Holdings, any Intermediate Parent, the ~~Borrowers~~ Borrower and ~~the~~ its Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of ~~Holdings,~~ the ~~Borrowers~~ Borrower and ~~the~~ its Restricted Subsidiaries and (y) otherwise permitted to be paid by ~~Holdings,~~ the ~~Borrowers~~ Borrower and ~~the~~ its Restricted Subsidiaries under this Agreement and (4) ~~payments~~ amounts that would otherwise be permitted to be paid ~~directly by Holdings, the Borrowers or the Restricted Subsidiaries~~ pursuant to Section ~~6.09(iii~~6.08(iii) or (xxi); (C) the proceeds of which shall be used by Holdings ~~or any Intermediate Holdings to pay~~ (or ~~to make Restricted Payments to allow~~ any direct or indirect parent ~~of Holdings~~ thereof) or any Intermediate Parent to ~~pay)~~ pay franchise and similar Taxes, and other fees and expenses, required to maintain its ~~organizational~~ corporate or other legal existence; (D) ~~the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E)~~ to finance any Investment made by Holdings or any Intermediate Parent that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04 ~~other than Section 6.04(m~~(including required payments of Earn-Outs in connection therewith); provided that (1A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2B) Holdings or any Intermediate ~~Holdings~~ Parent shall, immediately following the closing thereof, cause (x1) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to ~~Holdings,~~ the ~~Borrowers~~ Borrower or ~~the~~ its Restricted Subsidiaries or (y2) the Person formed or acquired to merge into or consolidate with ~~Holdings,~~ the ~~Borrowers~~ Borrower or any of the Restricted Subsidiaries to the extent such ~~merger, amalgamation~~ merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings (or any direct or indirect parent thereof) or any Intermediate Parent to pay) fees and expenses related to any equity or debt offering not prohibited by this Agreement; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings (or any direct or indirect parent company of ~~Holdings~~ Holdings) or any Intermediate Parent to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, any Intermediate Parent, or the ~~Borrowers~~ Borrower and ~~the~~ its Restricted Subsidiaries; and (G) the proceeds of which shall be used ~~by Holdings or any Intermediate Holdings to pay (or~~ to make ~~Restricted Payments to allow any direct or indirect parent thereof to pay~~payments permitted by clause (b)(iv) ~~fees~~ and ~~expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement~~ (~~whether or not such offering or other transaction is successful)~~b)(v) of Section 6.07; (~~viii~~vii) in addition to the foregoing Restricted Payments, the ~~Borrowers and any Intermediate Holdings~~ Borrower may make additional Restricted Payments to any Intermediate Holdings and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings DebtPayments, in an aggregate amount, when taken together with the aggregate amount of loans and advances ~~to Holdings~~ previously made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (~~viii~~vii), not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as no Event of Default shall have occurred and be continuing (or, in the case of the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h) or (i)), the Available Amount that is Not Otherwise Applied as in effect immediately prior to the time of making of such Restricted Payment, plus (CB) the Available Equity Amount that is Not Otherwise ~~Applied~~Applied as in effect immediately prior to the time of making of such Restricted Payment; provided that any Restricted Payment made in reliance on preceding clause (A), to the extent made using the Retained ECF Basket, shall be subject to (I) no Event of Default having occurred and be continuing or resulting therefrom and (II) before and after giving Pro Forma Effect to such Restricted Payment, on a Pro Forma Basis, the Total Net Leverage Ratio being less than or equal to 4.00 to 1.00 as of the end of the mostly recently ended Test Period as of such time (in each case, tested at the time of declaration of such Restricted Payment); (ixviii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed therebycontributions; (xix) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; (xix) Restricted Payments to Holdings or any Intermediate Parent, which Holdings or any Intermediate Parent may ~~(a)~~ use to pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms); (xii) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiiixi) payments made or expected to be made by Holdings, any Intermediate Parent, the Borrower or any Restricted Subsidiary in respect of withholding or similar ~~taxes~~ Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled ~~Affiliates, Immediate Family Members~~ Affiliates or ~~Permitted Transferees~~permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to 5.00 to 1.0 and (B) there is no continuing Event of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvixii) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a any Intermediate Parent, the Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (~~xvii~~xiii) so long as no Event of Default shall have occurred and be continuing or would result therefrom, the annual declaration and payment of Restricted Payments to Holdings’, (or the payment of Restricted Payments to any direct or indirect parent company of Holdings) to fund a payment of dividends on Holdings’ common stock, of up to $75,000,000; (xiv) [reserved]; (xv) so long as no Event of Default shall have occurred and be continuing or would result therefrom, additional Restricted Payments in ~~respect~~ an amount not to exceed the greater of ~~JV Preferred Equity Interests issued~~ $50,000,000 and 40.0% of Consolidated EBITDA on a Pro Forma Basis for the most recently ended Test Period; (xvi) the Borrower and its Restricted Subsidiaries may make Restricted Payments in ~~accordance with Section 6.01~~ securities or other property (other than cash) to Holdings and any Intermediate Parent so long as the relevant assets are promptly contributed to the ~~extent~~ Borrower or a Restricted Subsidiary; (xvii) additional Restricted Payments; provided that after giving effect to such ~~dividends are included in~~ Restricted Payment (A) on a Pro Forma Basis, the ~~calculation~~ Total Net Leverage Ratio is equal to or less than 3.50 to 1.00 and (B) no Event of ~~Consolidated Interest Expense~~Default exists or would result therefrom; and (xviii) ~~Holdings, Intermediate Holdings,~~ the purchase of (x) any ~~Borrower or~~ Permitted Equity Derivatives in connection with the issuance of any ~~Restricted Subsidiary may make Restricted Payments in cash~~ Convertible Debt Securities permitted under Section 6.01 (and the replacement of any such Permitted Equity Derivatives) and (y) Equity Interests of Holdings with proceeds of any Convertible Debt Security issued no more than 365 days prior to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such ~~reclassification~~purchase, (xix) the unwinding, settlement or termination of any Permitted Equity Derivatives; provided, that the entry into such ~~Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with~~ Permitted Equity Derivative was not prohibited by this ~~Section 6.08(a)~~Agreement. (b) ~~Neither Holdings~~The Borrower will not, ~~Intermediate Holdings nor any Borrower will, nor~~ and will ~~they~~ not permit any Restricted Subsidiary to, and Holdings will not permit Public Sector to, make or ~~pay~~agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoing, in each case, on or prior to the date that is one year prior to the scheduled maturity of such Junior Financing, except: (i) payment of regularly scheduled interest and principal ~~payments as~~payments, ~~in the form~~ mandatory offers to repay, repurchase or redeem, mandatory prepayments of principal premium and interest, and payment of fees, expenses and ~~when due in~~ indemnification obligations, with respect ~~of any Indebtedness~~to such Junior Financing, other than payments in respect of any Junior Financing prohibited by the subordination provisions thereof; (ii) refinancings of Indebtedness to the extent permitted by Section 6.01; (1) the conversion of any Junior Financing ~~Indebtedness with proceeds~~ to Equity Interests (other than Disqualified Equity Interests) of ~~other~~ Holdings or any of its direct or indirect parent companies or any Intermediate Parent and (2) any payment that is intended to prevent any Junior Financing ~~Indebtedness permitted~~ from being treated as an “applicable high yield discount obligation” within the meaning of Section 163(i)(1) of the Code; (iv) prepayments, redemptions, purchases, defeasances and other payments in respect of any Junior Financing prior to ~~be in~~the date that is one year prior to its scheduled maturity; provided that after giving effect to such prepayments, redemptions, purchases, defeasances or other payments (A) on a Pro Forma Basis, the Total Net Leverage Ratio is equal to or less than 3.50 to 1.00 and (B) no Event of Default exists or would result therefrom; (v)

Appears in 1 contract

Sources: Credit Agreement (Tenable Holdings, Inc.)

Restricted Payments; Certain Payments of Indebtedness. (a) Neither Holdings, ~~Intermediate Holdings~~ the Company nor any Borrower will, nor will they permit any Restricted Subsidiary, to pay or make, directly or indirectly, any Restricted Payment, except: (i) Each Borrower and each Restricted Subsidiary may make Restricted Payments to ~~Intermediate Holdings~~the Company, a Borrower or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a wholly-owned Subsidiary of a Borrower, such Restricted Payment is made to ~~Intermediate Holdings~~the Company, such Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests; (ii) payments or distributions to satisfy dissenters’ or appraisal rights, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of assets ~~(other than with respect to the Transactions)~~ that complies with Section 6.03; (iii) ~~Holdings and~~ Holdings, any Intermediate ~~Holdings~~ Parent and the Company may declare and make dividend payments or other distributions payable solely in the Equity Interests of such Person; (iv) Restricted Payments made in connection with or in order to consummate (a) the Transactions (including, without limitation, (A) cash payments to holders of Equity Interests of under Target Stock Plans as provided by the Acquisition Agreement, (B) cash payments to holders of Restricted Cash Awards upon vesting, (C) Restricted Payments (x) to direct and indirect parent companies of ~~Holdings~~ the Company to finance a portion of the consideration for the Acquisition and (Cy) ~~other payments~~ to holders of Equity Interests of the Target (immediately prior to giving effect to the Acquisition) in connection with, or as a result of, their exercise of appraisal rights and the settlement of any claims or actions (whether actual, contingent or potential) with respect thereto, in each case, with respect to ~~working capital adjustments~~ the Transactions and (D) other dividends by the Target that have a record date before the Effective Date, but a payment date on or ~~otherwise~~after the Effective Date, to the extent contemplated by the Acquisition Agreement~~); provided that~~ ) and/or (b) the ~~earnout contemplated by Exhibit F to~~ Original Transactions (including those transactions set forth in clauses (A) through (D) of Section 6.08(a)(iv) of the ~~Acquisition Agreement shall not be permitted on the basis of this clause (iv)~~Existing Term Loan Credit Agreement); (v) repurchases of Equity Interests in Holdings (or Restricted Payments by Holdings to allow repurchases of Equity Interest in any direct or indirect parent of Holdings) or ~~Intermediate Holdings~~ the Company deemed to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price of such stock options or warrants or other incentive interest; (vi) Restricted Payments to Holdings which Holdings may use to redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted stock units or stock appreciation rights ~~or other equity-linked interests~~ issued with respect to any of such Equity Interests) (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests) held by current or former officers, managers, consultants, directors and employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), ~~Holdings~~the Company, the Borrowers and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan~~, profits interest~~, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that the aggregate amount of Restricted Payments permitted by this clause (vi) after the Effective Date, together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu thereof, shall not exceed the sum of (~~A) the~~ A)the greater of $~~15.0 million~~ 250,000,000 and ~~5.0~~2.5% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of ~~Holdings (which subsequent to an IPO shall be increased to~~ the ~~greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings)~~Company, (B) the amount in any fiscal year equal to the cash proceeds of key man life insurance policies received by ~~Holdings~~the Company, the Borrowers or the Restricted Subsidiaries after the Effective ~~Date,~~ Date and (C) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of the Company or Holdings (to the extent contributed to ~~Holdings~~ the Company in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to ~~Holdings~~the Company, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests are contributed to ~~Holdings~~ the Company in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket ~~hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision~~hereunder; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year may be carried forward to succeeding fiscal years; (vii) any Intermediate Parent or the Company may make Restricted Payments in cash to Holdings and any Intermediate Parent and, where applicable, Holdings and such Intermediate Parent may make Restricted Payments in cash: (A) ~~without duplication of any Permitted Tax Distribution,~~ the proceeds of which shall be used by Holdings or any Intermediate ~~Holdings~~ Parent to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for any taxable period for which ~~Holdings~~ the Company and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of ~~Holdings~~ the Company is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of ~~Holdings~~ the Company and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (a)(vii)(A) shall not exceed the Tax liability that ~~Holdings~~ the Company and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of ~~Holdings~~ the Company may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to ~~Holdings, the Borrowers~~ Company or ~~their~~ its Restricted Subsidiaries; (B) the proceeds of which shall be used by Holdings or any Intermediate ~~Holdings~~ Parent to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof or any Intermediate ~~Holdings~~Parent) attributable to the ownership or operations of Holdings, the Company, the Borrowers and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of ~~Holdings~~the Company, the Borrowers and the Restricted Subsidiaries and (y) otherwise permitted to be paid by ~~Holdings~~the Company, the Borrowers and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by ~~Holdings~~the Company, the Borrowers or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x); (C) the proceeds of which shall be used by Holdings or any Intermediate ~~Holdings~~ Parent to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence; (D) the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(m); provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) Holdings or any Intermediate ~~Holdings~~ Parent shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to ~~Holdings~~the Company, the Borrowers or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with ~~Holdings~~the Company, the Borrowers or any of the Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of ~~Holdings~~the Company, the Borrowers and the Restricted Subsidiaries; and (G) the proceeds of which shall be used by Holdings or any Intermediate ~~Holdings~~ Parent to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful); (viii) in addition to the foregoing Restricted Payments, the Borrowers and any Intermediate ~~Holdings~~ Parent may make additional Restricted Payments to any Intermediate ~~Holdings~~ Parent and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate ~~Holdings~~ Parent to make any payments in respect of any Permitted Holdings Debt, in an aggregate amount, when taken together with the aggregate amount of (1) prepayments, redemptions, purchases, defeasances and other payments in respect of Junior Financings made pursuant to Section 6.08(b)(iv) and (2) loans and advances to Holdings made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii), not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $~~75.0 million~~ 1,000,000,000 and 2510% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as no Event of Default shall have occurred and be continuing (or, in the case of the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h) or (i)), the Available Amount that is Not Otherwise Applied plus (C) the Available Equity Amount that is Not Otherwise Applied; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock ~~options and~~ options, the vesting of restricted stock and restricted stock units, and the payment of Restricted Cash Awards; (xi) Holdings or the Company may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment of Restricted Payment on Holdings’ or the Company’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to ~~Intermediate Parent or~~ Parent, other than public offerings with respect to ~~Intermediate Parent’s or~~ Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of ~~Intermediate Parent or~~ Parent at the time of such IPO; (xiii) payments made or expected to be made by Holdings, the Company, any Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to ~~5.00~~ 3.75 to 1.0 and (B) there is no continuing Event of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, the Company, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than (A) Unrestricted Subsidiaries, the primary assets of which are Permitted ~~Investments~~Investments or (B) Equity Interests of VMware);; and (~~xvii~~xvi) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make Restricted Payments in cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (~~xviii~~xvi) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (~~xviii~~xv), in a manner that otherwise complies with this Section 6.08(a). (b) Neither Holdings, ~~Intermediate Holdings~~ the Company nor any Borrower will, nor will they permit any Restricted Subsidiary to, make or pay, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, except: (i) payment of regularly scheduled interest and principal payments as, in the form of payment and when due in respect of any Indebtedness, other than payments in respect of any Junior Financing prohibited by the subordination provisions thereof; (ii) refinancings of Junior ~~Financing~~ Indebtedness with proceeds of other Junior ~~Financing~~ Indebtedness permitted to be inincurred under Section 6.01; (iii) the conversion of any

Appears in 1 contract

Sources: Credit Agreement (Dell Technologies Inc)

Restricted Payments; Certain Payments of Indebtedness. (a) ~~Neither Holdings~~The Issuer will not, ~~Intermediate Holdings nor any Borrower will, nor~~ and will ~~they~~ not permit any Restricted ~~Subsidiary~~Subsidiary to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, except: (i) ~~Each Borrower and~~ each Restricted Subsidiary may make Restricted Payments to ~~Intermediate Holdings, a Borrower~~ (x) the Issuer or any ~~other~~ Restricted Subsidiary; , provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a ~~wholly-owned Subsidiary of a Borrower~~Wholly Owned Subsidiary, such Restricted Payment is made to ~~Intermediate Holdings, such Borrower~~an Issuer, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity ~~Interests~~Interests and (y) Holdings to the extent the proceeds of such Restricted Payments are contributed or loaned or advanced to another Restricted Subsidiary; (ii) ~~payments or distributions to satisfy dissenters’ or appraisal rights, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of assets (other than with respect to~~ the ~~Transactions) that complies with Section 6.03; (iii) Holdings~~ Issuer and ~~any Intermediate Holdings~~ each Restricted Subsidiary may declare and make dividend payments or other distributions payable solely in the Equity Interests of such Person; (iviii) Restricted Payments made in connection with ~~or in order to consummate~~ the Transactions (including, without limitation, (A) cash payments to holders of Equity Interests of Target as provided by the Acquisition Agreement, (B) Restricted Payments to direct and indirect parent companies of Holdings to finance a portion of the consideration for the Acquisition and (C) other payments with respect to working capital adjustments or otherwise, to the extent contemplated by the Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv))Transactions; (viv) repurchases of Equity Interests in Holdings (or ~~Restricted Payments by Holdings to allow repurchases of Equity Interest in~~ any direct or indirect parent of Holdings) ), any Intermediate Parent, the Issuer or ~~Intermediate Holdings~~ any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants ~~or other incentive interests~~ if such Equity Interests represent a portion of the exercise price or withholding taxes payable in connection with the exercise of such ~~stock~~ options or warrants or other incentive ~~interest~~interests; (viv) Restricted Payments to Holdings or any Intermediate Parent, which Holdings or such Intermediate Parent may use to redeem, acquire, ~~retire~~ retire, repurchase or ~~repurchase~~ settle its Equity Interests (or any options, warrants, restricted stock ~~units~~ or stock appreciation rights or ~~other equity-linked interests~~ similar securities issued with respect to any of such Equity Interests) or Indebtedness or to service Indebtedness incurred by Holdings or any Intermediate Parent or any direct or indirect parent companies of Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest or Indebtedness (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity ~~Interests)~~ Interests or their Indebtedness or to service Indebtedness incurred by Holdings or an Intermediate Parent to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or Indebtedness or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests or Indebtedness), held directly or indirectly by current or former officers, managers, consultants, ~~directors and~~ members of the Board of Directors, employees or independent contractors (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), ~~Holdings~~any Intermediate Parent, the ~~Borrowers~~ Issuer and ~~the~~ its Restricted Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, ~~profits interest,~~ employment termination agreement or any other employment agreements or equity holders’ ~~agreement; provided that the~~ agreement in an aggregate amount ~~of Restricted Payments permitted by this clause (vi)~~ after the ~~Effective Date,~~ Issue Date together with the aggregate amount of loans and advances to Holdings or an Intermediate Parent made pursuant to Section ~~6.04(m~~5.04(l) in lieu ~~thereof, shall~~ of Restricted Payments permitted by this clause (v) not to exceed ~~the sum of (A) the greater~~ $18,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years subject to a maximum of $~~15.0 million and 5.0% of Consolidated EBITDA for the most recently ended Test Period~~ 42,000,000 in any ~~fiscal~~ calendar year ~~of Holdings~~ (~~which subsequent to an IPO shall be increased~~ without giving effect to the ~~greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings~~following proviso)~~, (B) the~~ ; provided that such amount in any ~~fiscal~~ calendar year ~~equal~~ may be increased by (1) an amount not to exceed the cash proceeds of key man life insurance policies received by ~~Holdings,~~ the ~~Borrowers~~ Issuer (or by Holdings (or any direct or indirect parent thereof) or an Intermediate Parent and contributed to the Issuer) or the Restricted Subsidiaries after the ~~Effective~~ Issue Date, or (C2) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests amount of any ~~direct or indirect Parent Entity or management investment vehicle~~bona fide cash bonuses otherwise payable to members of the Board of Directors, ~~in each case to any future~~consultants, ~~present or former~~ officers, employees~~, directors~~, managers or ~~consultants~~ independent contractors of Holdings, ~~any of its Subsidiaries~~ an Intermediate Parent, the Issuer or any ~~direct~~ Restricted Subsidiary that are foregone in return for the receipt of Equity Interests, the Fair Market Value of which is equal to or ~~indirect Parent Entity or management investment vehicle that occurs after~~ less than the ~~Effective Date, to the extent the cash proceeds from the sale~~ amount of such ~~Equity Interests are contributed to Holdings~~ cash bonuses, which, if not used in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year year, may be carried forward to ~~succeeding~~ any subsequent fiscal ~~years~~year; provided further that cancellation of Indebtedness owing to the Issuer or any Restricted Subsidiary from members of the Board of Directors, consultants, officers, employees, managers or independent contractors (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings, any Intermediate Parent, the Issuer or any Restricted Subsidiary in connection with a repurchase of Equity Interests of Holdings, any Intermediate Parent or the Issuer will not be deemed to constitute a Restricted Payment for purposes of this Section 5.07 or any other provisions of this Indenture. (vi) other Restricted Payments made by the Issuer; provided that, at the time of making such Restricted Payments, (x) no Event of Default shall have occurred and be continuing or would result therefrom and (y) on a Pro Forma Basis, the Senior Secured Net Leverage Ratio is equal to or less than 6.00 to 1.00 for the most recently ended Test Period; (vii) ~~Holdings~~ the Issuer and any ~~Intermediate Holdings~~ Restricted Subsidiary may make Restricted Payments in ~~cash~~cash to the Issuer, Holdings and any Intermediate Parent: (A) ~~without duplication of any Permitted Tax Distribution,~~ as distributions by the ~~proceeds of which shall be used by Holdings~~ Issuer or any ~~Intermediate~~ Restricted Subsidiary to the Issuer or Holdings ~~to pay~~ (or ~~to make Restricted Payments to allow~~ any direct or indirect parent of Holdings) in amounts required for Holdings (or any direct or indirect parent of Holdings) to ~~pay), for~~ pay with respect to any taxable period ~~for~~ in which ~~Holdings~~ the Issuer and/or any of its Subsidiaries ~~are members~~ is a member of (or the Issuer is a disregarded entity for U.S. federal income tax purposes wholly owned by a member of) a consolidated, ~~combined~~ combined, unitary or ~~unitary~~ similar tax group (a “Tax Group”) for U.S. federal and/or applicable ~~state~~foreign, state or local ~~or foreign~~ income ~~Tax~~ tax purposes of which a Holdings or any other direct or indirect parent of Holdings is the common ~~parent (a “Tax Group”)~~parent, ~~the portion of any U.S. federal, state, local or foreign~~ Taxes ~~(as applicable) of such Tax Group for such taxable period~~ that are attributable to the ~~income~~ taxable income, revenue, receipts, gross receipts, gross profits, capital or margin of ~~Holdings~~ the Issuer and/or its Subsidiaries; provided ~~that Restricted Payments~~ that, for each taxable period, the amount of such payments made ~~pursuant to this clause (a)(vii)(A)~~ in respect of such taxable period in the aggregate shall not exceed the ~~Tax liability~~ amount of such Taxes that ~~Holdings and/or~~ the Issuer and its Subsidiaries ~~(as applicable)~~ would have ~~incurred were such Taxes determined as~~ been required to pay if ~~such entity(ies)~~ they were a stand-alone ~~taxpayer or a~~ Tax Group with the Issuer as the corporate common parents of such stand-alone ~~group; and provided~~Tax Group (collectively, further, that Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers or their Restricted Subsidiaries“Tax Distributions”); (B) the proceeds of which shall be used by Holdings or any Intermediate ~~Holdings~~ Parent to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, ~~accounting, tax reporting~~ accounting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by ~~directors~~ members of the Board of Directors or ~~officers~~ officers, employees, directors, managers, consultants or independent contractors of Holdings (or any parent ~~thereof~~ thereof) or any Intermediate ~~Holdings)~~ Parent attributable to the ownership or operations of Holdings, the ~~Borrowers~~ Issuer and ~~the~~ its Restricted Subsidiaries, (3) fees and expenses (x) due and payable by ~~any of Holdings,~~ the ~~Borrowers~~ Issuer and ~~the~~ its Restricted Subsidiaries and (y) otherwise permitted to be paid by ~~Holdings,~~ the ~~Borrowers~~ Issuer and ~~the~~ any Restricted Subsidiaries under this ~~Agreement and~~ Indenture, (4) ~~payments~~ to the extent constituting a Restricted Payment, amounts due and payable pursuant to any investor management agreement entered into with the Sponsor after the Issue Date in an aggregate amount not to exceed 2.5% of Consolidated EBITDA for the most recently ended Test Period at the time of such Restricted Payment and (5) amounts that would otherwise be permitted to be paid ~~directly by Holdings, the Borrowers or the Restricted Subsidiaries~~ pursuant to Section ~~6.09(iii~~5.08 (iii) or (xxi); (C) the proceeds of which shall be used by Holdings (or any Intermediate ~~Holdings to pay (~~Parent or ~~to make Restricted Payments to allow~~ any direct or indirect parent of ~~Holdings~~ Holdings) to ~~pay)~~ pay franchise and similar Taxes, and other fees and expenses, required to maintain its ~~organizational~~ corporate or other legal existence; (D) ~~the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E)~~ to finance any Investment made by Holdings or any Intermediate Parent that, if made by the Issuer, would be permitted to be made pursuant to Section ~~6.04 other than Section 6.04(m)~~5.04; provided that (1A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2B) Holdings (or any direct or indirect parent thereof) or any Intermediate ~~Holdings~~ Parent shall, immediately following the closing thereof, cause (x1) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section ~~6.04(b~~5.04(b)) to be contributed to ~~Holdings,~~ the ~~Borrowers~~ Issuer or ~~the~~ its Restricted Subsidiaries or (y2) the Person formed or acquired to merge into or amalgamate or consolidate with ~~Holdings,~~ the ~~Borrowers~~ Issuer or any of the Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section ~~6.03~~5.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections ~~5.11~~ 4.13 and ~~5.12~~4.14; (E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof or any Intermediate Parent thereof to pay) fees and expenses related to any equity or debt offering not prohibited by this Indenture; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings or any Intermediate Parent thereof to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the ~~Borrowers~~ Issuer and ~~the~~ its Restricted Subsidiaries; and (G) the proceeds of which shall be used ~~by Holdings or any Intermediate Holdings to pay (or~~ to make ~~Restricted Payments to allow any direct or indirect parent thereof to pay~~payments permitted by clause (b)(iv) ~~fees~~ and ~~expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by~~ (b)(v) of this ~~Agreement (whether or not such offering or other transaction is successful)~~Section 5.07; (viii) in addition to the foregoing Restricted ~~Payments, the Borrowers~~ Payments and any Intermediate Holdings may make additional Restricted Payments to any Intermediate Holdings and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt, in an aggregate amount, when taken together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii), not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as no Event of Default shall have occurred and be continuing ~~(or~~or would result therefrom, the Issuer may make additional Restricted Payments, in an aggregate amount not to exceed the ~~case~~ sum of ~~the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a),~~ (~~b), (h~~A) ~~or (i)),~~ the Available Amount that is Not Otherwise Applied as in effect immediately prior to the time of making of such Restricted Payment, so long as on a Pro Forma Basis, the Total Net Leverage Ratio does not exceed 7.50 to 1.00 for the most recently ended Test Period, plus (CB) the Available Equity Amount that is Not Otherwise ~~Applied~~Applied as in effect immediately prior to the time of making of such Restricted Payment; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the ~~Lenders~~ Holders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; (xi) payments to Holdings ~~may~~ or any Intermediate Parent to permit it to (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition or Permitted Change of Control (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) payments made or expected to be made by Holdings, any Intermediate Parent, the Issuer or any Restricted Subsidiary in respect of withholding or similar Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar Taxes; (xiii) [reserved]; (xiv) the declaration and payment of a Restricted Payment on Holdings’ or the Issuer’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to ~~sum of (a)~~ 6.0% per annum of the net cash proceeds of such IPO received by or contributed to ~~Intermediate Parent or Parent~~the Issuer, other than public offerings with respect to ~~Intermediate Parent’s or Parent~~the IPO Entity’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiii) payments made or expected to be made by Holdings, any Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to 5.00 to 1.0 and (B) there is no continuing Event of DefaultS-8; (xv) Restricted Payments ~~constituting or otherwise~~ made in connection with ~~or relating to~~ any ~~IPO Reorganization Transactions (limited, in the case~~ Permitted Change of ~~payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments);~~Control; and (xvi) ~~the distribution, by dividend~~ any distributions or ~~otherwise,~~ payments of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make Restricted Payments in cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a)Securitization Fees. (b) ~~Neither Holdings~~The Issuer will not, ~~Intermediate Holdings nor any Borrower will, nor~~ and will ~~they~~ not permit any Restricted Subsidiary to, make or ~~pay~~agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoing, except: (i) payment of regularly scheduled interest and principal ~~payments as~~payments, ~~in the form~~ mandatory offers to repay, repurchase or redeem, mandatory prepayments of principal premium and interest, and payment of fees, expenses and ~~when due in~~ indemnification obligations, with respect ~~of any Indebtedness~~to such Junior Financing, other than payments in respect of any Junior Financing prohibited by the subordination provisions thereof; (ii) refinancings of Indebtedness to the extent permitted by Section 5.01; (iii) the conversion of any Junior Financing ~~Indebtedness with proceeds~~ to Equity Interests (other than Disqualified Equity Interests) of ~~other~~ Holdings or any of its direct or indirect parent companies or any Intermediate Parent or the Issuer, and any payment that is intended to prevent any Junior Financing ~~Indebtedness permitted~~ from being treated as an “applicable high yield discount obligation” within the meaning of Section 163(i)(1) of the Code; (iv) prepayments, redemptions, repurchases, defeasances and other payments in respect of Junior Financings prior to their scheduled maturity in an aggregate amount, not to exceed the sum of (A) an amount at the time of making any such prepayment, redemption, repurchase, defeasance or other payment and together with any other prepayments, redemptions, repurchases, defeasances and other payments made utilizing this subclause (A) not to exceed the greater of (1) $60,000,000 and (2) 15% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such prepayment, redemption, purchase, defeasance or other payment plus (B) so long as (1) no Event of Default shall have occurred and shall be incontinuing or would result therefrom and (2) on a Pro Forma Basis, the Total Net Leverage Ratio does not exceed 7.50 to 1.00 for the most recently ended Test Period, (x) the Available Amount that is Not Otherwise Applied as in effect immediately prior to the time of making of such Investment plus (y) the Available Equity Amount that is Not Otherwise Applied as in effect immediately prior to the time of making of such Investment; (v) payments made in connection with the Transactions; (vi)

Appears in 1 contract

Sources: Indenture (Sotera Health Co)

Appears in 1 contract

Sources: Term Loan Credit Agreement (Viavi Solutions Inc.)

Restricted Payments; Certain Payments of Indebtedness. (a) ~~Neither~~ None of Holdings, ~~Intermediate Holdings nor~~ the Parent Borrower, any Subsidiary Term Borrower or any Foreign Subsidiary Borrower will, nor will they permit any ~~Restricted Subsidiary~~Subsidiary to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, except: (i) ~~Each Borrower~~ Holdings may declare and ~~each Restricted Subsidiary may make Restricted Payments~~ pay dividends with respect to ~~Intermediate Holdings, a Borrower or any other Restricted Subsidiary; provided that~~ its Equity Interests payable solely in the case of any such Restricted Payment by a Restricted Subsidiary that is not a wholly-owned Subsidiary of a Borrower, such Restricted Payment is made to Intermediate Holdings, such Borrower, any Restricted Subsidiary and to each other owner of additional Equity Interests of ~~such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests~~Holdings; (ii) ~~payments or distributions to satisfy dissenters’ or appraisal rights, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of assets (other than~~ Subsidiaries may declare and pay dividends ratably with respect to ~~the Transactions) that complies with Section 6.03~~their capital stock; (iii) the Parent Borrower may make payments to Holdings to permit it to make, and ~~any Intermediate~~ Holdings may ~~declare~~ make, Restricted Payments, not exceeding $5,000,000 during the term of this Agreement, in each case pursuant to and ~~make dividend payments~~ in accordance with stock option plans, equity purchase programs or agreements or other ~~distributions payable solely~~ benefit plans, in each case for management or employees or former employees of the ~~Equity Interests of such Person~~Parent Borrower and the Subsidiaries; (iv) ~~Restricted Payments made~~ the Parent Borrower may pay dividends to Holdings at such times and in ~~connection with or in order~~ such amounts as shall be necessary to ~~consummate the Transactions~~ permit Holdings to discharge and satisfy its obligations that are permitted hereunder (~~including, without limitation,~~ including (A) ~~cash payments~~ state and local taxes and other governmental charges, and administrative and routine expenses required to ~~holders~~ be paid by Holdings in the ordinary course of ~~Equity Interests of Target as provided by the Acquisition Agreement,~~ business and (B) ~~Restricted Payments~~ cash dividends payable by Holdings in respect of Qualified Holdings Preferred Stock issued pursuant to ~~direct~~ clauses (b) and ~~indirect parent companies of Holdings to finance a portion~~ (c) of the ~~consideration for the Acquisition and (C) other payments with respect to working capital adjustments or otherwise~~definition thereof, ~~to the extent contemplated~~ provided that dividends payable by the ~~Acquisition Agreement); provided that the earnout contemplated by Exhibit F~~ Parent Borrower to ~~the Acquisition Agreement shall not be permitted on the basis of~~ Holdings pursuant to this clause (iv) in order to satisfy cash dividends payable by Holdings in respect of Qualified Holdings Preferred Stock issued pursuant to clause (c) of the definition thereof may only be made after the fiscal year ending December 31, 2006 with Excess Cash Flow not otherwise required to be used to prepay Term Loans pursuant to Section 2.11(e)); (v) ~~repurchases of Equity Interests in Holdings (or Restricted Payments by~~ Parent Borrower may make payments to Holdings to ~~allow repurchases of Equity Interest in any direct or indirect parent of Holdings) or Intermediate Holdings deemed~~ permit it to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price of such stock options or warrants or other incentive interest; (vi) Restricted Payments to Holdings which make, and Holdings may use to redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted stock units or stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests) held by current or former officers, managers, consultants, directors and employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), Holdings, the Borrowers and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, profits interest, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that the aggregate amount of Restricted Payments payments permitted by this clause (vi) after the Effective Date, together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu thereof, shall not exceed the sum of (A) the greater of $15.0 million and 5.0% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings (which subsequent to an IPO shall be increased to the greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of HoldingsSections 6.09(d), (~~B) the amount in any fiscal year equal to the cash proceeds of key man life insurance policies received by Holdings, the Borrowers or the Restricted Subsidiaries after the Effective Date~~e), (~~C) the cash proceeds from the sale of Equity Interests~~ f), (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (Ag) and (B) above for any fiscal year may be carried forward to succeeding fiscal years; (vii) Holdings and any Intermediate Holdings may make Restricted Payments in cash: (A) without duplication of any Permitted Tax Distribution, the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (a)(vii)(A) shall not exceed the Tax liability that Holdings and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers or their Restricted Subsidiaries; (B) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof or any Intermediate Holdings) attributable to the ownership or operations of Holdings, the Borrowers and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of Holdings, the Borrowers and the Restricted Subsidiaries and (y) otherwise permitted to be paid by Holdings, the Borrowers and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the Borrowers or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x); (C) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence; (D) the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(mh); provided ~~that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) Holdings or any Intermediate Holdings shall~~that, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to Holdings, the Borrowers or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with Holdings, the Borrowers or any of the Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrowers and the Restricted Subsidiaries; and (G) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful); (viii) in addition to the foregoing Restricted Payments, the Borrowers and any Intermediate Holdings may make additional Restricted Payments to any Intermediate Holdings and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt, in an aggregate amount, when taken together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii), not to exceed the sum of (A) an amount at the time of ~~making any~~ such ~~Restricted Payment~~ payment and ~~together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period~~ after giving ~~Pro Forma Effect to the making of such Restricted Payment plus (B) so long as~~ effect thereto, no Default or Event of Default shall have occurred and be continuing ~~(or~~and Holdings and the Parent Borrower are in compliance with Section 6.12; provided, ~~in the case~~ further, that any payments that are prohibited because of the ~~use~~ immediately preceding proviso shall accrue and may be made as so accrued upon the curing or waiver of ~~the Starter Basket that is Not Otherwise Applied~~such Default, no Event of Default ~~under Section 7.01(a), (b), (h)~~ or (i)), the Available Amount that is Not Otherwise Applied plus (C) the Available Equity Amount that is Not Otherwise Applied; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; (xi) Holdings may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiii) payments made or expected to be made by Holdings, any Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to 5.00 to 1.0 and (B) there is no continuing Event of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expensenoncompliance; and (~~xviii~~vi) ~~Holdings, Intermediate Holdings, any~~ Parent Borrower ~~or any Restricted Subsidiary~~ may make ~~Restricted Payments in cash~~ payments to Holdings with the proceeds of Incremental Term Loans to ~~permit Holdings~~ the extent applied pursuant to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a proposed Restricted Payment clause (~~or a portion thereof~~b)(vi) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a)below. (b) ~~Neither~~ None of Holdings, ~~Intermediate Holdings nor~~ the Parent Borrower, any Subsidiary Term Borrower or any Foreign Subsidiary Borrower will, nor will they permit any ~~Restricted~~ Subsidiary to, make or ~~pay~~agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any ~~Junior Financing~~Indebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any ~~Junior Financing~~Indebtedness, except: (i) payment of Indebtedness created under the Loan Documents; (ii) payment of regularly scheduled interest and principal payments ~~as, in the form of payment~~ as and when due in respect of any Indebtedness, other than payments in respect of ~~any Junior Financing~~ the subordinated Indebtedness prohibited by the subordination provisions thereof; (iiiii) refinancings of ~~Junior Financing~~ Indebtedness to the extent permitted by Section 6.01; (iv) payment of secured Indebtedness out of the proceeds of any sale or transfer of the property or assets securing such Indebtedness; (v) payment in respect of Capital Lease Obligations in an aggregate amount not to exceed $25,000,000 during the term of this Agreement less the amount of Capital Expenditures made pursuant to Section 6.14(c)(i); (vi) payment in respect of Existing Subordinated Notes using proceeds from (A) the issuance of Replacement Subordinated Notes, (B) any Net Proceeds from an IPO, (C) the portion of Excess Cash Flow not subject to mandatory prepayment pursuant to Section 2.11(e) or (D) any source of cash (to the extent not otherwise prohibited in this Agreement) up to an amount not to exceed (1) if, after giving effect to such payment, the Leverage Ratio would be less than 3.25 to 1.00, $125,000,000, (2) if, after giving effect to such payment, the Leverage Ratio would be less than 4.25 to 1.00 but greater than 3.25 to 1.00, $75,000,000 and (3) otherwise, $25,000,000; and (vii) payment of Indebtedness with ~~proceeds~~ the Net Proceeds of ~~other Junior Financing Indebtedness~~ an issuance of Holdings’ Equity Interests subsequent to an IPO. (c) None of Holdings, the Parent Borrower or any Foreign Subsidiary Borrower will, nor will they permit any Subsidiary to, enter into or be party to, or make any payment under, any Synthetic Purchase Agreement unless (i) in the case of any Synthetic Purchase Agreement related to any Equity Interest of Holdings, the payments required to be made by Holdings are limited to amounts permitted to be inpaid under Section 6.08(a), (ii) in the case of any Synthetic Purchase Agreement related to any Restricted Indebtedness, the payments required to be made by Holdings, the Parent Borrower or the Subsidiaries thereunder are limited to the amount permitted under Section 6.08(b) and (iii) in the case of any Synthetic Purchase Agreement, the obligations of Holdings, the Parent Borrower and the Subsidiaries thereunder are subordinated to the Obligations on terms satisfactory to the Required Lenders.

Appears in 1 contract

Sources: Credit Agreement (Trimas Corp)

Restricted Payments; Certain Payments of Indebtedness. (a) ~~Neither Holdings~~The Parent Borrower will not, ~~Intermediate Holdings nor any Borrower will, nor~~ and will ~~they~~ not permit any Restricted ~~Subsidiary~~Subsidiary to, ~~to pay~~ declare or make, directly or indirectly, any Restricted Payment, except: (i) ~~Each~~ such Borrower may declare and ~~each Restricted Subsidiary may make Restricted Payments~~ pay dividends with respect to Intermediate Holdings, a Borrower or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a wholly-owned Subsidiary of a Borrower, such Restricted Payment is made to Intermediate Holdings, such Borrower, any Restricted Subsidiary and to each other owner of its Equity Interests payable solely in additional shares of ~~such Restricted Subsidiary based on their relative ownership interests of the relevant class of~~ its Equity Interests; (ii) ~~payments or distributions~~ (A) the Parent Borrower may declare and pay Restricted Payments to ~~satisfy dissenters’ or appraisal rights, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of assets~~ Holdings and (~~other than~~ B) Restricted Subsidiaries may declare and pay Restricted Payments with respect to their Equity Interests (provided that if such Restricted Subsidiary is not directly or indirectly wholly owned by the ~~Transactions) that complies with Section 6.03~~Parent Borrower, such dividends must be made on a pro rata basis to the holders of its Equity Interests or on a greater than ratable basis to the extent such greater payments are made solely to the Parent Borrower or a Restricted Subsidiary); (iii) ~~Holdings~~ to the extent constituting Restricted Payments, the Parent Borrower and ~~any Intermediate Holdings~~ its Restricted Subsidiaries may ~~declare and make dividend payments~~ enter into transactions expressly permitted by Sections 6.03, 6.04, 6.05 or ~~other distributions payable solely in the Equity Interests of such Person~~6.07; (iv) ~~Restricted Payments made~~ repurchases by the Parent Borrower of partial interests in its Equity Interests for nominal amounts which are required to be repurchased in connection with ~~or in order to consummate~~ the Transactions (including, without limitation, (A) cash payments to holders of Equity Interests of Target as provided by the Acquisition Agreement, (B) Restricted Payments to direct and indirect parent companies of Holdings to finance a portion of the consideration for the Acquisition and (C) other payments with respect to working capital adjustments or otherwise, to the extent contemplated by the Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv)); (v) repurchases of Equity Interests in Holdings (or Restricted Payments by Holdings to allow repurchases of Equity Interest in any direct or indirect parent of Holdings) or Intermediate Holdings deemed to occur upon exercise of stock options or warrants ~~or other incentive interests if such~~ to permit the issuance of only whole shares of Equity ~~Interests represent a portion of the exercise price of such stock options or warrants or other incentive interest~~Interests; (viv) ~~Restricted Payments to Holdings which Holdings~~ the Parent Borrower may ~~use to redeem~~pay for the repurchase, ~~acquire, retire~~ retirement or ~~repurchase its~~ other acquisition or retirement for value of Equity Interests (of the Parent Borrower or any ~~options, warrants, restricted stock units or~~ Parent Company (including related stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interestssimilar securities) held by ~~current~~ any future, present or former ~~officers~~director, ~~managers~~officer, ~~consultants~~member of management, ~~directors and employees~~ employee or consultant of any Parent Company, the Parent Borrower or any of its Subsidiaries (or ~~their respective spouses, former spouses, successors, executors, administrators~~the estate, heirs, ~~legatees~~ family members, spouse, former spouse, domestic partner or ~~distributees~~former domestic partner of any of the foregoing); provided that (A) at the time of ~~Holdings (or~~ any ~~direct or indirect parent thereof), Holdings, the Borrowers and the Restricted Subsidiaries, upon the death, disability~~such repurchase, retirement or ~~termination~~ other acquisition or retirement for value no Event of ~~employment of any such Person~~ Default has occurred and is continuing or ~~otherwise in accordance with any stock option or stock appreciation rights plan~~would result therefrom, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, profits interest, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that (B) the aggregate amount of Restricted Payments ~~permitted by~~ made under this clause (~~vi) after the Effective Date, together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m~~v) in ~~lieu thereof, shall~~ any Fiscal Year does not exceed (x) $15,000,000 (the ~~sum of~~ “Yearly Limit”) plus (Ay) the ~~greater~~ portion of ~~$15.0 million~~ the Yearly Limit from each of the immediately preceding four (4) Fiscal Years which was not expended by the Parent Borrower for Restricted Payments in such Fiscal Years (the “Carryover Amount” and ~~5.0% of Consolidated EBITDA~~ in calculating the Carryover Amount for any Fiscal Year, the ~~most recently ended Test Period in any~~ Yearly Limit applicable to the previous fiscal ~~year of Holdings (which subsequent to an IPO~~ years shall be ~~increased~~ deemed to ~~the greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period~~ have been utilized first by any Restricted Payments made under this clause (v) in ~~any fiscal year of Holdings),~~ such Fiscal Year) plus (Bz) ~~the~~ an amount ~~in any fiscal year~~ equal to ~~the cash proceeds of key man life insurance policies received by Holdings, the Borrowers or the Restricted Subsidiaries after the Effective Date, (C)~~ the cash proceeds from the sale of Equity Interests ~~(other than Disqualified Equity Interests)~~ to directors, officers, members of ~~Holdings (to the extent contributed to Holdings in the form~~ management, employees or consultants of ~~common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings~~any Parent Company, the ~~cash proceeds from~~ Parent Borrower or of its Subsidiaries (or the ~~sale~~ estate, heirs, family members, spouse or former spouse of any of the foregoing) in such Fiscal Year; (vi) the repurchase of Equity Interests of the Parent Borrower (or of any ~~direct or indirect~~ Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle Company) that occurs ~~after~~ upon the ~~Effective Date~~cashless exercise of stock options, to warrants or other convertible securities as a result of the ~~extent~~ Parent Borrower or such Parent Company accepting such options, warrants or other convertible securities as satisfaction of the ~~cash proceeds from the sale~~ exercise price of such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year may be carried forward to succeeding fiscal yearsInterests; (vii) ~~Holdings~~ the Parent Borrower and its Restricted Subsidiaries may pay (or may make Restricted Payments to allow a Parent Company to pay) cash payments in lieu of fractional shares in connection with (i) any ~~Intermediate Holdings~~ dividend, split or combination of its Equity Interests or any Permitted Acquisition (or similar Investment) or (ii) the exercise of warrants, options or other securities convertible into or exchangeable for Equity Interests of the Parent Borrower or any of its Subsidiaries; (viii) repurchase of Equity Interests deemed to occur upon the non-cash exercise of Equity Interests to pay Taxes; (ix) the Parent Borrower and its Restricted Subsidiaries may make Restricted Payments in ~~cash:~~ an aggregate amount not to exceed the Available Amount; provided that (A) ~~without duplication~~ no Event of Default shall exist or result therefrom and (B) the Total Net Leverage Ratio on a Pro Forma Basis as of the end of the most recent Test Period is less than or equal to 4.50:1.00, in each case determined, at the election of the Parent Borrower, at the time of (x) declaration of such Restricted Payment or (y) the making or consummation, as applicable, of such Restricted Payment; (x) the Parent Borrower and its Restricted Subsidiaries may make Restricted Payments in an aggregate amount in any Fiscal Year not to exceed the greater of $30,000,000 and 20% of Adjusted EBITDA (as determined at the time any such Restricted Payment is made (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period on or prior to the date of determination), it being agreed that the Parent Borrower shall be permitted to carry forward unused amounts to subsequent Fiscal Years; provided that as of the date of any ~~Permitted Tax Distribution~~such Restricted Payment and after giving effect thereto, the ~~proceeds of which~~ Parent Borrower shall be ~~used~~ in compliance with the Financial Covenant on a Pro Forma Basis for the most recently ended Test Period and no Event of Default shall exist or result therefrom; (xi) the Parent Borrower and its Restricted Subsidiaries may make Restricted Payments if the Total Net Leverage Ratio on a Pro Forma Basis as of the end of the most recent Test Period is less than or equal to 3.75:1.00; provided that no Event of Default shall exist or result therefrom; (xii) [Reserved]; (xiii) Restricted Payments made on or after the Closing Date relating to the Transactions; (xiv) any Borrower may make Restricted Payments in an amount not to exceed the amount of Excluded Contributions previously received by ~~Holdings or any Intermediate Holdings to pay~~ the Parent Borrower Not Otherwise Applied; (~~or to~~ xv) [Reserved]; (xvi) the Parent Borrower may make Restricted Payments to ~~allow~~ any direct or indirect parent of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (a)(vii)(A) shall not exceed the Tax liability that Holdings and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers or their Restricted Subsidiaries; (B) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof or any Intermediate Holdings) attributable to the ownership or operations of Holdings, the Borrowers and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of Holdings, the Borrowers and the Restricted Subsidiaries and (y) otherwise permitted to be paid by Holdings, the Borrowers and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the Borrowers or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x); (C) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence; (D) the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E) Parent Company to finance any Investment permitted to be made pursuant to Section ~~6.04 other than Section 6.04(m)~~6.04; provided ~~that~~ that (1A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2B) ~~Holdings or any Intermediate Holdings~~ such Persons shall, ~~immediately~~ promptly following the closing thereof, cause (x1) all property acquired (whether assets or Equity ~~Interests but not including any loans or advances made pursuant to Section 6.04(b)~~Interests) to be contributed to ~~Holdings,~~ the ~~Borrowers~~ Parent Borrower or ~~the~~ a Restricted ~~Subsidiaries~~ Subsidiary or (y2) the merger, amalgamation, consolidation or sale of all or substantially all assets (to the extent permitted in Section 6.03) of the Person formed or acquired ~~to merge~~ into ~~or consolidate with Holdings,~~ the Borrowers or ~~any of the~~ a Restricted ~~Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03)~~ Subsidiary in order to consummate such Investment, in each ~~case~~ case, in accordance with the requirements of ~~Sections 5.11~~ Section 5.10 and 5.12; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrowers and the Restricted SubsidiariesSection 6.04; and (Gxvii) the ~~proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to~~ Parent Borrower its Restricted Subsidiaries may make Restricted Payments ~~to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity offering, debt offering or other non~~from the Net Proceeds of Permitted Sale-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful); (viii) in addition to the foregoing Restricted Payments, the Borrowers and any Intermediate Holdings may make additional Restricted Payments to any Intermediate Holdings and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt, Leaseback Transactions in an aggregate ~~amount, when taken together with the aggregate~~ amount ~~of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii),~~ not to exceed $125,000,000 if the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as no Event of Default shall have occurred and be continuing (or, in the case of the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h) or (i)), the Available Amount that is Not Otherwise Applied plus (C) the Available Equity Amount that is Not Otherwise Applied; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; (xi) Holdings may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiii) payments made or expected to be made by Holdings, any Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) Total Net Leverage Ratio on a Pro Forma ~~Basis,~~ Basis as of the ~~Total Leverage Ratio~~ end of the most recent Test Period is less than or equal to 5.00 to 1.0 and (B) there is no continuing Event of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make Restricted Payments in cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a)4.00:1.00. (b) ~~Neither Holdings, Intermediate Holdings nor any~~ Each Borrower ~~will~~will not, nor will ~~they~~ it permit any of its Restricted ~~Subsidiary~~ Subsidiaries to, make ~~or pay~~any payment, directly or indirectly, ~~any payment or other distribution (whether in cash, securities or other property) of or~~ in respect of ~~principal~~ any purchase, redemption, retirement, acquisition, cancellation or termination of ~~or interest on~~ any Junior ~~Financing~~Indebtedness prior to the scheduled maturity thereof (it being understood that payments of regularly scheduled principal, interest, mandatory prepayments, mandatory offers to purchase, fees, expenses and indemnification obligations shall be permitted) (such Indebtedness, collectively, “Restricted Indebtedness”), or any other payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any ~~Junior Financing~~Restricted Indebtedness or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoing, except: (i) ~~payment~~ refinancings of ~~regularly scheduled interest and principal payments as, in~~ Restricted Indebtedness to the ~~form of payment and when due in respect of any Indebtedness, other than payments in respect of any Junior Financing prohibited~~ extent permitted by ~~the subordination provisions thereof~~Section 6.01; (ii) ~~refinancings~~ payments or other distributions in respect of ~~Junior Financing~~ principal or interest on, or payment or other distribution on account of the purchase, redemption, retirement, acquisition, cancellation or termination of, Restricted Indebtedness, if the Total Net Leverage Ratio on a Pro Forma Basis as of the end of the most recent Test Period is less than or equal to 3.75:1.00 and no Event of Default exists or would result from the making of such payment or distribution; (iii) payments or other distributions in respect of the purchase, redemption, retirement, acquisition, cancellation or termination of, Restricted Indebtedness, in an aggregate amount not to exceed $5,000,000; provided that at the time of any such payment or other distribution, no Event of Default shall exist or result therefrom; (iv) payments or other distributions in respect of the purchase, redemption, retirement, acquisition, cancellation or termination of, Restricted Indebtedness, in an aggregate amount not exceed to the Available Amount; provided that as of the date of any such payment and after giving effect thereto (A) no Event of Default shall exist or result therefrom and (B) the Total Net Leverage Ratio on a Pro Forma Basis as of the end of the most recent Test Period is less than or equal to 4.50:1.00; provided that, with respect to any such purchase, redemption, retirement, acquisition, cancellation or termination of, Restricted Indebtedness the notice of which is irrevocable, such conditions shall, at the election of the Parent Borrower, be tested at the time of the delivery of notice with ~~proceeds~~ respect to such purchase, redemption, retirement, acquisition, cancellation or termination; provided, however, that notwithstanding the foregoing, the absence of ~~other Junior Financing~~ an Event of Default shall be a condition to the consummation of any such purchase, redemption, retirement, acquisition, cancellation or termination; (v) payment-in-kind interest with respect to Restricted Indebtedness permitted by this Agreement; (vi) payments as part of an “applicable high yield discount obligation” catch up payment with respect to Restricted Indebtedness permitted by this Agreement; and (vii) the conversion of any Restricted Indebtedness to Equity Interests (other than Disqualified Equity Interests) or the prepayment of Restricted Indebtedness in an amount not to exceed the amount of Excluded Contributions previously received by the Parent Borrower Not Otherwise Applied. Notwithstanding the foregoing, the making of any dividend, payment or other distribution or the consummation of any irrevocable redemption within one hundred and eighty (180) days after the date of declaration of such dividend, payment or other distribution or giving of the redemption notice, as applicable, will not be inprohibited if, at the date of declaration or notice such dividend, payment or other distribution or redemption would have complied with the terms of this Agreement.

Appears in 1 contract

Sources: Credit Agreement (Krispy Kreme, Inc.)

Restricted Payments; Certain Payments of Indebtedness. (a) Neither ~~Holdings, Intermediate~~ Holdings nor ~~any~~ the Borrower will, nor will they permit any Restricted ~~Subsidiary~~Subsidiary to, ~~to pay~~ declare or make, directly or indirectly, any Restricted Payment, except: (i) ~~Each Borrower and~~ each Restricted Subsidiary may make Restricted Payments to ~~Intermediate Holdings, a~~ the Borrower or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a ~~wholly-owned~~ Wholly Owned Subsidiary of a the Borrower, such Restricted Payment is made to ~~Intermediate Holdings, such~~ the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests; (ii) ~~payments or distributions to satisfy dissenters’ or appraisal rights~~Holdings, ~~pursuant to or in connection with a consolidation, amalgamation, merger or transfer of assets (other than with respect to~~ the ~~Transactions) that complies with Section 6.03; (iii) Holdings~~ Borrower and ~~any Intermediate Holdings~~ each Restricted Subsidiary may declare and make dividend payments or other distributions payable solely in the Qualified Equity Interests of such Person; (iviii) Restricted Payments made ~~in connection with~~ on or ~~in order~~ prior to the Effective Date to consummate the Transactions (including, without limitation, ~~(A) cash payments~~ a dividend or distribution to ~~holders~~ Holdings and Boulevard the proceeds of ~~Equity Interests of Target as provided~~ which will be applied by Boulevard to pay all amounts required to be paid by Boulevard to Seller on the ~~Acquisition Agreement, (B) Restricted Payments~~ Effective Date pursuant to direct and indirect parent companies of Holdings to finance a portion of the consideration for the Acquisition and (C) other payments with respect to working capital adjustments or otherwise, to the extent contemplated by the Acquisition Agreement)~~; provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv))~~; (viv) repurchases of Equity Interests in ~~Holdings (~~Holdings, the Borrower or any Restricted ~~Payments by Holdings to allow repurchases of Equity Interest in any direct or indirect parent of Holdings) or Intermediate Holdings~~ Subsidiary deemed to occur upon exercise of stock options or warrants ~~or other incentive interests~~ if such Equity Interests represent a portion of the exercise price of such ~~stock~~ options or ~~warrants or other incentive interest~~warrants; (viv) ~~Restricted Payments to Holdings which~~ Holdings may ~~use to~~ redeem, acquire, retire or repurchase its Equity Interests (or any ~~options, warrants, restricted stock units~~ options or warrants or stock appreciation rights ~~or other equity-linked interests~~ issued with respect to any of such Equity Interests) (or make Restricted Payments to allow ~~any of Holdings’ direct or indirect parent companies~~ Boulevard to so redeem, retire, acquire or repurchase ~~their~~ its Equity Interests) held by current or former officers, managers, consultants, directors and employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of ~~Holdings (or any direct or indirect parent thereof),~~ Holdings, Boulevard, the ~~Borrowers and~~ Borrower or the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, ~~profits interest,~~ employment termination agreement or any other employment agreements or equity holders’ ~~agreement; provided that the aggregate~~ agreement in an amount ~~of Restricted Payments permitted by this clause~~ (~~vi) after the Effective Date,~~ together with the aggregate amount of loans and advances to Holdings made pursuant to Section ~~6.04(m~~6.04(l) in lieu ~~thereof, shall~~ of Restricted Payments permitted by this clause (v) in such fiscal year) not to exceed ~~the sum of (A) the greater of~~ $~~15.0 million and 5.0% of Consolidated EBITDA for the most recently ended Test Period~~ 5,000,000 in any fiscal year ~~of Holdings~~ (which subsequent to an IPO shall be increased to the greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings), (B) the amount in any fiscal year equal to the cash proceeds of key man life insurance policies received by Holdings, the Borrowers or the Restricted Subsidiaries after the Effective Date, (C) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided it being agreed that any unused ~~portion of the preceding basket calculated pursuant to clauses (A) and (B) above for~~ amounts in any fiscal year may be carried ~~forward~~ over to succeeding fiscal ~~years~~years and be utilized under this clause (v) in such subsequent fiscal years notwithstanding the foregoing provisions of this clause (v)); (vi) so long as no Default or Event of Default shall have occurred and be continuing or would result therefrom, Holdings, the Borrower and the Restricted Subsidiaries may make Restricted Payments to Holdings and Boulevard: (A) the proceeds of which shall be used by Boulevard to pay any Seller Earnout due and payable under the Acquisition Agreement; provided that (1) any such Restricted Payment to pay any Seller Earnout shall not be paid prior to the delivery of financial statements pursuant to Section 5.01(a) for the fiscal year ended December 31, 2017 and (2) any such Restricted Payment to pay any Seller Earnout shall not be paid (other than with the proceeds of the issuance of common equity or Qualified Equity Interests of Holdings or Permitted Subordinated Indebtedness of the Borrower) if, on a Pro Forma Basis after giving effect thereto, the Secured Net Leverage Ratio is equal to or greater than 3.75:1.00; and (B) in addition to the foregoing Restricted Payments, up to an amount not to exceed $12,000,000 in any fiscal year of the Borrower to (1) pay dividends to Boulevard’s public common stockholders and/or (2) on or prior to July 31, 2016, redeem or repurchase outstanding warrants of Boulevard for an aggregate repurchase price not in excess of $10,000,000. (vii) ~~Holdings~~ the Borrower and ~~any Intermediate Holdings~~ the Restricted Subsidiaries may make Restricted Payments in ~~cash~~cash to Holdings, the Borrower or any Restricted Subsidiary: (A) ~~without duplication~~ the proceeds of which shall be used by Holdings, the Borrower or any ~~Permitted Tax Distribution~~Restricted Subsidiary to pay (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting and similar expenses payable to third parties) that are reasonable, and indemnification claims made by directors or officers of Boulevard, Holdings or any Restricted Subsidiary, in each case to the extent attributable to the ownership or operations of Holdings, the Borrower and the Restricted Subsidiaries, (2) fees and expenses (x) due and payable by any of the Restricted Subsidiaries and (y) otherwise permitted to be paid by such Restricted Subsidiary under this Agreement and (3) amounts due and payable pursuant to Section 6.07(iv); (B) the proceeds of which shall be used by Holdings ~~or any Intermediate Holdings to pay (or~~ to make Restricted Payments permitted by Section 6.06(a)(iv) or Section 6.06(a)(v); (C) the proceeds of which shall be used to ~~allow~~ pay fees and expenses related to any ~~direct~~ unsuccessful equity or ~~indirect parent~~ debt offering permitted by this Agreement; (D) the proceeds of which shall be used to make payments permitted by clause (b)(iv) of this Section 6.06; and (E) the proceeds of which are applied to the purchase or other acquisition of all or substantially all of the property and assets or business of any Person, or of assets constituting a business unit, a line of business or division of such Person, or of all or a majority of the Equity Interests in a Person, provided that such purchase or other acquisition would have constituted a “Permitted Acquisition” or an other Investment permitted to be made pursuant to Section 6.04; provided, further, that (A) such Restricted Payment shall be made concurrently with the closing of such purchase or other acquisition, (B) the recipient of such Restricted Payment shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or one of the Restricted Subsidiaries (other than an Excluded Subsidiary) or (2) the merger (to the extent permitted in Section 6.03) of the Person formed or acquired into the Borrower or one of the Restricted Subsidiaries (other than an Excluded Subsidiary) in order to consummate such purchase or other acquisition, (C) Holdings ~~to pay)~~and its Affiliates (other than the Borrower or a Restricted Subsidiary) receives no consideration or other payment from Holdings, ~~for any taxable period for which Holdings and/or~~ the Borrower or any of ~~its~~ the Restricted Subsidiaries in connection with such transaction, except to the extent Holdings or a Restricted Subsidiary could have given such consideration or made such payment in compliance with Section 6.07, (D) any property received by the Borrower shall not increase the Available Amount and (E) such Investment shall be deemed to be made by the Borrower or such Restricted Subsidiary pursuant to Section 6.04(h); (viii) Restricted Payments by the Borrower or any Restricted Subsidiary in an aggregate amount not to exceed the Available Amount at such time; provided that (1) no Event of Default shall have occurred and be continuing or would result therefrom and (2) except with respect to Restricted Payments made with the Available Amount Equity Component, on a Pro Forma Basis after giving effect thereto, if (A) such Restricted Payment is made on or prior to January 31, 2017, the Senior Secured Net Leverage Ratio is less than or equal to 3.00:1.00 or (B) otherwise, the Senior Secured Net Leverage Ratio is less than or equal to 2.50:1.00; (ix) Holdings, the Borrower and the Restricted Subsidiaries may make Restricted Payments to Holdings and Boulevard: (A) the proceeds of which shall be used by Holdings and Boulevard to make payments that are ~~members~~ due and payable pursuant to the Tax Receivables Agreement; (B) the proceeds of a which shall be used by Holdings and Boulevard to make any payments that are due and payable pursuant to Section 2.3 or 2.4 of the Acquisition Agreement; and (C) the proceeds of which shall be used to pay the Tax liability of (or in respect of) Holdings, the Borrower or any Restricted Subsidiary to the relevant jurisdiction in respect of consolidated, ~~combined~~ combined, unitary or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are affiliated returns attributable to the income of ~~Holdings and/or its~~ the Borrower and any of the Restricted Subsidiaries; provided that Restricted Payments made pursuant to this clause (~~a)(vii)(A~~C) shall not exceed the Tax liability that ~~Holdings~~ Holdings, the Borrower and/or ~~its~~ the relevant Restricted Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers or their Restricted Subsidiaries; (Bx) Holdings and the ~~proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to~~ Borrower may make Restricted Payments to ~~allow~~ the extent of the Net Proceeds received by Holdings (and in the case of Restricted Payments by the Borrower, to the extent contributed to the Borrower as cash common equity) from any ~~direct~~ issuance of or ~~indirect parent~~ contribution to Qualified Equity Interests of Holdings ~~to pay) (1) its operating expenses incurred~~ not otherwise included in the ~~ordinary course of business and other corporate overhead costs and expenses (including administrative~~Available Amount, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof or any Intermediate Holdings) attributable to the ownership or operations of Holdings, the Borrowers and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of Holdings, the Borrowers and the Restricted Subsidiaries and (y) otherwise permitted to be paid by Holdings, the Borrowers and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the Borrowers or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x); (C) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence; (D) the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(m); provided that (1) so long as such Restricted Payment ~~shall be~~ is made ~~substantially concurrently with the closing~~ identifiable amounts of such ~~Investment and (2) Holdings or any Intermediate Holdings shall~~Net Proceeds and, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to Holdings, the Borrowers or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with Holdings, the Borrowers or any of the Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrowers and the Restricted Subsidiaries; and (G) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related respect to any ~~equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement (whether or not~~ such ~~offering or other transaction is successful); (viii) in addition to the foregoing~~ Restricted Payments, the Borrowers and any Intermediate Holdings may make additional Restricted Payments to any Intermediate Holdings and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt, in an aggregate amount, when taken together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii), not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as no Event of Default shall have occurred and be continuing ~~(or, in the case of the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h)~~ or (i)), the Available Amount that is Not Otherwise Applied plus (C) the Available Equity Amount that is Not Otherwise Applied; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock unitswould result therefrom; (xi) ~~Holdings~~ to the extent constituting Restricted Payments, Holdings, the Borrower and the Restricted Subsidiaries may enter into transactions expressly permitted by Sections 6.03 and 6.04; (xii) the Borrower or any of the Restricted Subsidiaries may (ai) pay cash in lieu of fractional ~~Equity Interests~~ shares in connection with any dividend, split or combination thereof or any Permitted Acquisition ~~(or other similar Investment)~~ and (bii) honor any non-cash conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPOconversion; (xiii) Restricted Payments in order to effectuate payments ~~made or expected~~ that at such time are permitted to be made ~~by Holdings~~pursuant to Section 6.07(iii), ~~any Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future~~(iv), ~~present or former employee, director, officer, manager or consultant~~ (~~or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees~~vii) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes(x); (xiv) ~~additional~~ the payment of dividends and distributions within sixty (60) days after the date of declaration thereof, if at the date of declaration of such payment, such payment would have complied with the other provisions of this Section 6.06; (xv) (x) the payment of regularly scheduled dividends on Disqualified Equity Interests, and (y) any redemption or repurchase of Disqualified Equity Interests permitted under Section 6.06(b); (xvi) redemptions in whole or in part of any of its Qualified Equity Interests for another class of its Qualified Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Qualified Equity Interests; and (xvii) other Restricted Payments; provided that ~~after giving effect to such Restricted Payment~~ (A1) no Event of Default shall have occurred and be continuing or would result therefrom and (2) on a Pro Forma ~~Basis~~Basis after giving effect thereto, if (A) such Restricted Payment is made on or prior to January 31, 2017, the Total Net Leverage Ratio is less than or equal to ~~5.00 to 1.0 and~~ 2.75:1.00 or (B) there is no continuing Event of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvi) the distribution, by dividend or otherwise, ~~of shares of Equity Interests of,~~ the Total Net Leverage Ratio is less than or ~~Indebtedness owed~~ equal to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make Restricted Payments in cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a)2.25:1.00. (b) Neither ~~Holdings, Intermediate~~ Holdings nor ~~any~~ the Borrower will, nor will they permit any other Restricted Subsidiary to, make or pay, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoing, except: (i) payment of regularly scheduled or required interest and principal payments as, in the form of payment and when due in respect of any ~~Indebtedness, other than~~ Indebtedness to the extent such payments in respect of any Junior Financing ~~prohibited~~ are permitted by the subordination provisions thereof, and the payment of regularly schedule dividends on Disqualified Equity Interests; (ii) ~~refinancings~~ refinancings, refundings, renewals, modifications or exchanges of Indebtedness to the extent permitted by Section 6.01; (iii) the conversion of any Junior Financing (including Disqualified Equity Interests) to Equity Interests (other than Disqualified Equity Interests) of Holdings; (iv) prepayments, redemptions, purchases, defeasances and other payments in respect of Junior ~~Financing Indebtedness~~ Financings (including Disqualified Equity Interests) prior to their scheduled maturity in an aggregate amount not to exceed the Available Amount at such time; provided that (1) no Event of Default shall have occurred and be continuing or would result therefrom and (2) except with ~~proceeds~~ respect to prepayments, redemptions, purchases, defeasances and other payments made with the Available Amount Equity Component made with the Available Amount Equity Component, on a Pro Forma Basis after giving effect thereto, if (A) such prepayment, redemption, purchase, defeasance or other payment occurs on or prior to January 31, 2017, the Senior Secured Net Leverage Ratio is less than or equal to 3.00:1.00 or (B) otherwise, the Senior Secured Net Leverage Ratio is less than or equal to 2.50:1.00; and (v) other prepayments, redemptions, purchases, defeasances and other payments in respect of Junior Financings prior to their scheduled maturity; provided that (1) no Event of Default shall have occurred and be continuing or would result therefrom and (2) on a Pro Forma Basis after giving effect thereto, if (A) such prepayment, redemption, purchase, defeasance or other ~~Junior Financing Indebtedness permitted~~ payment occurs on or prior to ~~be in~~January 31, 2017, the Total Net Leverage Ratio is less than or equal to 4:00:1.00 or (B) otherwise, the Total Net Leverage Ratio is less than or equal to 3.50:1.00.

Appears in 1 contract

Sources: Credit Agreement (AgroFresh Solutions, Inc.)

Restricted Payments; Certain Payments of Indebtedness. (a) ~~Neither Holdings, Intermediate Holdings nor any~~ The Borrower ~~will~~will not, nor will ~~they~~ it permit any ~~Restricted Subsidiary~~of its Subsidiaries to, ~~to pay~~ declare or make, directly or indirectly, any Restricted Payment, except: (i) ~~Each Borrower and~~ each ~~Restricted~~ Subsidiary may make Restricted Payments to ~~Intermediate Holdings, a~~ the Borrower or any other Subsidiary; provided that if such Subsidiary is a Loan Party, then it can only make a Restricted ~~Subsidiary~~Payment pursuant to this Section 6.06(a)(i) to another Loan Party; (ii) the Borrower and each of its Subsidiaries may declare and make dividend payments or other distributions payable solely in the Qualified Equity Interests of such Person; provided that in the case of any such Restricted Payment by a ~~Restricted~~ Subsidiary that is not a ~~wholly-owned~~ Wholly Owned Subsidiary of a the Borrower, such Restricted Payment is made to ~~Intermediate Holdings, such~~ the Borrower, any ~~Restricted~~ Subsidiary and to each other owner of Equity Interests of such ~~Restricted~~ Subsidiary based on their relative ownership interests of the relevant class of Equity Interests; (ii) payments or distributions to satisfy dissenters’ or appraisal rights, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of assets (other than with respect to the Transactions) that complies with Section 6.03; (iii) ~~Holdings~~ the Borrower and ~~any Intermediate Holdings~~ each of its Subsidiaries may ~~declare and make dividend payments or other distributions payable solely in the~~ (A) repurchase for fair value Equity Interests held by former directors, officers, employees and consultants; (B) pay withholding or similar Taxes payable by present or former directors, officers, employees or consultants in respect of ~~such Person~~their Equity Interests and (C) repurchase Equity Interests deemed to occur upon a cashless exercise of options or warrants; (iv) Restricted Payments made in connection with or in order to consummate the Transactions (including, without limitation, (A) cash payments to holders of Equity Interests of Target as provided by the Acquisition Agreement, (B) Restricted Payments to direct and indirect parent companies of Holdings to finance a portion Each of the consideration for the Acquisition and (C) other payments with respect to working capital adjustments or otherwise, to the extent contemplated by the Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv)); (v) repurchases of Equity Interests in Holdings (or Restricted Payments by Holdings to allow repurchases of Equity Interest in any direct or indirect parent of Holdings) or Intermediate Holdings deemed to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion Subsidiaries of the exercise price of such stock options or warrants or other incentive interest; (vi) Restricted Payments to Holdings which Holdings may use to redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted stock units or stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests) held by current or former officers, managers, consultants, directors and employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), Holdings, the Borrowers and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, profits interest, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that the aggregate amount of Restricted Payments permitted by this clause (vi) after the Effective Date, together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu thereof, shall not exceed the sum of (A) the greater of $15.0 million and 5.0% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings (which subsequent to an IPO shall be increased to the greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings), (B) the amount in any fiscal year equal to the cash proceeds of key man life insurance policies received by Holdings, the Borrowers or the Restricted Subsidiaries after the Effective Date, (C) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year may be carried forward to succeeding fiscal years; (vii) Holdings and any Intermediate Holdings Borrower may make Restricted Payments in ~~cash~~cash to the Borrower: ~~(A) without duplication of any Permitted Tax Distribution,~~ 1. the proceeds of which ~~shall~~ will be used ~~by Holdings or any Intermediate Holdings~~ to pay ~~(or~~ the Tax liability to ~~make Restricted Payments to allow any direct or indirect parent~~ the relevant jurisdiction in respect of ~~Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a~~ consolidated, ~~combined~~ combined, unitary or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are affiliated returns attributable to the income of ~~Holdings~~ the Borrower and/or ~~its Subsidiaries~~any Subsidiary; provided that Restricted Payments made pursuant to this -66- clause (~~a)(vii)(A~~a)(iv)(1) shall not exceed the Tax liability that ~~Holdings~~ the Borrower and/or ~~its~~ the relevant Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers or their Restricted Subsidiaries; ~~(B)~~ 2. the proceeds of which shall be used ~~by Holdings or any Intermediate Holdings~~ to pay ~~(or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay)~~ (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, ~~accounting, tax reporting~~ accounting and similar ~~expenses payable to third parties~~expenses) that are reasonable and customary and incurred in the ordinary course of business, ~~(2) any reasonable~~ and customary indemnification claims made by directors or officers of ~~Holdings~~ the Borrower (or any parent ~~thereof or any Intermediate Holdings)~~ thereof), in each case to the extent attributable to the ownership or operations of ~~Holdings,~~ the ~~Borrowers~~ Borrower and ~~the Restricted~~ its Subsidiaries, (32) fees and expenses (x) due and payable by any of ~~Holdings,~~ the ~~Borrowers and the Restricted~~ Subsidiaries and (y) otherwise permitted to be paid by ~~Holdings, the Borrowers and the Restricted Subsidiaries~~ such Subsidiary under this Agreement and (43) ~~payments that would otherwise be permitted to be paid directly by Holdings, the Borrowers or the Restricted Subsidiaries~~ amounts due and payable pursuant to Section ~~6.09(iii) or (x~~6.07(v); ~~(C)~~ 3. the proceeds of which shall be used ~~by Holdings or any Intermediate Holdings~~ to pay (franchise or ~~to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and~~ similar ~~Taxes,~~ Taxes and other ~~fees~~ fees, Taxes and ~~expenses,~~ expenses required to maintain its ~~organizational existence~~corporate or legal existence or to maintain and protect its interest in each and every item of such IP Collateral in full force and effect; ~~(D)~~ 4. the proceeds of which shall be used ~~by Holdings~~ to make Restricted Payments permitted by Section ~~6.08(a)(iv) or Section 6.08(a)(vi~~6.06(a)(iii); 5. the proceeds of which shall be used to make payments permitted by clause (Eb)(i) of this Section 6.06; 6. the proceeds of which are applied to ~~finance~~ the purchase or other acquisition of all or substantially all of the property and assets or business of any ~~Investment~~ Person, or of assets constituting a business unit, a line of business or division of such Person, or of all the Equity Interests in a Person, provided that such purchase or other acquisition would have constituted a “Permitted Acquisition” permitted to be made pursuant to Section ~~6.04 other than Section 6.04(m)~~6.04; ~~provided~~ provided, further, that (1A) such Restricted Payment shall be made ~~substantially~~ concurrently with the closing of such ~~Investment and~~ purchase or other acquisition, (2B) ~~Holdings or any Intermediate Holdings~~ the recipient of such Restricted Payment shall, immediately following the closing thereof, cause (x1) all property acquired (whether assets or Equity ~~Interests but not including any loans or advances made pursuant to Section 6.04(b)~~Interests) to be contributed to ~~Holdings,~~ the ~~Borrowers~~ Borrower or ~~the Restricted~~ one of its Subsidiaries or (y2) the merger (to the extent permitted in Section 6.03) of the Person formed or acquired ~~to merge~~ into the Borrower or ~~consolidate with Holdings, the Borrowers or any~~ one of ~~the Restricted~~ its Subsidiaries ~~to the extent such merger, amalgamation or consolidation is permitted in Section 6.03)~~ in order to consummate such ~~Investment, in each case in accordance with~~ purchase or other acquisition and (C) such Investment shall be deemed to be made by the ~~requirements of Sections 5.11 and 5.12;~~Borrower or such Subsidiary pursuant to Section 6.04(g); and ~~(F)~~ 7. the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrowers and the Restricted Subsidiaries; and (G) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any unsuccessful debt or equity ~~offering, debt~~ offering or proposed Permitted Acquisition, other ~~non-ordinary course transaction not prohibited by this Agreement (whether~~ Investment or ~~not such offering or other transaction is successful);~~Disposition; and (~~viii~~v) ~~in addition~~ the Borrower may make Restricted Payments to the ~~foregoing~~ extent of the net cash proceeds received by the Borrower (and in the case of Restricted Payments by the Borrower, to the extent contributed to the Borrower as cash common equity) from any issuance of Equity Interests (other than Disqualified Equity Interests) of the Borrower, so long as such Restricted Payment is made within 90 days of the receipt of such net cash proceeds and, with respect to any such Restricted Payments, the Borrowers and any Intermediate Holdings may make additional Restricted Payments to any Intermediate Holdings and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt, in an aggregate amount, when taken together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii), not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as no Event of Default shall have occurred and be continuing or would result therefrom; (orvi) to the extent constituting Restricted Payments, the Borrower and its Subsidiaries may enter into transactions expressly permitted by Sections 6.03 and 6.04; (vii) the Borrower or any of its Subsidiaries may (1) pay cash in lieu of fractional shares in connection with any dividend, split or combination thereof or any Permitted Acquisition and (2) (a) honor any conversion request by a holder of convertible Indebtedness (including any payment of cash in connection with such conversion pursuant to the ~~case~~ terms of such convertible Indebtedness in an amount not to exceed the sum of (x) the principal amount of such convertible Indebtedness plus (y) any payments received by the Borrower or any of its Subsidiaries pursuant to the exercise, settlement or termination of any related Permitted Bond Hedge Transaction or Permitted Warrant Transaction) and make cash payments in lieu of fractional shares in connection with any such conversion and (b) make payments in connection with a Permitted Bond Hedge Transaction and the settlement of any related Permitted Warrant Transaction (x) by delivery of shares of the ~~use~~ Borrower’s common stock upon net share settlement thereof or (y) by set-off against the related Permitted Bond Hedge Transaction and payment of an early termination amount thereof in common stock upon any early termination thereof; (viii) the ~~Starter Basket~~ Borrower or any of its Subsidiaries may make Restricted Payments in order to effectuate payments that ~~is Not Otherwise Applied~~at such time are permitted to be made pursuant to Section 6.07(iii), (v), (vi) and (vii); (ix) the Borrower may declare and pay dividends and distributions within 60 days after the record date therefor, if at the record date, no Event of Default under Section 7.01(a), (b), (h) or (i))) shall exist at the time of, or would result from, the ~~Available Amount that is Not Otherwise Applied plus (C) the Available Equity Amount that is Not Otherwise Applied~~making of such payment; (ixx) ~~redemptions~~ the Borrower may redeem in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units;; and (xi) ~~Holdings~~ the Borrower may ~~(a)~~ repurchase shares of its common stock in the open market or in private transactions or pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on ~~such company’s~~ its common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiii) payments made or expected to be made by Holdings, any Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to 5.00 to 1.0 and (B) there is no continuing Event of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make Restricted Payments in cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such ~~reclassification) such Restricted Payment (~~repurchase or ~~portion thereof) between such clauses~~ payment (i) ~~through~~ no Default has occurred and is continuing or would result therefrom, (~~xviii)~~ii) the Total Leverage Ratio shall not be greater than 0.25 less than the Total Leverage Ratio in effect on the Effective Date, and (iii) the Administrative Agent shall have received a certificate of a Responsible Officer, in ~~a manner that otherwise complies~~ form and substance reasonably satisfactory to the Administrative Agent, certifying and attaching calculations demonstrating compliance with ~~this Section 6.08(a)~~the requirements of clause (ii) above. (b) ~~Neither Holdings, Intermediate Holdings nor any~~ The Borrower ~~will~~will not, nor will ~~they~~ it permit any ~~Restricted~~ other Subsidiary to, make or pay, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoing, except: (i) payment of regularly scheduled or required interest and principal payments as, in the form of payment and when due in respect of any ~~Indebtedness, other than~~ Indebtedness to the extent such payments in respect of any Junior Financing ~~prohibited~~ are permitted by the subordination provisions thereof; (ii) ~~refinancings~~ refinancings, refundings, renewals, modifications or exchanges of Indebtedness to the extent permitted by Section 6.01; (iii) the conversion of any Junior Financing ~~Indebtedness with proceeds~~ to Equity Interests (other than Disqualified Equity Interests) of ~~other Junior Financing Indebtedness~~ the Borrower; (iv) any conversion of convertible notes and any payment in respect of a Permitted Bond Hedge Transaction and Permitted Warrant Transaction permitted by clause (a)(vii)(2) of this Section 6.06; and (v) the Borrower may make cash or common stock conversion payments to holders of the Existing Notes, and pay the present value of accrued interest on the Existing Notes in cash at the time of any such conversion thereof, in an aggregate amount not to exceed $25,000,000, so long as no Default under Section 7.01(a) or (b) or Event of Default shall have occurred and be incontinuing.

Appears in 1 contract

Sources: Credit Agreement (PDL Biopharma, Inc.)

Appears in 1 contract

Sources: Credit Agreement (EverCommerce Inc.)

Restricted Payments; Certain Payments of Indebtedness. (a) ~~Neither Holdings~~The Borrower will not, ~~Intermediate Holdings nor any Borrower will, nor~~ and will ~~they~~ not permit any Restricted ~~Subsidiary~~Subsidiary to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, except: (i) ~~Each Borrower and~~ each Restricted Subsidiary may make Restricted Payments to ~~Intermediate Holdings~~the Borrower or to any Restricted Subsidiary (and, in the case of a Restricted Payment by a Restricted Subsidiary that is not a Wholly Owned Subsidiary of the Borrower, to the Borrower or any other Restricted ~~Subsidiary~~Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests); (ii) the Borrower and each Restricted Subsidiary may declare and make dividend payments or other distributions payable solely in the Equity Interests of such Person; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a ~~wholly-owned~~ Wholly Owned Subsidiary of a the Borrower, such Restricted Payment is made to ~~Intermediate Holdings, such~~ the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests; (ii) payments or distributions to satisfy dissenters’ or appraisal rights, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of assets (other than with respect to the Transactions) that complies with Section 6.03; (iii~~) Holdings and any Intermediate Holdings may declare and make dividend payments or other distributions payable solely in the Equity Interests of such Person; (iv~~) Restricted Payments made in connection with or in order to consummate the Transactions ~~(including, without limitation, (A) cash payments~~ and to ~~holders of Equity Interests of Target as provided by~~ otherwiseto repurchase the ~~Acquisition Agreement, (B) Restricted Payments to direct and indirect parent companies of Holdings to finance a portion~~ common stock of the ~~consideration for~~ Borrower through tender offers or open market purchases in an amount not to exceed $28 the ~~Acquisition~~ sum of (i) $75,000,000 in the aggregate (on or after the Amendment No. 1 Effective Date) and (Cii) ~~other payments with respect~~ unused amounts permitted pursuant to working capital adjustments or otherwise, to the extent contemplated by the Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv)Section 6.07(a)(vi); (viv) repurchases of Equity Interests in ~~Holdings (~~the Borrower or any Restricted ~~Payments by Holdings to allow repurchases of Equity Interest in any direct or indirect parent of Holdings) or Intermediate Holdings~~ Subsidiary deemed to occur upon exercise of stock options or warrants ~~or other incentive interests~~ if such Equity Interests represent a portion of the exercise price or withholding taxes payable in connection with the exercise of such ~~stock~~ options or ~~warrants or other incentive interest~~warrants; (v) [reserved]; (vi) ~~Restricted Payments to Holdings which Holdings may use to redeem, acquire, retire or~~ payments for the repurchase ~~its~~ of Equity Interests of the Borrower held by any present or former employee, director, member of management, officer, manager or consultant (or any ~~options, warrants,~~ Affiliate or Immediate Family Member thereof) for the purpose of making payments of withholding tax on the vesting of restricted stock units or deferred stock ~~appreciation rights or other equity-linked interests issued with respect~~ units, in an amount not to any of such Equity Interests) (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests) held by current or former officers, managers, consultants, directors and employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), Holdings, the Borrowers and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, profits interest, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that the aggregate amount of Restricted Payments permitted by this clause (vi) after the Effective Date, together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu thereof, shall not exceed the sum of (Ax) ~~the greater of~~ $~~15.0 million and 5.0% of Consolidated EBITDA for the most recently ended Test Period~~ 205,000,000 in any fiscal year ~~of Holdings~~ (~~which subsequent to an IPO shall be increased to~~ commencing with the ~~greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in any~~ fiscal year ~~of Holdings~~ending December 31, 2019), ~~(B) the amount in any fiscal year equal to the cash proceeds of key man life insurance policies received by Holdings~~which amount, ~~the Borrowers or the Restricted Subsidiaries after the Effective Date~~if not used, (C) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year may be carried forward to the next succeeding fiscal ~~years~~year, and (y) unused amounts permitted pursuant to Section 6.07(a)(iii); (vii) Holdings and any Intermediate Holdings may make Restricted Payments in cash: (A) without duplication of any Permitted Tax Distribution, the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (a)(vii)(A) shall not exceed the Tax liability that Holdings and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers or their Restricted Subsidiaries; (B) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof or any Intermediate Holdings) attributable to the ownership or operations of Holdings, the Borrowers and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of Holdings, the Borrowers and the Restricted Subsidiaries and (y) otherwise permitted to be paid by Holdings, the Borrowers and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the Borrowers or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x); (C) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence; (D) the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(m); provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) Holdings or any Intermediate Holdings shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to Holdings, the Borrowers or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with Holdings, the Borrowers or any of the Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrowers and the Restricted Subsidiaries; and (G) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful); (viii) in addition to the foregoing Restricted Payments, the ~~Borrowers and any Intermediate Holdings~~ Borrower may make additional Restricted Payments to any Intermediate Holdings and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt, in an aggregate amount, ~~when taken~~ together with the aggregate amount of ~~loans~~ (1) prepayments, redemptions, purchases, defeasances and ~~advances to Holdings~~ other payments in respect of the Junior Financing made pursuant to Section ~~6.04(m~~6.07(b)(iv) and (2) loans and advances made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (~~viii~~vii), not to exceed the sum of (A) ~~an amount at~~ the ~~time of making any such~~ Initial Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment Amount plus (B) so long as no Event of Default shall have occurred and be continuing (or, in the case of the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h) or (i)), the Available Amount that is Not Otherwise Applied plus (C) the Available Equity Amount that is Not Otherwise Applied; provided that, (x) the Total Net Leverage Ratio shall not exceed 2.50:1.00 as of such time determined on a Pro Forma Basis and (y) with respect to any Restricted Payment (A) not made in connection with a Limited Condition Acquisition, no Default or Event of Default has occurred or is continuing at the time of consummation of such Restricted Payment and (B) made in connection with a Limited Condition Acquisition, no Default or Event of Default shall exist at the time of execution of the definitive documentation governing such Limited Condition Acquisition and (other than in connection with any Restricted Payment made in connection with a Limited Condition Acquisition and is financed solely with the proceeds of any Incremental Facility or Incremental Equivalent Debt) no Event of Default under Section 7.01(a), (b), (h) or (i) shall have occurred or be continuing at the time of consummation of such Limited Condition Acquisition; (ixviii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (xix) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; (xi) Holdings may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiii) payments made or expected to be made by Holdings, any Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment ~~(A)~~ on a Pro Forma Basis, (A) the Total Net Leverage Ratio is less than or equal to ~~5.00 to 1.0~~ 1.50:1.00 as of such time and (B) there is no continuing Event of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such ~~dividends are included~~ Investment (x) constitutes a Limited Condition Acquisition, no Default or Event of Default is occurring or continuing at the time of execution of the definitive documentation governing such Limited Condition Acquisition and (other than in connection with any Limited Condition Acquisition financed solely with the ~~calculation~~ proceeds of ~~Consolidated Interest Expense~~any Incremental Facility or Incremental Equivalent Debt) and no Event of Default under Section 7.01(a), (b), (h) or (i) shall have occurred or be continuing at the time of consummation of such Limited Condition Acquisition) and (y) does not constitute a Limited Condition Acquisition, no Default or Event of Default is occurring or continuing at the time of consummation of such Investment and (C) the aggregate outstanding principal amount of the Term Facility is no greater than $200,000,000; and (~~xviii~~x) ~~Holdings, Intermediate Holdings, any Borrower~~ to make dividends or ~~any Restricted Subsidiary may make Restricted Payments in cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments~~ distributions in respect of ~~Permitted Tax Distributions. For purposes~~ Equity Interests and restricted stock units of ~~determining compliance~~ the Borrower in an amount not to exceed $510,000,000 (grossed up for any applicable withholding) in any fiscal year (commencing with the fiscal year ending December 31, 2019), which amount, if not used, may be carried forward to subsequent future years; provided that, for the avoidance of doubt, with respect to the fiscal year ending December 31, 2017, this Section ~~6.08(a), in~~ 6.07(a)(x) shall only apply to dividends or distributions made on or after the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a)Effective Date. (b) ~~Neither Holdings, Intermediate Holdings nor any~~ The Borrower ~~will~~will not, nor will ~~they~~ it permit any Restricted Subsidiary to, make or ~~pay~~agree to pay or make, directly or indirectly, any ~~payment~~ prepayment, purchase or ~~other distribution~~ redemption (whether in cash, securities or other property) of or in respect of principal or any interest, fees or other amounts of ~~or interest on~~ any Junior Financing (which, solely for purposes of this Section 6.07(b), shall exclude any Junior Financing having an aggregate principal amount less than $10,000,000 (any Junior Financing in excess of such aggregate principal amount, “Restricted Junior Financing~~, or any payment or other distribution (whether in cash, securities or other property~~”)), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of the principal of any Restricted Junior ~~Financing~~Financing that has a substantially similar effect to any of the foregoing (collectively, a “Repayment”), except: (i) payment of regularly scheduled ~~interest and~~ interest, principal payments asand prepayment premiums and any other amounts, in each case, as in the form of payment and when due in respect of any Indebtedness, other than payments in respect of any Restricted Junior Financing prohibited by the subordination provisions thereof, if any; (ii) refinancings of Indebtedness to the extent permitted by Section 6.01; (iii) the conversion of any Restricted Junior Financing ~~Indebtedness~~ to Equity Interests (other than Disqualified Equity Interests) of the Borrower or any of its direct or indirect parent companies; (iv) Repayments, in respect of Restricted Junior Financing prior to their scheduled maturity in an aggregate amount, together with the aggregate amount of (1) Restricted Payments made pursuant to Section 6.07(a)(vii) and (2) loans and advances made pursuant to Section 6.04(l) in lieu thereof not to exceed the sum of (A) the Initial Restricted Payment Amount, plus (B) the Available Amount that is Not Otherwise Applied plus (C) the Available Equity Amount that is Not Otherwise Applied; provided that, (i) no Default or Event of Default has occurred or is continuing at the time of consummation of such Restricted Payments (provided that solely with respect to any Repayment made in connection with a Limited Condition Acquisition, no Default or Event of Default shall exist at the time of execution of the definitive documentation governing such Limited Condition Acquisition and (other than in connection with any Repayment made in connection with a Limited Condition Acquisition and is financed solely with the proceeds of any Incremental Facility or Incremental Equivalent Debt) no Event of Default under Section 7.01(a), (b), (h) or (i) shall have occurred or be continuing at the time of consummation of such Limited Condition Acquisition) and (ii) the Total Net Leverage Ratio shall not exceed 2.50:1.00 as of such time determined on a Pro Forma Basis and; (v) so long as no Default or Event of Default has occurred or is continuing (provided that, solely with respect to any Repayment made in connection with a Limited Condition Acquisition, no Default or Event of Default shall exist at the time of execution of the definitive documentation governing such Limited Condition Acquisition and (other than in connection with any Repayment made in connection with a Limited Condition Acquisition and is financed solely with the proceeds of any Incremental Facility or Incremental Equivalent Debt) no Event of Default under Section 7.01(a), (b), (h) or (i) shall have occurred or be continuing at the time of consummation of such Limited Condition Acquisition), other Repayments of Junior ~~Financing Indebtedness permitted~~ Financing; provided that after giving effect to ~~be in~~such Restricted Payment (A) the Total Net Leverage Ratio is equal to or less than 1.50:1.00 as of such time determined on a Pro Forma Basis and (B) the aggregate outstanding principal amount of the Term Facility is no greater than $200,000,000; and (vi) Repayments in respect of Restricted Junior Financings in an amount not to exceed $5,000,000 in any fiscal year.

Appears in 1 contract

Sources: Credit Agreement (Greenhill & Co Inc)

Restricted Payments; Certain Payments of Indebtedness. (a) ~~Neither Holdings, Intermediate Holdings nor any~~ The Borrower ~~will~~will not, nor will ~~they~~ it permit any ~~Restricted Subsidiary~~Subsidiary to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, except: (i) ~~Each~~ the Borrower may declare and ~~each Restricted Subsidiary may make Restricted Payments~~ pay dividends with respect to ~~Intermediate Holdings, a Borrower or any other Restricted Subsidiary; provided that~~ its Equity Interests payable solely in additional Equity Interests in the ~~case of any such Restricted Payment by a Restricted Subsidiary that is not a wholly-owned Subsidiary of a~~ Borrower, such Restricted Payment is made to Intermediate Holdings, such Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests; (ii) ~~payments or distributions to satisfy dissenters’ or appraisal rights, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of assets (other than~~ Subsidiaries may declare and pay dividends ratably with respect to ~~the Transactions) that complies with Section 6.03~~their capital stock; (iii) ~~Holdings~~ the Borrower may make Restricted Payments, not exceeding $5,000,0006,000,000 from and ~~any Intermediate Holdings may declare~~ after the date hereof, pursuant to and ~~make dividend payments~~ in accordance with stock option plans, equity purchase programs or agreements or other ~~distributions payable solely~~ benefit plans, in each case for management or employees or former employees of the ~~Equity Interests of such Person~~Borrower and the Subsidiaries; (iv) ~~Restricted Payments made~~ the Borrower may pay the Closing Date Dividend; (v) the Borrower may pay cash dividends in ~~connection with or in order~~ respect of Qualified Borrower Preferred Stock issued pursuant to ~~consummate the Transactions~~ clauses (~~including, without limitation,~~ b) and (Ac) ~~cash payments to holders of Equity Interests of Target as provided by the Acquisition Agreement, (B) Restricted Payments to direct and indirect parent companies of Holdings to finance a portion~~ of the ~~consideration for the Acquisition and (C) other payments with respect to working capital adjustments or otherwise, to the extent contemplated by the Acquisition Agreement)~~definition thereof; provided that ~~the earnout contemplated by Exhibit F~~ such dividends in respect of Qualified Borrower Preferred Stock issued pursuant to ~~the Acquisition Agreement shall not be permitted on the basis of this~~ clause (ivc) of the definition thereof may only be made after the fiscal year ending December 31, 20162019 and only with Excess Cash Flow not otherwise required to be used to prepay Term Loans pursuant to Section 2.11(d)) (without duplication of amounts used pursuant to Section 6.08(a)(vii) or amounts included in the Available Amount and used pursuant to Sections 6.04(s) or 6.08(b)(vii)); (vvi) ~~repurchases~~ [reserved]; (vii) the Borrower may make payments in respect of the repurchase, retirement or other acquisition of Equity Interests ~~in Holdings~~ of the Borrower or any Subsidiary using the portion of Excess Cash Flow not subject to mandatory prepayment pursuant to Section 2.11(d) (~~or Restricted Payments by Holdings~~ without duplication of amounts used pursuant to ~~allow repurchases of Equity Interest in any direct or indirect parent of Holdings~~Section 6.08(a)(v) or ~~Intermediate Holdings deemed~~ amounts included in the Available Amount and used pursuant to ~~occur upon exercise of stock options~~ Sections 6.04(s) or ~~warrants or other incentive interests if such Equity Interests represent a portion of the exercise price of such stock options or warrants or other incentive interest~~6.08(b)(vii)); (viviii) the Borrower may make Restricted Payments; provided that (x) if after giving effect to such Restricted Payments ~~to Holdings which Holdings may use to redeem, acquire, retire or repurchase its Equity Interests~~ (or and any ~~options, warrants, restricted stock units or stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests)~~ Indebtedness incurred in connection therewith (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests) held by current or former officers, managers, consultants, directors and employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), Holdings, but disregarding the ~~Borrowers and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment~~ proceeds of any such ~~Person~~ Indebtedness in calculating Unrestricted Domestic Cash) and any related repayment of Indebtedness), the Net Leverage Ratio at the time of the making such payments (the date of the making of such payments, the “RP Date”) would be (1) less than or ~~otherwise in accordance with any stock option or stock appreciation rights plan~~equal to 2.25 to 1.00, ~~any management~~but greater than 2.00 to 1.00, director and/or employee stock ownership or incentive plan, stock subscription plan, profits interest, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that the aggregate amount of Restricted Payments ~~permitted by~~ (excluding any Restricted Payments made prior to the 2018 Replacement Term Loan Facility Effective Date) made pursuant to this clause (viviii) ~~after~~ during the ~~Effective Date~~period from the date 12 months prior to the RP Date through (and including) the RP Date (such period, ~~together with~~ the “RP Period”) shall not exceed $40,000,000, (2) less than or equal to 2.75 to 1.00, but greater than 2.25 to 1.00, the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu thereof, shall not exceed the sum of (A) the greater of $15.0 million and 5.0% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings (which subsequent to an IPO shall be increased to the greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings), (B) the amount in any fiscal year equal to the cash proceeds of key man life insurance policies received by Holdings, the Borrowers or the Restricted Subsidiaries after the Effective Date, (C) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year may be carried forward to succeeding fiscal years; (vii) Holdings and any Intermediate Holdings may make Restricted Payments in cash: (A) without duplication of any Permitted Tax Distribution, the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (~~a)(vii)(A~~viii) during the RP Period shall not exceed the Tax liability that Holdings and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers or their Restricted Subsidiaries; (B) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof or any Intermediate Holdings) attributable to the ownership or operations of Holdings, the Borrowers and the Restricted Subsidiaries$25,000,000, (3) ~~fees and expenses (x) due and payable by any of Holdings~~less than or equal to 3.25 to 1.00 but greater than 2.75 to 1.00, the ~~Borrowers and~~ aggregate amount of Restricted Payments made pursuant to this clause (viii) during the ~~Restricted Subsidiaries and (y) otherwise permitted to be paid by Holdings, the Borrowers and the Restricted Subsidiaries under this Agreement~~ RP Period shall not exceed $15,000,00020,000,000 and (4) ~~payments that would otherwise be permitted~~ greater than 3.25 to ~~be paid directly by Holdings~~1.00, the Borrowers or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x); (C) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence; (D) the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(m); provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) Holdings or any Intermediate Holdings shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to Holdings, the Borrowers or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with Holdings, the Borrowers or any of the Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrowers and the Restricted Subsidiaries; and (G) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful); (viii) in addition to the foregoing Restricted Payments, the Borrowers and any Intermediate Holdings may make additional Restricted Payments to any Intermediate Holdings and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt, in an aggregate amount, when taken together with the aggregate amount of ~~loans and advances to Holdings~~ Restricted Payments made pursuant to ~~Section 6.04(m~~this clause (viii) ~~in lieu~~ during the RP Period shall not exceed $10,000,00015,000,000; provided further that at the time of ~~Restricted Payments permitted by~~ any payment pursuant to this clause (viii), not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as no Default or Event of Default shall have occurred and be continuing (or, in the case of the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h) or (i)), the Available Amount that is Not Otherwise Applied plus (C) the Available Equity Amount that is Not Otherwise Appliedcontinuing; (ix) ~~redemptions~~ the Borrower may make payments in ~~whole or in part~~ respect of any ~~of its Equity Interests for another class of its Equity Interests~~ purchase price adjustment required to be made under the Westfalia Purchase Agreement or ~~with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to~~ the ~~Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby~~Brink Purchase Agreement; (x) the Borrower may make any Restricted Payments and/or payments ~~made~~ or ~~expected to be made~~ deliveries in ~~respect~~ shares of ~~withholding~~ common stock (or ~~similar Taxes payable~~ other securities or property following a merger event or other change of the common stock of the Borrower) (and cash in lieu of fractional shares) and/or cash required by the terms of, and otherwise perform its obligations under, any ~~future~~Permitted Convertible Indebtedness (including, ~~present or former employee~~without limitation, ~~director~~making payments of interest and principal thereon, ~~manager or consultant~~ making payments due upon required repurchase thereof and/or making payments and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock unitsdeliveries due upon conversion thereof); (xi) ~~Holdings~~ the Borrower may ~~(a)~~ pay ~~cash~~ the premium in ~~lieu of fractional Equity Interests in connection with any dividend~~respect of, ~~split or combination thereof or~~ and otherwise perform its obligations under, any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;Bond Hedge Transaction; and (xii) the ~~declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of~~ Borrower may make any Restricted Payments ~~to any direct~~ and/or payments or ~~indirect parent company of Holdings to fund a payment of dividends on such company’s common stock)~~deliveries required by the terms of, following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and ~~(b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiii) payments made or expected to be made by Holdings~~otherwise perform its obligations under, any ~~Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable~~ Permitted Warrant Transaction (including, without limitation, making payments and/or deliveries due upon exercise ~~of Equity Interests by any future, present~~ and settlement or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to 5.00 to 1.0 and (B) there is no continuing Event of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make Restricted Payments in cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a proposed Restricted Payment (or a portion termination thereof) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a). (b) ~~Neither Holdings, Intermediate Holdings nor any~~ The Borrower ~~will~~will not, nor will ~~they~~ it permit any ~~Restricted~~ Subsidiary to, make or ~~pay~~agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any ~~Junior Financing~~Indebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any ~~Junior Financing~~Indebtedness, except: (i) payment of Indebtedness created under the Loan Documents; (ii) payment of regularly scheduled interest and principal payments ~~as, in the form of payment~~ as and when due in respect of any Indebtedness, other than payments in respect of ~~any Junior Financing~~ subordinated Indebtedness prohibited by the subordination provisions thereof; (iiiii) refinancings of ~~Junior Financing~~ Indebtedness to the extent permitted by Section 6.01; (iv) payment of secured Indebtedness out of the proceeds of any sale or transfer of the property or assets securing such Indebtedness; (v) payment of or in respect of (A) Indebtedness created under the ABL Loan Documents and (B) Indebtedness or obligations secured by the ABL Security Documents; (vi) payments of Indebtedness with the Net Proceeds of an issuance of Equity Interests in the Borrower; (vii) payments of Indebtedness in an amount equal to the Available Amount; provided that at the time of such payment and after giving effect thereto, (i) no Default or Event of Default shall have occurred and be continuing and (ii) at the time of such payment and after giving effect thereto and to the incurrence of any Indebtedness in connection therewith (but disregarding the proceeds of any such Indebtedness in calculating Unrestricted Domestic Cash), the Net Leverage Ratio is not greater than 2.00 to 1.00; (viii) the Borrower may make any payments or deliveries in shares of common stock (or other ~~Junior Financing~~ securities or property following a merger event or other change of the common stock of the Borrower) (and cash in lieu of fractional shares) and/or cash required by the terms of, and otherwise perform its obligations under, any Permitted Convertible Indebtedness (including, without limitation, making payments of interest and principal there-on, making payments due upon required repurchase thereof and/or making payments and deliveries due upon conversion thereof); and (ix) the purchase of any Permitted Bond Hedge Transaction by the Borrower and the performance of its obligations thereunder. (c) The Borrower will not, nor will it permit any Subsidiary to, enter into or be party to, or make any payment under, any Synthetic Purchase Agreement unless (i) in the case of any Synthetic Purchase Agreement related to any Equity Interests of the Borrower, the payments required to be made by the Borrower are limited to amounts permitted to be inpaid under Section 6.08(a), (ii) in the case of any Synthetic Purchase Agreement related to any Restricted Indebtedness, the payments required to be made by the Borrower or the Subsidiaries thereunder are limited to the amount permitted under Section 6.08(b) and (iii) in the case of any Synthetic Purchase Agreement, the obligations of the Borrower and the Subsidiaries thereunder are subordinated to the Obligations on terms satisfactory to the Required Lenders.

Appears in 1 contract

Sources: Term Loan Amendment (Horizon Global Corp)

Restricted Payments; Certain Payments of Indebtedness. (a) ~~Neither Holdings~~The Parent Borrower will not, ~~Intermediate Holdings nor any Borrower will, nor~~ and will ~~they~~ not permit any Restricted ~~Subsidiary~~Subsidiary to, to pay or make, directly or indirectly, any Restricted Payment, except: (i) ~~Each Borrower and~~ each Restricted Subsidiary may make Restricted Payments to ~~Intermediate Holdings, a~~ the Parent Borrower or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a wholly-owned Subsidiary of a the Parent Borrower, such Restricted Payment is made to ~~Intermediate Holdings, such~~ the Parent Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests; (ii) ~~payments or distributions to satisfy dissenters’ or appraisal rights, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of assets (other than with respect to~~ the ~~Transactions) that complies with Section 6.03; (iii) Holdings and any Intermediate Holdings~~ Parent Borrower may declare and make dividend payments or other distributions payable solely in the Equity Interests of ~~such Person~~the Parent Borrower; (iii) [reserved]; (iv) Restricted Payments made in connection with or in order to consummate the Transactions (including, without limitation, (A) cash payments to holders of Equity Interests of Target as provided by the Acquisition Agreement, (B) Restricted Payments to direct and indirect parent companies of Holdings to finance a portion of the consideration for the Acquisition and (C) other payments with respect to working capital adjustments or otherwise, to the extent contemplated by the Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv)); (v) repurchases of Equity Interests in ~~Holdings~~ the Parent Borrower (or Restricted Payments by ~~Holdings~~ the Parent Borrower to allow repurchases of Equity ~~Interest~~ Interests in the Parent Borrower or any direct or indirect parent of ~~Holdings)~~ the Parent Borrower), or ~~Intermediate Holdings~~ any Restricted Subsidiary deemed to occur upon exercise of ~~stock~~ equity options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price of such ~~stock~~ equity options or warrants or other incentive ~~interest~~interests; (viv) Restricted Payments to ~~Holdings~~ the Parent Borrower which ~~Holdings~~ the Parent Borrower may use to redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted stock units or stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) (or to make Restricted Payments to allow any of ~~Holdings’~~ the Parent Borrower’s direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity ~~Interests~~Interests or other such interests) held by current or former officers, managers, consultants, directors and employees and other service providers (or their respective Affiliates, spouses, former spouses, other Permitted Transferees, successors, executors, administrators, heirs, legatees or distributees) of ~~Holdings~~ the Parent Borrower (or any direct or indirect parent thereof), ~~Holdings,~~ the ~~Borrowers~~ Parent Borrower and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment or engagement of any such Person or otherwise in accordance with any ~~stock~~ equity option or ~~stock~~ equity appreciation rights plan, any management, director and/or employee ~~stock~~ equity ownership or incentive plan, ~~stock~~ equity subscription plan, profits interest, employment termination agreement or any other employment or service agreements with any director, officer or consultant or partnership or equity holders’ agreement; provided ~~that~~ that, except with respect to non-discretionary repurchases or net-settlement of “Section 16” equity transactions, the aggregate amount of Restricted Payments permitted by this clause (vi) after the Effective Date, together with the aggregate amount of loans and advances to ~~Holdings~~ the Parent Borrower (or any direct or indirect parent thereof) made pursuant to Section 6.04(m) in lieu thereof, shall ~~not~~ not, in any fiscal year of the Parent Borrower, exceed the sum of (Aa) the greater of $~~15.0 million~~ 40,000,000 and ~~5.0~~15.0% of Consolidated EBITDA for the most recently ended Test Period in as of such time determined on a Pro Forma Basis (net of any ~~fiscal year~~ proceeds from the reissuance or resale of ~~Holdings (which subsequent~~ such Equity Interests to ~~an IPO shall be increased to~~ another Person received by the ~~greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in~~ Parent Borrower or any ~~fiscal year of Holdings~~Restricted Subsidiary), (Bb) the amount ~~in any fiscal year~~ equal to the cash proceeds of key man life insurance policies received by ~~Holdings,~~ the ~~Borrowers~~ Parent Borrower or the Restricted Subsidiaries after the Effective Date, and (Cc) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of ~~Holdings~~ the Parent Borrower (to the extent contributed to ~~Holdings~~ the Parent Borrower in ~~the form of~~ exchange for common Equity Interests or Qualified Equity Interests) and, to the extent contributed to ~~Holdings~~the Parent Borrower, the cash proceeds from the sale of Equity Interests of any direct or indirect ~~Parent Entity~~ parent entity thereof or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of ~~Holdings~~the Parent Borrower, any of its Subsidiaries or any direct or indirect ~~Parent Entity~~ parent entity thereof or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests are contributed to ~~Holdings~~ the Parent Borrower in ~~the form of~~ exchange for common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket ~~hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision~~hereunder; provided that any unused portion of the preceding basket calculated pursuant to clauses (Aa) and (Bb) above for any fiscal year may be carried forward to succeeding fiscal years; provided, further, that any Indebtedness Incurred or Investments or payments made in reliance upon the Available RP Capacity Amount utilizing the unused amounts available pursuant to this Section 6.08(a)(v) shall reduce the amounts available pursuant to this Section 6.08(a)(v); (~~vii~~vi) ~~Holdings and any Intermediate Holdings~~ the Restricted Subsidiaries may make Restricted Payments ~~in cash~~to the Parent Borrower: (A) ~~without duplication of any Permitted Tax Distribution,~~ the proceeds of which shall be used by ~~Holdings or any Intermediate Holdings~~ the Parent Borrower to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (a)(vii)(A) shall not exceed the Tax liability that Holdings and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers or their Restricted Subsidiaries; (B) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings Parent Borrower to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of ~~business~~business and attributable to the ownership or operations of the Borrowers and their respective Subsidiaries, (2) any reasonable and customary indemnification claims made by directors or officers of ~~Holdings~~ the Parent Borrower (or any parent ~~thereof or any Intermediate Holdings~~thereof) attributable to the ownership or operations of ~~Holdings,~~ the ~~Borrowers~~ Parent Borrower and the Restricted Subsidiaries, ~~(3)~~ fees and expenses (x) due and payable by any of ~~Holdings,~~ the ~~Borrowers~~ Parent Borrower and the Restricted Subsidiaries and (y) otherwise ~~permitted~~ not prohibited to be paid by ~~Holdings,~~ the ~~Borrowers~~ Parent Borrower and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by ~~Holdings,~~ the ~~Borrowers~~ Parent Borrower or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x); (CB) the proceeds of which shall be used by ~~Holdings or any Intermediate Holdings~~ the Parent Borrower to pay (or to make Restricted Payments to allow any direct or indirect parent of ~~Holdings~~ the Parent Borrower to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence; (DC) the proceeds of which shall be used by ~~Holdings~~ the Parent Borrower (or any other direct or indirect parent thereof) to make Restricted Payments of the type permitted by Section ~~6.08(a)(iv~~6.08(a)(iii), Section 6.08(a)(v) or Section ~~6.08(a)(vi~~6.08(a)(x); (ED) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(m); provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) ~~Holdings or any Intermediate Holdings~~ the Parent Borrower shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to ~~Holdings,~~ the ~~Borrowers~~ Parent Borrower or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with ~~Holdings,~~ the ~~Borrowers~~ Parent Borrower or any of the Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (FE) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to ~~officers~~ officers, employees and ~~employees~~ other service providers of ~~Holdings~~ the Parent Borrower or any direct or indirect parent company of ~~Holdings~~ the Parent Borrower to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of ~~Holdings,~~ the ~~Borrowers~~ Parent Borrower and the Restricted Subsidiaries; and (GF) the proceeds of which shall be used by ~~Holdings or any Intermediate Holdings~~ the Parent Borrower to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful); (~~viii~~vii) ~~in addition to the foregoing Restricted Payments, the Borrowers and any Intermediate Holdings may make additional~~ Restricted Payments to any Intermediate Holdings and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt, (A) in an aggregate ~~amount~~amount not to exceed, at the time of making any such Restricted Payment and when taken together with the aggregate amount of loans and advances to ~~Holdings~~ the Parent Borrower (or any direct or indirect parent thereof) made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (~~viii~~vii), not to exceed the sum of (A) ~~an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed~~ the greater of $~~75.0 million~~ 40,000,000 and 2515% of Consolidated EBITDA for the most recently ended Test Period ~~after giving~~ as of such time determined on a Pro Forma ~~Effect to the making of such Restricted Payment plus (B) so long as~~ Basis provided that no Significant Event of Default shall have occurred and be continuing or result therefrom; plus (~~or, in the case of the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h~~B) ~~or (i)),~~ the Available Amount that is Not Otherwise Applied (provided that, solely with respect to usage of the Starter Basket, after giving effect to such Restricted Payment on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to 4.00 to 1.00) plus (C) the Available Equity Amount that is Not Otherwise Applied; provided that any Indebtedness incurred or Investments or payments made in reliance upon the Available RP Capacity Amount utilizing the unused amounts available pursuant to this Section 6.08(a)(vii) shall reduce the amounts available pursuant to this Section 6.08(a)(vii); (ixviii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (xa) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, ~~manager~~ manager, consultant or ~~consultant~~ other service provider and any repurchases of Equity Interests in consideration of such payments including deemed ~~repurchases~~ repurchases, in each case, in connection with the exercise of ~~stock~~ equity options and the vesting of restricted ~~stock~~ equity and restricted ~~stock units~~equity units and (b) payments or other adjustments to outstanding Equity Interests in accordance with any management equity plan, equity option plan or any other similar employee benefit plan, agreement or arrangement in connection with any Restricted Payment; (xix) ~~Holdings~~ the Parent Borrower or any Restricted Subsidiary may (a) pay (or to make Restricted Payments to allow any direct or indirect parent of the Parent Borrower to pay) cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor (or to make Restricted Payments to allow any direct or indirect parent of the Parent Borrower to honor) any conversion request by a holder of ~~convertible Indebtedness~~ Convertible Notes and make cash payments (or to make Restricted Payments to allow any direct or indirect parent of the Parent Borrower to make cash payments) in lieu of fractional shares in connection with any such conversion of Convertible Notes and may make payments on ~~convertible Indebtedness~~ Convertible Notes in accordance with ~~its~~ their terms; (~~xii~~xi) ~~the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of~~ Restricted Payments in an annual amount not to ~~any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to~~ exceed the sum of (a) 6.0% ~~per annum~~ of the sum of (i) the net cash proceeds ~~of such IPO~~ received by the Parent Borrower from any follow-on public equity issuance by the Parent Borrower and (ii) the net cash proceeds from any follow-on public equity issuance by any direct or indirect parent of the Parent Borrower to the extent contributed to ~~Intermediate~~ the Parent Borrower in cash as a capital contribution or ~~Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s~~ in exchange for common ~~stock registered on Form S-8 and~~ equity plus (b) 7.0% of the market capitalization of ~~Intermediate~~ Parent Borrower or any parent of the Parent at Borrower (so long as such parent does not own material assets, and is not engaged in any material business, other than its direct or indirect ownership of the ~~time~~ Equity Interests of ~~such IPO~~the Parent Borrower) on the date of the declaration of a Restricted Payment in reliance on this clause (xii); provided that any Indebtedness incurred or Investments or payments made in reliance upon the Available RP Capacity Amount utilizing the unused amounts available pursuant to this Section 6.08(a)(xi) shall reduce the amounts available pursuant to this Section 6.08(a)(xi); (~~xiii~~xii) payments made or expected to be made by ~~Holdings, any~~ the Parent Borrower or any Restricted Subsidiary (or made to a direct or indirect parent of the Parent Borrower to allow such parent to make such payments) in respect of withholding or similar taxes payable by the Parent Borrower, any parent of the Parent Borrower (so long as such parent does not own material assets, and is not engaged in any material business, other than its direct or indirect ownership of the Equity Interests of the Parent Borrower) or any Restricted Subsidiary upon exercise of Equity Interests by any future, present or former employee, director, officer, ~~manager~~ manager, consultant or ~~consultant~~ other service provider (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests of the Parent Borrower, any parent of the Parent Borrower (so long as such parent does not own material assets, and is not engaged in any material business, other than its direct or indirect ownership of the Equity Interests of the Parent Borrower) or any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (~~xiv~~xiii) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to ~~5.00~~ 2.50 to ~~1.0~~ 1.00 and (B) there is no continuing Significant Event of Default; (xvxiv) the Parent Borrower may make Restricted Payments ~~constituting~~ to pay (or ~~otherwise made in connection with~~ to make Restricted Payments to allow any direct or ~~relating~~ indirect parent of the Parent Borrower to ~~any IPO Reorganization Transactions (limited~~pay) to holders of Parent Borrower’s convertible preferred shares the preferred dividend pursuant to the Certificate of Designation of Convertible Preferred Shares of the Parent Borrower, which went into effect on December 13, 2024, in ~~the case of payments pursuant~~ an aggregate principal amount not to ~~a tax receivable agreement, to Permitted Tax Receivable Payments)~~exceed $12,000,000 per fiscal year; (~~xvi~~xv) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to ~~Holdings,~~ a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted ~~Subsidiaries,~~ Subsidiaries the primary assets of which are Permitted ~~Investments~~Investments (except to the extent that such Permitted Investments constitute the proceeds of any sale of the assets or equity of any Unrestricted Subsidiary)); (~~xvii~~xvi) the ~~declaration~~ Borrowers and ~~payment~~ the Restricted Subsidiaries may make Restricted Payments in cash, the proceeds of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings, any which shall be used by a Borrower or any Restricted Subsidiary ~~may~~ to pay (or to make Restricted Payments ~~in cash~~ to ~~Holdings~~ allow any direct or indirect parent of the Parent Borrower to ~~permit Holdings~~ pay), for any taxable period for which a Borrower and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes (a “Tax Group”) of which a Borrower or a direct or indirect parent of a Borrower is the common parent (or the Parent Borrower is a disregarded entity or partnership directly or indirectly owned by a member or members of such a Tax Group), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to ~~make, and Holdings may make,~~ the income of the Borrowers and/or their applicable Subsidiaries; provided that (a) Restricted Payments ~~in respect of Permitted~~ made pursuant to this clause (a)(xvi) shall not exceed the Tax ~~Distributions. For purposes of determining compliance with this Section 6.08(a), in~~ liability that the ~~event that a proposed Restricted Payment~~ Parent Borrower and/or its applicable Subsidiaries (~~or a portion thereof~~as applicable) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a). (b) Neither Holdings, Intermediate Holdings nor any Borrower will, nor will they permit any Restricted Subsidiary to, make or pay, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, except: (i) payment of regularly scheduled interest and principal payments as, in the form of payment and when due in respect of any Indebtedness, other than payments in respect of any Junior Financing prohibited by the subordination provisions thereof; (ii) refinancings of Junior Financing Indebtedness with proceeds of other Junior Financing Indebtedness permitted to be inwould have incurred we

Appears in 1 contract

Sources: Credit Agreement (Penguin Solutions, Inc.)

Appears in 1 contract

Sources: Credit Agreement (EverCommerce Inc.)

Restricted Payments; Certain Payments of Indebtedness. (a) ~~Neither Holdings~~The Borrower will not, ~~Intermediate Holdings nor any Borrower will, nor~~ and will ~~they~~ not permit any Restricted ~~Subsidiary~~Subsidiary to, to pay or make, directly or indirectly, any Restricted Payment, except: (i) ~~Each Borrower and~~ each Restricted Subsidiary may make Restricted Payments to ~~Intermediate Holdings, a~~ the Borrower or any ~~other~~ Restricted ~~Subsidiary; provided that~~ Subsidiary (and, in the case of any such ~~Restricted Payment by a Restricted~~ Subsidiary that is not a wholly-owned ~~Subsidiary of a Borrower~~Subsidiary, ~~such Restricted Payment is made to Intermediate Holdings, such Borrower, any Restricted Subsidiary and~~ to each other owner of Equity Interests of such ~~Restricted~~ Subsidiary ratably based on their relative ownership interests of the relevant class of Equity Interests); (ii) ~~payments or distributions~~ to ~~satisfy dissenters’ or appraisal rights~~the extent constituting a Restricted Payment, ~~pursuant to or in connection with a consolidation, amalgamation, merger or transfer of assets~~ the Borrower may consummate any transaction permitted by Section 6.03 (other than ~~with respect to the Transactions~~clause (i) ~~that complies with~~ thereof) and Section ~~6.03;~~6.04 (other than ▇▇▇▇▇▇▇ ▇.▇▇(▇), (▇), (▇), (▇), (▇) ▇▇▇ (▇)) (~~iii) Holdings and any Intermediate Holdings may declare and make dividend payments or other distributions payable solely in the Equity Interests of such Person; (iv~~▇▇▇) Restricted Payments made in connection with any Permitted Receivables Financing; (iv) Holdings and the Borrower may (or may pay Restricted Payments to permit any Parent Entity thereof or any Equityholding Vehicle to) redeem, repurchase, retire or otherwise acquire in whole or in ~~order to consummate~~ part any Equity Interests of Holdings, the ~~Transactions (including~~Borrower or any Restricted Subsidiary or any Equity Interests of any Parent Entity or Equityholding Vehicle, ~~without limitation, (A) cash payments to holders~~ in exchange for another class of Equity Interests or rights to acquire its Equity Interests or with proceeds from equity contributions or sales or issuances (other than to Holdings, the Borrower or a Restricted Subsidiary) of ~~Target as provided by the Acquisition Agreement, (B) Restricted Payments to direct and indirect parent companies~~ new shares of ~~Holdings to finance a portion of the consideration for the Acquisition and (C) other payments with respect to working capital adjustments or otherwise,~~ such Equity Interests to the extent ~~contemplated by~~ contributed to Holdings or the ~~Acquisition Agreement)~~Borrower (in each case other than Disqualified Equity Interests, “Refunding Equity Interests”) substantially concurrently with such contribution or sale or issuance; provided that ~~the earnout contemplated by Exhibit F~~ (i) any terms and provisions material to the ~~Acquisition Agreement shall~~ interests of the Lenders, when taken as a whole, contained in such Refunding Equity Interests are at least as advantageous to the Lenders as those contained in the Equity Interests redeemed thereby and (ii) Holdings, the Borrower, and any Restricted Subsidiary may pay Restricted Payments payable solely in the Equity Interests (other than Disqualified Equity Interests not be otherwise permitted ~~on the basis~~ by Section 6.01) of ~~this clause (iv))~~such Person; (v) repurchases of Equity Interests in ~~Holdings~~ any Parent Entity (or make Restricted Payments ~~by Holdings~~ to allow repurchases of Equity Interest in any ~~direct or indirect parent of Holdings~~Parent Entity) ~~or Intermediate Holdings~~ deemed to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price of such stock options or warrants or other incentive ~~interest~~interests; (vi) ~~Restricted Payments to Holdings which Holdings~~ the Borrower may ~~use to~~ redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted ~~stock units or~~ stock, stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) (or make Restricted Payments to allow any of ~~Holdings’ direct or indirect parent companies~~ its Parent Entities to so redeem, retire, acquire or repurchase their Equity Interests (or any options, warrants, restricted stock, stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) ), in each case, held by current or former officers, managers, consultants, ~~directors and employees~~ directors, employees, independent contractors or other service providers (or their respective ~~spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees~~Immediate Family Members) of ~~Holdings (~~the Borrower or any ~~direct or indirect parent thereof), Holdings, the Borrowers~~ Parent Entity thereof and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment or service of, or breach of restrictive covenants by, any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, ~~profits interest~~stock subscription or equity incentive award agreement, employment termination agreement or any other employment agreements or equity holders’ agreement or similar agreement; provided ~~that~~ that, the aggregate amount of Restricted Payments permitted by this clause (vi) after the Effective Date, together with the aggregate amount of loans and advances to Holdings (or any other Parent Entity) previously made pursuant to Section 6.04(m) in lieu ~~thereof~~of Restricted Payments permitted by this clause (vi), shall not exceed ~~the sum of (A) the greater of~~ $~~15.0 million and 5.0% of Consolidated EBITDA for the most recently ended Test Period~~ 5,000,000 in any fiscal year ~~of Holdings~~ (which ~~subsequent~~ shall increase to $10,000,000 following the consummation of an ~~IPO shall be increased to the greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period~~ IPO) with unused amounts in any fiscal year ~~of Holdings), (B) the amount in any~~ being carried over for no more than two succeeding fiscal ~~year equal to the~~ years plus all net cash proceeds ~~of key~~ obtained from any key-man life insurance policies received during such fiscal year (without giving effect to the following proviso) plus all proceeds obtained by ~~Holdings,~~ the ~~Borrowers~~ Borrower or any Parent Entity (and contributed to the ~~Restricted Subsidiaries~~ Borrower) after the Effective Date, (C) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds Date from the sale of such Equity Interests ~~are contributed~~ to ~~Holdings~~ other future, current or former officers, managers, consultants, employees, directors and independent contractors (or their respective Immediate Family Members) in ~~the form of common Equity Interests~~ connection with any plan or ~~Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied~~ agreement referred to ~~the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and~~ above in this clause (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year may be carried forward to succeeding fiscal yearsa)(vi); (vii) ~~Holdings and any Intermediate Holdings~~ the Borrower may make Restricted Payments in ~~cash~~cash to Holdings or any other Parent Entity: (A) ~~without duplication of any Permitted Tax Distribution~~so long as the Borrower is properly treated as a flow-through entity for U.S. federal income tax purposes, ~~the proceeds of which shall be used by~~ to enable Holdings or ~~any Intermediate Holdings to pay (or~~ such Parent Entity to make ~~Restricted Payments~~ tax distributions to ~~allow any~~ its direct or indirect ~~parent of Holdings~~ equity owners to ~~pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary~~ pay their respective tax ~~group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent~~ liabilities (~~a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable~~including estimated payments thereof) ~~of such Tax Group for such taxable period that are~~ attributable to the income of ~~Holdings and/or~~ the Borrower and its ~~Subsidiaries~~subsidiaries in any taxable period; provided that ~~Restricted Payments made pursuant to this clause~~ such tax liabilities shall be calculated for each taxable year by multiplying (~~a)(vii)(A~~I) ~~shall not exceed~~ the ~~Tax liability~~ excess of each such equity owner’s allocated share of taxable income over taxable losses of the Borrower for such taxable year (or if the Borrower is a disregarded entity, the excess of taxable income over taxable losses of the Borrower that ~~Holdings and/or its Subsidiaries (as applicable)~~ would ~~have incurred were such Taxes determined as~~ exist if such ~~entity(ies~~excess were calculated assuming that the Borrower is a partnership for U.S. federal income tax purposes), taking into account such losses only to the extent usable against such income, determined taking into account any step-up attributable to a direct or indirect member of the Borrower under section 743(b) ~~were~~ or 734(b) of the Code, reduced by any losses, deductions, credits and other attributes of the Borrower (or if the Borrower is a ~~stand~~disregarded entity, such losses, deductions, credits or other attributes of the Borrower that would exist if the Borrower is a partnership for U.S. federal income tax purposes) arising from and after the Closing Date to the extent such amounts can be used to offset such taxable income and have not previously been taken into account as an offset hereunder, by (II) the highest combined marginal U.S. federal, state and local tax rate then applicable to a natural person or corporation residing in New York City, New York or San Francisco, California (taking into account the application of the Medicare contribution tax, the character of the taxable income in question, and the alternative minimum tax rules, taking into account the character of income (long-~~alone taxpayer or a stand-alone group~~term capital gain, qualified dividend income, etc.) and determined after giving effect to the maximum allowable deduction for state and local income taxes for U.S. federal income tax purposes) for the relevant taxable period; ~~and provided, further,~~ provided further that ~~Restricted Payments~~ the amount of any distribution permitted under this subclause (A) ~~in respect~~ shall be reduced by the amount of any ~~Taxes~~ income taxes that are paid directly by the Borrower and attributable to such equity owner; provided, further, that to the extent a portion of the net taxable income of ~~any~~ the Borrower is attributable to an Unrestricted ~~Subsidiaries of Holdings may~~ Subsidiary, the tax distributions with respect to such portion shall be ~~made~~ allowed only to the extent ~~that~~ actual cash is received by the Borrower or its Restricted Subsidiary from such Unrestricted ~~Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers or their Restricted Subsidiaries~~Subsidiary ; (B) the proceeds of which shall be used by ~~Holdings or any Intermediate Holdings~~ such Parent Entity to pay ~~(or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay)~~ (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) ), that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by ~~directors~~ directors, officers, members of management, managers, employees or ~~officers~~ consultants of Holdings (or any ~~parent thereof or any Intermediate Holdings~~other Parent Entity) attributable to the ownership or operations of ~~Holdings~~any Parent Entity, the ~~Borrowers~~ Borrower and the respective Restricted Subsidiaries, (3) fees and expenses (x) due and payable by the Borrower or any ~~of Holdings, the Borrowers and the~~ Restricted ~~Subsidiaries~~ Subsidiary and (y) otherwise permitted to be paid by ~~Holdings,~~ the ~~Borrowers~~ Borrower and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by ~~Holdings,~~ the ~~Borrowers~~ Borrower or the Restricted Subsidiaries pursuant to Section 6.09(iii), (v) or (x); (C) the proceeds of which shall be used by Holdings (or any ~~Intermediate Holdings~~ other Parent Entity) to pay ~~(or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay)~~ franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence; (D) the proceeds of which ~~shall~~ will be ~~used by Holdings~~ applied to make ~~Restricted Payments~~ any payments permitted by Section ~~6.08(a)(iv~~6.09(vii) or and Section ~~6.08(a)(vi~~6.09(x); (E) the proceeds of which shall be used by any Parent Entity to finance any Investment that would be permitted to be made by the Borrower or any Restricted Subsidiary pursuant to Section 6.04 other than Section 6.04(m); provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) ~~Holdings or any Intermediate Holdings~~ such Parent Entity shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to ~~Holdings,~~ the ~~Borrowers~~ Borrower or any Restricted Subsidiary (and in no event shall any such contribution increase the ~~Restricted Subsidiaries~~ Available Equity Amount) or (y) the Person formed or acquired to merge into or consolidate or amalgamate with ~~Holdings,~~ the ~~Borrowers~~ Borrower or any ~~of the~~ Restricted ~~Subsidiaries~~ Subsidiary to the extent such ~~merger, amalgamation~~ merger or consolidation is permitted in by Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (F) the proceeds of which shall be used to pay customary salary, ~~bonus~~ bonus, severance and other benefits payable to ~~officers and~~ current or former directors, officers, members of management, managers, consultants, independent contractors or employees of Holdings or any ~~direct or indirect parent company of Holdings~~ other Parent Entity to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of ~~Holdings,~~ the ~~Borrowers~~ Borrower and the Restricted Subsidiaries~~; and~~; (G) the proceeds of which shall be used by Holdings (or any ~~Intermediate Holdings~~ other Parent Entity) to pay (~~or to make Restricted Payments to allow any direct or indirect parent thereof to pay~~i) fees and expenses related to any successful or unsuccessful equity issuance or offering or debt issuance, incurrence or offering, ~~debt offering~~ disposition or acquisition, Investment or other ~~non-ordinary course~~ transaction ~~not prohibited~~ permitted by this Agreement and (~~whether~~ ii) after the consummation of an IPO described in clause (a) of the definition thereof or ~~not such offering or other transaction is successful)~~issuance of public debt securities, Public Company Costs; and (H) the proceeds of which shall be used for the payment of insurance premiums to the extent attributable to any Parent Entity, the Borrower and their subsidiaries; (viii) in addition to the foregoing Restricted Payments, the ~~Borrowers and any Intermediate Holdings~~ Borrower may make additional Restricted Payments to ~~any Intermediate Holdings and~~ Holdings~~, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt~~, in an aggregate amount~~, when taken together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii)~~, not to exceed the sum of (A) ~~an amount at~~ the ~~time of making any such~~ Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of Amount at such ~~Restricted Payment plus (B)~~ time so long as no Event of Default ~~shall have~~ has occurred and be is continuing (~~or, in the case of the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a~~or would occur after giving pro forma effect to such action), plus (~~b), (h~~B) ~~or (i)),~~ the Available Amount that is Not Otherwise Applied as in effect immediately prior to the time of making of such Restricted Payment; provided that, in the case of this clause (B), (x) no Event of Default has occurred and is continuing (or would occur after giving pro forma effect to such action) and (y) after giving pro forma effect to such Restricted Payment on a pro forma basis as of the last day of the Test Period most recently ended on or prior to such date of such Restricted Payment (measured as of the date such Restricted Payment is made based upon the financial statements most recently delivered (or required to have been delivered) on or prior to such date pursuant to Section 5.01(a) or (b)), the Total Net Cash Leverage Ratio is less than or equal to 5.50:1.00, plus (C) the Available Equity Amount that is Not Otherwise ~~Applied~~Applied as in effect immediately prior to the time of making of such Restricted Payment; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity ~~Interests~~Interests (and in no event shall such contribution or issuance so utilized increase the Available Equity Amount); provided that such new Equity Interests contain terms and provisions at least as ~~advantageous~~ advantageous, taken as a whole, to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; (xi) ~~Holdings~~ the Borrower may make Restricted Payments to any Parent Entity to enable such Parent Entity to (aA) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (bB) honor any conversion request by a holder of convertible Indebtedness by delivering or issuing Equity Interests and ~~make~~ making cash payments in lieu of fractional shares in connection with any such conversion and may make required cash interest payments on convertible Indebtedness in accordance with its terms; (xii) following the ~~declaration and payment~~ consummation of ~~Restricted Payment on Holdings’ common stock (or~~ an IPO, the payment of Restricted Payments to Holdings or any direct ~~or indirect parent company~~ Parent Entity of Holdings to fund a the payment of regular dividends on such company’s ~~common stock)~~Equity Interests, ~~following consummation of~~ in an ~~IPO, of up~~ aggregate amount per annum not to ~~sum of (a)~~ exceed 6.0% per annum of the ~~net cash~~ aggregate amount of proceeds of from such IPO received by by, or contributed to, the Borrower or any Restricted Subsidiary; provided that, on the date of declaration of any such dividend, after giving effect to ~~Intermediate Parent~~ such dividend, there is no continuing Event of Default before or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPOafter giving effect thereto; (xiii) payments made ~~or expected to be made~~ by ~~Holdings, any~~ the Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled ~~Affiliates,~~ Affiliates or Immediate Family ~~Members or Permitted Transferees~~Members) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) ~~additional~~ a Restricted ~~Payments~~Payment in an amount not to exceed $50,000,000; provided that after giving effect to such Restricted Payment (A) on a ~~Pro Forma Basis~~pro forma basis as of the Test Period most recently ended on or prior to the date of such Restricted Payment (measured as of the date such Restricted Payment is made based upon the financial statements most recently delivered (or required to have been delivered) on or prior to such date pursuant to Section 5.01(a) or (b)), the Total Net Cash Leverage Ratio is less than or equal to ~~5.00 to 1.0~~ 6.00:1.00 and (B) ~~there is~~ no ~~continuing~~ Event of ~~Default~~Default has occurred and is continuing (or would occur after giving pro forma effect to such Restricted Payment); (xv) Restricted Payments constituting or otherwise made in connection with or relating to any ~~IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted~~ Tax ~~Receivable Payments)~~Restructuring; (xvi) the ~~distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a~~ Borrower ~~or a~~ may make Restricted ~~Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries~~Payments, the ~~primary assets~~ proceeds of which are ~~Permitted Investments);~~ applied (~~xvii~~A) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make Restricted Payments in cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) ~~through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing~~ on the ~~date~~ Effective Date, solely to effect the consummation of ~~such reclassification~~the Transactions and (ii) ~~such Restricted Payment (or portion thereof) between such clauses (i) through (xviii)~~on and after the Effective Date, in a manner that otherwise complies with this Section 6.08(a). (b) Neither Holdings, Intermediate Holdings nor any Borrower will, nor will they permit any Restricted Subsidiary to, make or pay, directly or indirectly, to satisfy any payment ~~or other distribution~~ obligations owing under the Merger Agreement (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, except: (i) payment of regularly scheduled interest and principal payments as, in the form of payment and when due in respect of any ~~Indebtedness, other than~~ payments ~~in respect of any Junior Financing prohibited by the subordination provisions thereof; (ii) refinancings of Junior Financing Indebtedness with proceeds of other Junior Financing Indebtedness permitted~~ required to be inmade after the Effective Date in connection with, or necessary to consummate, the Transactions and the other transactions set forth in the Merger Agreement) and (B) to payments or distributions to satisfy dissenters’ rights purs

Appears in 1 contract

Sources: Incremental Facility Agreement (GoHealth, Inc.)

Restricted Payments; Certain Payments of Indebtedness. ~~(a) Neither Holdings, Intermediate Holdings nor any Borrower will, nor~~ i. No Loan Party will ~~they permit any Restricted Subsidiary, to pay~~ declare or make, directly or indirectly, any Restricted Payment, ~~except:~~except that (ia) ~~Each Borrower and each~~ any Loan Party or any Restricted Subsidiary of a Loan Party may ~~make~~ declare and pay Restricted Payments to ~~Intermediate Holdings,~~ a ~~Borrower~~ Loan Party and a pro rata Restricted Payment to any third party in respect of non-wholly owned Restricted Subsidiaries; b) any Loan party may declare and pay Restricted Payments to Holdings or Parent (or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a wholly-owned Subsidiary of a Borrower, such Restricted Payment is made to Intermediate Holdings, such Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests; (ii) payments or distributions to satisfy dissenters’ or appraisal rights, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of assets (other than with respect to the Transactions) that complies with Section 6.03; (iii) Holdings and any Intermediate Holdings may declare and make dividend payments or other distributions payable solely in the Equity Interests of such Person; (iv) Restricted Payments made in connection with or in order to consummate the Transactions (including, without limitation, (A) cash payments to holders of Equity Interests of Target as provided by the Acquisition Agreement, (B) Restricted Payments to direct and indirect parent companies of Holdings to finance a portion of the consideration for the Acquisition and (C) other payments with respect to working capital adjustments or otherwise, to the extent contemplated by the Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv)); (v) repurchases of Equity Interests in Holdings (or Restricted Payments by Holdings to allow repurchases of Equity Interest in any direct or indirect parent of ~~Holdings) or Intermediate Holdings deemed to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion of~~ the exercise price of such stock options or warrants or other incentive interest; (vi) Restricted Payments to Holdings which Holdings may use to redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted stock units or stock appreciation rights or other equity-linked interests issued with respect to any of such Equity InterestsLead Borrower) (~~or make Restricted Payments~~ w) to ~~allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests) held by current or former officers, managers, consultants, directors~~ pay general corporate and employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), Holdings, the Borrowers and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, profits interest, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that the aggregate amount of Restricted Payments permitted by this clause (vi) after the Effective Date, together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu thereof, shall not exceed the sum of (A) the greater of $15.0 million and 5.0% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings (which subsequent to an IPO shall be increased to the greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings), (B) the amount in any fiscal year equal to the cash proceeds of key man life insurance policies received overhead expenses incurred by Holdings, ~~the Borrowers~~ Parent or ~~the Restricted Subsidiaries after the Effective Date~~Burlington Stores, (C) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year may be carried forward to succeeding fiscal years; (vii) Holdings and any Intermediate Holdings may make Restricted Payments in cash: (A) without duplication of any Permitted Tax Distribution, the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (a)(vii)(A) shall not exceed the Tax liability that Holdings and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers or their Restricted Subsidiaries; (B) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred Inc. in the ordinary course of business ~~and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable~~ but only to ~~third parties) that are reasonable and customary and incurred in~~ the ~~ordinary course~~ extent related to the business of ~~business, (2)~~ the Loan Parties or the amount of any ~~reasonable and customary~~ indemnification claims made by ~~directors~~ any director or ~~officers~~ officer of Holdings or the Parent, (x) to pay franchise taxes and other fees, taxes and expenses required to maintain the corporate existence of Holdings, Parent or Burlington Stores, Inc. (or any ~~parent thereof~~ other direct or ~~any Intermediate Holdings~~indirect Parent of the Borrower), and (y) ~~attributable~~ to ~~the ownership or operations of Holdings, the Borrowers and the Restricted Subsidiaries, (3) fees and expenses (x)~~ pay taxes that are due and payable by ~~any~~ Holdings as the parent of ~~Holdings, the Borrowers~~ a consolidated group that includes Parent and ~~the~~ its Restricted Subsidiaries and (y) otherwise permitted to be paid by Holdings, the Borrowers and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the Borrowers or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x)Subsidiaries; c) the Loan Parties may make Restricted Payments made prior to or substantially concurrently with the initial public offering of Burlington Stores, Inc. for the purpose of paying amounts owing under the advisory agreement with the Sponsor, to the extent permitted under SECTION 6.07; d) the Loan Parties may make Restricted Payments to Burlington Stores, Inc. using solely a portion of the net proceeds of the Additional Term B-3 Loans (Cas defined in the Term Loan Agreement) on or after the Closing Date to fund Burlington Stores, Inc.’s repurchase or redemption, defeasance or other retirement of the Holdco Notes; e) the Loan Parties may declare and make Restricted Payments with respect to its Capital Stock payable solely in shares of Capital Stock of the Loan Parties that is not Disqualified Capital Stock; f) the Lead Borrower may make payments (or may make Restricted Payments to any parent, the proceeds of which ~~shall~~ will be used ~~by Holdings or any Intermediate Holdings to pay (or~~ to make ~~Restricted Payments to allow any direct or indirect parent of Holdings to pay~~payments) ~~franchise~~ at such times and ~~similar Taxes, and other fees and expenses, required to maintain its organizational existence; (D) the proceeds of which shall be used by Holdings~~ in such amounts as are necessary to make ~~Restricted Payments permitted by Section 6.08(a)(iv)~~ payments of or ~~Section 6.08(a)(vi); (E) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(m); provided that~~ on account of (1) ~~such Restricted Payment shall be made substantially concurrently with the closing of such Investment~~ monitoring or management or similar fees or transaction fees and (2) ~~Holdings or any Intermediate Holdings shall~~reimbursement of out-of-pocket costs, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to Holdings, the Borrowers or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with Holdings, the Borrowers or any of the Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such Investmentexpenses and indemnities, in each case ~~in accordance with~~ to the ~~requirements of Sections 5.11 and 5.12; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings~~ Sponsor or any ~~direct or indirect parent company~~ of ~~Holdings~~ its Affiliates, in each case to the extent ~~such salaries, bonuses and other benefits are attributable to~~ permitted by SECTION 6.07(l) (assuming the ownership or operation of Holdings, the Borrowers and the Restricted Subsidiaries; and (G) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successfulLead Borrower was party thereto); ~~(viii~~g) ~~in addition to the foregoing Restricted Payments~~as long as no Event of Default exists or would arise therefrom, the ~~Borrowers and~~ Loan Parties may make a Restricted Payment as consideration for the acquisition of additional Capital Stock in any ~~Intermediate Holdings~~ Restricted Subsidiary from minority shareholders that are not Affiliates; provided that the amount of Restricted Payments permitted pursuant to this clause (vii) shall not exceed $25,000,000 in any Fiscal Year; h) the Loan Parties may make additional Restricted Payments to ~~any Intermediate Holdings and Holdings,~~ the ~~proceeds of which may be utilized by Holdings to make additional~~ extent that such Restricted Payments ~~or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt, in an aggregate amount, when taken together with~~ are made within ninety (90) days following the ~~aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii), not to exceed the sum~~ Lead Borrower’s receipt of (A) ~~an amount at~~ Net Proceeds received by the ~~time~~ Lead Borrower (or any parent entity) after the First Amendment Effective Date from the issuance or sale of ~~making~~ Capital Stock of the Lead Borrower that is not Disqualified Capital Stock (or any ~~such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A~~parent entity) ~~not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus~~ or (B) ~~so long as no Event~~ proceeds of ~~Default shall have occurred and be continuing (or~~an equity contribution initially made to Parent, in each case to the ~~case~~ extent such proceeds have been contributed to the common equity of the ~~use~~ Lead Borrower and have not been applied pursuant to clause (bb) of the ~~Starter Basket that is Not Otherwise Applied, no Event~~ definition of ~~Default under Section 7.01(a), (b), (h)~~ “Permitted Investment” or ~~(i)),~~ utilized to also increase the Available Amount ~~that is Not Otherwise Applied plus~~ (Cas defined in the Term Loan Agreement); i) the Available Equity Amount that is Not Otherwise Applied; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous Loan Parties may make Restricted Payments to the ~~Lenders in all respects material~~ Parent (or any parent entity) to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; (xi) Holdings may (a) pay cash in lieu of fractional ~~Equity Interests~~ Capital Stock in connection with (a) any dividend, split or combination thereof or any ~~Permitted~~ Acquisition (or other ~~similar Investment)~~ Investment otherwise permitted hereunder, all or a portion of the consideration for which is paid in whole or in part in Capital Stock of the Parent, and (b) ~~honor~~ any conversion request by a holder of convertible Indebtedness ~~and make cash payments in lieu of fractional shares in connection with any~~ (to the extent such conversion ~~and~~ request is paid solely in shares of Capital Stock of the Parent (or any parent entity) that is not Disqualified Capital Stock); j) the Loan Parties may make ~~payments~~ Restricted Payments to its direct or indirect parent to declare and pay regular quarterly dividends on ~~convertible Indebtedness in accordance with~~ its ~~terms; (xii) the declaration and payment of Restricted Payment on Holdings’~~ common stock (or ~~the payment~~ similar Capital Stock of ~~Restricted Payments to any~~ its direct or indirect ~~parent company of Holdings~~ parent) in an amount not to ~~fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0~~exceed 6% per ~~annum~~ year of the aggregate net cash proceeds of the initial public offering of such ~~IPO~~ parent that were actually received by or contributed to ~~Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0%~~ the Capital Stock of the ~~market capitalization~~ Lead Borrower in or from such initial public offering; k) the making of ~~Intermediate Parent or Parent~~ any Restricted Payment within 60 days after the date of declaration thereof, if at the ~~time~~ date of both such ~~IPO; (xiii) payments made or expected to be made by Holdings, any Borrower or any~~ declaration and payment such Restricted ~~Subsidiary in respect~~ Payment would have complied with another provision of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Paymentsthis SECTION 6.06(a); provided that ~~after giving effect to~~ the making of such Restricted Payment ~~(A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal~~ will reduce capacity for Restricted Payments pursuant to ~~5.00 to 1.0 and (B) there is no continuing Event of Default~~such other provision when so made; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvil) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary Loan Parties may make Restricted Payments ~~in cash to Holdings to permit Holdings to make~~consisting of Permitted Dispositions of the type described, and ~~Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a)~~subject to the limitations contained, in the ~~event that a proposed~~ definition thereof; and m) the Loan Parties may make other Restricted Payments if the Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a)Conditions are satisfied. ~~(b) Neither Holdings, Intermediate Holdings nor any Borrower will, nor~~ ii. No Loan Party will ~~they permit any Restricted Subsidiary to,~~ pay or make ~~or pay, directly or indirectly,~~ any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any ~~Junior Financing~~Indebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any ~~Junior Financing~~Indebtedness, except: a) payments in Capital Stock (ias long as no Change in Control would result therefrom) ~~payment~~ and payments of ~~regularly scheduled~~ interest in-kind of the Loan Parties and their Subsidiaries; b) payments of principal ~~payments as, in the form of payment~~ and ~~when due~~ interest in respect of any ~~Indebtedness, other than payments in respect of any Junior Financing prohibited by the~~ Subordinated Indebtedness (subject to applicable subordination provisions ~~thereof~~relating thereto); ~~(ii) refinancings of Junior Financing Indebtedness with proceeds of other Junior Financing Indebtedness permitted to be in~~

Appears in 1 contract

Sources: Credit Agreement (Burlington Stores, Inc.)

Restricted Payments; Certain Payments of Indebtedness. TC “SECTION 6.08. Restricted Payments; Certain Payments of Indebtedness.” \f C \l “2” (a) ~~Neither Holdings, Intermediate Holdings nor any Borrower~~ No Loan Party will, nor will ~~they~~ it permit any ~~Restricted Subsidiary~~Subsidiary to, declare or make, or agree to ~~pay~~ declare or make, directly or indirectly, any Restricted Payment, ~~except:~~ or incur any obligation (contingent or otherwise) to do so, except (i) ~~Each~~ the Borrower may declare and pay dividends with respect to its common stock payable solely in additional shares of its common stock, and, with respect to its preferred stock, payable solely in additional shares of such preferred stock or in shares of its common stock, (ii) Subsidiaries may declare and pay dividends ratably with respect to their Equity Interests, (iii) subject to Section 2.11(c), the Borrower and each ~~Restricted~~ Subsidiary may ~~make Restricted Payments to Intermediate Holdings~~purchase, ~~a Borrower~~ redeem or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a wholly-owned Subsidiary of a Borrower, such Restricted Payment is made to Intermediate Holdings, such Borrower, any Restricted Subsidiary and to each other owner of otherwise acquire its common Equity Interests with the proceeds received from the substantially concurrent issuance of ~~such Restricted Subsidiary based on their relative ownership interests of the relevant class of~~ new common Equity Interests~~; (ii) payments or distributions to satisfy dissenters’ or appraisal rights~~, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of assets (other than with respect to the Transactions) that complies with Section 6.03; (iii) Holdings and any Intermediate Holdings may declare and make dividend payments or other distributions payable solely in the Equity Interests of such Person; (iv) ~~Restricted Payments made in connection with~~ the Borrower and any of its Subsidiaries may make dividends, distributions or in order to consummate the Transactions (including, without limitation, (A) cash payments to holders of Equity Interests of Target as provided by the Acquisition Agreement, (B) Restricted Payments to direct and indirect parent companies of Holdings to finance a portion of the consideration for the Acquisition and (C) other payments with respect to ~~working capital adjustments~~ awards granted to current or ~~otherwise~~former employees, directors or independent contractors of any Loan Party or any of its Affiliates; provided that, no such dividends, distributions or payments shall be made in cash pursuant to this clause (iv) unless (x) both immediately prior to and after giving effect (including pro forma effect) thereto, no Default or Event of Default shall occurred and be continuing and (y) such dividends, distributions and payments shall be made in accordance with the Borrower’s 2020 Equity and Incentive Compensation Plan, effective as of May 6, 2020 (as amended, restated, supplemented or otherwise modified from time to time, except to the extent any such amendment, restatement or modification would be materially adverse to the Lenders) or a new equity incentive plan that is reasonably acceptable to the Administrative Agent (as amended, restated, supplemented or otherwise modified from time to time, except to the extent any such amendment, restatement or modification would be materially adverse to the Lenders) and (v) the Borrower and each Subsidiary may make other Restricted Payments not otherwise permitted under this Section 6.08(a), so long as the Payment Condition shall be satisfied with respect to such Restricted Payment. Notwithstanding the foregoing, and for the avoidance of doubt, (i) the conversion by holders of (including any cash payment upon conversion), or required payment of any principal or premium on, or required payment of any interest with respect to, any Permitted Convertible Notes, in each case, in accordance with the terms of the indenture governing such Permitted Convertible Notes, shall not constitute a Restricted Payment; provided that, to the extent ~~contemplated by the Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause~~ both (~~iv)); (v~~a) repurchases of Equity Interests in Holdings (or Restricted Payments by Holdings to allow repurchases of Equity Interest in any direct or indirect parent of Holdings) or Intermediate Holdings deemed to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price of such stock options or warrants or other incentive interest; (vi) Restricted Payments to Holdings which Holdings may use to redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted stock units or stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests) held by current or former officers, managers, consultants, directors and employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), Holdings, the Borrowers and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, profits interest, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that the aggregate amount of cash payable upon conversion or payment of any Permitted Convertible Note (excluding any required payment of interest with respect to such Permitted Convertible Note and excluding any payment of cash in lieu of a fractional share due upon conversion thereof) exceeds the aggregate principal amount thereof and (b) such conversion or payment does not trigger or correspond to an exercise or early unwind or settlement of a corresponding portion of the Bond Hedge Transactions constituting Permitted Call Spread Swap Agreements relating to such Permitted Convertible Note (including, for the avoidance of doubt, the case where there is no Bond Hedge Transaction constituting a Permitted Call Spread Swap Agreement relating to such Permitted Convertible Note), the payment of such excess cash (any such payment, a “Cash Excess Payment”) shall constitute a Restricted ~~Payments permitted by~~ Payment notwithstanding this clause (vii); and (ii) ~~after the Effective Date~~any required payment with respect to, ~~together~~ or required early unwind or settlement of, any Permitted Call Spread Swap Agreement, in each case, in accordance with the ~~aggregate amount~~ terms of ~~loans and advances to Holdings made pursuant to Section 6.04(m) in lieu thereof,~~ the agreement governing such Permitted Call Spread Swap Agreement shall not exceed the sum of (A) the greater of $15.0 million and 5.0% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings (which subsequent to an IPO shall be increased to the greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings), (B) the amount in any fiscal year equal to the cash proceeds of key man life insurance policies received by Holdings, the Borrowers or the constitute a Restricted Subsidiaries after the Effective Date, (C) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) andPayment; provided that, to the extent ~~contributed to Holdings, the~~ cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount is required to be paid under ~~the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion~~ a Warrant Transaction as a result of the ~~preceding basket calculated pursuant to clauses~~ election of “cash settlement” (Aor substantially equivalent term) ~~and~~ as the “settlement method” (Bor substantially equivalent term) ~~above for~~ thereunder by the Borrower (or its Affiliate) (including in connection with the exercise and/or early unwind or settlement thereof), the payment of such cash (any ~~fiscal year may be carried forward to succeeding fiscal years;~~ such payment, a “Cash Settlement Payment”) shall constitute a Restricted Payment notwithstanding this clause (~~vii) Holdings and any Intermediate Holdings~~ ii). Notwithstanding the foregoing, the Borrower may make Restricted Payments in ~~cash: (A) without duplication~~ respect of ~~any Permitted Tax Distribution~~Cash Excess Payments and/or Cash Settlement Payments so long as the Payment Condition shall be satisfied with respect thereto. Notwithstanding the foregoing, the ~~proceeds~~ Borrower may repurchase, exchange or induce the conversion of Permitted Convertible Notes by delivery of shares of the Borrower’s common stock and/or a different series of Permitted Convertible Notes (which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (a)(vii)(A) shall not exceed the Tax liability that Holdings and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers or their Restricted Subsidiaries; (B) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof or any Intermediate Holdings) attributable to the ownership or operations of Holdings, the Borrowers and the Restricted Subsidiaries, (3) fees and expenses series (x) ~~due~~ matures after, and ~~payable by~~ does not require any scheduled amortization or other scheduled payments of ~~Holdings~~principal prior to, the ~~Borrowers and~~ analogous date under the ~~Restricted Subsidiaries~~ indenture governing the Permitted Convertible Notes that are so repurchased, exchanged or converted and (y) ~~otherwise permitted~~ has terms, conditions and covenants that are, taken as a whole, no less favorable to ~~be paid~~ the Borrower than the Permitted Convertible Notes that are so repurchased, exchanged or converted (as determined by ~~Holdings~~the board of directors of the Borrower, or a committee thereof, in good faith)) (any such series of Permitted Convertible Notes, “Refinancing Convertible Notes”) and/or by payment of cash (in an amount that does not exceed the ~~Borrowers and~~ proceeds received by the ~~Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly~~ Borrower from the substantially concurrent issuance of shares of the Borrower’s common stock and/or a Refinancing Convertible Notes plus the net cash proceeds, if any, received by ~~Holdings,~~ the ~~Borrowers or the Restricted Subsidiaries~~ Borrower pursuant to ~~Section 6.09(iii)~~ the related exercise or ~~(x); (C)~~ early unwind or termination of the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence; (D) the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E) to finance any Investment permitted to be made related Permitted Call Spread Swap Agreements pursuant to ~~Section 6.04 other than Section 6.04(m~~the immediately following proviso); provided that, substantially concurrently with, or a commercially reasonable period of time before or after, the related settlement date for the Permitted Convertible Notes that are so repurchased, exchanged or converted, the Borrower shall (~~1) such Restricted Payment~~ and, for the avoidance of doubt, shall be ~~made substantially concurrently with the closing of such Investment and~~ permitted under this Section 6.08(a) to) exercise or unwind or terminate early (~~2) Holdings~~ whether in cash, shares or any ~~Intermediate Holdings shall, immediately following the closing~~ combination thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to Holdings, the Borrowers or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with Holdings, the Borrowers or any of the Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrowers and the Restricted Subsidiaries; and (G) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful); (viii) in addition to the foregoing Restricted Payments, the Borrowers and any Intermediate Holdings may make additional Restricted Payments to any Intermediate Holdings and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt, in an aggregate amount, when taken together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii), not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as no Event of Default shall have occurred and be continuing (or, in the case of the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h) or (i)), the Available Amount that is Not Otherwise Applied plus (C) the Available Equity Amount that is Not Otherwise Applied; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; (xi) Holdings may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiii) payments made or expected to be made by Holdings, any Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the ~~exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect~~ Permitted Call Spread Swap Agreements, if any, corresponding to such ~~Restricted Payment (A) on a Pro Forma Basis~~Permitted Convertible Notes that are so repurchased, ~~the Total Leverage Ratio is less than~~ exchanged or equal to 5.00 to 1.0 and (B) there is no continuing Event of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make Restricted Payments in cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a)converted. (b) ~~Neither Holdings, Intermediate Holdings nor any Borrower~~ No Loan Party will, nor will ~~they~~ it permit any ~~Restricted~~ Subsidiary to, make or ~~pay~~agree to pay or make, directly or indirectly, any voluntary payment or other voluntary distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any ~~Junior Financing~~Indebtedness, or any voluntary payment or other voluntary distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any ~~Junior Financing~~Indebtedness, except: (i) payment of Indebtedness created under the Loan Documents; (ii) payment of regularly scheduled interest and principal payments ~~as, in the form of payment~~ as and when due in respect of any ~~Indebtedness~~Indebtedness permitted to be incurred pursuant to Section 6.01, other than payments in respect of any ~~Junior Financing~~ Subordinated Indebtedness to the extent prohibited by the subordination provisions thereof; (iiiii) refinancings of ~~Junior Financing~~ Indebtedness to the extent permitted by Section 6.01; and (iv) payment of secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness (to the extent such sale or transfer is permitted by the terms of Section 6.05). Notwithstanding the foregoing, this Section 6.08(b) shall not apply to any direct or indirect prepayment, redemption, repurchase, conversion, settlement, amendment, modification, supplement or adjustment with ~~proceeds~~ respect to any Permitted Convertible Notes pursuant to their terms unless such prepayment, redemption, repurchase, conversion, settlement, amendment, modification, supplement or adjustment results from a default thereunder or an event of ~~other Junior Financing Indebtedness permitted to be in~~the type that constitutes an Event of Default.

Appears in 1 contract

Sources: Credit Agreement (TimkenSteel Corp)

Restricted Payments; Certain Payments of Indebtedness. (a) ~~Neither Holdings~~Except as permitted by Section 6.05, ~~Intermediate Holdings nor any~~ the Borrower ~~will~~will not, ~~nor~~ and will ~~they~~ not permit any ~~Restricted Subsidiary~~Subsidiary to, make or agree to pay or make, directly or indirectly, ~~any Restricted Payment, except: (i) Each Borrower and each Restricted Subsidiary may make Restricted Payments to Intermediate Holdings, a Borrower~~ or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a wholly-owned Subsidiary of a Borrower, such Restricted Payment is made to Intermediate Holdings, such Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests; (ii) payments be or distributions to satisfy dissenters’ or appraisal rights, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of assets (other than with respect to the Transactions) that complies with Section 6.03; (iii) Holdings and any Intermediate Holdings may declare and make dividend payments or other distributions payable solely in the Equity Interests of such Person; (iv) Restricted Payments made in connection with or in order to consummate the Transactions (including, without limitation, (A) cash payments to holders of Equity Interests of Target as provided by the Acquisition Agreement, (B) Restricted Payments to direct and indirect parent companies of Holdings to finance a portion of the consideration for the Acquisition and (C) other payments with respect to working capital adjustments or otherwise, to the extent contemplated by the Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv)); (v) repurchases of Equity Interests in Holdings (or Restricted Payments by Holdings to allow repurchases of Equity Interest in any direct or indirect parent of Holdings) or Intermediate Holdings deemed to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price of such stock options or warrants or other incentive interest; (vi) Restricted Payments to Holdings which Holdings may use to redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted stock units or stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests) held by current or former officers, managers, consultants, directors and employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), Holdings, the Borrowers and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, profits interest, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that the aggregate amount of Restricted Payments permitted by this clause (vi) after the Effective Date, together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu thereof, shall not exceed the sum of (A) the greater of $15.0 million and 5.0% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings (which subsequent to an IPO shall be increased to the greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings), (B) the amount in any fiscal year equal to the cash proceeds of key man life insurance policies received by Holdings, the Borrowers or the Restricted Subsidiaries after the Effective Date, (C) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year may be carried forward to succeeding fiscal years; (vii) Holdings and any Intermediate Holdings may make Restricted Payments in cash: (A) without duplication of any Permitted Tax Distribution, the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (a)(vii)(A) shall not exceed the Tax liability that Holdings and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this subclause (A) become liable in respect of any ~~Taxes attributable~~ obligation to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers or their Restricted Subsidiaries; (B) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof or any Intermediate Holdings) attributable to the ownership or operations of Holdings, the Borrowers and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of Holdings, the Borrowers and the Restricted Subsidiaries and (y) otherwise permitted to be paid by Holdings, the Borrowers and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the Borrowers or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x); (C) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence; (D) the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(m); provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) Holdings or any Intermediate Holdings shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to Holdings, the Borrowers or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with Holdings, the Borrowers or any of the Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrowers and the Restricted Subsidiaries; and (G) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful); (viii) in addition to the foregoing Restricted Payments, the Borrowers and any Intermediate Holdings may make additional Restricted Payments to any Intermediate Holdings and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt, in an aggregate amount, when taken together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii), not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as no Event of Default shall have occurred and be continuing (or, in the case of the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h) or (i)), the Available Amount that is Not Otherwise Applied plus (C) the Available Equity Amount that is Not Otherwise Applied; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; (xi) Holdings may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiii) payments made or expected to be made by Holdingsmake, any Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment (~~A) on a Pro Forma Basis, the Total Leverage Ratio is less than~~ but excluding payments or ~~equal to 5.00 to 1.0 and (B) there is no continuing Event~~ distributions of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Paymentsits capital stock); (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make Restricted Payments in cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a). (b) Neither Holdings, Intermediate Holdings nor any Borrower will, nor will they permit any Restricted Subsidiary to, make or pay, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, except: (i) payment of Indebtedness created under the Loan Documents; (ii) payment of regularly scheduled interest and principal payments ~~as, in the form of payment~~ as and when due in respect of any Indebtedness, the prepayment of Capitalized Lease Obligations and the repayment of any Indebtedness assumed by the Borrower or any Subsidiary in connection with an acquisition within 45 days of the date of consummation of such acquisition; (iii) refinancings of Indebtedness to the extent permitted by Section 6.01; (iv) payment of secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness; (v) the repurchase, redemption, or other acquisition or retirement for value of any shares of any class of capital stock of the Borrower in exchange for (including any such exchange pursuant to the exercise of a conversion right or privilege in connection with which cash is paid in lieu of the issuance of fractional shares or scrip), or out of the Net Proceeds of a substantially concurrent issuance and sale for cash (other than to a Subsidiary) of, other shares of capital stock (other than Redeemable Capital Stock) of the Borrower; (vi) the repurchase, redemption, defeasance, retirement or acquisition for value or payment of principal of any subordinated Indebtedness or Redeemable Capital Stock in exchange for, or in an amount not in excess of the Net Proceeds of, a substantially concurrent issuance and sale for cash (other than to a Subsidiary of the Borrower) of, any capital stock or Redeemable Capital Stock of the Borrower; provided that -------- any such new Redeemable Capital Stock (A) shall have an aggregate liquidation preference that does not exceed the aggregate liquidation preference of the amount so refinanced; (B) has a stated maturity later than date six months after the Maturity Date; (vii) the repurchase, redemption, defeasance, retirement, refinancing, acquisition for value or payment of principal of any subordinated Indebtedness (other than Redeemable Capital Stock) through the substantially concurrent issuance of the new subordinated Indebtedness of the Borrower; provided -------- that any such new subordinated Indebtedness (A) shall be in a principal amount that does not exceed the principal amount and accrued interest thereon so refinanced or the accreted value thereof as of the date of refinancing (or, if such subordinated Indebtedness provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, then such lesser amount as of the date of determination), plus the lesser of (x) the stated amount of any premium or other payment required to be paid in connection with such a refinancing pursuant to the terms of the Indebtedness being refinanced or (y) the amount of premium or other payment actually paid at such time to refinance the Indebtedness, plus, in either case, the amount of expenses of the Borrower incurred in connection with such refinancing, (B) has a stated maturity for its final scheduled principal payment later than the date six months after the Maturity Date and (C) is expressly subordinated in right of payment to all amounts payable by the Borrower to the Lenders at least to the same extent as the subordinated Indebtedness to be refinanced to the reasonable satisfaction of the Required Lenders; (viii) the repurchase of shares of, or options to purchase shares of, common stock of Borrower or any of its Subsidiaries from employees, officers, consultants or directors or any former employees, officers, consultants or directors of the Borrower or any of its Subsidiaries (or permitted transferees of such employees, officers, consultants or directors or former employees, officers, consultants or directors), pursuant to the terms of the agreements (including employment agreements) or plans (or amendments thereto) or other arrangements or transactions approved by the Board of Directors of the Borrower under which such individuals purchase or sell or are granted that option to purchase or sell, shares of such common stock; provided, however, that the aggregate amount of such repurchases -------- ------- shall not exceed $1,000,000 in any calendar year or $3,000,000 in the aggregate for the term of this Agreement pursuant to this clause (viii); (ix) the (A) payment of dividends on the Borrower's Series B Preferred Stock (in the form of cash or additional shares of Series B Preferred Stock) in an aggregate amount not to exceed $3,000,000 in any calendar year; provided that such amounts may, to the extent not previously -------- paid, be aggregated through the period prior to the conversion or redemption of such Series B Preferred Stock, and (B) redemption of any shares of Series B Preferred Stock outstanding on the date of this Agreement (including any shares of Series B Preferred Stock issued on or after the date of this Agreement as dividends thereon or in respect of such additional shares so issued) pursuant to the terms of such shares of Series B Preferred Stock and the certificate of incorporation of the Borrower as in effect on the date of this Agreement (or as such terms may be amended to the extent such amendment is determined by the Board of Directors, in good faith, not to adversely affect the Lenders); (x) the payment or declaration of any dividend or the making of any distribution on or the redemption of rights or any securities issued pursuant to the Borrower Rights Agreement; (xi) the payment of cash in lieu of the issuance of fractional shares pursuant to any agreement, warrant or option and any repurchase or other acquisition of fractional shares from time to time; and (xii) the acquisition of capital stock of the Borrower by the Borrower in connection with the cashless exercise of any options, warrants or similar rights issued by the Borrower on or prior to January 1, 1998; (xiii) the payment or declaration of any non-cash dividend or distribution in respect of any of the Borrower's or any Subsidiaries' capital stock (including any preferred stock), it being understood that the Borrower shall not make any cash payments in excess of $1,000,000 in the aggregate (as permitted in definition of "Permitted Preferred Stock" set forth in Section 1.01) in respect to any redemption of preferred stock pursuant to Section 6(d) of Article Fourth of the Certificate of Amendment of the Borrower's Certificate of Incorporation dated November 6, 1997; (xiv) the redemption or repurchase of any class of Redeemable Capital Stock; provided that the aggregate cash payments in respect of such -------- redemption shall not be in excess of $1,000,000 for the term of this Agreement; and (xv) the payment of any ~~Junior Financing prohibited~~ cash dividends on Permitted Preferred Stock to the extent that (i) any such payment shall not be made with the proceeds of any Loan made hereunder, (ii) both before and after such payment is made by the ~~subordination provisions thereof~~Borrower or any Subsidiary of the Borrower is in pro forma compliance with the financial covenants set forth in Section 6.12, (iii) the aggregate amount of any such payments shall not exceed $25,000,000 in any fiscal year and (iv) after giving effect thereto, the aggregate amount of all such payments declared or made after the date hereof shall not exceed the sum of the following: (i) the Cumulative Operating Cash Flow determined at the time of such Restricted Payment less (ii) 150% of cumulative Consolidated Interest Expense determined for the period (treated as one accounting period) commencing on the date hereof and ending on the last day of the most recent fiscal quarter immediately preceding the date of such payment for which consolidated financial information of the Borrower is required to be available; (iiB) ~~refinancings~~ the aggregate Net Proceeds received after the date hereof by the Borrower from the issuance or sale (other than to any of ~~Junior Financing Indebtedness~~ its Subsidiaries) of capital stock (other than Redeemed Capital Stock) of the Borrower or any options, warrants or rights to purchase such capital stock (other than Redeemed Capital Stock) of the Borrower (except to the extent such proceeds are used to purchase, redeem or otherwise retire capital stock as set forth above in Section 6.08(vi) or (vii); (C) the aggregate Net Proceeds received after the date hereof by the Borrower (other than from any of its Subsidiaries) upon the exercise of any options, warrants or rights to purchase capital stock (other than Redeemed Capital Stock) of the Borrower; (D) the aggregate Net Proceeds received after the date hereof by the Borrower from the conversion or exchange, if any, of debt securities or Redeemable Capital Stock of the Borrower or its Subsidiaries into or for capital stock (other than Redeemed Capital Stock) of the Borrower plus, to the extent such debt securities or Redeemable Capital Stock were issued after the date hereof, the aggregate of Net Proceeds from their original issuance; and (E) in the case of the disposition or repayment of any Investment constituting a Restricted Payment, an amount equal to the lesser of (x) the cash return of capital with ~~proceeds~~ respect to such Investment (less the cost of disposition and taxes, if any) and (y) the initial amount of such Investment. (b) The Borrower will not, and will not permit any Subsidiary to, issue any preferred stock other ~~Junior Financing Indebtedness permitted~~ than Permitted Preferred Stock, the Series B Preferred Stock and other preferred stock issued to ~~be in~~a Loan Party.

Appears in 1 contract

Sources: Credit Agreement (Psinet Inc)

Restricted Payments; Certain Payments of Indebtedness. (a) ~~Neither Holdings, Intermediate Holdings nor any Borrower~~ The Issuers will, ~~nor~~ not, and will ~~they~~ not permit any ~~Restricted Subsidiary~~Subsidiary to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, ~~except:~~ or incur any obligation (contingent or otherwise) to do so, except that (i) ~~Each Borrower~~ any Issuer or Subsidiary may pay dividends to the Company or any other Issuer or Subsidiary (other than a Foreign Subsidiary) at such times and ~~each~~ in such amounts during any fiscal year, as shall be necessary to permit the Issuers or any other Subsidiary (other than a Foreign Subsidiary) to discharge their permitted liabilities, (ii) any Issuer or Subsidiary may pay dividends to a Foreign Subsidiary at such times and in such amounts so that the aggregate amount of the dividends paid by all Issuers (other than the Company) and all Subsidiaries to all Foreign Subsidiaries does not exceed $250,000 during any fiscal year, and (iii) the Company may make Restricted Payments in the form of dividends to the extent payable in, or exchanges or conversions for or into, shares of common stock of the Company or options or warrants to purchase common stock of the Company; and (iv) any Issuer or Subsidiary may make Restricted Payments required by the Confirmation Order to ~~Intermediate Holdings, a Borrower or any other Restricted Subsidiary; provided that~~ the shareholders of the "Existing Common Stock" (as defined in the ~~case~~ Plan of any such Restricted Payment by a Restricted Subsidiary that is not a wholly-owned Subsidiary of a Borrower, such Restricted Payment is made to Intermediate Holdings, such Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests; (iiReorganization) ~~payments or distributions to satisfy dissenters’ or appraisal rights, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of assets (other than~~ with respect to the Transactions) that complies with Section 6.03; (iii) Holdings and any Intermediate Holdings may declare and make dividend payments or other distributions payable solely in the Equity Interests of such Person; (iv) Restricted Payments made in connection with or in order to consummate the Transactions (including, without limitation, (A) ~~cash payments~~ 20% of any proceeds or other amounts relating to ~~holders~~ the Hick▇ ▇▇▇e Lawsuit (as defined in the Credit Agreement) to which the Issuers or any of ~~Equity Interests of Target as provided by the Acquisition Agreement~~their Subsidiaries are entitled, and (B) ~~Restricted Payments to direct and indirect parent companies~~ 40% of ~~Holdings to finance a portion of~~ any Net Proceeds (as defined in the ~~consideration for the Acquisition and (C~~Credit Agreement) ~~other payments with respect to working capital adjustments or otherwise, to the extent contemplated~~ received by the Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv)); (v) repurchases of Equity Interests in Holdings (or Restricted Payments by Holdings to allow repurchases of Equity Interest in any direct or indirect parent of Holdings) or Intermediate Holdings deemed to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price of such stock options or warrants or other incentive interest; (vi) Restricted Payments to Holdings which Holdings may use to redeem, acquire, retire or repurchase its Equity Interests (Issuers or any ~~options, warrants, restricted stock units or stock appreciation rights or other equity-linked interests issued~~ of their Subsidiaries with respect to any ~~of such Equity Interests) (~~sale, transfer or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests) held by current or former officers, managers, consultants, directors and employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), Holdings, the Borrowers and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, profits interest, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that the aggregate amount of Restricted Payments permitted by this clause (vi) after the Effective Date, together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu thereof, shall not exceed the sum of (A) the greater of $15.0 million and 5.0% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings (which subsequent to an IPO shall be increased to the greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings), (B) the amount in any fiscal year equal to the cash proceeds of key man life insurance policies received by Holdings, the Borrowers or the Restricted Subsidiaries after the Effective Date, (C) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue disposition of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year may be carried forward to succeeding fiscal years; (vii) Holdings and any Intermediate Holdings may make Restricted Payments in cash: (A) without duplication of any Permitted Tax Distribution, the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (a)(vii)(A) shall not exceed the Tax liability that Holdings and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers or their Restricted Subsidiaries; (B) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof or any Intermediate Holdings) attributable to the ownership or operations of Holdings, the Borrowers and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of Holdings, the Borrowers and the Restricted Subsidiaries and (y) otherwise permitted to be paid by Holdings, the Borrowers and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the Borrowers or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x); (C) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence; (D) the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(m); provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) Holdings or any Intermediate Holdings shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to Holdings, the Borrowers or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with Holdings, the Borrowers or any of the Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrowers and the Restricted Subsidiaries; and (G) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful); (viii) in addition to the foregoing Restricted Payments, the Borrowers and any Intermediate Holdings may make additional Restricted Payments to any Intermediate Holdings and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt, in an aggregate amount, when taken together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii), not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as no Event of Default shall have occurred and be continuing (or, in the case of the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h) or (i)), the Available Amount that is Not Otherwise Applied plus (C) the Available Equity Amount that is Not Otherwise Applied; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; (xi) Holdings may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiii) payments made or expected to be made by Holdings, any Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to 5.00 to 1.0 and (B) there is no continuing Event of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make Restricted Payments in cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a)Tunisia Assets. (b) ~~Neither Holdings~~The Issuers will not, ~~Intermediate Holdings nor any Borrower will, nor~~ and will ~~they~~ not permit any ~~Restricted~~ Subsidiary to, make or ~~pay~~agree to pay or make, directly or indirectly, any payment or other distribution (whether in ~~cash,~~ cash securities or other ~~property~~Property) of or in respect of principal of or interest on any ~~Junior Financing,~~ Indebtedness not permitted under Section 4.1 or any payment or other distribution (whether in cash, securities or other ~~property~~Property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, except: (i) payment of regularly scheduled interest and principal payments as, in the form of payment and when due in respect of any Indebtedness, other than payments in respect of any Junior Financing prohibited by the subordination provisions thereof; (ii) refinancings of Junior Financing Indebtedness ~~with proceeds of other Junior Financing Indebtedness~~ not permitted ~~to be in~~under Section 4.1.

Appears in 1 contract

Sources: Note Agreement (Coho Energy Inc)

Restricted Payments; Certain Payments of Indebtedness. ~~(a) Neither Holdings~~The Borrower will not, ~~Intermediate Holdings nor any Borrower will, nor~~ and will ~~they~~ not permit any Restricted ~~Subsidiary~~Subsidiary to, to pay or make, directly or indirectly, any Restricted Payment, except: : (i) ~~Each Borrower and~~ each Restricted Subsidiary may make Restricted Payments to ~~Intermediate Holdings, a~~ the Borrower or any ~~other~~ Restricted ~~Subsidiary; provided that~~ Subsidiary (and, in the case of any such ~~Restricted Payment by a Restricted~~ Subsidiary that is not a ~~wholly-~~wholly owned ~~Subsidiary of a Borrower~~Subsidiary, ~~such Restricted Payment is made to Intermediate Holdings, such Borrower, any Restricted Subsidiary and~~ to each other owner of Equity Interests of such ~~Restricted~~ Subsidiary ratably based on their relative ownership interests of the relevant class of Equity Interests; ); (ii) ~~payments or distributions~~ to ~~satisfy dissenters’ or appraisal rights~~the extent constituting a Restricted Payment, ~~pursuant to or~~ the Borrower may consummate any transaction permitted by Section 6.03 (other than clause (i) thereof) and Section 6.04 (other than Section 6.04(m), (n), (q), (t), (u) and (y)) (iii)so long as no Event of Default has occurred and is continuing, Restricted Payments made in connection with ~~a consolidation~~any Permitted Receivables Financing; (iv) Holdings and the Borrower may (or may pay Restricted Payments to permit any Parent Entity thereof or any Equityholding Vehicle to) redeem, ~~amalgamation~~repurchase, ~~merger~~ retire or ~~transfer~~ otherwise acquire in whole or in part any Equity Interests of ~~assets~~ Holdings, the Borrower or any Restricted Subsidiary or any Equity Interests of any Parent Entity or Equityholding Vehicle, in exchange for another class of Equity Interests or rights to acquire its Equity Interests or with proceeds from equity contributions or sales or issuances (other than ~~with respect~~ to Holdings, the Borrower or a Restricted Subsidiary) of new shares of such Equity Interests to the ~~Transactions~~extent contributed to Holdings or the Borrower (in each case other than Disqualified Equity Interests, “Refunding Equity Interests”) substantially concurrently with such contribution or sale or issuance; provided that ~~complies with Section 6.03;~~ (~~iii~~i) ~~Holdings~~ any terms and provisions material to the interests of the Lenders, when taken as a whole, contained in such Refunding Equity Interests are at least as advantageous to the Lenders as those contained in the Equity Interests redeemed thereby and (ii) Holdings, the Borrower, and any ~~Intermediate Holdings~~ Restricted Subsidiary may ~~declare and make dividend payments or other distributions~~ pay Restricted Payments payable solely in the Equity Interests (other than Disqualified Equity Interests not otherwise permitted by Section 6.01) of such Person; (iv) Restricted Payments made in connection with or in order to consummate the Transactions (including, without limitation, (A) cash payments to holders of Equity Interests of Target as provided by the Acquisition Agreement, (B) Restricted Payments to direct and indirect parent companies of Holdings to finance a portion of the consideration for the Acquisition and (C) other payments with respect to working capital adjustments or otherwise, to the extent contemplated by the Acquisition Agreement); ~~provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv));~~ 213 #97964454v4 #97964454v11 (v) repurchases of Equity Interests in ~~Holdings~~ any Parent Entity (or make Restricted Payments ~~by Holdings~~ to allow repurchases of Equity Interest in any ~~direct or indirect parent of Holdings~~Parent Entity) ~~or Intermediate Holdings~~ deemed to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price of such stock options or warrants or other incentive ~~interest;~~ interests; (vi) ~~Restricted Payments to Holdings which Holdings~~ the Borrower may ~~use to~~ redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted ~~stock units or~~ stock, stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) (or make Restricted Payments to allow any of ~~Holdings’ direct or indirect parent companies~~ its Parent Entities to so redeem, retire, acquire or repurchase their Equity Interests (or any options, warrants, restricted stock, stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) ), in each case, held by current or former officers, managers, consultants, ~~directors and employees~~ directors, employees, independent contractors or other service providers (or their respective ~~spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees~~Immediate Family Members) of ~~Holdings (~~the Borrower or any ~~direct or indirect parent thereof), Holdings, the Borrowers~~ Parent Entity thereof and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment or service of, or breach of restrictive covenants by, any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, ~~profits interest~~stock subscription or equity incentive award agreement, employment termination agreement or any other employment agreements or equity holders’ agreement or similar agreement; provided ~~that~~ that, the aggregate amount of Restricted Payments permitted by this clause (vi) after the Effective Date, together with the aggregate amount of loans and advances to Holdings (or any other Parent Entity) previously made pursuant to Section 6.04(m) in lieu ~~thereof~~of Restricted Payments permitted by this clause (vi), shall not exceed (x) during the ~~sum of (A) the greater of~~ Suspension Period, $~~15.0 million and 5.0% of Consolidated EBITDA for the most recently ended Test Period~~ 1,000,000 in any fiscal year ~~of Holdings~~ (~~which subsequent to an IPO shall be increased to the greater of $30.0 million~~ and ~~10% of Consolidated EBITDA for the most recently ended Test Period~~ any unused amounts in any fiscal year ~~of Holdings~~shall not be permitted to be carried over to succeeding fiscal years), and (By) after the ~~amount~~ Suspension Period has ended, $10,000,000 in any fiscal year ~~equal to the~~ (with unused amounts in any fiscal year being carried over for no more than two succeeding fiscal years), plus all net cash proceeds ~~of key~~ obtained from any key-man life insurance policies received during such fiscal year (without giving effect to the following proviso) plus all proceeds obtained by ~~Holdings,~~ the ~~Borrowers~~ Borrower or any Parent Entity (and contributed to the ~~Restricted Subsidiaries~~ Borrower) after the Effective Date, (C) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds Date from the sale of such Equity Interests ~~are contributed~~ to ~~Holdings~~ other future, current or former officers, managers, consultants, employees, directors and independent contractors (or their respective Immediate Family Members) in ~~the form of common Equity Interests~~ connection with any plan or ~~Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied~~ agreement referred to ~~the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and~~ above in this clause (~~D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision~~a)(vi); ~~provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year may be carried forward to succeeding fiscal years;~~ (vii) ~~Holdings and any Intermediate Holdings~~ the Borrower may make Restricted Payments in ~~cash:~~ cash to Holdings or any other Parent Entity: (A) ~~without duplication of any Permitted Tax Distribution~~so long as the Borrower is properly treated as a flow-through entity for U.S. federal income tax purposes, ~~the proceeds of which shall be used by~~ to enable Holdings or ~~any Intermediate Holdings to pay (or~~ such Parent Entity to make ~~Restricted Payments~~ tax distributions to ~~allow any~~ its direct or indirect ~~parent of Holdings~~ equity owners to ~~pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary~~ pay their respective tax ~~group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent~~ liabilities (~~a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable~~including estimated payments thereof) ~~of such Tax Group for such taxable period that are~~ attributable to the income of ~~Holdings and/or~~ the Borrower and its ~~Subsidiaries~~subsidiaries in any taxable period; provided that ~~Restricted Payments made pursuant to this clause~~ such tax liabilities shall be calculated for each taxable year by multiplying (~~a)(vii)(A~~1) ~~shall not exceed~~ the ~~Tax liability~~ excess of each such equity owner’s allocated share of taxable income over 214 #97964454v4 #97964454v11 taxable losses of the Borrower for such taxable year (or if the Borrower is a disregarded entity, the excess of taxable income over taxable losses of the Borrower that ~~Holdings and/or its Subsidiaries (as applicable)~~ would ~~have incurred were such Taxes determined as~~ exist if such ~~entity(ies~~excess were calculated assuming that the Borrower is a partnership for U.S. federal income tax purposes), taking into account such losses only to the extent usable against such income, determined taking into account any step-up attributable to a direct or indirect member of the Borrower under section 743(b) ~~were~~ or 734(b) of the Code, reduced by any losses, deductions, credits and other attributes of the Borrower (or if the Borrower is a ~~stand~~disregarded entity, such losses, deductions, credits or other attributes of the Borrower that would exist if the Borrower is a partnership for U.S. federal income tax purposes) arising from and after the Closing Date to the extent such amounts can be used to offset such taxable income and have not previously been taken into account as an offset hereunder, by (2) the highest combined marginal U.S. federal, state and local tax rate then applicable to a natural person or corporation residing in New York City, New York or San Francisco, California (taking into account the application of the Medicare contribution tax, the character of the taxable income in question, and the alternative minimum tax rules, taking into account the character of income (long-~~alone taxpayer or a stand-alone group~~term capital gain, qualified dividend income, etc.) and determined after giving effect to the maximum allowable deduction for state and local income taxes for U.S. federal income tax purposes) for the relevant taxable period; ~~and provided, further,~~ provided further that ~~Restricted Payments~~ the amount of any distribution permitted under this subclause (A) ~~in respect~~ shall be reduced by the amount of any ~~Taxes~~ income taxes that are paid directly by the Borrower and attributable to such equity owner; provided, further, that to the extent a portion of the net taxable income of ~~any~~ the Borrower is attributable to an Unrestricted ~~Subsidiaries of Holdings may~~ Subsidiary, the tax distributions with respect to such portion shall be ~~made~~ allowed only to the extent ~~that~~ actual cash is received by the Borrower or its Restricted Subsidiary from such Unrestricted ~~Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers or their Restricted Subsidiaries;~~ Subsidiary; (B) the proceeds of which shall be used by ~~Holdings or any Intermediate Holdings~~ such Parent Entity to pay ~~(or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay)~~ (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) ), that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by ~~directors~~ directors, officers, members of management, managers, employees or ~~officers~~ consultants of Holdings (or any ~~parent thereof or any Intermediate Holdings~~other Parent Entity) attributable to the ownership or operations of ~~Holdings~~any Parent Entity, the ~~Borrowers~~ Borrower and the respective Restricted Subsidiaries, (3) fees and expenses (x) due and payable by the Borrower or any ~~of Holdings, the Borrowers and the~~ Restricted ~~Subsidiaries~~ Subsidiary and (y) otherwise permitted to be paid by ~~Holdings,~~ the ~~Borrowers~~ Borrower and the Restricted Subsidiaries under this ~~Agreement~~ Agreement; provided that, during the Suspension Period, the aggregate amount of such fees and payments under clauses (x) and (y) shall not exceed $1,000,000 in any fiscal year and (4) payments that would otherwise be permitted to be paid directly by ~~Holdings,~~ the ~~Borrowers~~ Borrower or the Restricted Subsidiaries pursuant to Section 6.09(iii), (v) or (x); ; 215 #97964454v4 #97964454v11 (C) the proceeds of which shall be used by Holdings (or any ~~Intermediate Holdings~~ other Parent Entity) to pay ~~(or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay)~~ franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence; ; (D) the proceeds of which will be applied to make any payments permitted by Section 6.09(vii) and Section 6.09(x); (E) the proceeds of which shall be used by ~~Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E)~~ any Parent Entity to finance any Investment that would be permitted to be made by the Borrower or any Restricted Subsidiary pursuant to Section 6.04 other than Section 6.04(m); provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) ~~Holdings or any Intermediate Holdings~~ such Parent Entity shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to ~~Holdings,~~ the ~~Borrowers~~ Borrower or any Restricted Subsidiary (and in no event shall any such contribution increase the ~~Restricted Subsidiaries~~ Available Equity Amount) or (y) the Person formed or acquired to merge into or consolidate or amalgamate with ~~Holdings,~~ the ~~Borrowers~~ Borrower or any ~~of the~~ Restricted ~~Subsidiaries~~ Subsidiary to the extent such ~~merger, amalgamation~~ merger or consolidation is permitted in by Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of ~~Sections~~ Section 5.11 and 5.12; ; (F) the proceeds of which shall be used to pay customary salary, ~~bonus~~ bonus, severance and other benefits payable to ~~officers and~~ current or former directors, officers, members of management, managers, consultants, independent contractors or employees of Holdings or any ~~direct or indirect parent company of Holdings~~ other Parent Entity to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of ~~Holdings,~~ the ~~Borrowers~~ Borrower and the Restricted Subsidiaries; ~~and~~ (G) the proceeds of which shall be used by Holdings (or any ~~Intermediate Holdings~~ other Parent Entity) to pay (~~or to make Restricted Payments to allow any direct or indirect parent thereof to pay~~i) fees and expenses related to any successful or unsuccessful equity issuance or offering or debt issuance, incurrence or offering, ~~debt offering~~ disposition or acquisition, Investment or other ~~non-ordinary course~~ transaction ~~not prohibited~~ permitted by this Agreement and (~~whether~~ ii) after the consummation of an IPO described in clause (a) of the definition thereof or ~~not such offering or other transaction is successful);~~ issuance of public debt securities, Public Company Costs; and (H) the proceeds of which shall be used for the payment of insurance premiums to the extent attributable to any Parent Entity, the Borrower and their subsidiaries; (viii) after the Suspension Period has ended, in addition to the foregoing Restricted Payments, the ~~Borrowers and any Intermediate Holdings~~ Borrower may make additional Restricted Payments to ~~any Intermediate Holdings and~~ Holdings~~, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt~~, in an aggregate amount~~, when taken together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii)~~, not to exceed the sum of (A) ~~an amount at~~ after the ~~time of making any such~~ Suspension Period has ended, the Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of Amount at such ~~Restricted Payment plus (B)~~ time so long as no Event of Default ~~shall have~~ has occurred and be is continuing (~~or, in~~ or would occur after giving pro forma effect to such action) (for the ~~case~~ avoidance of ~~the use of the Starter Basket that is Not Otherwise Applied~~doubt, no ~~Event of Default under Section 7.01(a~~Restricted Payment shall be made in reliance 216 #97964454v4 #97964454v11 on this clause (A) during the Suspension Period), plus (~~b), (h~~B) ~~or (i)),~~ the Available Amount that is Not Otherwise Applied as in effect immediately prior to the time of making of such Restricted Payment (for the avoidance of doubt, no transaction shall be made in reliance on the Available Amount during the Suspension Period); provided that, in the case of this clause (B), (x) no Event of Default has occurred and is continuing (or would occur after giving pro forma effect to such action) and (y) after giving pro forma effect to such Restricted Payment on a pro forma basis as of the last day of the Test Period most recently ended on or prior to such date of such Restricted Payment (measured as of the date such Restricted Payment is made based upon the financial statements most recently delivered (or required to have been delivered) on or prior to such date pursuant to Section 5.01(a) or (b)), the Total Net Cash Leverage Ratio is less than or equal to (1) during the Suspension Period, 4.00:1.00, and (2) after the Suspension Period has ended, 5.50:1.00, plus (C) the Available Equity Amount that is Not Otherwise ~~Applied;~~ Applied as in effect immediately prior to the time of making of such Restricted Payment (for the avoidance of doubt, no Restricted Payment shall be made in reliance on clause (b) of the Available Equity Amount during the Suspension Period) (for the avoidance of doubt, no Restricted Payment shall be made in reliance on this clause (viii) during the Suspension Period); (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity ~~Interests~~Interests (and in no event shall such contribution or issuance so utilized increase the Available Equity Amount); provided that such new Equity Interests contain terms and provisions at least as ~~advantageous~~ advantageous, taken as a whole, to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; ; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; ; (xi) ~~Holdings~~ the Borrower may make Restricted Payments to any Parent Entity to enable such Parent Entity to (aA) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (bB) honor any conversion request by a holder of convertible Indebtedness by delivering or issuing Equity Interests and ~~make~~ making cash payments in lieu of fractional shares in connection with any such conversion and may make required cash interest payments on convertible Indebtedness in accordance with its terms; ; (xii) following the ~~declaration~~ consummation of an IPO, and ~~payment of Restricted Payment on Holdings’ common stock (or~~ after the Suspension Period has ended, the payment of Restricted Payments to Holdings or any direct ~~or indirect parent company~~ Parent Entity of Holdings to fund a the payment of regular dividends on such company’s ~~common stock)~~Equity Interests, ~~following consummation of~~ in an ~~IPO, of up~~ aggregate amount per annum not to ~~sum of (a)~~ exceed 6.0% per annum of the ~~net cash~~ aggregate amount of proceeds of from such IPO received by by, or contributed ~~to Intermediate Parent or Parent~~to, ~~other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of~~ the ~~market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiii) payments made or expected to be made by Holdings, any~~ Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted PaymentsSubsidiary; provided ~~that after giving effect to such Restricted Payment (A) on a Pro Forma Basis~~that, the Total Leverage Ratio is less than or equal to 5.00 to 1.0 and (B) there is no continuing Event of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make Restricted Payments in cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a). (b) Neither Holdings, Intermediate Holdings nor any Borrower will, nor will they permit any Restricted Subsidiary to, make or pay, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) declaration of or in respect of principal of or interest on any Junior Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, except: (i) payment of regularly scheduled interest and principal payments as, in the form of payment and when due in respect of any Indebtedness, other than payments in respect of any Junior Financing prohibited by the subordination provisions thereof; (ii) refinancings of Junior Financing Indebtedness with proceeds of other Junior Financing Indebtedness permitted to be inany

Appears in 1 contract

Sources: Credit Agreement (GoHealth, Inc.)

Restricted Payments; Certain Payments of Indebtedness. (a) ~~Neither Holdings~~The Borrower will not, ~~Intermediate Holdings nor any Borrower will, nor~~ and will ~~they~~ not permit any Restricted ~~Subsidiary~~Subsidiary to, ~~to pay~~ declare or ~~make, directly or indirectly,~~ make any Restricted Payment, ~~except~~except that: (i) ~~Each Borrower~~ (A) the Restricted Subsidiaries may declare and ~~each~~ make Restricted Payments ratably with respect to their Equity Interests and (B) any Restricted Subsidiary may make a Restricted ~~Payments~~ Payment to ~~Intermediate Holdings, a~~ the Borrower or any other Restricted ~~Subsidiary; provided that~~ Subsidiary (so long as, in the case of ~~any such~~ this clause (B), if the Restricted Subsidiary making the Restricted Payment ~~by a Restricted Subsidiary that~~ is not ~~a wholly-~~wholly owned ~~Subsidiary of a~~ (directly or indirectly) by the Borrower, such Restricted Payment is made ~~to Intermediate Holdings, such Borrower, any Restricted Subsidiary and to each other owner~~ ratably among the holders of ~~Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of~~ its Equity Interests); (ii) ~~payments or distributions to satisfy dissenters’ or appraisal rights, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of assets (other than~~ the Borrower and the Restricted Subsidiaries may declare and make Restricted Payments with respect to their Equity Interests payable solely in shares of Qualified Equity Interests (so long as, in the ~~Transactions~~case of this clause (ii), if the Restricted Subsidiary making the Restricted Payment is not wholly owned (directly or indirectly) ~~that complies with Section 6.03~~by the Borrower, such Restricted Payment is made ratably among the holders of its Equity Interests); (iii) ~~Holdings~~ the Borrower and the Restricted Subsidiaries may make Restricted Payments at such times and in such amounts as shall be necessary to permit any ~~Intermediate Holdings may declare~~ Parent Entity (or, after an IPO, the Public Company) and ~~make dividend payments~~ Holdco to discharge their respective general corporate and overhead or other ~~distributions~~ expenses (including administrative, legal, accounting and similar expenses provided by third parties, customary salary, commissions, bonus and other benefits payable ~~solely~~ to officers and employees of Holdco or any Parent Entity and directors fees and director and officer indemnification obligations) incurred in the ~~Equity Interests of such Person~~ordinary course; (iv) the Borrower and the Restricted Payments made in connection with or in order to consummate the Transactions (including, without limitation, (A) cash payments to holders of Equity Interests of Target as provided by the Acquisition Agreement, (B) Subsidiaries may make Restricted Payments to ~~direct~~ Holdco to enable Holdco to make payments to any Parent Entity (or, after an IPO, the Public Company) at such times and ~~indirect parent companies~~ in such amounts as are necessary to make payments of ~~Holdings to finance a portion~~ or on account of ~~the consideration for the Acquisition~~ (1) monitoring or management or similar fees or transaction fees and (C2) ~~other payments with respect~~ reimbursement of out-of-pocket costs, expenses and indemnities, in each case to ~~working capital adjustments~~ any Equity Investor or ~~otherwise~~any of its Affiliates, in each case to the extent ~~contemplated~~ permitted by ~~the Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv))~~Section 6.09; (v) ~~repurchases~~ payments made or expected to be made by Holdco, the Borrower or any Restricted Subsidiary in respect of withholding or similar Taxes payable upon exercise of Equity Interests ~~in Holdings (~~by any future, present or ~~Restricted Payments by Holdings to allow repurchases of Equity Interest in any direct~~ former employee, director, manager or indirect parent of Holdings) or Intermediate Holdings deemed to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price of such stock options or warrants or other incentive interest; (vi) Restricted Payments to Holdings which Holdings may use to redeem, acquire, retire or repurchase its Equity Interests consultant (or any options, warrants, restricted stock units or stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests) held by current or former officers, managers, consultants, directors and employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or ~~distributees~~distributes of any of the foregoing) and repurchases of ~~Holdings~~ Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants; (vi) the Restricted Subsidiaries may make a Restricted Payment in connection with the acquisition of additional Equity Interests in any Restricted Subsidiary from minority shareholders; (vii) the Borrower or any Restricted Subsidiary may make repurchases of Equity Interests in Holdco, the Borrower or any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants or the settlement or vesting of other equity-based awards if such Equity Interests represent a portion of the exercise price of, or tax withholdings with respect to, such options, warrants or other equity-based awards; (viii) the Borrower and the Restricted Subsidiaries may make Restricted Payments to allow any Parent Entity (or, after an IPO, the Public Company), Holdco, the Borrower or any Restricted Subsidiary to purchase Holdco’s, such Parent Entity’s (or, after an IPO, the Public Company’s) preferred stock, common stock, restricted stock or common stock options from present or former consultants, directors, manager, officers or employees of any Parent Entity (or, after an IPO, the Public Company), Holdco, the Borrower or any Subsidiary, or their estates, descendants, family, spouses or former spouses, upon the death, disability or termination of employment of such consultant, director, officer or employee or pursuant to any employee, management, director or manager equity plan, employee, management, director or manager stock option plan or any other employee, management, director or manager benefit plan or any agreement (including any stock subscription or shareholder agreement) with any employee, director, manager, officer or consultant of Parent Entity (or, after an IPO, the Public Company), Holdco, the Borrower or any Subsidiary (including, for the avoidance of doubt, distributions to allow Holdco or any direct or indirect parent of Holdco to pay principal or interest on promissory notes that were issued to any future, present or former employee, officer, director, manager or consultant (or any spouses, former spouses, successors, executors, administrators, heirs, legatees or distributes of any of the foregoing) of such Restricted Subsidiary (or the Borrower or any other direct or indirect parent thereof~~), Holdings,~~ ) in lieu of cash payments for the ~~Borrowers and the Restricted Subsidiaries, upon the death, disability~~repurchase, retirement or ~~termination~~ other acquisition or retirement for value of ~~employment of any~~ such ~~Person~~ Equity Interests or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, profits interest, employment termination agreement or any other employment agreements or equity holders’ agreementequity-based awards held by such Persons; provided that the aggregate amount of ~~Restricted Payments permitted by~~ payments under this clause (viviii) subsequent to the Closing Date (net of proceeds received by any Parent Entity or Holdco (or, after an IPO, the ~~Effective Date~~Public Company) subsequent to the date hereof in connection with resales of any stock or common stock options so purchased (which to the extent that such cash proceeds from the issuance of any such stock are utilized to make payments pursuant to this clause in excess of the amounts otherwise permitted hereunder then such equity proceeds so utilized are Not Otherwise Applied)) shall not exceed $7,800,000 (with unused amounts in any fiscal year being carried over to the next succeeding fiscal year subject to a maximum of $15,600,000 in any fiscal year) per fiscal year, ~~together with~~ plus the ~~aggregate~~ amount of ~~loans~~ any key-man life insurance policies; provided that the cancellation of Indebtedness owing to Holdco (or any Parent Entity), the Borrower or any of its Subsidiaries in connection with a repurchase of any such Equity Interests and ~~advances~~ the redemption or cancellation of such Equity Interests without cash payment will not be deemed to ~~Holdings~~ constitute a Restricted Payment for purposes of this covenant or any other provision of this Agreement; (ix) [Reserved]; (x) Restricted Payments made (i) to consummate the 2015 Transactions (ii) in respect of working capital adjustments or purchase price adjustments pursuant to the 2015 Purchase Agreement, any Permitted Acquisition or other permitted Investments (other than pursuant to Section ~~6.04(m~~6.08(a)), (iii) to satisfy indemnity and other similar obligations under the 2015 Purchase Agreement, Permitted Acquisitions or other permitted Investments, (iv) to holders of restricted stock, restricted stock units, unit appreciation rights, or similar equity awards under any equity plan and phantom stock awards as contemplated by and in ~~lieu thereof~~accordance with the 2015 Purchase Agreement, or to Sponsors on behalf of such holders, and (v) to dissenting stockholders in connection with, or as a result of, their exercise of appraisal rights and the settlement of any claims or actions (whether actual, contingent or potential) with respect thereto (including any accrued interest), in each case of this clause (v), with respect to the 2015 Transactions; (xi) Restricted Payments necessary to consummate transactions permitted pursuant to Section 6.03 and to make Investments permitted pursuant to Section 6.04 (other than pursuant to Section 6.08(a)); (xii) the Borrower and the Restricted Subsidiaries may forgive or cancel any Indebtedness owed to the Borrower or any Restricted Subsidiary issued for repurchases of Holdco’s (or, after an IPO, Public Company’s) or any Parent Entity’s Equity Interests; (xiii) [Reserved]; (xiv) the Borrower or any Restricted Subsidiary may make additional Restricted Payments in an amount that shall not exceed the ~~sum~~ greater of (A) ~~the greater of~~ $~~15.0 million~~ 18,000,000 and ~~5.0~~(B) 12% of Consolidated EBITDA for the most recently ended ~~Test Period~~ four fiscal quarter period for which financial statements are available (less the aggregate amount of Investments made in ~~any fiscal year~~ reliance on Section 6.04(ff)(ii) and payments, redemptions, repurchases, retirements, terminations or cancellations of ~~Holdings~~ Indebtedness made in reliance on Section 6.08(b)(ix)); (~~which subsequent to an IPO shall be increased to the greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings), (B~~xv) the ~~amount in~~ Borrower or any ~~fiscal year equal to the cash proceeds of key man life insurance policies received by Holdings, the Borrowers or the~~ Restricted ~~Subsidiaries after the Effective Date, (C) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (~~Subsidiary may make additional Restricted Payments to the extent ~~contributed to Holdings in~~ that such Restricted Payments are made with net proceeds received by Holdco or any Parent Entity after the ~~form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds~~ Closing Date from the issuance or sale of Qualified Equity Interests of Holdco or any ~~direct or indirect~~ Parent Entity (or, if after an IPO, Public Company) or ~~management investment vehicle~~proceeds of an equity contribution initially made to Holdco, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the ~~Effective Date,~~ extent such proceeds have been contributed to the ~~extent the cash proceeds from the sale of such Equity Interests are contributed to Holdings in the form of~~ common ~~Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue~~ equity of the ~~Available Equity Amount or~~ Borrower (which such equity proceeds so utilized are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year may be carried forward to succeeding fiscal years; (vii) Holdings and any Intermediate Holdings may make Restricted Payments in cash: (A) without duplication of any Permitted Tax Distribution, the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (a)(vii)(A) shall not exceed the Tax liability that Holdings and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers or their Restricted Subsidiaries; (B) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof or any Intermediate Holdings) attributable to the ownership or operations of Holdings, the Borrowers and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of Holdings, the Borrowers and the Restricted Subsidiaries and (y) otherwise permitted to be paid by Holdings, the Borrowers and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the Borrowers or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (xNot Otherwise Applied); (Cxvi) ~~the proceeds~~ distributions or payments of ~~which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes~~Securitization Fees, sales contributions and other ~~fees~~ transfers of Securitization Assets or Receivables Assets and ~~expenses, required to maintain its organizational existence; (D) the proceeds~~ purchases of ~~which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv)~~ Securitization Assets or ~~Section 6.08(a)(vi); (E) to finance any Investment permitted to be made~~ Receivables Assets pursuant to Section 6.04 other than Section 6.04(m); provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) Holdings or any Intermediate Holdings shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to Holdings, the Borrowers or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with Holdings, the Borrowers or any of the Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such Investmenta Securitization Repurchase Obligations, in each case in ~~accordance~~ connection with ~~the requirements of Sections 5.11 and 5.12~~a Qualified Securitization Financing or a Receivables Facility; (Fxvii) the Borrower and the Restricted Subsidiaries may make Restricted Payments the proceeds of which shall be used to pay customary ~~salary~~costs, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrowers and the Restricted Subsidiaries; and (G) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any unsuccessful equity ~~offering,~~ or debt offering ~~or other non-ordinary course transaction not prohibited~~ permitted by this ~~Agreement (whether or not~~ Agreement, so long as the proceeds of such offering were intended to be contributed to the Borrower or ~~other transaction is successful)~~any Restricted Subsidiary or such offering was otherwise related to the business of the Borrower and the Restricted Subsidiaries; (~~viii~~xviii) ~~in addition to~~ the ~~foregoing~~ Borrower and the Restricted ~~Payments, the Borrowers and any Intermediate Holdings~~ Subsidiaries may make ~~additional~~ Restricted Payments to ~~any Intermediate Holdings and Holdings, the proceeds of which may be utilized by Holdings~~ Holdco to enable Holdco to make ~~additional Restricted Payments or by Holdings or by~~ payments to any ~~Intermediate Holdings~~ Parent Entity to make any payments in respect of any Permitted Holdings Debt, in an aggregate amount, when taken together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii), not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as no Event of Default shall have occurred and be continuing (or, in the case of the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h) or (i)), the Available Amount that is Not Otherwise Applied plus (C) the Available Equity Amount that is Not Otherwise Applied; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; (xi) Holdings may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any ~~Permitted Acquisition (~~Acquisition, Investment or other ~~similar Investment)~~ transaction otherwise permitted hereunder and (b) honor any conversion request by a holder of convertible Indebtedness (to the extent such conversion request is paid solely in shares of Qualified Equity Interests of Holdco (or any Parent Entity)) and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (~~xii~~xix) after an IPO, Public Company may (and the ~~declaration~~ Borrower and ~~payment of~~ the Restricted Subsidiaries may make any Restricted Payment by the Public Company or any other direct or indirect parent of the Public Company to pay listing fees and other costs and expenses attributable to being a publicly traded company which are reasonable and customary and (ii) additional Restricted Payments so that Public Company may) declare and pay regular quarterly dividends on ~~Holdings’~~ its common stock (or ~~the payment~~ similar Equity Interests of ~~Restricted Payments~~ Public Company) in an amount not to ~~any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0~~exceed 6% per ~~annum~~ year of the aggregate net cash proceeds of such IPO that were actually received by or contributed to ~~Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0%~~ the Qualified Equity Interests of the ~~market capitalization of Intermediate Parent~~ Borrower in or ~~Parent~~ from all such public offerings; (xx) the Borrower and the Restricted Subsidiaries may make Restricted Payments in an aggregate amount not to exceed the Available Amount; provided, however, that at the time of making such ~~IPO~~Restricted Payment (i) no Event of Default shall have occurred and be continuing or would result therefrom and (ii) as of the Applicable Date of Determination immediately after giving effect on a Pro Forma Basis to each such proposed Restricted Payment pursuant to this clause (xx), the Total Net Leverage Ratio shall be no greater than 5.70:1.00; (~~xiii~~xxi) ~~payments made or expected to be made by Holdings, any~~ the Borrower ~~or any~~ may make Restricted ~~Subsidiary in respect of withholding or similar taxes payable upon exercise~~ Payments consisting of Equity Interests by in any ~~future~~Unrestricted Subsidiary, ~~present~~ whether pursuant to a distribution, dividend or ~~former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and~~ any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxesother transaction not prohibited hereunder; (~~xiv~~xxii) within thirty (30) days following the Closing Date, KC Sub may make Restricted Payments to consummate the 2017 Distribution; (xxiii) the making of any Restricted Payment within sixty (60) days after the date of declaration thereof, if at the date of such declaration such Restricted Payment would have complied with another provision of this Section 6.08(a); provided that the making of such Restricted Payment will reduce capacity for Restricted Payments pursuant to such other provision when the declaration is so made; and (xxiv) additional Restricted Payments; provided that as of the Applicable Date of Determination immediately after giving effect ~~to such Restricted Payment (A)~~ on a Pro Forma ~~Basis, the Total Leverage Ratio is less than or equal~~ Basis to 5.00 to 1.0 and (B) there is no continuing Event of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent each such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make Restricted Payments in cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a proposed Restricted Payment pursuant to this clause (~~or a portion thereof) meets the criteria of clauses~~ xxiv), (i) ~~through~~ the Total Net Leverage Ratio shall be no greater than 4.25:1.00 and (~~xviii~~ii) ~~above, the Borrowers will~~ no Event of Default shall have occurred and be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a)continuing. (b) ~~Neither Holdings~~The Borrower will not, ~~Intermediate Holdings nor any Borrower will, nor~~ and will ~~they~~ not permit any Restricted Subsidiary ~~to,~~ to make ~~or pay, directly or indirectly,~~ any ~~payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior Financing, or any~~ voluntary payment or other distribution (whether in cash, securities or other property), ~~including any sinking fund~~ of or ~~similar deposit~~in respect of principal or interest, ~~on account~~ or such payment by way of the purchase, redemption, retirement, acquisition, cancellation or ~~termination~~ termination, in each case prior to the final scheduled maturity thereof, of any ~~Junior Financing~~Material Indebtedness that is (x) unsecured, (y) contractually subordinated in right of payment to any of the Obligations (it being understood that Indebtedness shall not be deemed to be subordinated in right of payment to the Obligations merely because such Indebtedness is secured by a Lien that is junior to the Liens securing the applicable portion of the Obligations) or (z) Indebtedness that has a Lien on the Collateral that is junior to the Lien on the Collateral securing the Obligations, except: (i) payment of regularly scheduled interest and principal payments (and fees, indemnities and expenses payable) as, ~~in the form of payment~~ and when due in respect of any ~~Indebtedness, other than payments~~ such Indebtedness to the extent permitted by any subordination or intercreditor provisions in respect ~~of any Junior Financing prohibited by the subordination provisions~~ thereof; (ii) ~~refinancings~~ refinancings, replacements, substitutions, extensions, restructurings, exchanges and renewals of ~~Junior Financing~~ any such Indebtedness to the extent such refinancing, replacement, exchange or renewed Indebtedness is permitted by Section 6.01 and any fees and expenses in connection therewith; (iii) payments of intercompany Indebtedness permitted under Section 6.01 to the extent permitted by any subordination provisions in respect thereof; (iv) convert, exchange, redeem, repay or prepay such Indebtedness into or for Equity Interests of Holdco or any Parent Entity (other than Disqualified Equity Interests of Holdco or such Parent Entity, except to the extent permitted under Section 6.01(a)(xxxiii)); (v) AHYDO Catch-Up Payments relating to Indebtedness of the Borrower and its Restricted Subsidiaries so long as no Event of Default under Section 7.01(a), 7.01(b), 7.01(h) or 7.01(i) has occurred and is continuing; (vi) any such payments or other distributions in an amount not to exceed the Available Amount; provided, however, that (i) at the time of such payments or distributions, no Event of Default has occurred and is continuing or would result therefrom and (ii) as of the Applicable Date of Determination immediately after giving effect on a Pro Forma Basis to each such proposed Restricted Payment pursuant to this clause (vi), the Total Net Leverage Ratio shall be no greater than 5.70:1.00; (vii) payments or distributions made with net proceeds received by Holdco or any Parent Entity after the Closing Date from the issuance or sale of Qualified Equity Interests of Holdco or any Parent Entity (or, if after an IPO, Public Company) or proceeds of ~~other Junior Financing~~ an equity contribution initially made to Holdco to the extent such proceeds have been contributed to the Qualified Equity Interests of the Borrower (which such equity proceeds so utilized are Not Otherwise Applied); (viii) the payment, redemption, repurchase, retirement, termination or cancellation of Indebtedness ~~permitted to be in~~within sixty (60) days of the date of the Redemption Notice if, at the date of any payment, redemption, repurchase, retirement, termination or cancellation notice in respect thereof (the “Redemption Notice”), such payment, redemption, repurchase, retirement termination or cancellation would have complied with another provision of this Section 6.08(b); provided that s

Appears in 1 contract

Sources: Second Lien Credit Agreement (KC Holdco, LLC)

Restricted Payments; Certain Payments of Indebtedness. (a) ~~Neither Holdings~~The Parent Borrower will not, ~~Intermediate Holdings nor any Borrower will, nor~~ and will ~~they~~ not permit any Restricted ~~Subsidiary~~Subsidiary to, ~~to pay~~ declare or make, directly or indirectly, any Restricted Payment, except: (i) ~~Each~~ such Borrower may declare and ~~each Restricted Subsidiary may make Restricted Payments~~ pay dividends with respect to Intermediate Holdings, a Borrower or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a wholly-owned Subsidiary of a Borrower, such Restricted Payment is made to Intermediate Holdings, such Borrower, any Restricted Subsidiary and to each other owner of its Equity Interests payable solely in additional shares of ~~such Restricted Subsidiary based on their relative ownership interests of the relevant class of~~ its Equity Interests; (ii) ~~payments or distributions~~ (A) the Parent Borrower may declare and pay Restricted Payments to ~~satisfy dissenters’ or appraisal rights, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of assets~~ Holdings and (~~other than~~ B) Restricted Subsidiaries may declare and pay Restricted Payments with respect to their Equity Interests (provided that if such Restricted Subsidiary is not directly or indirectly wholly owned by the ~~Transactions) that complies with Section 6.03~~Parent Borrower, such dividends must be made on a pro rata basis to the holders of its Equity Interests or on a greater than ratable basis to the extent such greater payments are made solely to the Parent Borrower or a Restricted Subsidiary); (iii) ~~Holdings~~ to the extent constituting Restricted Payments, the Parent Borrower and ~~any Intermediate Holdings~~ its Restricted Subsidiaries may ~~declare and make dividend payments~~ enter into transactions expressly permitted by Sections 6.03, 6.04, 6.05 or ~~other distributions payable solely in the Equity Interests of such Person~~6.07; (iv) ~~Restricted Payments made~~ repurchases by the Parent Borrower of partial interests in its Equity Interests for nominal amounts which are required to be repurchased in connection with ~~or in order to consummate~~ the Transactions (including, without limitation, (A) cash payments to holders of Equity Interests of Target as provided by the Acquisition Agreement, (B) Restricted Payments to direct and indirect parent companies of Holdings to finance a portion of the consideration for the Acquisition and (C) other payments with respect to working capital adjustments or otherwise, to the extent contemplated by the Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv)); (v) repurchases of Equity Interests in Holdings (or Restricted Payments by Holdings to allow repurchases of Equity Interest in any direct or indirect parent of Holdings) or Intermediate Holdings deemed to occur upon exercise of stock options or warrants ~~or other incentive interests if such~~ to permit the issuance of only whole shares of Equity ~~Interests represent a portion of the exercise price of such stock options or warrants or other incentive interest~~Interests; (viv) ~~Restricted Payments to Holdings which Holdings~~ the Parent Borrower may ~~use to redeem~~pay for the repurchase, ~~acquire, retire~~ retirement or ~~repurchase its~~ other acquisition or retirement for value of Equity Interests (of the Parent Borrower or any ~~options, warrants, restricted stock units or~~ Parent Company (including related stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interestssimilar securities) held by ~~current~~ any future, present or former ~~officers~~director, ~~managers~~officer, ~~consultants~~member of management, ~~directors and employees~~ employee or consultant of any Parent Company, the Parent Borrower or any of its Subsidiaries (or ~~their respective spouses, former spouses, successors, executors, administrators~~the estate, heirs, ~~legatees~~ family members, spouse, former spouse, domestic partner or ~~distributees~~former domestic partner of any of the foregoing); provided that (A) at the time of ~~Holdings (or~~ any ~~direct or indirect parent thereof), Holdings, the Borrowers and the Restricted Subsidiaries, upon the death, disability~~such repurchase, retirement or ~~termination~~ other acquisition or retirement for value no Event of ~~employment of any such Person~~ Default has occurred and is continuing or ~~otherwise in accordance with any stock option or stock appreciation rights plan~~would result therefrom, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, profits interest, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that (B) the aggregate amount of Restricted Payments ~~permitted by~~ made under this clause (~~vi) after the Effective Date, together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m~~v) in ~~lieu thereof, shall~~ any Fiscal Year does not exceed (x) $15,000,000 (the ~~sum of~~ “Yearly Limit”) plus (Ay) the ~~greater~~ portion of ~~$15.0 million~~ the Yearly Limit from each of the immediately preceding four (4) Fiscal Years which was not expended by the Parent Borrower for Restricted Payments in such Fiscal Years (the “Carryover Amount” and ~~5.0% of Consolidated EBITDA~~ in calculating the Carryover Amount for any Fiscal Year, the ~~most recently ended Test Period in any~~ Yearly Limit applicable to the previous fiscal ~~year of Holdings (which subsequent to an IPO~~ years shall be ~~increased~~ deemed to ~~the greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period~~ have been utilized first by any Restricted Payments made under this clause (v) in ~~any fiscal year of Holdings),~~ such Fiscal Year) plus (Bz) ~~the~~ an amount ~~in any fiscal year~~ equal to ~~the cash proceeds of key man life insurance policies received by Holdings, the Borrowers or the Restricted Subsidiaries after the Effective Date, (C)~~ the cash proceeds from the sale of Equity Interests ~~(other than Disqualified Equity Interests)~~ to directors, officers, members of ~~Holdings (to the extent contributed to Holdings in the form~~ management, employees or consultants of ~~common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings~~any Parent Company, the ~~cash proceeds from~~ Parent Borrower or of its Subsidiaries (or the ~~sale~~ estate, heirs, family members, spouse or former spouse of any of the foregoing) in such Fiscal Year; (vi) the repurchase of Equity Interests of the Parent Borrower (or of any ~~direct or indirect~~ Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle Company) that occurs ~~after~~ upon the ~~Effective Date~~cashless exercise of stock options, to warrants or other convertible securities as a result of the ~~extent~~ Parent Borrower or such Parent Company accepting such options, warrants or other convertible securities as satisfaction of the ~~cash proceeds from the sale~~ exercise price of such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year may be carried forward to succeeding fiscal yearsInterests; (vii) ~~Holdings~~ the Parent Borrower and ~~any Intermediate Holdings~~ its Restricted Subsidiaries may ~~make Restricted Payments in cash: (A) without duplication of any Permitted Tax Distribution, the proceeds of which shall be used by Holdings or any Intermediate Holdings to~~ pay (or to may make Restricted Payments to allow ~~any direct or indirect parent of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of~~ a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (a)(vii)(A) shall not exceed the Tax liability that Holdings and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers or their Restricted Subsidiaries; (B) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings Parent Company to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof or any Intermediate Holdings) attributable to the ownership or operations of Holdings, the Borrowers and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of Holdings, the Borrowers and the Restricted Subsidiaries and (y) otherwise permitted to be paid by Holdings, the Borrowers and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the Borrowers or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x); (C) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence; (D) the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(m); provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) Holdings or any Intermediate Holdings shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to Holdings, the Borrowers or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with Holdings, the Borrowers or any of the Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrowers and the Restricted Subsidiaries; and (G) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful); (viii) in addition to the foregoing Restricted Payments, the Borrowers and any Intermediate Holdings may make additional Restricted Payments to any Intermediate Holdings and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt, in an aggregate amount, when taken together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii), not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as no Event of Default shall have occurred and be continuing (or, in the case of the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h) or (i)), the Available Amount that is Not Otherwise Applied plus (C) the Available Equity Amount that is Not Otherwise Applied; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; (xi) Holdings may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with (i) any ~~such conversion and may make payments on~~ dividend, split or combination of its Equity Interests or any Permitted Acquisition (or similar Investment) or (ii) the exercise of warrants, options or other securities convertible ~~Indebtedness in accordance with~~ into or exchangeable for Equity Interests of the Parent Borrower or any of its ~~terms~~Subsidiaries; (~~xii~~viii) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiii) payments made or expected to be made by Holdings, any Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases repurchase of Equity Interests deemed to occur upon the non-cash exercise of ~~stock options or warrants if such~~ Equity Interests ~~represent a portion of the exercise price of such options or warrants or required withholding or similar taxes~~to pay Taxes; (~~xiv~~ix) ~~additional~~ the Parent Borrower and its Restricted ~~Payments~~Subsidiaries may make Restricted Payments in an aggregate amount not to exceed the Available Amount; provided that ~~after giving effect to such Restricted Payment~~ (A) no Event of Default shall exist or result therefrom and (B) the Total Net Leverage Ratio on a Pro Forma ~~Basis,~~ Basis as of the ~~Total Leverage Ratio~~ end of the most recent Test Period is less than or equal to ~~5.00~~ 4.50:1.00, in each case determined, at the election of the Parent Borrower, at the time of (x) declaration of such Restricted Payment or (y) the making or consummation, as applicable, of such Restricted Payment; (x) the Parent Borrower and its Restricted Subsidiaries may make Restricted Payments in an aggregate amount in any Fiscal Year not to ~~1.0~~ exceed the greater of $30,000,000 and 20% of Adjusted EBITDA (Bas determined at the time any such Restricted Payment is made (calculated on a Pro Forma Basis) ~~there is~~ as of the last day of the most recently ended Test Period on or prior to the date of determination), it being agreed that the Parent Borrower shall be permitted to carry forward unused amounts to subsequent Fiscal Years; provided that as of the date of any such Restricted Payment and after giving effect thereto, the Parent Borrower shall be in compliance with the Financial Covenant on a Pro Forma Basis for the most recently ended Test Period and no ~~continuing~~ Event of ~~Default~~Default shall exist or result therefrom; (xi) the Parent Borrower and its Restricted Subsidiaries may make Restricted Payments if the Total Net Leverage Ratio on a Pro Forma Basis as of the end of the most recent Test Period is less than or equal to 3.75:1.00; provided that no Event of Default shall exist or result therefrom; (xii) [Reserved]; (xiii) Restricted Payments made on or after the Closing Date relating to the Transactions; (xiv) any Borrower may make Restricted Payments in an amount not to exceed the amount of Excluded Contributions previously received by the Parent Borrower Not Otherwise Applied; (xv) the Parent Borrower and its Restricted Subsidiaries may make additional Restricted Payments ~~constituting or otherwise made in connection with or relating~~ to any ~~IPO Reorganization Transactions~~ Parent Company the proceeds of which shall be used by any Parent Company to (~~limited~~i)(x) pay Taxes (including franchise Taxes) and (y) make payments to the holders of its Equity Interests, which aggregate amount in the case of ~~payments pursuant~~ this clause (i) shall not exceed the amount of Taxes that would be due as if the Parent Borrower and its Restricted Subsidiaries had computed such Taxes as if the Parent Borrower and its Restricted Subsidiaries filed a consolidated, combined, unitary or similar type return with Parent Borrower as the consolidated parent, without regard to tax deductions attributable to any Parent Company; provided clause (i) shall only apply in the event that the Parent Borrower files a consolidated, combined, unitary or similar type tax ~~receivable agreement~~return with any Parent Company, (ii) pay other fees and expenses required to ~~Permitted Tax Receivable Payments~~maintain its (or any of its direct or indirect parents’) corporate existence, in each case of clauses (i) and (ii)~~; (xvi) the distribution~~, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such ~~dividends~~ Taxes, fees or expenses are ~~included in~~ attributable to the ~~calculation~~ ownership or operations of ~~Consolidated Interest Expense; and (xviii) Holdings~~the Parent Borrower and its Subsidiaries, ~~Intermediate Holdings,~~ provided that any such distributions attributable to Taxes of an Unrestricted Subsidiary shall not exceed any corresponding payments actually made by such Unrestricted Subsidiary to the Parent Borrower or any Restricted Subsidiary ~~may make Restricted Payments in cash to Holdings to permit Holdings to make~~for such purpose, (iii) pay customary salary, bonus, severance and other benefits payable to, and ~~Holdings may make~~indemnities provided on behalf of, ~~Restricted Payments in respect~~ directors, officers, employees, members of ~~Permitted Tax Distributions. For purposes~~ management and consultants of ~~determining compliance with~~ such Persons and (iv) pay costs, fees and expenses related to any equity (including after a Qualifying IPO, Public Company Costs) or debt offering permitted by this ~~Section 6.08(a~~Agreement (whether or not successful), ; provided that in the ~~event that a proposed Restricted Payment (or a portion thereof) meets the criteria~~ case of clauses (iiii) ~~through~~ and (~~xviii) above~~iv), such amount shall be solely for the ~~Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date~~ account of such ~~reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner~~ items that otherwise complies with this Section 6.08(a). (b) Neither Holdings, Intermediate Holdings nor any Borrower will, nor will they permit any Restricted Subsidiary to, make or pay, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account relate to Parent Company’s ownership and management of the ~~purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, except: (i) payment of regularly scheduled interest~~ Parent Borrower and ~~principal payments as, in the form of payment and when due in respect of any Indebtedness, other than payments in respect of any Junior Financing prohibited by the subordination provisions thereof~~its Restricted Subsidiaries; ~~(ii) refinancings of Junior Financing Indebtedness with proceeds of other Junior Financing Indebtedness permitted to be in~~

Appears in 1 contract

Sources: Master Amendment (Krispy Kreme, Inc.)

Restricted Payments; Certain Payments of Indebtedness. (a) ~~Neither Holdings~~The Borrower will not, ~~Intermediate Holdings nor any Borrower will, nor~~ and will ~~they~~ not permit any Restricted ~~Subsidiary~~Subsidiary to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, except: (i) ~~Each Borrower and~~ each Restricted Subsidiary may make Restricted Payments to ~~Intermediate Holdings, a~~ the Borrower or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a ~~wholly-owned Subsidiary of a Borrower~~Wholly Owned Subsidiary, such Restricted Payment is made to ~~Intermediate Holdings, such~~ the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests; (ii) ~~payments or distributions to satisfy dissenters’ or appraisal rights, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of assets (other than with respect to~~ the ~~Transactions) that complies with Section 6.03; (iii) Holdings~~ Borrower and ~~any Intermediate Holdings~~ each Restricted Subsidiary may declare and make dividend payments or other distributions payable solely in the Equity Interests of such Person; (iviii) Restricted Payments made ~~in connection with or in order~~ to consummate the Transactions (including, without limitation, (A) cash payments to holders of Equity Interests of Target as provided by the Acquisition Agreement, (B) Restricted Payments to direct and indirect parent companies of Holdings to finance a portion of the consideration for the Acquisition and (C) other payments with respect to working capital adjustments or otherwise, to the extent contemplated by the Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv))Transactions; (viv) repurchases of Equity Interests in ~~Holdings (~~the Borrower or any Restricted ~~Payments by Holdings to allow repurchases of Equity Interest in any direct or indirect parent of Holdings) or Intermediate Holdings~~ Subsidiary deemed to occur upon exercise of stock options or warrants ~~or other incentive interests~~ if such Equity Interests represent a portion of the exercise price or withholding taxes payable in connection with the exercise of such ~~stock~~ options or warrants or other incentive ~~interest~~interests; (viv) Restricted Payments to ~~Holdings~~ the Borrower, which ~~Holdings~~ the Borrower may use to redeem, acquire, ~~retire~~ retire, repurchase or ~~repurchase~~ settle its Equity Interests (or any options, warrants, restricted stock ~~units~~ or stock appreciation rights or ~~other equity-linked interests~~ similar securities issued with respect to any of such Equity Interests) (or ~~make Restricted Payments~~ Indebtedness or to ~~allow any~~ service Indebtedness incurred by the Borrower to finance the redemption, acquisition, retirement, repurchase or settlement of ~~Holdings’ direct~~ such Equity Interest or ~~indirect parent companies to so redeem~~Indebtedness, ~~retire, acquire~~ held directly or ~~repurchase their Equity Interests) held~~ indirectly by current or former officers, managers, consultants, ~~directors and~~ members of the Board of Directors, employees or independent contractors (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of ~~Holdings (or any direct or indirect parent thereof), Holdings,~~ the ~~Borrowers~~ Borrower and ~~the~~ its Restricted Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, ~~profits interest,~~ employment termination agreement or any other employment agreements or equity holders’ ~~agreement; provided that the~~ agreement in an aggregate amount ~~of Restricted Payments permitted by this clause (vi)~~ after the Effective ~~Date,~~ Date together with the aggregate amount of loans and advances to ~~Holdings~~ the Borrower made pursuant to Section 6.04(m) in lieu ~~thereof, shall~~ of Restricted Payments permitted by this clause (v) not to exceed ~~the sum of (A) the greater~~ $75,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years subject to a maximum of $~~15.0 million and 5.0% of Consolidated EBITDA for the most recently ended Test Period~~ 150,000,000 in any ~~fiscal~~ calendar year ~~of Holdings~~ (~~which subsequent to an IPO shall be increased~~ without giving effect to the ~~greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings~~following proviso)~~, (B) the~~ ; provided that such amount in any ~~fiscal~~ calendar year ~~equal~~ may be increased by (1) an amount not to exceed the cash proceeds of key man life insurance policies received by ~~Holdings,~~ the ~~Borrowers~~ Borrower or the Restricted Subsidiaries after the Effective Date, or (C2) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests amount of any ~~direct or indirect Parent Entity or management investment vehicle~~bona fide cash bonuses otherwise payable to members of the Board of Directors, ~~in each case to any future~~consultants, ~~present or former~~ officers, employees~~, directors~~, managers or ~~consultants~~ independent contractors of ~~Holdings, any of its Subsidiaries~~ the Borrower or any ~~direct~~ Restricted Subsidiary that are foregone in return for the receipt of Equity Interests, the fair market value of which is equal to or ~~indirect Parent Entity or management investment vehicle that occurs after~~ less than the ~~Effective Date, to the extent the cash proceeds from the sale~~ amount of such ~~Equity Interests are contributed to Holdings~~ cash bonuses, which, if not used in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year year, may be carried forward to ~~succeeding~~ any subsequent fiscal ~~years~~year; provided further that cancellation of Indebtedness owing to the Borrower or any Restricted Subsidiary from members of the Board of Directors, consultants, officers, employees, managers or independent contractors (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of the Borrower or any Restricted Subsidiary in connection with a repurchase of Equity Interests of the Borrower will not be deemed to constitute a Restricted Payment for purposes of this Section 6.07 or any other provisions of this Agreement. (vi) other Restricted Payments made by the Borrower; provided that, at the time of making such Restricted Payments, (i) no Default or Event of Default shall have occurred and be continuing or would result therefrom and (ii) on a Pro Forma Basis, the Total Net Leverage Ratio is equal to or less than 3.00 to 1.00; (vii) ~~Holdings and~~ any ~~Intermediate Holdings~~ Restricted Subsidiary may make Restricted Payments in ~~cash~~cash to the Borrower: (A) ~~without duplication of~~ as distributions by any ~~Permitted Tax Distribution,~~ Restricted Subsidiary to the ~~proceeds of which shall be used by Holdings or any Intermediate Holdings~~ Borrower in amounts required for the Borrower to pay ~~(or~~ with respect to ~~make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for~~ any taxable period ~~for~~ in which ~~Holdings~~ the Borrower and/or any of its Subsidiaries ~~are~~ is a member of (or is a flow-through entity for U.S. federal income tax purposes owned directly or indirectly by one or more such members of of) a consolidated, ~~combined~~ combined, unitary or ~~unitary~~ similar tax group ~~for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent~~ (a “Tax Group”)) of which the Borrower is the common parent, ~~the portion of any~~ U.S. federal, ~~state,~~ state and local or and foreign ~~Taxes (as applicable) of such Tax Group for such taxable period~~ taxes that are attributable to the taxable income of ~~Holdings~~ the Borrower and/or its Subsidiaries; provided that ~~Restricted Payments~~ for each taxable period, the amount of such payments made ~~pursuant to this clause (a)(vii)(A)~~ in respect of such taxable period in the aggregate shall not exceed the ~~Tax liability~~ amount of such taxes that ~~Holdings and/or~~ the Borrower and its Subsidiaries ~~(as applicable)~~ would have ~~incurred were such Taxes determined as~~ been required to pay if ~~such entity(ies)~~ they were a stand-alone ~~taxpayer or a~~ Tax Group with the Borrower as the corporate common parent of such stand-alone ~~group; and provided~~Tax Group (collectively, further, that Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers or their Restricted Subsidiaries“Tax Distributions”); (B) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof or any Intermediate Holdings) attributable to the ownership or operations of Holdings, the Borrowers and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of Holdings, the Borrowers and the Restricted Subsidiaries and (y) otherwise permitted to be paid by Holdings, the Borrowers and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the Borrowers or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x)[reserved]; (C) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence[reserved]; (D) ~~the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E)~~ to finance any Investment made by the Borrower that, if made by the Borrower, would be permitted to be made pursuant to Section ~~6.04 other than Section 6.04(m)~~6.04; provided that (1A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2B) ~~Holdings or any Intermediate Holdings~~ the Borrower shall, immediately following the closing thereof, cause (x1) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to ~~Holdings,~~ the ~~Borrowers~~ Borrower or ~~the~~ its Restricted Subsidiaries or (y2) the Person formed or acquired to merge into or consolidate with ~~Holdings,~~ the ~~Borrowers~~ Borrower or any of the Restricted Subsidiaries to the extent such ~~merger, amalgamation~~ merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow the Borrower to pay) fees and expenses related to any equity or debt offering; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of ~~Holdings or any direct or indirect parent company of Holdings~~ the Borrower to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of ~~Holdings,~~ the ~~Borrowers~~ Borrower and ~~the~~ its Restricted Subsidiaries; and (G) the proceeds of which shall be used ~~by Holdings or any Intermediate Holdings to pay (or~~ to make ~~Restricted Payments to allow any direct or indirect parent thereof to pay~~payments permitted by clause (b)(iv) ~~fees~~ and ~~expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement~~ (~~whether or not such offering or other transaction is successful)~~b)(v) of Section 6.07; (viii) in addition to the foregoing Restricted Payments, the ~~Borrowers and any Intermediate Holdings~~ Borrower may make additional Restricted Payments to any Intermediate Holdings and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings DebtPayments, in an aggregate amount, when taken together with the aggregate amount of loans and advances ~~to Holdings~~ previously made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii), not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as no Event of Default shall have occurred and be continuing (or, in the case of the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h) or (i)), the Available Amount that is Not Otherwise Applied as in effect immediately prior to the time of making of such Restricted Payment; provided that amounts pursuant to clause (b) of the definition of “Available Amount” may only be used to fund a Restricted Payment pursuant to this clause (viii)(A) to the extent that the Total Net Leverage Ratio on a Pro Forma Basis after giving effect thereto is equal to or less than 3.75 to 1.00, plus (CB) the Available Equity Amount that is Not Otherwise ~~Applied~~Applied as in effect immediately prior to the time of making of such Restricted Payment; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; (xi) ~~Holdings~~ the Borrower may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiii) payments made or expected to be made by ~~Holdings, any~~ the Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled ~~Affiliates, Immediate Family Members~~ Affiliates or ~~Permitted Transferees~~permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to 5.00 to 1.0 and (B) there is no continuing Event of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvixiii) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to ~~Holdings, a~~ the Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (~~xvii~~xiv) the declaration and payment of ~~dividends in respect~~ Restricted Payments on the Borrower’s common stock, following consummation of ~~JV Preferred Equity Interests issued in accordance with Section 6.01~~ any public offering, of up to 6.0% per annum of the net cash proceeds of such public offering received by or contributed to the ~~extent such~~ Borrower, other than public offerings registered on Form S-8; (xv) the declaration and payment of regular cash dividends ~~are included~~ on common stock of the Borrower in ~~the calculation~~ an aggregate amount not to exceed 2.0% of ~~Consolidated Interest Expense~~Market Capitalization per fiscal year; (xvi) any distributions or payments of Securitization Fees; and (~~xviii~~xvii) ~~Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make~~ additional Restricted Payments in ~~cash~~ an amount not to ~~Holdings~~ exceed the greater of $25,000,000 and 20.0% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to ~~permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in~~ the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date making of such ~~reclassification) such~~ Restricted ~~Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a)~~Payment. (b) ~~Neither Holdings~~The Borrower will not, ~~Intermediate Holdings nor any Borrower will, nor~~ and will ~~they~~ not permit any Restricted Subsidiary to, make or ~~pay~~agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any ~~Junior~~ Restricted Debt Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any ~~Junior~~ Restricted Debt Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoing, except: (i) payment of regularly scheduled interest and principal ~~payments as~~payments, ~~in the form~~ mandatory offers to repay, repurchase or redeem, mandatory prepayments of principal premium and interest, and payment of fees, expenses and ~~when due in~~ indemnification obligations, with respect ~~of any Indebtedness~~to such Restricted Debt Financing, other than payments in respect of any ~~Junior~~ Restricted Debt Financing prohibited by the subordination provisions thereof; (ii) refinancings of ~~Junior~~ Indebtedness to the extent permitted by Section 6.01; (iii) the conversion of any Restricted Debt Financing to Equity Interests (other than Disqualified Equity Interests) of the Borrower, and any payment that is intended to prevent any Restricted Debt Financing from being treated as an “applicable high yield discount obligation” within the meaning of Section 163(i)(1) of the Code; (iv) prepayments, redemptions, repurchases, defeasances and other payments in respect of Restricted Debt Financings prior to their scheduled maturity in an aggregate amount, not to exceed the sum of (A) an amount at the time of making any such prepayment, redemption, repurchase, defeasance or other payment and together with any other prepayments, redemptions, repurchases, defeasances and other payments made utilizing this subclause (A) not to exceed the greater of $25,000,000 and 20.0% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such prepayment, redemption, purchase, defeasance or other payment plus (B) (x) the Available Amount that is Not Otherwise Applied as in effect immediately prior to the time of making of such Investment; provided that amounts pursuant to clause (b) of the definition of “Available Amount” may only be used to fund any such prepayment, redemption, purchase, defeasance or other payment pursuant to this clause (iv)(B)(x) to the extent that the Total Net Leverage Ratio on a Pro Forma Basis after giving effect thereto is equal to or less than 3.75 to 1.00 plus (y) the Available Equity Amount that is Not Otherwise Applied as in effect immediately prior to the time of making of such Investment; (v) payments made in connection with the Transactions; (vi) prepayments, redemptions, purchases, defeasances and other payments in respect of Restricted Debt Financings prior to their scheduled maturity; provided that (i) no Default or Event of Default shall have occurred and be continuing or would result therefrom and (ii) after giving effect to such prepayment, redemption, repurchase, defeasance or other payment, on a Pro Forma Basis, the Total Net Leverage Ratio is less than or equal to 3.25 to 1.00; and (vii) prepayments of Restricted Debt Financing owed to the Borrower or a Restricted Subsidiary or prepayments of Permitted Refinancing of such Indebtedness with the proceeds of any other ~~Junior Financing Indebtedness permitted to be in~~Restricted Debt Financing.

Appears in 1 contract

Sources: Restatement Agreement (Installed Building Products, Inc.)

Restricted Payments; Certain Payments of Indebtedness. (a) ~~Neither Holdings~~The Borrower will not, ~~Intermediate Holdings nor any Borrower will, nor~~ and will ~~they~~ not permit any Restricted ~~Subsidiary~~Subsidiary to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, except: (i) ~~Each Borrower and~~ each Restricted Subsidiary may make Restricted Payments to ~~Intermediate Holdings, a~~ the Borrower or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a ~~wholly-owned~~ Wholly Owned Subsidiary of a the Borrower, such Restricted Payment is made to ~~Intermediate Holdings, such~~ the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests; (ii) ~~payments or distributions to satisfy dissenters’ or appraisal rights, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of assets (other than with respect to~~ the ~~Transactions) that complies with Section 6.03; (iii) Holdings~~ Borrower and ~~any Intermediate Holdings~~ each Restricted Subsidiary may declare and make dividend payments or other distributions payable solely in the Equity Interests of such Person; (iviii) Restricted Payments made ~~in connection~~ on or substantially contemporaneously with ~~or in order~~ the Effective Date to consummate the ~~Transactions (including~~AMERICAS 107903477 Transactions, ~~without limitation, (A) cash payments to holders of Equity Interests of Target as provided by the Acquisition Agreement, (B) Restricted Payments to direct and indirect parent companies of Holdings~~ including to finance ~~a portion~~ the payment of the consideration for the Acquisition and (C) other payments with respect to working capital adjustments or otherwise, to the extent contemplated by the Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv))Transaction Costs; (viv) repurchases of Equity Interests in Holdings (or ~~Restricted Payments by Holdings to allow repurchases of Equity Interest in~~ any direct or indirect parent of Holdings) ), any Intermediate Parent, the Borrower or ~~Intermediate Holdings~~ any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants ~~or other incentive interests~~ if such Equity Interests represent a portion of the exercise price or withholding taxes payable in connection with the exercise of such ~~stock~~ options or warrants or other incentive ~~interest~~interests; (viv) Restricted Payments to Holdings or any Intermediate Parent, which Holdings or such Intermediate Parent may use to redeem, acquire, ~~retire~~ retire, repurchase or ~~repurchase~~ settle its Equity Interests (or any options, warrants, restricted stock ~~units~~ or stock appreciation rights or ~~other equity-linked interests~~ similar securities issued with respect to any of such Equity Interests) or to service Indebtedness incurred by Holdings or any Intermediate Parent to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred by Holdings or an Intermediate Parent to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests) ), held directly or indirectly by current or former officers, managers, consultants, ~~directors and~~ members of the Board of Directors, employees or independent contractors (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), ~~Holdings~~any Intermediate Parent, the ~~Borrowers~~ Borrower and ~~the~~ its Restricted Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, ~~profits interest,~~ employment termination agreement or any other employment agreements or equity holders’ ~~agreement; provided that the~~ agreement in an aggregate amount ~~of Restricted Payments permitted by this clause (vi)~~ after the Effective Date, together with the aggregate amount of loans and advances to Holdings or an Intermediate Parent made pursuant to Section 6.04(m) in lieu ~~thereof~~of Restricted Payments permitted by this clause (v), ~~shall~~ not to exceed ~~the sum of (A)~~ the greater of AMERICAS 107903477 $~~15.0 million~~ 20,000,000 and ~~5.0~~17.0% of Consolidated EBITDA ~~for the most recently ended Test Period~~ in any ~~fiscal~~ calendar year ~~of Holdings (which subsequent to an IPO shall be increased to the greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period~~ with unused amounts in any ~~fiscal~~ calendar year ~~of Holdings), (B) the~~ being carried over to succeeding calendar years; provided that such amount in any ~~fiscal~~ calendar year ~~equal~~ may be increased by (1) an amount not to exceed the cash proceeds of key man life insurance policies received by ~~Holdings,~~ the ~~Borrowers~~ Borrower (or by Holdings or an Intermediate Parent and contributed to the Borrower) or the Restricted Subsidiaries after the Effective Date, or (C2) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests amount of any ~~direct or indirect Parent Entity or management investment vehicle~~bona fide cash bonuses otherwise payable to members of the Board of Directors, ~~in each case to any future~~consultants, ~~present or former~~ officers, employees~~, directors~~, managers or ~~consultants~~ independent contractors of Holdings, ~~any of its Subsidiaries~~ an Intermediate Parent, the Borrower or any ~~direct~~ Restricted Subsidiary that are foregone in return for the receipt of Equity Interests, the fair market value of which is equal to or ~~indirect Parent Entity or management investment vehicle that occurs after~~ less than the ~~Effective Date, to the extent the cash proceeds from the sale~~ amount of such ~~Equity Interests are contributed to Holdings~~ cash bonuses, which, if not used in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year year, may be carried forward to ~~succeeding~~ any subsequent fiscal ~~years;~~year; provided further that cancellation of Indebtedness owning to the Borrower or any Restricted Subsidiary from members of the Board of Directors, consultants, officers, employees, managers or independent contractors (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings, any Intermediate Parent, the Borrower or any Restricted Subsidiary in connection with a repurchase of Equity Interests of Holdings, any Intermediate Parent or the Borrower will not be deemed to constitute a Restricted Payment for purposes of this Section 6.07 or any other provisions of this Agreement. (~~vii~~vi) ~~Holdings~~ the Borrower and ~~any Intermediate Holdings~~ its Restricted Subsidiaries may make Restricted Payments in ~~cash~~cash to Holdings and any Intermediate Parent: (A) for the purpose of funding, without duplication ~~of any Permitted Tax Distribution, the proceeds of which shall be used~~ (i) payments by Holdings ~~or any Intermediate Holdings to pay~~ (or ~~to make Restricted Payments to allow~~ any direct or indirect parent of ~~Holdings to pay~~Holdings), ~~for~~ any ~~taxable period for which Holdings and/or~~ Intermediate Parent (and any ~~of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a~~ direct or indirect ~~parent of Holdings~~ Subsidiary thereof with respect to which the Borrower is ~~the common parent (~~a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (a)(vii)(A) shall not exceed the Tax liability that Holdings and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this subclause (ASubsidiary) in respect of Taxes directly payable by such entities, including any ~~Taxes attributable to~~ franchise or similar taxes, fees and expenses, and (ii) any tax distributions permitted by Section 6.2 of the ~~income~~ Third Amended and Restated Limited Liability Company Agreement of ~~any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to~~ E2open Holdings, LLC, as in effect on the ~~Borrowers or their Restricted Subsidiaries~~Effective Date (disregarding for this purpose any limitations on such tax distributions imposed therein by AMERICAS 107903477 reference to any bank financing agreements) (collectively, “Tax Distributions”); (B) the proceeds of which shall be used by Holdings (or any direct or indirect parent of Holdings) or any Intermediate ~~Holdings~~ Parent to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, ~~accounting, tax reporting~~ accounting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by ~~directors~~ members of the Board of Directors or ~~officers~~ officers, employees, directors, managers, consultants or independent contractors of Holdings (or any direct or indirect parent ~~thereof~~ thereof) or any Intermediate ~~Holdings)~~ Parent attributable to the ownership or operations of Holdings, the ~~Borrowers~~ Borrower and ~~the~~ its Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of ~~Holdings,~~ the ~~Borrowers~~ Borrower and ~~the~~ its Restricted Subsidiaries and (y) otherwise permitted to be paid by ~~Holdings,~~ the ~~Borrowers~~ Borrower and ~~the~~ its Restricted Subsidiaries under this ~~Agreement and~~ Agreement, (4) ~~payments~~ amounts due and payable pursuant to any investor management agreement entered into with any of the Sponsors as such investor management agreement is in effect on the Effective Date (to the extent that such amounts are reasonably satisfactory to the Administrative Agent) and (5) amounts that would otherwise be permitted to be paid ~~directly by Holdings, the Borrowers or the Restricted Subsidiaries~~ pursuant to Section ~~6.09(iii~~6.08(iii) or (xxi); (C) the proceeds of which shall be used by Holdings or any ~~Intermediate Holdings to pay (or to make Restricted Payments to allow any~~ direct or indirect parent ~~of Holdings~~ thereof or Intermediate Parent to ~~pay)~~ pay franchise and similar Taxes, and other fees and expenses, required to maintain its ~~organizational~~ corporate or other legal existence; (D) ~~the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E)~~ to finance any Investment made by Holdings or any Intermediate Parent that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04 ~~other than Section 6.04(m~~(including required payments of Earn-Outs in connection therewith); provided that (1A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2B) Holdings or any Intermediate ~~Holdings~~ Parent AMERICAS 107903477 shall, immediately following the closing thereof, cause (x1) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to ~~Holdings,~~ the ~~Borrowers~~ Borrower or ~~the~~ its Restricted Subsidiaries or (y2) the Person formed or acquired to merge into or consolidate with ~~Holdings,~~ the ~~Borrowers~~ Borrower or any of the Restricted Subsidiaries to the extent such ~~merger, amalgamation~~ merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any equity or debt offering not prohibited by this Agreement; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the ~~Borrowers~~ Borrower and ~~the~~ its Restricted Subsidiaries; and (G) the proceeds of which shall be used ~~by Holdings or any Intermediate Holdings to pay (or~~ to make ~~Restricted Payments to allow any direct or indirect parent thereof to pay~~payments permitted by clause (b)(iv) ~~fees~~ and ~~expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement~~ (~~whether or not such offering or other transaction is successful)~~b)(v) of Section 6.07; (~~viii~~vii) in addition to the foregoing Restricted Payments, the ~~Borrowers and any Intermediate Holdings~~ Borrower may make additional Restricted Payments to any Intermediate Holdings and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings DebtPayments, in an aggregate amount, when taken together with the aggregate amount of loans and advances ~~to Holdings~~ previously made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (~~viii~~vii), not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as no Event of Default shall have occurred and be continuing (or, in the case of the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h) or (i)), the Available Amount that is Not Otherwise Applied as in effect immediately prior to the time of making of such Restricted Payment, plus (CB) the Available Equity Amount that is Not Otherwise ~~Applied~~Applied as in effect immediately prior to the time of making of such Restricted Payment; provided that any Restricted Payment made in reliance on preceding clause (A), to the extent made using the Retained ECF Basket, shall be subject to (I) no Event of Default having occurred and be continuing or resulting therefrom and (II) before AMERICAS 107903477 and after giving Pro Forma Effect to such Restricted Payment, on a Pro Forma Basis, the Total Leverage Ratio being less than or equal to 4.30 to 1.00 as of the end of the mostly recently ended Test Period as of such time (in each case, tested at the time of declaration of such Restricted Payment); (ixviii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed therebycontributions; (xix) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; (xix) Restricted Payments to Holdings or any Intermediate Parent, which Holdings or any Intermediate Parent may use to (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiiixi) payments made or expected to be made by Holdings, any Intermediate Parent, the Borrower or any Restricted Subsidiary in respect of withholding or similar ~~taxes~~ Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled ~~Affiliates, Immediate Family Members~~ Affiliates or ~~Permitted Transferees~~permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xii) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, any Intermediate Parent, the Borrower or a Restricted Subsidiary AMERICAS 107903477 by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xiii) so long as no Event of Default shall have occurred and be continuing or would result therefrom, the annual declaration and payment of Restricted Payments on Holdings’ or the Borrower’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), of up to $160,000,000; (xiv) [reserved]; (xv) so long as no Event of Default shall have occurred and be continuing or would result therefrom, additional Restricted Payments in an amount not to exceed the greater of $50,000,000 and 42.0% of Consolidated EBITDA on a Pro Forma Basis for the most recently ended Test Period; (xvi) the Borrower and its Restricted Subsidiaries may make Restricted Payments in securities or other property (other than cash) to Holdings and any Intermediate Parent so long as the relevant assets are promptly contributed to the Borrower or a Restricted Subsidiary; (xvii) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is equal to or less than ~~or equal~~ 3.55 to ~~5.00 to 1.0~~ 1.00 and (B) ~~there is~~ no ~~continuing~~ Event of ~~Default; (xv) Restricted Payments constituting~~ Default exists or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expensewould result therefrom; and (xviii) ~~Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make~~ additional Restricted Payments to finance any payments required to be made by Public Parent pursuant to the Tax Receivable Agreement, other than any accelerated payments or payments calculated based on valuation assumptions without regard to actual tax savings, including any such payments arising from a “Change of Control” (as defined in ~~cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted~~ the Tax ~~Distributions. For purposes of determining compliance with this Section 6.08(a~~Receivable Agreement), in a contractual breach, or by election of any party to the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a)Tax Receivable Agreement. (b) ~~Neither Holdings~~The Borrower will not, ~~Intermediate Holdings nor any Borrower will, nor~~ and will ~~they~~ not permit any Restricted Subsidiary to, make or ~~pay~~agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, AMERICAS 107903477 retirement, acquisition, cancellation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoing, in each case, on or prior to the date that is one year prior to the scheduled maturity of such Junior Financing, except: (i) payment of regularly scheduled interest and principal ~~payments as~~payments, ~~in the form~~ mandatory offers to repay, repurchase or redeem, mandatory prepayments of principal premium and interest, and payment of fees, expenses and ~~when due in~~ indemnification obligations, with respect ~~of any Indebtedness~~to such Junior Financing, other than payments in respect of any Junior Financing prohibited by the subordination provisions thereof; (ii) refinancings of Indebtedness to the extent permitted by Section 6.01; (1) the conversion of any Junior Financing ~~Indebtedness with proceeds~~ to Equity Interests (other than Disqualified Equity Interests) of ~~other~~ Holdings or any of its direct or indirect parent companies or any Intermediate Parent and (2) any payment that is intended to prevent any Junior Financing ~~Indebtedness permitted~~ from being treated as an “applicable high yield discount obligation” within the meaning of Section 163(i)(1) of the Code; (iv) prepayments, redemptions, purchases, defeasances and other payments in respect of any Junior Financing prior to ~~be in~~the date that is one year prior to its scheduled maturity; provided that after giving effect to such prepayments, redemptions, purchases, defeasances or other payments (A) on a Pro Forma Basis, the Total Leverage Ratio is equal to or less than 3.55 to 1.00 and (B) no Event of Default exists or would result therefrom; (v) payments made in connection with, or in order to consummate, the Transactions; (vi) (A) so lo

Appears in 1 contract

Sources: Credit Agreement (E2open Parent Holdings, Inc.)

Restricted Payments; Certain Payments of Indebtedness. (a) Neither ~~Holdings, Intermediate~~ Holdings nor ~~any~~ the Borrower will, nor will they permit any Restricted ~~Subsidiary~~Subsidiary to, to pay or make, directly or indirectly, any Restricted Payment, except: (i) ~~Each~~ the Borrower and each Restricted Subsidiary may make Restricted Payments to ~~Intermediate Holdings, a~~ the Borrower or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a wholly-owned Subsidiary of a the Borrower, such Restricted Payment is made to ~~Intermediate Holdings, such~~ the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests; (ii) ~~payments or distributions~~ Restricted Payments to satisfy appraisal or other dissenters’ ~~or appraisal~~ rights, pursuant to or in connection with a consolidation, amalgamation, ~~merger or~~ merger, transfer of assets ~~(other than with respect to the Transactions)~~ or acquisition that complies with Section ~~6.03~~6.03 or Section 6.04; (iii) ~~Holdings and any Intermediate~~ Holdings may declare and make dividend payments or other distributions payable solely in the Equity Interests of such Person; (iv) Restricted Payments made in connection with or in order to consummate the Transactions or pay Transaction Costs (including, without limitation, (A) cash payments to holders of Equity ~~Interests~~ Interests, restricted stock units, options or other equity-linked interests of the Target (or any Parent Entity) as provided by the Acquisition Agreement, (B) Restricted Payments (x) to direct and indirect parent companies of Holdings to finance a portion of the consideration for the Acquisition and (y) to holders of Equity Interests of the Target (immediately prior to giving effect to the Acquisition) in connection with, or as a result of, their exercise of appraisal rights and the settlement of any claims or actions (whether actual, contingent or potential) with respect thereto, in each case, with respect to the Transactions and (C) other payments with respect to working capital adjustments or ~~otherwise,~~ otherwise to the extent contemplated by the Acquisition Agreement~~); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis~~ , including any payments in respect of ~~this clause (iv)~~any warranty and indemnity insurance policy); (v) repurchases of Equity Interests in Holdings (or Restricted Payments by Holdings to allow repurchases of Equity ~~Interest~~ Interests in any direct or indirect parent of Holdings) ~~or Intermediate Holdings~~ deemed to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price of such stock options or warrants or other incentive interest; (vi) Restricted Payments to Holdings which Holdings may use to redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted stock units or stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) (or to make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity ~~Interests~~Interests or other such interests) held by current or former officers, managers, consultants, ~~directors~~ directors, employees and ~~employees~~ other service providers (or their respective Affiliates, spouses, former spouses, other Permitted Transferees, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), ~~Holdings,~~ the ~~Borrowers~~ Borrower and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment or engagement of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, profits interest, employment termination agreement or any other employment agreement or service agreements with any director, officer or consultant or partnership or equity holders’ agreement; provided ~~that~~ that, except with respect to non-discretionary repurchases, the aggregate amount of Restricted Payments permitted by this clause (vi) after the Effective Date, together with the aggregate amount of loans and advances to Holdings (or any direct or indirect parent thereof) made pursuant to Section 6.04(m) in lieu thereof, shall not exceed the sum of (Aa) the greater of $~~15.0 million~~ 265,000,000 and ~~5.0~~50% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of ~~Holdings~~ the Borrower (~~which subsequent~~ net of any proceeds from the reissuance or resale of such Equity Interests to ~~an IPO shall be increased to~~ another Person received by Holdings, the ~~greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in~~ Borrower or any ~~fiscal year of Holdings~~Restricted Subsidiary), (Bb) the amount in any fiscal year equal to the cash proceeds of key man life insurance policies received by Holdings, the ~~Borrowers~~ Borrower or the Restricted Subsidiaries after the Effective Date, and (Cc) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket ~~hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision~~hereunder; provided that any unused portion of the preceding basket calculated pursuant to clauses (Aa) and (Bb) above for any fiscal year may be carried forward to succeeding fiscal years; provided, further, that any Indebtedness Incurred or Investments or payments made in reliance upon the Available RP Capacity Amount utilizing the unused amounts available pursuant to this Section 6.08(a)(vi) shall reduce the amounts available pursuant to this Section 6.08(a)(vi); (vii) ~~Holdings and~~ Holdings, the Borrower and/or any ~~Intermediate Holdings~~ Restricted Subsidiary may make Restricted Payments in cash: (A) ~~without duplication~~ the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof) attributable to the ownership or operations of Holdings, the Borrower and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of Holdings, the Borrower and the Restricted Subsidiaries and (y) otherwise not prohibited to be paid by Holdings, the Borrower and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the Borrower or the Restricted Subsidiaries pursuant to Section 5.18 (except transactions described in clauses (ii) and (ix) of such Section); (B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence; (C) the proceeds of which shall be used by Holdings (or any other direct or indirect parent thereof) to make Restricted Payments of the type permitted by Section 6.08(a)(iv), Section 6.08(a)(vi) or Section 6.08(a)(xi); (D) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(m); provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) Holdings shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to the Borrower or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (E) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers, employees and other service providers of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrower and the Restricted Subsidiaries; and (F) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful); (viii) Restricted Payments (including Restricted Payments to Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments, to make any payments in respect of any Permitted ~~Tax Distribution~~Holdings Debt or otherwise) (A) in an aggregate amount not to exceed, at the time of making any such Restricted Payment and when taken together with the aggregate amount of loans and advances to Holdings (or any direct or indirect parent thereof) made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii) and the aggregate amount of any other Restricted Payments made utilizing this clause (A) after the Effective Date, the greater of $265,000,000 and 50% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment, (B) in an amount not to exceed the Available Amount that is Not Otherwise Applied (provided that, with respect to any Restricted Payment made in reliance on clause (b) of the definition of “Available Amount” pursuant to this clause (B), no Event of Default under Section 7.01(a), (b), (h) or (i) shall be continuing or would result therefrom) and (C) in an amount not to exceed the Available Equity Amount that is Not Otherwise Applied; provided that any Indebtedness Incurred or Investments or payments made in reliance upon the Available RP Capacity Amount utilizing the unused amounts available pursuant to this Section 6.08(a)(viii) shall reduce the amounts available pursuant to this Section 6.08(a)(viii); (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (a) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager, consultant or other service provider and any repurchases of Equity Interests in consideration of such payments including deemed repurchases, in each case, in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units and (b) payments or other adjustments to outstanding Equity Interests in accordance with any management equity plan, stock option plan or any other similar employee benefit plan, agreement or arrangement in connection with any Restricted Payment; (xi) Holdings or any Restricted Subsidiary may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) Restricted Payments after the Effective Date in an annual amount for each fiscal year of Holdings equal to the sum of (a) $50,000,000 plus (b) an amount equal to 7.0% of the net cash proceeds of the IPO (and any subsequent public offerings) received by or contributed to Holdings and/or its Subsidiaries, other than public offerings with respect to common stock registered on Form S-8 plus (c) an amount equal to 8.0% of the market capitalization of Parent on the date of the declaration of a Restricted Payment in reliance on this clause (xii); provided that any Indebtedness Incurred or Investments or payments made in reliance upon the Available RP Capacity Amount utilizing the unused amounts available pursuant to this Section 6.08(a)(xii) shall reduce the amounts available pursuant to this Section 6.08(a)(xii); (xiii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager, consultant or other service provider (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to 5.00 to 1.00 and (B) there is no continuing Event of Default under Section 7.01(a), (b), (h) or (i); (xv) [reserved]; (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, the Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) [reserved]; and (xviii) Holdings, the Borrower or any Restricted Subsidiary may make Restricted Payments in cash, the proceeds of which shall be used by ~~Holdings or any Intermediate~~ Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (~~a)(vii)(A~~a)(xviii) shall not exceed the Tax liability that Holdings and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this ~~subclause~~ clause (Aa)(xviii) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to ~~Holdings,~~ the ~~Borrowers~~ Borrower or their Restricted Subsidiaries; (B) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof or any Intermediate Holdings) attributable to the ownership or operations of Holdings, the Borrowers and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of Holdings, the Borrowers and the Restricted Subsidiaries and (y) otherwise permitted to be paid by Holdings, the Borrowers and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the Borrowers or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x); (C) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence; (D) the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(m); provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) Holdings or any Intermediate Holdings shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to Holdings, the Borrowers or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with Holdings, the Borrowers or any of the Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrowers and the Restricted Subsidiaries; and (G) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful); (viii) in addition to the foregoing Restricted Payments, the Borrowers and any Intermediate Holdings may make additional Restricted Payments to any Intermediate Holdings and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt, in an aggregate amount, when taken together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii), not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as no Event of Default shall have occurred and be continuing (or, in the case of the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h) or (i)), the Available Amount that is Not Otherwise Applied plus (C) the Available Equity Amount that is Not Otherwise Applied; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; (xi) Holdings may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiii) payments made or expected to be made by Holdings, any Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to 5.00 to 1.0 and (B) there is no continuing Event of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make Restricted Payments in cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a). (b) Neither ~~Holdings, Intermediate~~ Holdings nor ~~any~~ the Borrower will, nor will they permit any ~~Restricted~~ Subsidiary Loan Party to, make or pay, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, ~~acquisition~~prepayment, ~~cancellation or termination of any Junior Financing~~defeasance, except: (i) payment of regularly scheduled interest and principal payments as, in the form of payment and when due in respect of any Indebtedness, other than payments in respect of any Junior Financing prohibited by the subordination provisions thereof; (ii) refinancings of Junior Financing Indebtedness with proceeds of other Junior Financing Indebtedness permitted to be inacquis

Appears in 1 contract

Sources: First Lien Credit Agreement (First Advantage Corp)

Restricted Payments; Certain Payments of Indebtedness. (a) ~~Neither Holdings~~The Borrower will not, ~~Intermediate Holdings nor any Borrower will, nor~~ and will ~~they~~ not permit any ~~Restricted Subsidiary~~Subsidiary to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, except: (i) ~~Each Borrower and~~ each ~~Restricted~~ Subsidiary may make Restricted Payments to ~~Intermediate Holdings, a~~ the Borrower ~~or any~~ and to its other ~~Restricted Subsidiary~~Subsidiaries; provided that in the case of any such Restricted Payment by a ~~Restricted~~ Subsidiary that is not a ~~wholly-owned~~ Wholly Owned Subsidiary of a the Borrower, such Restricted Payment is made to ~~Intermediate Holdings, such Borrower,~~ the Borrower and to any ~~Restricted~~ other Subsidiary and to each other owner of Equity Interests of such ~~Restricted~~ Subsidiary based on their relative ownership interests of the relevant class of Equity Interests; (ii) ~~payments or distributions to satisfy dissenters’ or appraisal rights, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of assets (other than with respect to~~ the ~~Transactions) that complies with Section 6.03; (iii) Holdings~~ Borrower and ~~any Intermediate Holdings~~ each Subsidiary may declare and make dividend payments or other distributions payable solely in the Equity Interests (other than Disqualified Equity Interests) of such Person~~; (iv)~~ ; provided that in the case of any such Restricted ~~Payments~~ Payment by a Subsidiary that is not a Wholly Owned Subsidiary of the Borrower, such Restricted Payment is made ~~in connection with or in order~~ to ~~consummate~~ the ~~Transactions (including, without limitation, (A) cash payments~~ Borrower and to ~~holders~~ any other Subsidiary and to each other owner of Equity Interests of ~~Target as provided by the Acquisition Agreement, (B) Restricted Payments to direct and indirect parent companies of Holdings to finance a portion~~ such Subsidiary based on their relative ownership interests of the consideration for the Acquisition and (C) other payments with respect to working capital adjustments or otherwise, to the extent contemplated by the Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis relevant class of ~~this clause (iv))~~Equity Interests; (viii) repurchases of Equity Interests in ~~Holdings (~~the Borrower or ~~Restricted Payments by Holdings to allow repurchases of Equity Interest in~~ any ~~direct or indirect parent of Holdings) or Intermediate Holdings~~ Subsidiary deemed to occur upon exercise of stock options or warrants ~~or other incentive interests~~ if such Equity Interests represent a portion of the exercise price or withholding taxes payable in connection with the exercise of such ~~stock~~ options or ~~warrants or other incentive interest~~warrants; (viiv) Restricted Payments to Holdings which Holdings may use to redeem, acquire, ~~retire~~ retire, repurchase or ~~repurchase~~ settle its Equity Interests (or any ~~options, warrants, restricted stock units~~ options or warrants or stock appreciation rights ~~or other equity-linked interests~~ issued with respect to any of such Equity Interests) (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests) held by current or former officers, managers, consultants, directors and employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent ~~thereof~~thereof (only to the extent attributable to the Borrower), ~~Holdings,~~ the ~~Borrowers~~ Borrower and the ~~Restricted~~ Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, ~~profits interest,~~ employment termination agreement or any other employment agreements or equity holders’ ~~agreement; provided that the~~ agreement in an aggregate amount ~~of Restricted Payments permitted by this clause (vi)~~ after the Effective Date, together with the aggregate amount of loans and advances to Holdings made pursuant to Section ~~6.04(m~~6.04(l) in lieu ~~thereof~~of Restricted Payments permitted by this clause (v), ~~shall~~ not to exceed ~~the sum of (A) the greater~~ $10,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years subject to a maximum of $~~15.0 million and 5.0% of Consolidated EBITDA for the most recently ended Test Period in~~ 15,000,000 any ~~fiscal~~ calendar year ~~of Holdings~~ (~~which subsequent to an IPO shall be increased~~ without giving effect to the ~~greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings~~following proviso)~~, (B) the~~ ; provided that such amount in any ~~fiscal~~ calendar year ~~equal~~ may be increased by an amount not to exceed the cash proceeds of key man life insurance policies received by ~~Holdings,~~ the ~~Borrowers~~ Borrower or ~~the Restricted~~ its Subsidiaries (or by Holdings and contributed to Borrower) after the Effective Date, (C) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year may be carried forward to succeeding fiscal years; (~~vii~~v) ~~Holdings~~ the Borrower and ~~any Intermediate Holdings~~ the Subsidiaries may make Restricted Payments in ~~cash~~cash to Holdings and any Intermediate Parent: (A) without duplication of any Permitted Tax Distribution, the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (a)(vii)(A) shall not exceed the Tax liability that Holdings and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent ~~that such Unrestricted Subsidiaries have made cash~~ Holdings is required to make any payments ~~for such purpose to Holdings,~~ under Section 4.01(b) of the ~~Borrowers or their Restricted Subsidiaries~~Holdings LLC Agreement; (B) the proceeds of which shall be used by Holdings or any Intermediate ~~Holdings~~ Parent to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, ~~accounting, tax reporting~~ accounting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, in an aggregate amount, together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (2) a)(vii)(B), not to exceed $1,000,000 in any fiscal year plus any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent ~~thereof or any Intermediate Holdings~~thereof) attributable to the ownership or operations of ~~Holdings,~~ the ~~Borrowers~~ Borrower and the ~~Restricted~~ Subsidiaries, (32) fees and expenses (x) due and payable by the Borrower or any of ~~Holdings,~~ the ~~Borrowers and the Restricted~~ Subsidiaries and (y) otherwise permitted to be paid by ~~Holdings,~~ the ~~Borrowers and the Restricted Subsidiaries~~ Borrower or such Subsidiary under this Agreement and (43) ~~payments that would otherwise be permitted to be paid directly by Holdings~~so long as no Event of Default under Section 7.01(a), ~~the Borrowers or the Restricted Subsidiaries pursuant to Section 6.09(iii~~(b), (h) or (x)i) shall have occurred and be continuing or would result therefrom, any management, monitoring, consulting and advisory fees payable to the Investors on or after the Effective Date in an aggregate amount not to exceed $2,500,000 in any fiscal year; (C) the proceeds of which shall be used by Holdings or any Intermediate ~~Holdings~~ Parent to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its ~~organizational~~ corporate existence; (D~~) the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E~~) to finance any Investment permitted to be made pursuant to Section ~~6.04 other than Section 6.04(m)~~6.04; provided that (1A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2B) Holdings or any Intermediate ~~Holdings~~ Parent shall, immediately following the closing thereof, cause (x1) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to ~~Holdings,~~ the ~~Borrowers~~ Borrower or the ~~Restricted~~ Subsidiaries or (y2) the Person formed or acquired to merge into or consolidate with ~~Holdings,~~ the ~~Borrowers~~ Borrower or any of the ~~Restricted~~ Subsidiaries (to the extent such ~~merger, amalgamation~~ merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrowers and the Restricted Subsidiaries; and (GE) the proceeds of which shall be used by Holdings or any Intermediate ~~Holdings~~ Parent to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any unsuccessful equity ~~offering,~~ or debt offering ~~or other non-ordinary course transaction not prohibited~~ permitted by this Agreement ~~(whether or not such offering or other transaction is successful)~~so long as attributable to the Borrower and the Subsidiaries; (~~viii~~vi) in addition to the foregoing Restricted ~~Payments, the Borrowers~~ Payments and any Intermediate Holdings may make additional Restricted Payments to any Intermediate Holdings and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt, in an aggregate amount, when taken together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii), not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as (1) no Default or Event of Default shall have occurred and be continuing or would result therefrom and (~~or,~~ 2) the Borrower shall be in compliance with the ~~case~~ Financial Performance Covenant on a Pro Forma Basis as of the ~~use~~ end of the ~~Starter Basket that~~ most recent Test Period (regardless of whether such Financial Performance Covenant is ~~Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h) or (i)~~applicable at such time), the ~~Available Amount that is Not Otherwise Applied plus (C)~~ Borrower may make additional Restricted Payments to any Intermediate Parent and Holdings, in an aggregate amount not to exceed the Available ~~Equity Amount that is Not Otherwise Applied~~Amount; (ixvii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders and the Issuing Banks in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (xviii) ~~payments made~~ so long as no Event of Default shall have occurred and be continuing or ~~expected~~ would result therefrom, the Borrower may make Restricted Payments to Holdings: (A) to provide funds that are used by CWH to pay amounts required to be ~~made in respect of withholding or similar Taxes payable~~ paid by ~~any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with~~ CWH under the ~~exercise of stock options and the vesting of restricted stock and restricted stock units~~Tax Receivable Agreement; (xiB) to provide funds that are used by Holdings ~~may~~ and/or CWH to (a1) pay ~~cash in lieu~~ Public Company Expenses, (2) reimburse expenses of ~~fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment)~~ CWH to the extent required by the Holdings LLC Agreement and (b3) ~~honor any conversion request~~ make indemnification payments to the extent required by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its termsthe Holdings LLC Agreement; (~~xii~~C) of up to $30,000,000 during any fiscal year to provide funds that are used by Holdings to pay regular quarterly dividends ratably to its unitholders (including CWH) with unused amounts in any calendar year being carried over to the ~~declaration~~ succeeding calendar year; provided that the funds received by CWH are used to pay regular quarterly dividends to its shareholders; and (D) Restricted Payments to Holdings that are used for “Cash Settlements” pursuant to the Holdings LLC Agreement; and (ix) so long as no Event of Default shall have occurred and ~~payment of Restricted Payment on Holdings’ common stock (~~be continuing or would result therefrom, the ~~payment of~~ Borrower may make additional Restricted Payments to any ~~direct~~ Intermediate Parent and Holdings in an aggregate amount, for all such Restricted Payments made on or ~~indirect parent company of Holdings~~ after the Third Amendment Effective Date, not to ~~fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum~~ exceed the greater of (ax) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 $20,000,000 and (by) 7.0% of Consolidated EBITDA for the market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiii) payments made or expected to be made by Holdings, any Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to 5.00 to 1.0 and (B) there is no continuing Event of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make Restricted Payments in cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a)most recently ended Test Period. (b) ~~Neither Holdings~~The Borrower will not, ~~Intermediate Holdings nor any Borrower will, nor~~ and will ~~they~~ not permit any ~~Restricted~~ other Subsidiary to, make or ~~pay~~agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any ~~Junior Financing~~Subordinated Indebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any ~~Junior Financing~~Subordinated Indebtedness, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoing, except: (i) payment of regularly scheduled interest and principal payments as, in the form of payment and when due in respect of any Indebtedness, other than payments in respect of any ~~Junior Financing~~ Subordinated Indebtedness prohibited by the subordination provisions thereof; (ii) refinancings of ~~Junior Financing~~ Indebtedness to the extent permitted by Section 6.01; (iii) the conversion of any Subordinated Indebtedness to Equity Interests (other than Disqualified Equity Interests) of Holdings or any of its direct or indirect parent companies or any Intermediate Parent; and (iv) so long as (1) no Default or Event of Default shall have occurred and be continuing or would result therefrom and (2) the Borrower shall be in compliance with ~~proceeds~~ the Financial Performance Covenant on a Pro Forma Basis as of the end of the most recent Test Period (regardless of whether such Financial Performance Covenant is applicable at such time), prepayments, redemptions, purchases, defeasances and other ~~Junior Financing~~ payments in respect of any Subordinated Indebtedness ~~permitted~~ prior to ~~be in~~their scheduled maturity in an aggregate amount, not to exceed the Available Amount.

Appears in 1 contract

Sources: Credit Agreement (Camping World Holdings, Inc.)

Restricted Payments; Certain Payments of Indebtedness. (a) ~~Neither Holdings~~The Borrower will not, ~~Intermediate Holdings nor any Borrower will, nor~~ and will ~~they~~ not permit any Restricted ~~Subsidiary~~Subsidiary to, to pay or make, directly or indirectly, any Restricted Payment, except: (i) ~~Each Borrower and~~ each Restricted Subsidiary may make Restricted Payments to ~~Intermediate Holdings, a~~ the Borrower or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a wholly-owned Subsidiary of a the Borrower, such Restricted Payment is made to ~~Intermediate Holdings, such~~ the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests; (ii) ~~payments or distributions~~ Restricted Payments to satisfy appraisal or other dissenters’ ~~or appraisal~~ rights, pursuant to or in connection with a consolidation, amalgamation, ~~merger or~~ merger, transfer of assets ~~(other than with respect to the Transactions)~~ or acquisition that complies with Section ~~6.03~~6.03 or Section 6.04; (iii) ~~Holdings and any Intermediate Holdings~~ the Borrower may declare and make dividend payments or other distributions payable solely in the Equity Interests of ~~such Person~~the Borrower; (iv) Restricted Payments made in connection with or in order to consummate the Transactions (including, without limitation, (A) cash payments to holders of Equity Interests of Target as provided by the Acquisition Agreement, (B) Restricted Payments to direct and indirect parent companies of Holdings to finance a portion of the consideration for the Acquisition and (C) other payments with respect to working capital adjustments or otherwise, to the extent contemplated by the Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv))Specified Distribution/Repayment; (v) repurchases of Equity Interests in ~~Holdings~~ the Borrower (or Restricted Payments by ~~Holdings~~ the Borrower to allow repurchases of Equity ~~Interest~~ Interests in Holdings or any direct or indirect parent of Holdings) ), or ~~Intermediate Holdings~~ any Restricted Subsidiary deemed to occur upon exercise of ~~stock~~ equity options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price of such ~~stock~~ equity options or warrants or other incentive ~~interest~~interests; (vi) Restricted Payments to Holdings which Holdings may use to redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted stock units or stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) (or to make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity ~~Interests~~Interests or other such interests) held by current or former officers, managers, consultants, directors (or analogous Person) and employees and other service providers (or their respective Affiliates, spouses, former spouses, other Permitted Transferees, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), ~~Holdings,~~ the ~~Borrowers~~ Borrower and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment or engagement of any such Person or otherwise in accordance with any ~~stock~~ equity option or ~~stock~~ equity appreciation rights plan, any management, director and/or employee ~~stock~~ equity ownership or incentive plan, ~~stock~~ equity subscription plan, profits interest, employment termination agreement or any other employment or service agreements with any director (or analogous Person), officer or consultant or partnership or equity holders’ agreement; provided ~~that~~ that, except with respect to non-discretionary repurchases, the aggregate amount of Restricted Payments permitted by this clause (vi) after the Effective Date, together with the aggregate amount of loans and advances to Holdings (or any direct or indirect parent thereof) made pursuant to Section 6.04(m) in lieu thereof, shall not exceed the sum of ~~(A)~~ the greater of $~~15.0 million~~ 62,500,000 and ~~5.0~~50.0% of Consolidated EBITDA for the most recently ended Test Period as of such time determined on a Pro Forma Basis in any fiscal year of ~~Holdings~~ the Borrower (~~which subsequent~~ net of any proceeds from the reissuance or resale of such Equity Interests to ~~an IPO shall be increased to~~ another Person received by Holdings, the ~~greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in~~ Borrower or any ~~fiscal year of Holdings~~Restricted Subsidiary), ~~(B)~~ the amount in any fiscal year equal to the cash proceeds of key man life insurance policies received by Holdings, the ~~Borrowers~~ Borrower or the Restricted Subsidiaries after the Effective Date, ~~(C)~~ and the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket ~~hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision~~hereunder; provided that any unused portion of the preceding basket calculated pursuant to clauses (Aa) and (Bb) above for any fiscal year may be carried forward to succeeding fiscal years; provided, further, that any Indebtedness Incurred or Investments or payments made in reliance upon the Available RP Capacity Amount utilizing the unused amounts available pursuant to this Section 6.08(a)(vi) shall reduce the amounts available pursuant to this Section 6.08(a)(vi); (vii) ~~Holdings~~ the Borrower and ~~any Intermediate Holdings~~ the Restricted Subsidiaries may make Restricted Payments ~~in cash~~to Holdings and any Parent Entity: (A) without duplication of any Permitted Tax Distribution, the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (a)(vii)(A) shall not exceed the Tax liability that Holdings and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers or their Restricted Subsidiaries; (B) the proceeds of which shall be used by ~~Holdings or any Intermediate~~ Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors (or analogous Persons) or officers of Holdings (or any parent ~~thereof or any Intermediate Holdings~~thereof) attributable to the ownership or operations of Holdings, the ~~Borrowers~~ Borrower and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of Holdings, the ~~Borrowers~~ Borrower and the Restricted Subsidiaries and (y) otherwise ~~permitted~~ not prohibited to be paid by Holdings, the ~~Borrowers~~ Borrower and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the ~~Borrowers~~ Borrower or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x); (CB) the proceeds of which shall be used by ~~Holdings or any Intermediate~~ Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence; (DC) the proceeds of which shall be used by Holdings (or any other direct or indirect parent thereof) to make Restricted Payments of the type permitted by Section 6.08(a)(iv), Section 6.08(a)(vi) or Section ~~6.08(a)(vi~~6.08(a)(xi); (ED) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(m); provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) Holdings or any ~~Intermediate Holdings~~ Parent Entity shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to ~~Holdings,~~ the ~~Borrowers~~ Borrower or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with ~~Holdings,~~ the ~~Borrowers~~ Borrower or any of the Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (FE) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to ~~officers~~ officers, employees and ~~employees~~ other service providers of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the ~~Borrowers~~ Borrower and the Restricted Subsidiaries; and (GF) the proceeds of which shall be used by ~~Holdings or any Intermediate~~ Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful); (viii) ~~in addition to the foregoing~~ Restricted ~~Payments, the Borrowers and any Intermediate Holdings may make additional~~ Payments (including Restricted Payments to ~~any Intermediate Holdings and~~ Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings ~~or by any Intermediate Holdings~~ to make any payments in respect of any ~~Permitted Holdings Debt,~~ Indebtedness of Holdings) (A) in an aggregate ~~amount~~amount not to exceed, at the time of making any such Restricted Payment and when taken together with the aggregate amount of loans and advances to Holdings (or any direct or indirect parent thereof) made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii), not to exceed the sum of (A) ~~an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed~~ the greater of $~~75.0 million~~ 37,500,000 and 2530% of Consolidated EBITDA for the most recently ended Test Period ~~after giving~~ as of such time determined on a Pro Forma ~~Effect to the making of such Restricted Payment~~ Basis plus (B) ~~so long as no Event of Default shall have occurred and be continuing (or, in~~ the ~~case of the use of the Starter Basket~~ Available Amount that is Not Otherwise ~~Applied~~Applied (provided, that with respect to any Restricted Payment made out of amounts under clause (b) of the definition of “Available Amount” pursuant to this clause (B), no Event of Default under Section 7.01(a), (b), (h) or (i~~)), the Available Amount that is Not Otherwise Applied~~ ) shall have occurred or be continuing or would result therefrom) plus (C) the Available Equity Amount that is Not Otherwise Applied; provided that any Indebtedness Incurred or Investments or payments made in reliance upon the Available RP Capacity Amount utilizing the unused amounts available pursuant to this Section 6.08(a)(viii) shall reduce the amounts available pursuant to this Section 6.08(a)(viii); (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (xa) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, ~~director~~director (or analogous Person), ~~manager~~ manager, consultant or ~~consultant~~ other service provider and any repurchases of Equity Interests in consideration of such payments including deemed ~~repurchases~~ repurchases, in each case, in connection with the exercise of ~~stock~~ equity options and the vesting of restricted ~~stock~~ equity and restricted ~~stock units~~equity units and (b) payments or other adjustments to outstanding Equity Interests in accordance with any management equity plan, equity option plan or any other similar employee benefit plan, agreement or arrangement in connection with any Restricted Payment; (xi) ~~Holdings~~ the Borrower may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment of Restricted ~~Payment~~ Payments on ~~Holdings’~~ the Borrower’s common stock (or the payment of Restricted Payments to Holdings or any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s 's common ~~stock), following consummation of an IPO,~~ stock or common equity) of up to the sum per annum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and $50,000,000 plus (b) 7.0% of the ~~market capitalization~~ net cash proceeds received by or contributed to the Borrower from public offerings with respect to Holdings’ or the Parent Entity’s common stock, other than any public offerings registered on Form S-8 plus (c) 7.0% of ~~Intermediate~~ the Market Capitalization of Holdings or any such Parent Entity; provided that any Indebtedness Incurred or ~~Parent at~~ Investments or payments made in reliance upon the ~~time of such IPO~~Available RP Capacity Amount utilizing the unused amounts available pursuant to this Section 6.08(a)(xii) shall reduce the amounts available pursuant to this Section 6.08(a)(xii); (xiii) payments made or expected to be made by Holdings, ~~any~~ the Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, ~~director~~director (or analogous Person), officer, ~~manager~~ manager, consultant or ~~consultant~~ other service provider (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) ~~additional~~ Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to ~~5.00~~ 3.50 to ~~1.0~~ 1.00 and (B) there is no continuing Event of ~~Default~~Default under Section 7.01(a), (b), (h) or (i); (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments)[reserved]; (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a the Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted ~~Subsidiaries,~~ Subsidiaries the primary assets of which are Permitted ~~Investments~~Investments (except to the extent that such Permitted Investments constitute the proceeds of any sale of the assets or equity of any Unrestricted Subsidiary)); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense[reserved]; and (xviii) ~~Holdings, Intermediate Holdings, any~~ the Borrower or any Restricted Subsidiary may make Restricted Payments in ~~cash to~~ cash, the proceeds of which shall be used by Holdings to ~~permit~~ pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to ~~make~~pay), ~~and~~ for any taxable period for which the Borrower and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which Holdings ~~may make~~or a direct or indirect parent of Holdings is the common parent (a “Tax Group”) (or the Borrower or any Restricted Subsidiary is a disregarded entity or partnership directly or indirectly owned by a member or members of such a group), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of the Borrower and/or its applicable Subsidiaries; provided that (a) Restricted Payments made pursuant to this clause (a)(xviii) shall not exceed the Tax liability that the Borrower and/or its applicable Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group for all relevant taxable periods and (b) Restricted Payments under this clause (a)(xviii) in respect of ~~Permitted Tax Distributions. For purposes~~ any Taxes attributable to the income of ~~determining compliance with this Section 6.08(a), in~~ any Unrestricted Subsidiaries may be made only to the ~~event~~ extent that ~~a proposed~~ such Unrestricted Subsidiaries have made cash payments for such purpose to the Borrower or its Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a)Subsidiaries. (b) ~~Neither Holdings~~The Borrower will not, ~~Intermediate Holdings nor any Borrower will, nor~~ and will ~~they~~ not permit any Restricted Subsidiary to, make or pay, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) ~~of or in respect~~ of principal of or interest on any Junior Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, prepayment, defeasance, acquisition, cancellation or termination of any Junior ~~Financing~~Financing (any such payment, a “Restricted Debt Payment”), except: (i) payment of regularly scheduled interest and principal payments as, in the form of payment and when due in respect of any Indebtedness, other than payments in respect of any Junior Financing prohibited by the subordination provisions thereof; (ii) refinancings of Junior Financing Indebtedness with proceeds of of, or in exchange for, other Junior Financing Indebtedness permitted to be inincurred under Section 6.01; (iii) the conversion of any Junior Financing to

Appears in 1 contract

Sources: Credit Agreement (N-Able, Inc.)

Restricted Payments; Certain Payments of Indebtedness. (a) Neither Holdings, ~~Intermediate Holdings~~ the Company nor any Borrower will, nor will they permit any Restricted Subsidiary, to pay or make, directly or indirectly, any Restricted Payment, except: (i) Each Borrower and each Restricted Subsidiary may make Restricted Payments to ~~Intermediate Holdings~~the Company, a Borrower or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a wholly-owned Subsidiary of a Borrower, such Restricted Payment is made to ~~Intermediate Holdings~~the Company, such Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests; (ii) payments or distributions to satisfy dissenters’ or appraisal rights, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of assets ~~(other than with respect to the Transactions)~~ that complies with Section 6.03; (iii) ~~Holdings and~~ Holdings, any Intermediate ~~Holdings~~ Parent and the Company may declare and make dividend payments or other distributions payable solely in the Equity Interests of such Person; (iv) Restricted Payments made in connection with or in order to consummate (a) the Transactions (including, without limitation, (A) cash payments to holders of Equity Interests of under Target Stock Plans as provided by the Acquisition Agreement, (B) cash payments to holders of Restricted Cash Awards upon vesting, (C) Restricted Payments (x) to direct and indirect parent companies of ~~Holdings~~ the Company to finance a portion of the consideration for the Acquisition and (Cy) ~~other payments~~ to holders of Equity Interests of the Target (immediately prior to giving effect to the Acquisition) in connection with, or as a result of, their exercise of appraisal rights and the settlement of any claims or actions (whether actual, contingent or potential) with respect thereto, in each case, with respect to ~~working capital adjustments~~ the Transactions and (D) other dividends by the Target that have a record date before the Effective Date, but a payment date on or ~~otherwise~~after the Effective Date, to the extent contemplated by the Acquisition Agreement~~); provided that~~ ) and/or (b) the ~~earnout contemplated by Exhibit F to~~ Original Transactions (including those transactions set forth in clauses (A) through (D) of Section 6.08(a)(iv) of the ~~Acquisition Agreement shall not be permitted on the basis of this clause (iv)~~Existing Term Loan Credit Agreement); (v) repurchases of Equity Interests in Holdings (or Restricted Payments by Holdings to allow repurchases of Equity Interest in any direct or indirect parent of Holdings) or ~~Intermediate Holdings~~ the Company deemed to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price of such stock options or warrants or other incentive interest; (vi) Restricted Payments to Holdings which Holdings may use to redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted stock units or stock appreciation rights ~~or other equity-linked interests~~ issued with respect to any of such Equity Interests) (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests) held by current or former officers, managers, consultants, directors and employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), ~~Holdings~~the Company, the Borrowers and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan~~, profits interest~~, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that the aggregate amount of Restricted Payments permitted by this clause (vi) after the Effective Date, together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu thereof, shall not exceed the sum of (A) the greater of $~~15.0 million~~ 250,000,000 and ~~5.0~~2.5% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of ~~Holdings (which subsequent to an IPO shall be increased to~~ the ~~greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings)~~Company, (B) the amount in any fiscal year equal to the cash proceeds of key man life insurance policies received by ~~Holdings~~the Company, the Borrowers or the Restricted Subsidiaries after the Effective ~~Date,~~ Date and (C) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of the Company or Holdings (to the extent contributed to ~~Holdings~~ the Company in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to ~~Holdings~~the Company, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests are contributed to ~~Holdings~~ the Company in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket ~~hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision~~hereunder; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year may be carried forward to succeeding fiscal years; (vii) any Intermediate Parent or the Company may make Restricted Payments in cash to Holdings and any Intermediate Parent and, where applicable, Holdings and such Intermediate Parent may make Restricted Payments in cash: (A) ~~without duplication of any Permitted Tax Distribution,~~ the proceeds of which shall be used by Holdings or any Intermediate ~~Holdings~~ Parent to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for any taxable period for which ~~Holdings~~ the Company and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of ~~Holdings~~ the Company is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of ~~Holdings~~ the Company and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (a)(vii)(A) shall not exceed the Tax liability that ~~Holdings~~ the Company and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of ~~Holdings~~ the Company may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to ~~Holdings, the Borrowers~~ Company or ~~their~~ its Restricted Subsidiaries; (B) the proceeds of which shall be used by Holdings or any Intermediate ~~Holdings~~ Parent to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof or any Intermediate ~~Holdings~~Parent) attributable to the ownership or operations of Holdings, the Company, the Borrowers and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of ~~Holdings~~the Company, the Borrowers and the Restricted Subsidiaries and (y) otherwise permitted to be paid by ~~Holdings~~the Company, the Borrowers and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by ~~Holdings~~the Company, the Borrowers or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x); (C) the proceeds of which shall be used by Holdings or any Intermediate ~~Holdings~~ Parent to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence; (D) the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(m); provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) Holdings or any Intermediate ~~Holdings~~ Parent shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to ~~Holdings~~the Company, the Borrowers or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with ~~Holdings~~the Company, the Borrowers or any of the Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of ~~Holdings~~the Company, the Borrowers and the Restricted Subsidiaries; and (G) the proceeds of which shall be used by Holdings or any Intermediate ~~Holdings~~ Parent to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful); (viii) in addition to the foregoing Restricted Payments, the Borrowers and any Intermediate ~~Holdings~~ Parent may make additional Restricted Payments to any Intermediate ~~Holdings~~ Parent and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate ~~Holdings~~ Parent to make any payments in respect of any Permitted Holdings Debt, in an aggregate amount, when taken together with the aggregate amount of (1) prepayments, redemptions, purchases, defeasances and other payments in respect of Junior Financings made pursuant to Section 6.08(b)(iv) and (2) loans and advances to Holdings made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii), not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $~~75.0 million~~ 1,000,000,000 and 2510% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as no Event of Default shall have occurred and be continuing (or, in the case of the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h) or (i)), the Available Amount that is Not Otherwise Applied plus (C) the Available Equity Amount that is Not Otherwise Applied; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock ~~options and~~ options, the vesting of restricted stock and restricted stock units, and the payment of Restricted Cash Awards; (xi) Holdings or the Company may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment of Restricted Payment on Holdings’ or the Company’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to ~~Intermediate Parent or~~ Parent, other than public offerings with respect to ~~Intermediate Parent’s or~~ Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of ~~Intermediate Parent or~~ Parent at the time of such IPO; (xiii) payments made or expected to be made by Holdings, the Company, any Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to ~~5.00~~ 3.75 to 1.0 and (B) there is no continuing Event of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, the Company, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than (A) Unrestricted Subsidiaries, the primary assets of which are Permitted ~~Investments~~Investments or (B) Equity Interests of VMware);; and (~~xvii~~xvi) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make Restricted Payments in cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (~~xviii~~xvi) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (~~xviii~~xvi), in a manner that otherwise complies with this Section 6.08(a). (b) Neither Holdings, ~~Intermediate Holdings~~ the Company nor any Borrower will, nor will they permit any Restricted Subsidiary to, make or pay, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, except: (i) payment of regularly scheduled interest and principal payments as, in the form of payment and when due in respect of any Indebtedness, other than payments in respect of any Junior Financing prohibited by the subordination provisions thereof; (ii) refinancings of Junior ~~Financing~~ Indebtedness with proceeds of other Junior ~~Financing~~ Indebtedness permitted to be inincurred under Section 6.01; (iii) the conversion of an

Appears in 1 contract

Sources: Credit Agreement (Dell Technologies Inc)

Restricted Payments; Certain Payments of Indebtedness. (a) ~~Neither Holdings~~The Borrower will not, ~~Intermediate Holdings nor any Borrower will, nor~~ and will ~~they~~ not permit any Restricted ~~Subsidiary~~Subsidiary to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, except: (i) ~~Each Borrower and~~ each Restricted Subsidiary may make Restricted Payments to ~~Intermediate Holdings~~the Borrower or to its other Restricted Subsidiaries (and, in the case of a Restricted Payment by a non-wholly owned Restricted Subsidiary, to the Borrower or any of its other Restricted ~~Subsidiary~~Subsidiaries and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests); (ii) the Borrower and each Restricted Subsidiary may declare and make dividend payments or other distributions payable solely in the Equity Interests of such Person; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a ~~wholly-owned~~ Wholly Owned Subsidiary of a the Borrower, such Restricted Payment is made to ~~Intermediate Holdings, such~~ the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests; (ii) payments or distributions to satisfy dissenters’ or appraisal rights, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of assets (other than with respect to the Transactions) that complies with Section 6.03; (iii) ~~Holdings and any Intermediate Holdings may declare and make dividend payments or other distributions payable solely in the Equity Interests of such Person~~[Reserved]; (iv) Restricted Payments made in connection with or in order to consummate the Transactions (including, without limitation, (A) cash payments to holders of Equity Interests of Target as provided by the Acquisition Agreement, (B) Restricted Payments to direct and indirect parent companies of Holdings to finance a portion of the consideration for the Acquisition and (C) other payments with respect to working capital adjustments or otherwise, to the extent contemplated by the Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv)); (v) repurchases of Equity Interests in Holdings (or any Restricted ~~Payments by Holdings to allow repurchases of Equity Interest in any direct or indirect parent of Holdings) or Intermediate Holdings~~ Subsidiary deemed to occur upon exercise of stock options or warrants ~~or other incentive interests~~ if such Equity Interests represent a portion of the exercise price or withholding taxes payable in connection with the exercise of such ~~stock~~ options or ~~warrants or other incentive interest~~warrants; (viv) Restricted Payments to Holdings which Holdings may use to redeem, acquire, ~~retire~~ retire, repurchase or ~~repurchase~~ settle its Equity Interests (or any ~~options, warrants, restricted stock units~~ options or warrants or stock appreciation rights ~~or other equity-linked interests~~ issued with respect to any of such Equity Interests) or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests) held by current or former officers, managers, consultants, ~~directors~~ members of the Board of Directors and employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), ~~Holdings,~~ the ~~Borrowers~~ Borrower and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, ~~profits interest,~~ employment termination agreement or any other employment agreements or equity holders’ ~~agreement; provided that the~~ agreement in an aggregate amount ~~of Restricted Payments permitted by this clause (vi)~~ after the Third Amendment Effective ~~Date,~~ Date together with the aggregate amount of loans and advances to Holdings made pursuant to Section ~~6.04(m~~6.04(l) in lieu ~~thereof, shall~~ of Restricted Payments permitted by this clause (v) not to exceed ~~the sum of (A) the greater~~ $15,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years subject to a maximum of $~~15.0 million and 5.0% of Consolidated EBITDA for the most recently ended Test Period~~ 30,000,000 in any ~~fiscal~~ calendar year ~~of Holdings~~ (~~which subsequent to an IPO shall be increased~~ without giving effect to the ~~greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings~~following proviso)~~, (B) the~~ ; provided that such amount in any ~~fiscal~~ calendar year ~~equal~~ may be increased by an amount not to exceed the cash proceeds of key man life insurance policies received by ~~Holdings,~~ the ~~Borrowers~~ Borrower or ~~the~~ its Restricted Subsidiaries (or by Holdings and contributed to Borrower) after the Third Amendment Effective Date, ; (Cvi) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year may be carried forward to succeeding fiscal years[Reserved]; (vii) ~~Holdings~~ the Borrower and ~~any Intermediate Holdings~~ the Restricted Subsidiaries may make Restricted Payments in ~~cash~~cash to Holdings and any Intermediate Parent: (A) ~~without duplication of any Permitted Tax Distribution,~~ the proceeds of which shall be used by Holdings ~~or any Intermediate Holdings to pay~~ (or ~~to make Restricted Payments to allow~~ any direct or indirect ~~parent~~ equity owner of ~~Holdings~~ Holdings) or any Intermediate Parent to ~~pay), for any taxable period for which Holdings and/or any~~ pay its Tax liability to the relevant jurisdiction in respect of ~~its Subsidiaries are members of a~~ consolidated, ~~combined~~ combined, unitary or ~~unitary tax group for U.S. federal and/or applicable state~~affiliated returns, ~~local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”)~~if any, ~~the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are~~ attributable to the income of ~~Holdings and/or~~ the Borrower and its Subsidiaries; provided that Restricted Payments made pursuant to this clause (a)(vii)(A) shall not exceed the Tax liability that ~~Holdings~~ the Borrower and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this ~~subclause~~ clause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of ~~Holdings~~ the Borrower may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to ~~Holdings,~~ the ~~Borrowers~~ Borrower or ~~their~~ its Restricted Subsidiaries; (B) the proceeds of which shall be used by Holdings to pay any Tax liability, computed at a notional rate, of any beneficial owner of Holdings (or any direct or indirect parent thereof), to the extent such Tax liability arises from the allocation to such owner of income attributable to any Restricted Payments permitted by this Section 6.07(a) (including, for the avoidance of doubt, Restricted Payments permitted by this Section 6.07(a)(vii)(B)); (C) the proceeds of which shall be used by Holdings or any Intermediate ~~Holdings~~ Parent to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, ~~accounting, tax reporting~~ accounting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, in an aggregate amount together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (2a)(vii)(C) not to exceed $6,000,000 in any fiscal year plus any reasonable and customary indemnification claims made by ~~directors~~ members of the Board of Directors or officers of Holdings (or any parent ~~thereof or any Intermediate Holdings~~thereof) attributable to the ownership or operations of ~~Holdings, the Borrowers~~ Holdings and the Restricted Subsidiaries, (32) fees and expenses (x) due and payable by any of ~~Holdings, the Borrowers and~~ the Restricted Subsidiaries and (y) otherwise permitted to be paid by ~~Holdings, the Borrowers and the~~ such Restricted ~~Subsidiaries~~ Subsidiary under this Agreement and (43) ~~payments that would otherwise be~~ amounts due and payable pursuant to the Investor Management Agreement permitted to be paid ~~directly by Holdings, the Borrowers or the Restricted Subsidiaries~~ pursuant to Section ~~6.09(iii) or (x~~6.08(iv); (C) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence; (D) the proceeds of which shall be used by Holdings or any Intermediate Parent to ~~make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi)~~pay franchise Taxes and other fees, Taxes and expenses required to maintain its corporate existence; (E) to finance any Investment permitted to be made pursuant to Section ~~6.04 other than Section 6.04(m)~~6.04; provided that (1A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2B) Holdings or any Intermediate ~~Holdings~~ Parent shall, immediately following the closing thereof, cause (x1) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to ~~Holdings,~~ the ~~Borrowers~~ Borrower or the Restricted Subsidiaries or (y2) the Person formed or acquired to merge into or consolidate with ~~Holdings,~~ the ~~Borrowers~~ Borrower or any of the Restricted Subsidiaries (to the extent such ~~merger, amalgamation~~ merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12;; and (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrowers and the Restricted Subsidiaries; and (G) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any unsuccessful equity ~~offering,~~ or debt offering ~~or other non-ordinary course transaction not prohibited~~ permitted by this ~~Agreement (whether or not such offering or other transaction is successful)~~Agreement; (viii) in addition to the foregoing Restricted ~~Payments~~Payments and so long as no Event of Default shall have occurred and be continuing or would result therefrom, the ~~Borrowers and any Intermediate Holdings~~ Borrower may make additional Restricted Payments to any Intermediate ~~Holdings and~~ Parent or Holdings~~, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt~~, in an aggregate amount, ~~when taken~~ together with the aggregate amount of ~~loans~~ (1) prepayments, redemptions, purchases, defeasances and ~~advances to Holdings~~ other payments in respect of Subordinated Indebtedness made pursuant to Section ~~6.04(m~~6.07(b)(iv) and (2) loans and advances made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (viii), not to exceed (x) the ~~sum of (A) an amount at the time of making any such~~ Initial Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as no Event of Default shall have occurred and be continuing (or, in the case of the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h) or (i)), the Available Amount that is Not Otherwise Applied plus (Cy) so long as (A) the ~~Available~~ Fixed Charge Coverage Ratio for the Test Period then last ended shall be at least 2.00 to 1.00, and (B) the Borrower shall be in Pro Forma Compliance with the Financial Performance Covenant as of the end of the most recently ended Test Period, the amount of Cumulative Excess Cash Flow that is Not Otherwise Applied plus (z) the aggregate amount of the Net Proceeds of the issuance of, or contribution in respect of existing, Qualified Equity ~~Amount~~ Interests (other than any such issuance or contribution made pursuant to Section 7.02) that is Not Otherwise Applied; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;; and (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; (xi) Holdings may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiii) payments made or expected to be made by Holdings, any Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to 5.00 to 1.0 and (B) there is no continuing Event of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make Restricted Payments in cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a).[Reserved] (b) ~~Neither Holdings~~The Borrower will not, ~~Intermediate Holdings nor any Borrower will, nor~~ and will ~~they~~ not permit any other Restricted Subsidiary to, make or ~~pay~~agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any ~~Junior Financing~~Subordinated Indebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any ~~Junior Financing~~Subordinated Indebtedness, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoing, except: (i) payment of regularly scheduled interest and principal payments as, in the form of payment and when due in respect of any Indebtedness, other than payments in respect of any ~~Junior Financing~~ Subordinated Indebtedness prohibited by the subordination provisions thereof; (ii) refinancings of ~~Junior Financing~~ Indebtedness to the extent permitted by Section 6.01; (iii) the conversion of any Subordinated Indebtedness to Equity Interests (other than Disqualified Equity Interests) of Holdings or any of its direct or indirect parent companies or any Intermediate Parent; (iv) so long as no Event of Default shall have occurred and be continuing or would result therefrom, prepayments, redemptions, purchases, defeasances and other payments in respect of Subordinated Indebtedness prior to their scheduled maturity in an aggregate amount, together with ~~proceeds~~ the aggregate amount of (1) Restricted Payments made pursuant to Section 6.07(a)(viii) and (2) loans and advances made pursuant to Section 6.04(l) in lieu thereof not to exceed the sum of (x) the Initial Restricted Payment Amount that is Not Otherwise Applied plus (y) so long as (A) the Fixed Charge Coverage Ratio for the Test Period then last ended shall be at least 2.00 to 1.00, and (B) the Borrower shall be in Pro Forma Compliance with the Financial Performance Covenant as of the end of the most recently ended Test Period, the amount of Cumulative Excess Cash Flow that is Not Otherwise Applied plus (z) the aggregate amount of the Net Proceeds of the issuance of, or contribution in respect of existing, Qualified Equity Interests (other ~~Junior Financing Indebtedness permitted~~ than any such issuance or contribution made pursuant to ~~be in~~Section 7.02) that is Not Otherwise Applied; and (v) payments made in connection with the Original Credit Agreement and the Third Amendment Transactions.

Appears in 1 contract

Sources: Credit Agreement (Endurance International Group Holdings, Inc.)

Restricted Payments; Certain Payments of Indebtedness. (a) ~~Neither Holdings~~The Parent Borrower will not, ~~Intermediate Holdings nor any Borrower will, nor~~ and will ~~they~~ not permit any Restricted ~~Subsidiary~~Subsidiary to, ~~to pay~~ declare or make, directly or indirectly, any Restricted Payment, except: : (i) ~~Each~~ such Borrower may declare and ~~each Restricted Subsidiary~~ pay dividends with respect to its Equity Interests payable solely in additional shares of its Equity Interests; (ii) (A) the Parent Borrower may ~~make~~ declare and pay Restricted Payments to Intermediate Holdings, a Borrower or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a wholly-owned Subsidiary of a Borrower, such Restricted Payment is made to Intermediate Holdings, such Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests; (ii) payments or distributions to satisfy dissenters’ or appraisal rights, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of assets (other than with respect to the Transactions) that complies with Section 6.03; (iii) Holdings and any Intermediate Holdings may declare and make dividend payments or other distributions payable solely in the Equity Interests of such Person; (iv) Restricted Payments made in connection with or in order to consummate the Transactions (including, without limitation, (A) cash payments to holders of Equity Interests of Target as provided by the Acquisition Agreement, (B) Restricted Subsidiaries may declare and pay Restricted Payments ~~to direct and indirect parent companies of Holdings to finance a portion of the consideration for the Acquisition and (C) other payments~~ with respect to ~~working capital adjustments~~ their Equity Interests (provided that if such Restricted Subsidiary is not directly or ~~otherwise~~indirectly wholly owned by the Parent Borrower, such dividends must be made on a pro rata basis to the holders of its Equity Interests or on a greater than ratable basis to the extent ~~contemplated~~ such greater payments are made solely to the Parent Borrower or a Restricted Subsidiary); (iii) to the extent constituting Restricted Payments, the Parent Borrower and its Restricted Subsidiaries may enter into transactions expressly permitted by Sections 6.03, 6.04, 6.05 or 6.07; (iv) repurchases by the ~~Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis~~ Parent Borrower of ~~this clause (iv)); (v) repurchases of~~ partial interests in its Equity Interests for nominal amounts which are required to be repurchased in ~~Holdings (or Restricted Payments by Holdings to allow repurchases of Equity Interest in any direct or indirect parent of Holdings) or Intermediate Holdings deemed to occur upon~~ connection with the exercise of stock options or warrants to permit the issuance of only whole shares of Equity Interests; (v) the Parent Borrower may pay for the repurchase, retirement or other ~~incentive interests if such~~ acquisition or retirement for value of Equity Interests ~~represent a portion~~ of the exercise price of such stock options or warrants or other incentive interest; (vi) Restricted Payments to Holdings which Holdings may use to redeem, acquire, retire or repurchase its Equity Interests (Parent Borrower or any ~~options, warrants, restricted stock units or~~ Parent Company (including related stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interestssimilar securities) held by ~~current~~ any future, present or former ~~officers~~director, ~~managers~~officer, ~~consultants~~member of management, ~~directors and employees~~ employee or consultant of any Parent Company, the Parent Borrower or any of its Subsidiaries (or ~~their respective spouses, former spouses, successors, executors, administrators~~the estate, heirs, ~~legatees~~ family members, spouse, former spouse, domestic partner or ~~distributees~~former domestic partner of any of the foregoing); provided that (A) at the time of ~~Holdings (or~~ any ~~direct or indirect parent thereof), Holdings, the Borrowers and the Restricted Subsidiaries, upon the death, disability~~such repurchase, retirement or ~~termination~~ other acquisition or retirement for value no Event of ~~employment of any such Person~~ Default has occurred and is continuing or ~~otherwise in accordance with any stock option or stock appreciation rights plan~~would result therefrom, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, profits interest, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that (B) the aggregate amount of Restricted Payments ~~permitted by~~ made under this clause (~~vi) after the Effective Date, together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m~~v) in ~~lieu thereof, shall~~ any Fiscal Year does not exceed (x) $15,000,000 (the ~~sum of~~ “Yearly Limit”) plus (Ay) the ~~greater~~ portion of ~~$15.0 million~~ the Yearly Limit from each of the immediately preceding four (4) Fiscal Years which was not expended by the Parent Borrower for Restricted Payments in such Fiscal Years (the “Carryover Amount” and ~~5.0% of Consolidated EBITDA~~ in calculating the Carryover Amount for any Fiscal Year, the ~~most recently ended Test Period in any~~ Yearly Limit applicable to the previous fiscal ~~year of Holdings (which subsequent to an IPO~~ years shall be ~~increased~~ deemed to ~~the greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period~~ have been utilized first by any Restricted Payments made under this clause (v) in ~~any fiscal year of Holdings),~~ such Fiscal Year) plus (Bz) ~~the~~ an amount ~~in any fiscal year~~ equal to ~~the cash proceeds of key man life insurance policies received by Holdings, the Borrowers or the Restricted Subsidiaries after the Effective Date, (C)~~ the cash proceeds from the sale of Equity Interests ~~(other than Disqualified Equity Interests)~~ to directors, officers, members of ~~Holdings (to the extent contributed to Holdings in the form~~ management, employees or consultants of ~~common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings~~any Parent Company, the ~~cash proceeds from~~ Parent Borrower or of its Subsidiaries (or the ~~sale~~ estate, heirs, family members, spouse or former spouse of any of the foregoing) in such Fiscal Year; (vi) the repurchase of Equity Interests of the Parent Borrower (or of any ~~direct or indirect~~ Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle Company) that occurs ~~after~~ upon the ~~Effective Date~~cashless exercise of stock options, to warrants or other convertible securities as a result of the ~~extent~~ Parent Borrower or such Parent Company accepting such options, warrants or other convertible securities as satisfaction of the ~~cash proceeds from the sale~~ exercise price of such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment ProvisionInterests; ~~provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year may be carried forward to succeeding fiscal years;~~ (vii) ~~Holdings~~ the Parent Borrower and ~~any Intermediate Holdings~~ its Restricted Subsidiaries may ~~make Restricted Payments in cash: (A) without duplication of any Permitted Tax Distribution, the proceeds of which shall be used by Holdings or any Intermediate Holdings to~~ pay (or to may make Restricted Payments to allow ~~any direct or indirect parent of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of~~ a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (a)(vii)(A) shall not exceed the Tax liability that Holdings and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers or their Restricted Subsidiaries; (B) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings Parent Company to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof or any Intermediate Holdings) attributable to the ownership or operations of Holdings, the Borrowers and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of Holdings, the Borrowers and the Restricted Subsidiaries and (y) otherwise permitted to be paid by Holdings, the Borrowers and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the Borrowers or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x); (C) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence; (D) the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(m); provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) Holdings or any Intermediate Holdings shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to Holdings, the Borrowers or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with Holdings, the Borrowers or any of the Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrowers and the Restricted Subsidiaries; and (G) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful); (viii) in addition to the foregoing Restricted Payments, the Borrowers and any Intermediate Holdings may make additional Restricted Payments to any Intermediate Holdings and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt, in an aggregate amount, when taken together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii), not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as no Event of Default shall have occurred and be continuing (or, in the case of the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h) or (i)), the Available Amount that is Not Otherwise Applied plus (C) the Available Equity Amount that is Not Otherwise Applied; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; (xi) Holdings may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiii) payments made or expected to be made by Holdings, any Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to 5.00 to 1.0 and (B) there is no continuing Event of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make Restricted Payments in cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) ~~through (xviii) above~~any dividend, ~~the Borrowers will be entitled to classify~~ split or ~~later reclassify (based on circumstances existing on the date~~ combination of ~~such reclassification) such Restricted Payment~~ its Equity Interests or any Permitted Acquisition (or ~~portion thereof~~similar Investment) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a). (b) Neither Holdings, Intermediate Holdings nor any Borrower will, nor will they permit any Restricted Subsidiary to, make or pay, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, except: (i) payment of regularly scheduled interest and principal payments as, in the form of payment and when due in respect of any Indebtedness, other than payments in respect of any Junior Financing prohibited by the subordination provisions thereof; (ii) ~~refinancings~~ the exercise of ~~Junior Financing Indebtedness with proceeds of~~ warrants, options or other ~~Junior Financing Indebtedness permitted to be in~~securities

Appears in 1 contract

Sources: Credit Agreement (Krispy Kreme, Inc.)

Restricted Payments; Certain Payments of Indebtedness. (a) ~~Neither~~ None of Holdings, ~~Intermediate Holdings nor~~ the Parent Borrower, any Subsidiary Term Borrower or any Foreign Subsidiary Borrower will, nor will they permit any ~~Restricted Subsidiary~~Subsidiary to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, except: (i) ~~Each Borrower~~ Holdings may declare and ~~each Restricted Subsidiary may make Restricted Payments~~ pay dividends with respect to Intermediate Holdings, a Borrower or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a wholly-owned Subsidiary of a Borrower, such Restricted Payment is made to Intermediate Holdings, such Borrower, any Restricted Subsidiary and to each other owner of its Equity Interests ~~of such Restricted Subsidiary based on their relative ownership interests of the relevant class of~~ 509265-1724-13879091 payable solely in additional Equity ~~Interests~~Interests in Holdings; (ii) ~~payments or distributions to satisfy dissenters’ or appraisal rights, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of assets (other than~~ Subsidiaries may declare and pay dividends ratably with respect to ~~the Transactions) that complies with Section 6.03~~their capital stock; (iii) the Parent Borrower may make payments to Holdings to permit it to make, and ~~any Intermediate~~ Holdings may ~~declare~~ make, Restricted Payments, not exceeding $5,000,000 during the term of this Agreement, in each case pursuant to and ~~make dividend payments~~ in accordance with stock option plans, equity purchase programs or agreements or other ~~distributions payable solely~~ benefit plans, in each case for management or employees or former employees of the ~~Equity Interests of such Person~~Parent Borrower and the Subsidiaries; (iv) ~~Restricted Payments made in connection with~~ the Parent Borrower may make Permitted Tax Distributions to Holdings or ~~in order to consummate the Transactions (including, without limitation, (A) cash payments to holders of Equity Interests of Target as provided by the Acquisition Agreement, (B) Restricted Payments to~~ any other direct ~~and~~ or indirect ~~parent companies of Holdings to finance a portion~~ equity owners of the consideration for the Acquisition and (C) other payments with respect to working capital adjustments or otherwise, to the extent contemplated by the Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv))Parent Borrower; (v) ~~repurchases of Equity Interests~~ the Parent Borrower may pay dividends to Holdings at such times and in ~~Holdings (or Restricted Payments by~~ such amounts as shall be necessary to permit Holdings to allow repurchases of Equity Interest in any direct or indirect parent of Holdings) or Intermediate Holdings deemed to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price of such stock options or warrants or other incentive interest; discharge and satisfy its obligations that are permitted hereunder (vi) Restricted Payments to Holdings which Holdings may use to redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted stock units or stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests) held by current or former officers, managers, consultants, directors and employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), Holdings, the Borrowers and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, profits interest, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that the aggregate amount of Restricted Payments permitted by this clause (vi) after the Effective Date, together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu thereof, shall not exceed the sum of including (A) ~~the greater of $15.0 million~~ state and ~~5.0% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings (which subsequent to an IPO shall be increased to the greater of $30.0 million~~ local taxes and ~~10% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings)~~other governmental charges, (B) the amount in any fiscal year equal to the cash proceeds of key man life insurance policies received by Holdings, the Borrowers or the Restricted Subsidiaries after the Effective Date, (C) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and ~~are not Cure Amounts~~ administrative and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount routine expenses required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year may be carried forward to succeeding fiscal years; (vii) Holdings and any Intermediate Holdings may make Restricted Payments in cash: (A) without duplication of any Permitted Tax Distribution, the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (a)(vii)(A) shall not exceed the Tax liability that Holdings and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers or their Restricted Subsidiaries; (B) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and ~~other corporate overhead costs and expenses~~ (~~including administrative, legal, accounting, tax reporting and similar expenses payable to third parties~~B) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof or any Intermediate Holdings) attributable to the ownership or operations of Holdings, the Borrowers and the Restricted Subsidiaries, (3) fees and expenses (x) due and cash dividends payable by ~~any~~ Holdings in respect of ~~Holdings, the Borrowers and the Restricted Subsidiaries~~ Qualified Holdings Preferred Stock issued pursuant to clauses (b) and (yc) of the definition thereof; provided that dividends payable by the Parent Borrower to Holdings pursuant to this clause (v) in order to satisfy cash dividends payable by Holdings in respect of Qualified Holdings Preferred Stock issued pursuant to clause (c) of the definition thereof may only be made after the fiscal year ending December 31, 2012, with Excess Cash Flow not otherwise ~~permitted~~ required to be ~~paid by Holdings, the Borrowers and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted~~ used to ~~be paid directly by Holdings, the Borrowers or the Restricted Subsidiaries~~ prepay Term Loans pursuant to Section ~~6.09(iii~~2.11(d)) (without duplication of amounts used pursuant to Section 6.08(b)(vi)(A) or (xamounts included in the Available Amount and used pursuant to Sections 6.04(t), 6.08(a)(vii) or 6.08(b)(viii)); (Cvi) the ~~proceeds of which shall be used by Holdings or any Intermediate~~ Parent Borrower may make payments to Holdings to ~~pay (or~~ permit it to ~~make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes~~make, and ~~other fees and expenses, required to maintain its organizational existence; (D) the proceeds of which shall be used by~~ Holdings to may make ~~Restricted Payments~~ payments permitted by ~~Section 6.08(a)(iv~~Sections 6.09(d), (e), (f) ~~or Section 6.08(a)(vi);~~ and (~~E) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(m~~g); provided ~~that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) Holdings or any Intermediate Holdings shall~~that, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to Holdings, the Borrowers or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with Holdings, the Borrowers or any of the Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrowers and the Restricted Subsidiaries; and (G) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful); (viii) in addition to the foregoing Restricted Payments, the Borrowers and any Intermediate Holdings may make additional Restricted Payments to any Intermediate Holdings and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt, in an aggregate amount, when taken together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii), not to exceed the sum of (A) an amount at the time of ~~making any~~ such ~~Restricted Payment~~ payment and ~~together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period~~ after giving ~~Pro Forma Effect to the making of such Restricted Payment plus (B) so long as~~ effect thereto, no Default or Event of Default shall have occurred and be continuing and Holdings and the Parent Borrower are in compliance with Section 6.12; provided, further, that any payments that are prohibited because of the immediately preceding proviso shall accrue and may be made as so accrued upon the curing or waiver of such Default, Event of Default or noncompliance; and (~~or,~~ vii) (A) the Parent Borrower and Holdings may make Restricted Payments in an aggregate amount not to exceed the Available Amount and (B) Holdings may make Restricted Payments with the proceeds of Restricted Payments made to it by the Borrower pursuant to clause (A); provided that in the case of ~~the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a),~~ both clauses (b), (h) or (i)), the Available Amount that is Not Otherwise Applied plus (C) the Available Equity Amount that is Not Otherwise Applied; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; (xi) Holdings may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar InvestmentA) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stockB), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiii) payments made or expected to be made by Holdings, any Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) payment and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect thereto, (i) no Default or Event of Default shall have occurred and be continuing and (ii) at the time of such payment and after giving effect thereto and to ~~such Restricted Payment (A) on a Pro Forma Basis~~the incurrence of any Indebtedness in connection therewith, the ~~Total~~ Leverage Ratio is ~~less~~ not greater than ~~or equal~~ 2.00 to 5.00 to 1.0 and (B) there is no continuing Event of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make Restricted Payments in cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a)1.00. (b) ~~Neither~~ None of Holdings, ~~Intermediate Holdings nor~~ the Parent Borrower, any Subsidiary Term Borrower or any Foreign Subsidiary Borrower will, nor will they permit any ~~Restricted~~ Subsidiary to, make or ~~pay~~agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any ~~Junior Financing~~Indebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the 509265-1724-13879091 purchase, redemption, retirement, acquisition, cancellation or termination of any ~~Junior Financing~~Indebtedness, except: (i) payment of Indebtedness created under the Loan Documents; (ii) payment of regularly scheduled interest and principal payments ~~as, in the form of payment~~ as and when due in respect of any Indebtedness, other than payments in respect of ~~any Junior Financing~~ subordinated Indebtedness prohibited by the subordination provisions thereof; (iiiii) refinancings of ~~Junior Financing~~ Indebtedness to the extent permitted by Section 6.01; (iv) payment of secured Indebtedness out of the proceeds of any sale or transfer of the property or assets securing such Indebtedness; (v) [reserved]; (vi) payments in respect of the repurchase, retirement or other acquisition of Equity Interests in Holdings using (A) the portion of Excess Cash Flow not subject to mandatory prepayment pursuant to Section 2.11(d) (without duplication of amounts used pursuant to Section 6.08(a)(v) or amounts included in the Available Amount and used pursuant to Sections 6.04(t), 6.08(a)(vii) or 6.08(b)(viii)) or (B) any source of cash (to the extent not otherwise prohibited in this Agreement) up to an amount not to exceed (x) if after giving effect to such payment, the Leverage Ratio would be (1) less than 2.25 to 1.00, $100,000,000, (2) less than 2.75 to 1.00, but greater than or equal to 2.25 to 1.00, $75,000,000 and (3) less than 3.25 to 1.00 but greater than or equal to 2.75 to 1.00, $50,000,000 and (y) otherwise, $15,000,000; (vii) payments of Indebtedness with ~~proceeds~~ the Net Proceeds of ~~other Junior Financing~~ an issuance of Equity Interests in Holdings; and (viii) payments of Indebtedness in an amount equal to the Available Amount; provided that at the time of such payment and after giving effect thereto, (i) no Default or Event of Default shall have occurred and be continuing and (ii) at the time of such payment and after giving effect thereto and to the incurrence of any Indebtedness in connection therewith, the Leverage Ratio is not greater than 2.00 to 1.00. (c) None of Holdings, the Parent Borrower or any Foreign Subsidiary Borrower will, nor will they permit any Subsidiary to, enter into or be party to, or make any payment under, any Synthetic Purchase Agreement unless (i) in the case of any Synthetic Purchase Agreement related to any Equity Interest of Holdings, the payments required to be made by Holdings are limited to amounts permitted to be inpaid under Section 6.08(a), (ii) in the case of any Synthetic Purchase Agreement related to any Restricted Indebtedness, the payments required to be made by Holdings, the Parent Borrower or the Subsidiaries thereunder are limited to the amount permitted under Section 6.08(b) and (iii) in the case of any Synthetic Purchase Agreement, the obligations of Holdings, the Parent Borrower and the Subsidiaries thereunder are subordinated to the Obligations on terms satisfactory to the Required Lenders.

Appears in 1 contract

Sources: Credit Agreement (Trimas Corp)

Restricted Payments; Certain Payments of Indebtedness. (a) ~~Neither Holdings, Intermediate Holdings nor any~~ The Borrower ~~will~~will not, nor will ~~they~~ the Borrower permit any Restricted ~~Subsidiary~~Subsidiary to, ~~to pay~~ declare or ~~make, directly or indirectly,~~ make any Restricted Payment, ~~except~~except that: (i) ~~Each Borrower~~ (A) the Restricted Subsidiaries may declare and ~~each~~ make Restricted Payments ratably with respect to their Equity Interests and (B) any Restricted Subsidiary may make a Restricted ~~Payments~~ Payment to ~~Intermediate Holdings, a~~ the Borrower or any other Restricted ~~Subsidiary; provided that~~ Subsidiary (so long as, in the case of ~~any such~~ this clause (B), if the Restricted Subsidiary making the Restricted Payment ~~by a Restricted Subsidiary that~~ is not ~~a wholly-~~wholly owned ~~Subsidiary of a~~ (directly or indirectly) by the Borrower, such Restricted Payment is made ~~to Intermediate Holdings, such Borrower, any Restricted Subsidiary and to each other owner~~ ratably among the holders of ~~Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of~~ its Equity Interests); (ii) ~~payments or distributions to satisfy dissenters’ or appraisal rights, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of assets (other than~~ the Borrower and the Restricted Subsidiaries may declare and make Restricted Payments with respect to its Equity Interests payable solely in shares of Qualified Equity Interests (so long as, in the ~~Transactions~~case of this clause (ii), if the Restricted Subsidiary making the Restricted Payment is not wholly owned (directly or indirectly) ~~that complies with Section 6.03~~by the Borrower, such Restricted Payment is made ratably among the holders of its Equity Interests); (iii) ~~Holdings and any Intermediate Holdings~~ the Restricted Subsidiaries may ~~declare and~~ make ~~dividend payments or other distributions payable solely~~ a Restricted Payment in connection with the acquisition of additional Equity Interests ~~of such Person~~in any Restricted Subsidiary from minority shareholders; (iv) the Borrower or any Restricted Payments made in connection with or in order to consummate the Transactions (including, without limitation, (A) cash payments to holders of Equity Interests of Target as provided by the Acquisition Agreement, (B) Restricted Payments to direct and indirect parent companies of Holdings to finance a portion of the consideration for the Acquisition and (C) other payments with respect to working capital adjustments or otherwise, to the extent contemplated by the Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv)); (v) Subsidiary may make repurchases of Equity Interests ~~in Holdings (or Restricted Payments by Holdings to allow repurchases of Equity Interest in any direct or indirect parent of Holdings) or Intermediate Holdings~~ deemed to occur upon the cashless exercise of stock options ~~or warrants or other incentive interests if~~ when such Equity Interests ~~represent~~ represents a portion of the exercise price ~~of such stock options or warrants or other incentive interest~~thereof; (viv) the Restricted ~~Payments to Holdings which Holdings~~ Subsidiaries may use to redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted stock units or stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) (or make Restricted Payments to allow the Borrower or any ~~of Holdings’ direct~~ Restricted Subsidiary to purchase the Borrower’s preferred stock, common stock, restricted stock or ~~indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests) held by current~~ common stock options from present or former ~~officers, managers,~~ consultants, ~~directors and~~ directors, manager, officers or employees (of the Borrower or any Subsidiary, or their ~~respective spouses~~estates, descendants, family, spouses or former spouses~~, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), Holdings, the Borrowers and the Restricted Subsidiaries~~, upon the death, ~~disability, retirement~~ disability or termination of employment of such consultant, director, officer or employee or pursuant to any ~~such Person or otherwise in accordance with any stock option or stock appreciation rights plan~~employee, ~~any~~ management, director ~~and/or employee stock ownership~~ or ~~incentive~~ manager equity plan, employee, management, director or manager stock ~~subscription plan, profits interest, employment termination agreement~~ option plan or any other ~~employment agreements~~ employee, management, director or ~~equity holders’~~ manager benefit plan or any agreement (including any stock subscription or shareholder agreement; ) with any employee, director, manager, officer or consultant of the Borrower or any Subsidiary, provided that the aggregate amount of ~~Restricted Payments permitted by~~ payments under this clause (viv) ~~after~~ subsequent to the ~~Effective Date, together~~ Closing Date (net of proceeds received by such the Borrower subsequent to the date hereof in connection with resales of any stock or common stock options so purchased (which to the ~~aggregate amount~~ extent that such cash proceeds from the issuance of ~~loans and advances~~ any such stock are utilized to ~~Holdings made~~ make payments pursuant to ~~Section 6.04(m~~this clause in excess of the amounts otherwise permitted hereunder then such equity proceeds so utilized shall not also increase the Available Amount)) ~~in lieu thereof,~~ shall not exceed ~~the sum of~~ $25,000,000 (~~A) the greater of $15.0 million and 5.0% of Consolidated EBITDA for the most recently ended Test Period~~ with unused amounts in any fiscal year ~~of Holdings (which subsequent to an IPO shall be increased~~ being carried over to the ~~greater~~ next succeeding fiscal year subject to a maximum of $~~30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period~~ 50,000,000 in any fiscal ~~year of Holdings)~~year) per fiscal year, ~~(B)~~ plus the amount in of any ~~fiscal year equal to the cash proceeds of key~~ key- man life insurance ~~policies received by Holdings,~~ policies; provided that the ~~Borrowers or the Restricted Subsidiaries after the Effective Date, (C) the cash proceeds from the sale~~ cancellation of ~~Equity Interests (other than Disqualified Equity Interests) of Holdings (~~Indebtedness owing to the ~~extent contributed to Holdings in the form of common Equity Interests~~ Borrower or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries in connection with a repurchase of any such Equity Interests and the redemption or ~~any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale~~ cancellation of such Equity Interests ~~are contributed~~ without cash payment will not be deemed to ~~Holdings in~~ constitute a Restricted Payment for purposes of this covenant or any other provision of this Agreement; (vi) the ~~form of common Equity Interests or Qualified Equity Interests~~ Borrower and ~~are not Cure Amounts and have not otherwise been applied~~ its Restricted Subsidiaries may make Restricted Payments pursuant to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year may be carried forward to succeeding fiscal yearsIntercompany License Agreements; (vii) ~~Holdings~~ the Borrower and ~~any Intermediate Holdings~~ its Restricted Subsidiaries may make Restricted Payments ~~in cash:~~ (A) ~~without duplication of any Permitted Tax Distribution~~(i) to consummate the Transactions, ~~the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay~~ (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (a)(vii)(A) shall not exceed the Tax liability that Holdings and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this subclause (Aii) in respect of ~~any Taxes attributable~~ working capital adjustments or purchase price adjustments pursuant to the ~~income~~ Acquisition Agreement, any Permitted Acquisition or other permitted Investments (other than pursuant to Section 6.04(aa)), (iii) to satisfy indemnity and other similar obligations under the Acquisition Agreement, Permitted Acquisitions or other permitted Investments, (iv) to holders of restricted stock or restricted stock units under any equity plan and phantom stock awards (including MSUs (or similar equity grants)) as contemplated by and in accordance with the Acquisition Agreement and (v) to dissenting stockholders in connection with, or as a result of, their exercise of appraisal rights and the settlement of any ~~Unrestricted Subsidiaries~~ claims or actions (whether actual, contingent or potential) with respect thereto (including any accrued interest), in each case of ~~Holdings may be made only~~ this clause (v), with respect to the ~~extent that such Unrestricted Subsidiaries have made cash payments for such purpose~~ Transactions and (B) to ~~Holdings,~~ the ~~Borrowers~~ Borrower or ~~their~~ any Restricted ~~Subsidiaries~~Subsidiary to effectuate a Permitted Tax Restructuring; (Bviii) the ~~proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to~~ Borrower and its Restricted Subsidiaries may make Restricted Payments necessary to ~~allow any direct or indirect parent of Holdings~~ consummate transactions permitted pursuant to ~~pay~~Section 6.03 and to make Investments permitted pursuant to Section 6.04 (other than pursuant to Section 6.04(aa)); (ix) ~~(1) its operating expenses incurred in~~ the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof or any Intermediate Holdings) attributable to the ownership or operations of Holdings, the Borrowers and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of Holdings, the Borrowers Borrower and the Restricted Subsidiaries ~~and (y) otherwise permitted~~ may forgive or cancel any Indebtedness owed to ~~be paid by Holdings,~~ the ~~Borrowers and~~ Borrower or any Restricted Subsidiary issued for repurchases of the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the Borrowers or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x)Borrower’s Equity Interests; (Cx) the ~~proceeds of which shall be used by Holdings~~ Borrower or any ~~Intermediate Holdings to pay (or to~~ Restricted Subsidiary may make additional Restricted Payments provided that (a) no Event of Default has occurred and is continuing or would result therefrom and (b) the Total Net Leverage Ratio after giving effect thereto on a Pro Forma Basis as of the Applicable Date of Determination is less than or equal to ~~allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence~~3.00:1.00; (Dxi) ~~the proceeds~~ distributions or payments of ~~which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv)~~ Securitization Fees, sales contributions and other transfers of Securitization Assets or ~~Section 6.08(a)(vi); (E) to finance any Investment permitted to be made~~ Receivables Assets and purchases of Securitization Assets or Receivables Assets pursuant to Section 6.04 other than Section 6.04(m); provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) Holdings or any Intermediate Holdings shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to Holdings, the Borrowers or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with Holdings, the Borrowers or any of the Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such InvestmentSecuritization Repurchase Obligations, in each case in ~~accordance~~ connection with ~~the requirements of Sections 5.11 and 5.12~~a Qualified Securitization Financing or a Receivables Facility; (Fxii) the Restricted Subsidiaries may make Restricted Payments to the Borrower the proceeds of which shall be used to pay customary ~~salary~~costs, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrowers and the Restricted Subsidiaries; and (G) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any unsuccessful equity ~~offering,~~ or debt offering ~~or other non-ordinary course transaction not prohibited~~ permitted by this ~~Agreement (whether or not such offering or other transaction is successful)~~Agreement; (~~viii~~xiii) ~~in addition to~~ the ~~foregoing~~ Restricted ~~Payments, the Borrowers and any Intermediate Holdings~~ Subsidiaries may make ~~additional~~ Restricted Payments to ~~any Intermediate Holdings and Holdings,~~ the ~~proceeds of which may be utilized by Holdings~~ Borrower to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt, in an aggregate amount, when taken together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii), not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as no Event of Default shall have occurred and be continuing (or, in the case of the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h) or (i)), the Available Amount that is Not Otherwise Applied plus (C) the Available Equity Amount that is Not Otherwise Applied; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; (xi) Holdings may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any ~~Permitted Acquisition (~~Acquisition, Investment or other ~~similar Investment)~~ transaction otherwise permitted hereunder and (b) honor any conversion request by a holder of convertible Indebtedness (to the extent such conversion request is paid solely in shares of Qualified Equity Interests of the Borrower) and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;; and (~~xii~~xiv) the ~~declaration~~ Borrower and ~~payment of~~ the Restricted ~~Payment on Holdings’ common stock (or the payment of~~ Subsidiaries may make Restricted Payments in an aggregate amount not to exceed (A) $50,000,000 (less any ~~direct or indirect parent company of Holdings~~ amounts applied pursuant to ~~fund a payment of dividends on such company’s common stock~~Section 6.06(b)(v)(A)~~, following consummation of an IPO, of up to sum of~~ ) plus (B) the Available Amount; provided however that (a) ~~6.0% per annum~~ at the time of ~~the net cash proceeds~~ making such Restricted Payment, no Event of ~~such IPO received by~~ Default has occurred and is continuing or ~~contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8~~ would result therefrom and (b) ~~7.0%~~ amounts pursuant to clause (b) of the ~~market capitalization~~ definition of ~~Intermediate Parent or Parent at the time of such IPO; (xiii) payments made or expected~~ “Available Amount” may be used to ~~be made by Holdings, any Borrower or any~~ fund Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed Payment pursuant to ~~occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;~~ this clause (xiv) ~~additional Restricted Payments; provided~~ only to the extent that ~~after giving effect to such Restricted Payment (A)~~ the Total Secured Net Leverage Ratio on a Pro Forma ~~Basis,~~ Basis after giving effect thereto as of the ~~Total Leverage Ratio~~ Applicable Date of Determination is less than or equal to 5.00 to 1.0 and (B) there is no continuing Event of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make Restricted Payments in cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a)3.00:1.00. (b) ~~Neither Holdings, Intermediate Holdings nor any~~ The Borrower ~~will~~will not, nor will ~~they~~ the Borrower permit any Restricted Subsidiary ~~to,~~ to make ~~or pay, directly or indirectly,~~ any ~~payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior Financing, or any~~ voluntary payment or other distribution (whether in cash, securities or other property), ~~including any sinking fund~~ of or ~~similar deposit~~in respect of principal or interest, ~~on account~~ or such payment by way of the purchase, redemption, retirement, acquisition, cancellation or ~~termination~~ termination, in each case prior to the final scheduled maturity thereof, of any ~~Junior Financing,~~ Material Indebtedness that is contractually subordinated in right of payment to any of the Obligations (it being understood that Indebtedness shall not be deemed to be subordinated in right of payment to the Obligations merely because such Indebtedness is secured by a Lien that is junior to the Liens securing the applicable portion of the Obligations) except: (i) payment of regularly scheduled interest and principal payments (and fees, indemnities and expenses payable) as, ~~in the form of payment~~ and when due in respect of any ~~Indebtedness, other than payments~~ such Indebtedness to the extent permitted by any subordination or intercreditor provisions in respect ~~of any Junior Financing prohibited by the subordination provisions~~ thereof; (ii) ~~refinancings~~ Permitted Refinancings of ~~Junior Financing~~ any such Indebtedness ~~with proceeds~~ to the extent such Permitted Refinancings are permitted by Section 6.01; (iii) payments of ~~other Junior Financing~~ intercompany Indebtedness permitted under Section 6.01 to the extent permitted by any subordination provisions in respect thereof; (iv) convert, exchange, redeem, repay or prepay such Indebtedness into or for Equity Interests of the Borrower (other than Disqualified Equity Interests of the Borrower, except to the extent permitted under Section 6.01(y); (v) AHYDO Catch-Up Payments relating to Indebtedness of the Borrower and its Restricted Subsidiaries so long as no Event of Default under Section 7.01(a), (b), (h) or (i) has occurred and is continuing; (vi) any such payments or other distributions in an amount not to exceed (A) $50,000,000 (less any amounts applied pursuant to Section 6.06(a)(xiv)(A)) plus (B) the Available Amount; provided however that in the case of payments or distributions made pursuant to this clause (vi) (I) at the time of making such payment or distribution, no Event of Default has occurred and is continuing or would result therefrom and (II) amounts pursuant to clause (b) of the definition of “Available Amount” may be inused to make payments pursuant to this clause (vi) only to the extent that the Total Secured Net Leverage Ratio on a Pro Forma Basis after giving effect thereto as of the Applicable Date of Determination is less than or equal to 3.00:1.00; (vii) payments or distributions made with net proceeds received by the Borrower after the Closing Date from the issuance or sale of Qualified Equity Interests of the Borrower (which such equity proceeds so utilized shall not also increase the Available Amount); (viii) the payment, redemption, repurchase, retirement, termination or cancellation of Indebtedness within 60 days of the date of the Redemption Notice if, at the date of any payment, redemption, repurchase, retirement, termination or cancellation notice in respect thereof (the “Redemption Notice”), such payment, redemption, repurchase, retirement termination or cancellation would have complied with another provision of this Section 6.06(b); provided that such payment, redemption, repurchase, retirement termination or cancellation shall reduce capacity under such other provision.

Appears in 1 contract

Sources: Credit Agreement (Zebra Technologies Corp)

Restricted Payments; Certain Payments of Indebtedness. (a) ~~Neither Holdings, Intermediate Holdings nor any Borrower will, nor will they permit any Restricted Subsidiary, to pay~~ Declare or make, directly or indirectly, any Restricted Payment, except: (i) ~~Each Borrower and~~ each ~~Restricted~~ Subsidiary may make Restricted Payments to ~~Intermediate Holdings, a~~ the Borrower or any other ~~Restricted Subsidiary~~Subsidiary of the Borrower; provided that in the case of any such Restricted Payment by a ~~Restricted~~ Subsidiary that is not a ~~wholly-owned~~ Wholly Owned Subsidiary of a the Borrower, such Restricted Payment is made to ~~Intermediate Holdings, such~~ the Borrower, any ~~Restricted~~ Subsidiary and to each other owner of Equity Interests of such ~~Restricted~~ Subsidiary based on their relative ownership interests of the relevant class of Equity Interests; (ii) ~~payments or distributions to satisfy dissenters’ or appraisal rights, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of assets (other than with respect to~~ the ~~Transactions) that complies with Section 6.03; (iii) Holdings~~ Borrower and ~~any Intermediate Holdings~~ each Subsidiary may declare and make dividend payments or other distributions payable solely in the Qualified Equity Interests of such Person; (iviii) Restricted Payments made ~~in connection with or in order~~ on the Effective Date to consummate the Transactions (including, without limitation, (A) cash payments to holders of Equity Interests of Target as provided by the Acquisition Agreement, (B) Restricted Payments to direct and indirect parent companies of Holdings to finance a portion of the consideration for the Acquisition and (C) other payments with respect to working capital adjustments or otherwise, to the extent contemplated by the Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv))Acquisition; (viv) repurchases of Equity Interests in Holdings (or Restricted Payments by Holdings to allow repurchases of Equity Interest in any direct or indirect parent of Holdings) or Intermediate Holdings deemed to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price of such stock options or warrants or other incentive interest; (vi) Restricted Payments to Holdings which Holdings may use to redeem, acquire, retire or repurchase its Equity Interests (Borrower or any options, warrants, restricted stock units or stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests) held by current or former officers, managers, consultants, directors and employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), Holdings, the Borrowers and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, profits interest, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that the aggregate amount of Restricted Payments permitted by this clause (vi) after the Effective Date, together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu thereof, shall not exceed the sum of (A) the greater of $15.0 million and 5.0% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings (which subsequent to an IPO shall be increased to the greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings), (B) the amount in any fiscal year equal to the cash proceeds of key man life insurance policies received by Holdings, the Borrowers or the Restricted Subsidiaries after the Effective Date, (C) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year may be carried forward to succeeding fiscal years; (vii) Holdings and any Intermediate Holdings may make Restricted Payments in cash: (A) without duplication of any Permitted Tax Distribution, the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (a)(vii)(A) shall not exceed the Tax liability that Holdings and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers or their Restricted Subsidiaries; (B) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred Subsidiary in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof or any Intermediate Holdings) attributable to the ownership or operations of Holdings, the Borrowers and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of Holdings, the Borrowers and the Restricted Subsidiaries and (y) otherwise permitted to be paid by Holdings, the Borrowers and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the Borrowers or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x); (C) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence; (D) the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(m); provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) Holdings or any Intermediate Holdings shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to Holdings, the Borrowers or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with Holdings, the Borrowers or any of the Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrowers and the Restricted Subsidiaries; and (G) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful); (viii) in addition to the foregoing Restricted Payments, the Borrowers and any Intermediate Holdings may make additional Restricted Payments to any Intermediate Holdings and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt, in an aggregate amount, when taken together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii), not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as no Event of Default shall have occurred and be continuing (or, in the case of the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h) or (i)), the Available Amount that is Not Otherwise Applied plus (C) the Available Equity Amount that is Not Otherwise Applied; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; (xi) Holdings may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiii) payments made or expected to be made by Holdings, any Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to 5.00 to 1.0 and (B) there is no continuing Event of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expensewarrants; and (~~xviii~~v) ~~Holdings, Intermediate Holdings, any~~ the Borrower or any ~~Restricted Subsidiary~~ of its Subsidiaries may ~~make Restricted Payments in cash~~ pay for the repurchase, retirement or other acquisition or retirement for value of Equity Interests of the Borrower held by any future, present or former employee, director or officer (or any successors, executors, administrators, heirs, legatees or distributees of any of the foregoing) of the Borrower or any of its Subsidiaries upon the death, disability, retirement or termination of employment of any such Person or otherwise pursuant to ~~Holdings to permit Holdings to make,~~ any employee or management stock option plan; provided that the aggregate amount of payments made by the Borrower and ~~Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For~~ its Subsidiaries for the purposes ~~of determining compliance with~~ provided under this Section ~~6.08(a), in the event that a proposed Restricted Payment (or a portion thereof~~6.06(v) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a)shall not exceed $1,000,000. (b) ~~Neither Holdings~~Issue, ~~Intermediate Holdings nor~~ sell or otherwise dispose of any ~~Borrower will~~class or series of Equity Interests that, ~~nor will they permit~~ by its terms or by the terms of any ~~Restricted Subsidiary to~~security into which it is convertible or exchangeable, is, or upon the happening of an event or passage of time would be, (i) convertible or exchangeable into Indebtedness or (ii) required to be redeemed or repurchased, including at the option of the holder, in whole or in part, or has, or upon the happening of an event or passage of time would have, a redemption or similar payment due. (c) Prepay, redeem, purchase, defease, cancel or otherwise satisfy prior to the scheduled maturity thereof in any manner or make ~~or pay, directly or indirectly,~~ any payment or ~~other distribution~~ violate any subordination terms in any respect, in each case, of and Indebtedness that is subordinated to, or secured on terms that are junior in right of payment to the Obligations, except (~~whether in cash~~i) so long as no Default has occurred and is continuing, ~~securities or other property)~~ regularly scheduled cash interest payments and payments of or fees, expenses and indemnification obligations in respect of principal of or interest on any Junior Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, except: (i) payment of regularly scheduled interest and principal payments assuch Indebtedness, in ~~the form of payment and~~ each case when due and in amounts not to exceed the amounts required to be paid with respect ~~of any Indebtedness~~thereto, ~~other than payments in respect of any Junior Financing prohibited by the subordination provisions thereof;~~ (ii) ~~refinancings~~ the repayment of ~~Junior Financing~~ intercompany Indebtedness ~~with proceeds~~ to the extent that the amount of such payment is made to (1) a Loan Party or (2) to a Subsidiary that is not a Loan Party, to the extent that the amount of such payment is promptly thereafter paid as a dividend or is otherwise distributed to a Loan Party and (iii) as part of a Permitted Refinancing. (d) Amend, supplement or otherwise modify, or permit the amendment, supplement or other ~~Junior Financing~~ modification, the terms of any Indebtedness ~~permitted~~ that is subordinated to, or secured on terms that are junior in right of payment to the Obligations or any Material Indebtedness in any manner that could reasonably be expected to be inmaterial adverse to the rights or interests of an Agent, the Issuing Banks or the Lenders.

Appears in 1 contract

Sources: Credit Agreement (Lmi Aerospace Inc)

Restricted Payments; Certain Payments of Indebtedness. (a) ~~Neither Holdings, Intermediate Holdings nor any Borrower will, nor will they permit any~~ No member of the Restricted ~~Subsidiary, to~~ Group shall pay or make, directly or indirectly, or declare, any Restricted Payment, ~~except~~other than any Restricted Payment by a member of the Restricted Group to a Loan Party (or to another member of the Restricted Group and then to a Loan Party), provided, however, so long as no Default or Event of Default then exists or would result therefrom: (i) ~~Each Borrower and each Restricted Subsidiary~~ the Parent may make Restricted Payments ~~to Intermediate Holdings, a Borrower or any other Restricted Subsidiary; provided that~~ in the ~~case~~ minimum amount necessary to maintain its status as a REIT (including the 90% distribution requirement of any such Restricted Payment by a Restricted Subsidiary that is not a wholly-owned Subsidiary of a Borrower, such Restricted Payment is made to Intermediate Holdings, such Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests Section 857(a) of the ~~relevant class~~ Internal Revenue Code), so long as such distribution is comprised of ~~Equity Interests~~the maximum amount possible in non-cash consideration to maintain such REIT status; (ii) ~~payments or distributions~~ the Parent may pay de minimis cash settlement amounts to ~~satisfy dissenters’ or appraisal rights, pursuant to or~~ its shareholders in ~~connection with a consolidation, amalgamation, merger or transfer~~ respect of ~~assets (other than with respect to the Transactions) that complies with Section 6.03;~~fractional shares resulting from share splits; and (iii) ~~Holdings and any Intermediate Holdings~~ Subsidiaries of the Parent that are not Loan Parties may declare and make ~~dividend payments or other~~ distributions ~~payable solely in~~ to equity owners which are not Loan Parties concurrently with any distribution made to the ~~Equity Interests~~ equity owners of such ~~Person; (iv) Restricted Payments made~~ Subsidiary which are Loan Parties in ~~connection with or~~ amounts proportionate to such non-Loan Party’s ownership in order to consummate the Transactions (including, without limitation, (A) cash payments to holders of Equity Interests of Target as provided by the Acquisition Agreement, (B) Restricted Payments to direct such Subsidiary and ~~indirect parent companies of Holdings to finance a portion of the consideration for the Acquisition and (C) other payments with respect to working capital adjustments or otherwise,~~ to the extent ~~contemplated by the Acquisition Agreement); provided that the earnout contemplated by Exhibit F~~ required pursuant to the Acquisition Agreement shall not be permitted on the basis of this clause (iv)); (v) repurchases of Equity Interests in Holdings (or Restricted Payments by Holdings to allow repurchases of Equity Interest in any direct or indirect parent of Holdings) or Intermediate Holdings deemed to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion terms of the ~~exercise price~~ corresponding organizational agreements of such stock options or warrants or other incentive interest; (vi) Restricted Payments to Holdings which Holdings may use to redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted stock units or stock appreciation rights or other equity-linked interests issued with respect to any Subsidiary in effect as of such Equity Interests) (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests) held by current or former officers, managers, consultants, directors and employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), Holdings, the Borrowers and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, profits interest, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that the aggregate amount of Restricted Payments permitted by this clause (vi) after the Effective Date, together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu thereof, shall not exceed the sum of (A) the greater of $15.0 million and 5.0% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings (which subsequent to an IPO shall be increased to the greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings), (B) the amount in any fiscal year equal to the cash proceeds of key man life insurance policies received by Holdings, the Borrowers or the Restricted Subsidiaries after the Effective Date, (C) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year may be carried forward to succeeding fiscal years; (vii) Holdings and any Intermediate Holdings may make Restricted Payments in cash: (A) without duplication of any Permitted Tax Distribution, the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (a)(vii)(A) shall not exceed the Tax liability that Holdings and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers or their Restricted Subsidiaries; (B) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof or any Intermediate Holdings) attributable to the ownership or operations of Holdings, the Borrowers and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of Holdings, the Borrowers and the Restricted Subsidiaries and (y) otherwise permitted to be paid by Holdings, the Borrowers and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the Borrowers or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x); (C) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence; (D) the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(m); provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) Holdings or any Intermediate Holdings shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to Holdings, the Borrowers or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with Holdings, the Borrowers or any of the Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrowers and the Restricted Subsidiaries; and (G) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful); (viii) in addition to the foregoing Restricted Payments, the Borrowers and any Intermediate Holdings may make additional Restricted Payments to any Intermediate Holdings and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt, in an aggregate amount, when taken together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii), not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as no Event of Default shall have occurred and be continuing (or, in the case of the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h) or (i)), the Available Amount that is Not Otherwise Applied plus (C) the Available Equity Amount that is Not Otherwise Applied; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; (xi) Holdings may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiii) payments made or expected to be made by Holdings, any Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to 5.00 to 1.0 and (B) there is no continuing Event of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make Restricted Payments in cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a). (b) ~~Neither Holdings, Intermediate Holdings nor~~ No member of the Restricted Group shall make any ~~Borrower will, nor will they permit any Restricted Subsidiary to, make or pay, directly or indirectly, any payment or other distribution~~ voluntary prepayment (whether in cash, securities or other property) of on or in respect of principal of or interest on any ~~Junior Financing, or any payment or other distribution (whether in cash, securities or other property)~~Indebtedness, including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any ~~Junior Financing~~such Indebtedness prior to the scheduled maturity, ~~except~~except for: (i) subject to the terms of the Intercreditor Agreement, payment of Indebtedness created under the First Lien Documents and the Loan Documents; (ii) payment of regularly scheduled interest and principal payments ~~as,~~ as and when due in ~~the form~~ respect of Indebtedness permitted by Section 9.14; (iii) payment of mandatory prepayments as and when due in respect of any ~~Indebtedness, other than payments in respect of any Junior Financing prohibited~~ Indebtedness permitted by ~~the subordination provisions thereof~~Section 9.14; (iiiv) ~~refinancings~~ Refinancings of ~~Junior Financing~~ Indebtedness ~~with proceeds~~ to the extent permitted by Section 9.14; and (v) payment of ~~other Junior Financing Indebtedness permitted~~ intercompany indebtedness to ~~be in~~the extent not prohibited by this Agreement.

Appears in 1 contract

Sources: Second Lien Credit Agreement (Pennsylvania Real Estate Investment Trust)

Restricted Payments; Certain Payments of Indebtedness. (a) Neither ~~Holdings, Intermediate~~ Holdings nor ~~any~~ the Borrower will, nor will they permit any Restricted ~~Subsidiary~~Subsidiary to, to pay or make, directly or indirectly, any Restricted Payment, except: (i) ~~Each~~ the Borrower and each Restricted Subsidiary may make Restricted Payments to ~~Intermediate Holdings, a~~ the Borrower or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a wholly-owned Subsidiary of a the Borrower, such Restricted Payment is made to ~~Intermediate Holdings, such~~ the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests; (ii) ~~payments or distributions~~ Restricted Payments to satisfy appraisal or other dissenters’ ~~or appraisal~~ rights, pursuant to or in connection with a consolidation, amalgamation, ~~merger or~~ merger, transfer of assets ~~(other than with respect to the Transactions)~~ or acquisition that complies with Section ~~6.03~~6.03 or Section 6.04; (iii) ~~Holdings and any Intermediate~~ Holdings may declare and make dividend payments or other distributions payable solely in the Equity Interests of such Person; (iv) Restricted Payments made in connection with or in order to consummate the Transactions (including, without limitation, (A) cash payments to holders of Equity ~~Interests~~ Interests, restricted stock units, options or other equity-linked interests of Target (or any Parent Entity) as provided by the Acquisition Agreement, (B) Restricted Payments (x) to direct and indirect parent companies of Holdings to finance a portion of the consideration for the Acquisition and (y) to holders of Equity Interests of the Target (immediately prior to giving effect to the Acquisition) in connection with, or as a result of, their exercise of appraisal rights and the settlement of any claims or actions (whether actual, contingent or potential) with respect thereto, in each case, with respect to the Transactions and (C) other payments with respect to working capital adjustments or ~~otherwise,~~ otherwise to the extent contemplated by the Acquisition Agreement~~); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis~~ , including any payments in respect of ~~this clause (iv)~~any warranty and indemnity insurance policy); (v) repurchases of Equity Interests in Holdings (or Restricted Payments by Holdings to allow repurchases of Equity ~~Interest~~ Interests in any direct or indirect parent of Holdings) ~~or Intermediate Holdings~~ deemed to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price of such stock options or warrants or other incentive interest; (vi) Restricted Payments to Holdings which Holdings may use to redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted stock units or stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) (or to make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity ~~Interests~~Interests or other such interests) held by current or former officers, managers, consultants, directors and employees (or their respective Affiliates, spouses, former spouses, other Permitted Transferees, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), ~~Holdings,~~ the ~~Borrowers~~ Borrower and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, profits interest, employment termination agreement or any other employment agreements or equity holders’ agreement; provided ~~that~~ that, except with respect to non-discretionary repurchases, the aggregate amount of Restricted Payments permitted by this clause (vi) after the Effective Date, together with the aggregate amount of loans and advances to Holdings (or any direct or indirect parent thereof) made pursuant to Section 6.04(m) in lieu thereof, shall not exceed the sum of (Aa) the greater of $~~15.0 million~~ 11,000,000 and ~~5.0~~7.5% of Consolidated EBITDA (provided that, after the occurrence of an IPO, such amount shall be the greater of $22,000,000 and 15% of Consolidated EBITDA) for the most recently ended Test Period in any fiscal year of ~~Holdings~~ the Borrower (~~which subsequent~~ net of any proceeds from the reissuance or resale of such Equity Interests to ~~an IPO shall be increased to~~ another Person received by Holdings, the ~~greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in~~ Borrower or any ~~fiscal year of Holdings~~Restricted Subsidiary), (Ba) the amount in any fiscal year equal to the cash proceeds of key man life insurance policies received by Holdings, the ~~Borrowers~~ Borrower or the Restricted Subsidiaries after the Effective Date, and (Ca) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket ~~hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision~~hereunder; provided that any unused portion of the preceding basket calculated pursuant to clauses (Aa) and (Bb) above for any fiscal year may be carried forward to succeeding fiscal years; provided, further, that any Indebtedness Incurred or Investments or payments made in reliance upon the Available RP Capacity Amount utilizing the unused amounts available pursuant to this Section 6.08(a)(vi) shall reduce the amounts available pursuant to this Section 6.08(a)(vi); (vii) ~~Holdings and~~ Holdings, the Borrower and/or any ~~Intermediate Holdings~~ Restricted Subsidiary may make Restricted Payments in cash: (A) ~~without duplication~~ the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof) attributable to the ownership or operations of Holdings, the Borrower and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of Holdings, the Borrower and the Restricted Subsidiaries and (y) otherwise permitted to be paid by Holdings, the Borrower and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the Borrower or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x); (B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence; (C) the proceeds of which shall be used by Holdings (or any other direct or indirect parent thereof) to make Restricted Payments of the type permitted by Section 6.08(a)(iv), Section 6.08(a)(vi) or Section 6.08(a)(xi); (D) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(m); provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) Holdings shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to the Borrower or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (E) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrower and the Restricted Subsidiaries; and (F) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful); (viii) additional Restricted Payments (including Restricted Payments to Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments, to make any payments in respect of any Permitted ~~Tax Distribution~~Holdings Debt or otherwise) (A) in an aggregate amount not to exceed, at the time of making any such Restricted Payment and when taken together with the aggregate amount of loans and advances to Holdings (or any direct or indirect parent thereof) made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii) and the aggregate amount of any other Restricted Payments made utilizing this clause (A), the greater of $43,000,000 and 30% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment, (B) so long as, immediately after giving effect to any such Restricted Payment, no Event of Default under Section 7.01(a), (b), (h) or (i) has occurred and is continuing, in an amount not to exceed the Available Amount that is Not Otherwise Applied and (C) in an amount not to exceed the Available Equity Amount that is Not Otherwise Applied; provided that any Indebtedness Incurred or Investments or payments made in reliance upon the Available RP Capacity Amount utilizing the unused amounts available pursuant to this Section 6.08(a)(viii) shall reduce the amounts available pursuant to this Section 6.08(a)(viii); (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (a) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases, in each case, in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units and (b) payments or other adjustments to outstanding Equity Interests in accordance with any management equity plan, stock option plan or any other similar employee benefit plan, agreement or arrangement in connection with any Restricted Payment; (xi) Holdings or any Restricted Subsidiary may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment of Restricted Payments on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, in an annual amount for each fiscal year of Holdings equal to the sum of (a) an amount equal to 6.0% of the net cash proceeds of such IPO (and any subsequent public offerings) received by or contributed to Holdings and/or its Subsidiaries, other than public offerings with respect to common stock registered on Form S-8 and (b) an amount equal to 7.0% of the market capitalization of the IPO Entity at the time of such IPO; provided that any Indebtedness Incurred or Investments or payments made in reliance upon the Available RP Capacity Amount utilizing the unused amounts available pursuant to this Section 6.08(a)(xii) shall reduce the amounts available pursuant to this Section 6.08(a)(xii); (xiii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to 5.00 to 1.00 and (B) there is no continuing Event of Default under Section 7.01(a), (b), (h) or (i); (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions; (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, the Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, the Borrower or any Restricted Subsidiary may make Restricted Payments in cash, the proceeds of which shall be used by ~~Holdings or any Intermediate~~ Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (~~a)(vii)(A~~a)(xviii) shall not exceed the Tax liability that Holdings and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this ~~subclause~~ clause (Aa)(xviii) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to ~~Holdings,~~ the ~~Borrowers~~ Borrower or their Restricted Subsidiaries; (B) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof or any Intermediate Holdings) attributable to the ownership or operations of Holdings, the Borrowers and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of Holdings, the Borrowers and the Restricted Subsidiaries and (y) otherwise permitted to be paid by Holdings, the Borrowers and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the Borrowers or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x); (C) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence; (D) the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(m); provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) Holdings or any Intermediate Holdings shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to Holdings, the Borrowers or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with Holdings, the Borrowers or any of the Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrowers and the Restricted Subsidiaries; and (G) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful); (viii) in addition to the foregoing Restricted Payments, the Borrowers and any Intermediate Holdings may make additional Restricted Payments to any Intermediate Holdings and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt, in an aggregate amount, when taken together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii), not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as no Event of Default shall have occurred and be continuing (or, in the case of the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h) or (i)), the Available Amount that is Not Otherwise Applied plus (C) the Available Equity Amount that is Not Otherwise Applied; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; (xi) Holdings may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiii) payments made or expected to be made by Holdings, any Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to 5.00 to 1.0 and (B) there is no continuing Event of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make Restricted Payments in cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (~~xviii~~xvii) ~~above~~above (or any sub-clause therein), the ~~Borrowers~~ Borrower will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a). (b) Neither Holdings, Intermediate Holdings nor any Borrower will, nor will they permit any Restricted Subsidiary to, make or pay, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, except: (i) payment of regularly scheduled interest and principal payments as, in the form of payment and when due in respect of any Indebtedness, other than payments in respect of any Junior Financing prohibited by the subordination provisions thereof; (ii) refinancings of Junior Financing Indebtedness with proceeds of other Junior Financing Indebtedness permitted to be incircumsta

Appears in 1 contract

Sources: First Lien Credit Agreement (First Advantage Corp)

Restricted Payments; Certain Payments of Indebtedness. (a) ~~Neither Holdings, Intermediate Holdings nor any~~ The Borrower ~~will~~will not, nor will ~~they~~ it permit any ~~Restricted Subsidiary~~Subsidiary to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, except: (i) ~~Each~~ the Borrower may declare and ~~each Restricted Subsidiary may make Restricted Payments~~ pay dividends with respect to ~~Intermediate Holdings, a Borrower or any other Restricted Subsidiary; provided that~~ its Equity Interests payable solely in additional Equity Interests in the ~~case of any such Restricted Payment by a Restricted Subsidiary that is not a wholly-owned Subsidiary of a~~ Borrower, such Restricted Payment is made to Intermediate Holdings, such Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests; (ii) ~~payments or distributions to satisfy dissenters’ or appraisal rights, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of assets (other than~~ Subsidiaries may declare and pay dividends ratably with respect to ~~the Transactions) that complies with Section 6.03~~their capital stock; (iii) ~~Holdings~~ the Borrower may make Restricted Payments, not exceeding $5,000,000 from and ~~any Intermediate Holdings may declare~~ after the date hereof, pursuant to and ~~make dividend payments~~ in accordance with stock option plans, equity purchase programs or agreements or other ~~distributions payable solely~~ benefit plans, in each case for management or employees or former employees of the ~~Equity Interests of such Person~~Borrower and the Subsidiaries; (iv) ~~Restricted Payments made~~ the Borrower may pay the Closing Date Dividend; (v) the Borrower may pay cash dividends in ~~connection with or in order~~ respect of Qualified Borrower Preferred Stock issued pursuant to ~~consummate the Transactions~~ clauses (~~including, without limitation,~~ b) and (Ac) ~~cash payments to holders of Equity Interests of Target as provided by the Acquisition Agreement, (B) Restricted Payments to direct and indirect parent companies of Holdings to finance a portion~~ of the ~~consideration for the Acquisition and (C) other payments with respect to working capital adjustments or otherwise, to the extent contemplated by the Acquisition Agreement)~~definition thereof; provided that ~~the earnout contemplated by Exhibit F~~ such dividends in respect of Qualified Borrower Preferred Stock issued pursuant to ~~the Acquisition Agreement shall not be permitted on the basis of this~~ clause (ivc) of the definition thereof may only be made after the fiscal year ending December 31, 2016 and only with Excess Cash Flow not otherwise required to be used to prepay Term Loans pursuant to Section 2.11(d)) (without duplication of amounts used pursuant to Section 6.08(a)(vii) or amounts included in the Available Amount and used pursuant to Sections 6.04(s) or 6.08(b)(vii)); (v) repurchases of Equity Interests in Holdings (or Restricted Payments by Holdings to allow repurchases of Equity Interest in any direct or indirect parent of Holdings) or Intermediate Holdings deemed to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price of such stock options or warrants or other incentive interest; (vi) Restricted Payments to Holdings which Holdings may use to redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted stock units or stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests) held by current or former officers, managers, consultants, directors and employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), Holdings, the Borrowers and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, profits interest, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that the aggregate amount of Restricted Payments permitted by this clause (vi) after the Effective Date, together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu thereof, shall not exceed the sum of (A) the greater of $15.0 million and 5.0% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings (which subsequent to an IPO shall be increased to the greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings), (B) the amount in any fiscal year equal to the cash proceeds of key man life insurance policies received by Holdings, the Borrowers or the Restricted Subsidiaries after the Effective Date, (C) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year may be carried forward to succeeding fiscal years[reserved]; (vii) ~~Holdings~~ the Borrower may make payments in respect of the repurchase, retirement or other acquisition of Equity Interests of the Borrower or any Subsidiary using the portion of Excess Cash Flow not subject to mandatory prepayment pursuant to Section 2.11(d) (without duplication of amounts used pursuant to Section 6.08(a)(v) or amounts included in the Available Amount and ~~any Intermediate Holdings~~ used pursuant to Sections 6.04(s) or 6.08(b)(vii)); (viii) the Borrower may make Restricted Payments; provided that (x) if after giving effect to such Restricted Payments (and any Indebtedness incurred in ~~cash:~~ connection therewith (~~A) without duplication of any Permitted Tax Distribution,~~ but disregarding the proceeds of ~~which shall be used by Holdings or~~ any ~~Intermediate Holdings to pay (or to make Restricted Payments to allow~~ such Indebtedness in calculating Unrestricted Domestic Cash) and any ~~direct or indirect parent~~ related repayment of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”Indebtedness), the ~~portion~~ Net Leverage Ratio at the time of ~~any U.S. federal, state, local or foreign Taxes~~ the making such payments (~~as applicable)~~ the date of the making of such ~~Tax Group for such taxable period that are attributable~~ payments, the “RP Date”) would be (1) less than or equal to 2.25 to 1.00, but greater than 2.00 to 1.00, the ~~income~~ aggregate amount of ~~Holdings and/or its Subsidiaries; provided that~~ Restricted Payments made pursuant to this clause (~~a)(vii)(A~~viii) during the period from the date 12 months prior to the RP Date through (and including) the RP Date (such period, the “RP Period”) shall not exceed the Tax liability that Holdings and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers or their Restricted Subsidiaries; (B) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business$40,000,000, (2) ~~any reasonable and customary indemnification claims made by directors~~ less than or ~~officers of Holdings (or any parent thereof or any Intermediate Holdings) attributable~~ equal to ~~the ownership or operations of Holdings~~2.75 to 1.00, but greater than 2.25 to 1.00, the ~~Borrowers and~~ aggregate amount of Restricted Payments made pursuant to this clause (viii) during the ~~Restricted Subsidiaries~~RP Period shall not exceed $25,000,000, (3) ~~fees and expenses (x) due and payable by any of Holdings~~less than or equal to 3.25 to 1.00 but greater than 2.75 to 1.00, the ~~Borrowers and~~ aggregate amount of Restricted Payments made pursuant to this clause (viii) during the ~~Restricted Subsidiaries and (y) otherwise permitted to be paid by Holdings, the Borrowers and the Restricted Subsidiaries under this Agreement~~ RP Period shall not exceed $15,000,000 and (4) ~~payments that would otherwise be permitted~~ greater than 3.25 to ~~be paid directly by Holdings~~1.00, the Borrowers or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x); (C) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence; (D) the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(m); provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) Holdings or any Intermediate Holdings shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to Holdings, the Borrowers or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with Holdings, the Borrowers or any of the Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrowers and the Restricted Subsidiaries; and (G) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful); (viii) in addition to the foregoing Restricted Payments, the Borrowers and any Intermediate Holdings may make additional Restricted Payments to any Intermediate Holdings and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt, in an aggregate amount, when taken together with the aggregate amount of ~~loans and advances to Holdings~~ Restricted Payments made pursuant to ~~Section 6.04(m~~this clause (viii) ~~in lieu~~ during the RP Period shall not exceed $10,000,000; provided further that at the time of ~~Restricted Payments permitted by~~ any payment pursuant to this clause (viii), not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as no Default or Event of Default shall have occurred and be continuing (or, in the case of the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h) or (i)), the Available Amount that is Not Otherwise Applied plus (C) the Available Equity Amount that is Not Otherwise Applied; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; (xi) Holdings may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiii) payments made or expected to be made by Holdings, any Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to 5.00 to 1.0 and (B) there is no continuing Event of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make Restricted Payments in cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a)continuing. (b) ~~Neither Holdings, Intermediate Holdings nor any~~ The Borrower ~~will~~will not, nor will ~~they~~ it permit any ~~Restricted~~ Subsidiary to, make or ~~pay~~agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any ~~Junior Financing~~Indebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any ~~Junior Financing~~Indebtedness, except: (i) payment of Indebtedness created under the Loan Documents; (ii) payment of regularly scheduled interest and principal payments ~~as, in the form of payment~~ as and when due in respect of any Indebtedness, other than payments in respect of ~~any Junior Financing~~ subordinated Indebtedness prohibited by the subordination provisions thereof; (iiiii) refinancings of ~~Junior Financing~~ Indebtedness to the extent permitted by Section 6.01; (iv) payment of secured Indebtedness out of the proceeds of any sale or transfer of the property or assets securing such Indebtedness; (v) payment of or in respect of (A) Indebtedness created under the ABL Loan Documents and (B) Indebtedness or obligations secured by the ABL Security Documents; (vi) payments of Indebtedness with the Net Proceeds of an issuance of Equity Interests in the Borrower; and (vii) payments of Indebtedness in an amount equal to the Available Amount; provided that at the time of such payment and after giving effect thereto, (i) no Default or Event of Default shall have occurred and be continuing and (ii) at the time of such payment and after giving effect thereto and to the incurrence of any Indebtedness in connection therewith (but disregarding the proceeds of ~~other Junior Financing~~ any such Indebtedness in calculating Unrestricted Domestic Cash), the Net Leverage Ratio is not greater than 2.00 to 1.00. (c) The Borrower will not, nor will it permit any Subsidiary to, enter into or be party to, or make any payment under, any Synthetic Purchase Agreement unless (i) in the case of any Synthetic Purchase Agreement related to any Equity Interests of the Borrower, the payments required to be made by the Borrower are limited to amounts permitted to be inpaid under Section 6.08(a), (ii) in the case of any Synthetic Purchase Agreement related to any Restricted Indebtedness, the payments required to be made by the Borrower or the Subsidiaries thereunder are limited to the amount permitted under Section 6.08(b) and (iii) in the case of any Synthetic Purchase Agreement, the obligations of the Borrower and the Subsidiaries thereunder are subordinated to the Obligations on terms satisfactory to the Required Lenders.

Appears in 1 contract

Sources: Term Loan Credit Agreement (Horizon Global Corp)

Restricted Payments; Certain Payments of Indebtedness. (a) ~~Neither~~ None of Holdings, ~~Intermediate Holdings nor~~ the Parent Borrower, any Subsidiary Term Borrower or any Foreign Subsidiary Borrower will, nor will they permit any ~~Restricted Subsidiary~~Subsidiary to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, except: (i) ~~Each Borrower~~ Holdings may declare and ~~each Restricted Subsidiary may make Restricted Payments~~ pay dividends with respect to ~~Intermediate Holdings, a Borrower or any other Restricted Subsidiary; provided that~~ its Equity Interests payable solely in the case of any such Restricted Payment by a Restricted Subsidiary that is not a wholly-owned Subsidiary of a Borrower, such Restricted Payment is made to Intermediate Holdings, such Borrower, any Restricted Subsidiary and to each other owner of additional Equity Interests of ~~such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests~~Holdings; (ii) ~~payments or distributions to satisfy dissenters’ or appraisal rights, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of assets (other than~~ Subsidiaries may declare and pay dividends ratably with respect to ~~the Transactions) that complies with Section 6.03~~their capital stock; (iii) the Parent Borrower may make payments to Holdings to permit it to make, and ~~any Intermediate~~ Holdings may ~~declare~~ make, Restricted Payments, not exceeding $5,000,000 during the term of this Agreement, in each case pursuant to and ~~make dividend payments~~ in accordance with stock option plans, equity purchase programs or agreements or other ~~distributions payable solely~~ benefit plans, in each case for management or employees or former employees of the ~~Equity Interests of such Person~~Parent Borrower and the Subsidiaries; (iv) ~~Restricted Payments made~~ the Parent Borrower may pay dividends to Holdings at such times and in ~~connection with or in order~~ such amounts as shall be necessary to ~~consummate the Transactions~~ permit Holdings to discharge and satisfy its obligations that are permitted hereunder (~~including, without limitation,~~ including (A) ~~cash payments~~ state and local taxes and other governmental charges, and administrative and routine expenses required to ~~holders~~ be paid by Holdings in the ordinary course of ~~Equity Interests of Target as provided by the Acquisition Agreement,~~ business and (B) ~~Restricted Payments~~ cash dividends payable by Holdings in respect of Qualified Holdings Preferred Stock issued pursuant to ~~direct~~ clauses (b) and ~~indirect parent companies of Holdings to finance a portion~~ (c) of the ~~consideration for the Acquisition and (C) other payments with respect to working capital adjustments or otherwise~~definition thereof, ~~to the extent contemplated~~ provided that dividends payable by the ~~Acquisition Agreement); provided that the earnout contemplated by Exhibit F~~ Parent Borrower to ~~the Acquisition Agreement shall not be permitted on the basis of~~ Holdings pursuant to this clause (iv) in order to satisfy cash dividends payable by Holdings in respect of Qualified Holdings Preferred Stock issued pursuant to clause (c) of the definition thereof may only be made after the fiscal year ending December 31, 2003 with Excess Cash Flow not otherwise required to be used to prepay Term Loans pursuant to Section 2.11(e)); (v) ~~repurchases of Equity Interests in Holdings (or Restricted Payments by~~ Parent Borrower may make payments to Holdings to ~~allow repurchases of Equity Interest in any direct or indirect parent of Holdings) or Intermediate Holdings deemed~~ permit it to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price of such stock options or warrants or other incentive interest; (vi) Restricted Payments to Holdings which make, and Holdings may use to redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted stock units or stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests) held by current or former officers, managers, consultants, directors and employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), Holdings, the Borrowers and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, profits interest, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that the aggregate amount of Restricted Payments payments permitted by this clause (vi) after the Effective Date, together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu thereof, shall not exceed the sum of (A) the greater of $15.0 million and 5.0% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings (which subsequent to an IPO shall be increased to the greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of HoldingsSections 6.09(d), (~~B) the amount in any fiscal year equal to the cash proceeds of key man life insurance policies received by Holdings, the Borrowers or the Restricted Subsidiaries after the Effective Date~~e), (~~C) the cash proceeds from the sale of Equity Interests~~ f), (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (Ag) and (B) above for any fiscal year may be carried forward to succeeding fiscal years; (vii) Holdings and any Intermediate Holdings may make Restricted Payments in cash: (A) without duplication of any Permitted Tax Distribution, the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (a)(vii)(A) shall not exceed the Tax liability that Holdings and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers or their Restricted Subsidiaries; (B) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof or any Intermediate Holdings) attributable to the ownership or operations of Holdings, the Borrowers and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of Holdings, the Borrowers and the Restricted Subsidiaries and (y) otherwise permitted to be paid by Holdings, the Borrowers and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the Borrowers or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x); (C) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence; (D) the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(mh); provided ~~that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) Holdings or any Intermediate Holdings shall~~that, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to Holdings, the Borrowers or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with Holdings, the Borrowers or any of the Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrowers and the Restricted Subsidiaries; and (G) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful); (viii) in addition to the foregoing Restricted Payments, the Borrowers and any Intermediate Holdings may make additional Restricted Payments to any Intermediate Holdings and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt, in an aggregate amount, when taken together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii), not to exceed the sum of (A) an amount at the time of ~~making any~~ such ~~Restricted Payment~~ payment and ~~together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period~~ after giving ~~Pro Forma Effect to the making of such Restricted Payment plus (B) so long as~~ effect thereto, no Default or Event of Default shall have occurred and be continuing ~~(or~~and Holdings and the Parent Borrower are in compliance with Section 6.12; provided, ~~in the case~~ further, that any payments that are prohibited because of the ~~use~~ immediately preceding proviso shall accrue and may be made as so accrued upon the curing or waiver of ~~the Starter Basket that is Not Otherwise Applied~~such Default, no Event of Default ~~under Section 7.01(a), (b), (h)~~ or ~~(i)), the Available Amount that is Not Otherwise Applied plus (C) the Available Equity Amount that is Not Otherwise Applied~~noncompliance; (ixvi) ~~redemptions in whole~~ the Parent Borrower or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms Holdings may make the payments required by the Acquisition Documents including the Cash Dividend, the Debt Repayment, the A/R Purchase and ~~provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x)~~ payments ~~made or expected to be made~~ in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; (xi) Holdings may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiii) payments made or expected to be made by Holdings, any Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to 5.00 to 1.0 and (B) there is no continuing Event of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest ExpenseStock Obligation; and (~~xviii~~vii) ~~Holdings~~Holdings may purchase, ~~Intermediate Holdings~~repurchase, ~~any~~ redeem or otherwise acquire its Equity Interest held by, directly or indirectly, Metaldyne Corporation with up to $20,000,000 of the Net Proceeds from the issuance of the Add-On Notes (it being understood that if the Parent Borrower or any ~~Restricted Subsidiary~~ of the Subsidiaries holds such proceeds, it may ~~make Restricted Payments in cash~~ declare and pay a dividend to Holdings to permit Holdings to ~~make~~effect such purchase, ~~and Holdings may make~~repurchase, ~~Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a proposed Restricted Payment (~~redemption or a portion thereof) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(aacquisition). (b) ~~Neither~~ None of Holdings, ~~Intermediate Holdings nor~~ the Parent Borrower, any Subsidiary Term Borrower or any Foreign Subsidiary Borrower will, nor will they permit any ~~Restricted~~ Subsidiary to, make or ~~pay~~agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any ~~Junior Financing~~Indebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any ~~Junior Financing~~Indebtedness, except: (i) payment of Indebtedness created under the Loan Documents; (ii) payment of regularly scheduled interest and principal payments ~~as, in the form of payment~~ as and when due in respect of any Indebtedness, other than payments in respect of ~~any Junior Financing~~ the subordinated Indebtedness prohibited by the subordination provisions thereof; (iiiii) refinancings of ~~Junior Financing~~ Indebtedness ~~with~~ to the extent permitted by Section 6.01; and (iv) payment of secured Indebtedness out of the proceeds of ~~other Junior Financing Indebtedness~~ any sale or transfer of the property or assets securing such Indebtedness. (c) None of Holdings, the Parent Borrower or any Foreign Subsidiary Borrower will, nor will they permit any Subsidiary to, enter into or be party to, or make any payment under, any Synthetic Purchase Agreement unless (i) in the case of any Synthetic Purchase Agreement related to any Equity Interest of Holdings, the payments required to be made by Holdings are limited to amounts permitted to be inpaid under Section 6.08(a), (ii) in the case of any Synthetic Purchase Agreement related to any Restricted Indebtedness, the payments required to be made by Holdings, the Parent Borrower or the Subsidiaries thereunder are limited to the amount permitted under Section 6.08(b) and (iii) in the case of any Synthetic Purchase Agreement, the obligations of Holdings, the Parent Borrower and the Subsidiaries thereunder are subordinated to the Obligations on terms satisfactory to the Required Lenders.

Appears in 1 contract

Sources: Credit Agreement (Trimas Corp)

Restricted Payments; Certain Payments of Indebtedness. (a) Neither ~~Holdings,~~ Intermediate Holdings nor ~~any~~ the Borrower will, nor will they permit any ~~Restricted Subsidiary~~Subsidiary to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, ~~except:~~ or incur any obligation (contingent or otherwise) to do so, except (i) ~~Each~~ each of Intermediate Holdings and the Borrower may declare and ~~each Restricted Subsidiary~~ pay dividends with respect to its common stock payable solely in additional shares of its common stock, (ii) Subsidiaries may declare and pay dividends ratably with respect to their capital stock, membership or partnership interests or other similar Equity Interests, (iii) the Borrower may make Restricted Payments to Intermediate Holdings (which may, in turn, make Restricted Payments to Holdings in an amount equal to the Restricted Payments received from the Borrower) to permit Holdings to make payments pursuant to and in accordance with stock option plans or other benefit plans for management or employees of Holdings, a Borrower or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a wholly-owned Subsidiary of a Borrower, such Restricted Payment is made to Intermediate Holdings, ~~such Borrower~~the Borrower and the Subsidiaries that have been approved by the board of directors of Holdings in an amount not to exceed $1,000,000 during any fiscal year, which amount, if not used in any ~~Restricted Subsidiary and~~ fiscal year, may be carried forward to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests; (ii) payments or distributions to satisfy dissenters’ or appraisal rightsany subsequent fiscal year, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of assets (other than with respect to the Transactions) that complies with Section 6.03; (iii) Holdings and any Intermediate Holdings may declare and make dividend payments or other distributions payable solely in the Equity Interests of such Person; (iv) the Borrower may pay dividends to Intermediate Holdings (which may, in turn, make Restricted Payments ~~made~~ to Holdings in ~~connection with or~~ an amount equal to the Restricted Payments received from the Borrower) at such times and in ~~order to consummate the Transactions (including, without limitation,~~ such amounts (A) ~~cash~~ not exceeding $2,500,000 during any fiscal year, as shall be necessary to permit Holdings and Intermediate Holdings to discharge their corporate overhead (including franchise taxes and directors fees) and other permitted liabilities and to make payments ~~to holders of Equity Interests of Target as provided~~ permitted by ~~the Acquisition Agreement,~~ Section 6.09 and (B) ~~Restricted Payments~~ as shall be necessary to ~~direct~~ pay any taxes that are due and ~~indirect parent companies~~ payable by Holdings and Intermediate Holdings as part of ~~Holdings to finance~~ a ~~portion of~~ consolidated group that includes the ~~consideration for the Acquisition and (C) other payments with respect to working capital adjustments or otherwise~~Borrower, to the extent ~~contemplated by the Acquisition Agreement); provided~~ that ~~the earnout contemplated by Exhibit F~~ such taxes relate to the ~~Acquisition Agreement shall not be permitted on~~ operations of the ~~basis of this clause (iv));~~ Borrower and the Subsidiaries, (v) ~~repurchases of Equity Interests in Holdings (~~so long as no Default has occurred and is continuing or ~~Restricted Payments by Holdings to allow repurchases of Equity Interest in any direct or indirect parent of Holdings) or~~ would result therefrom, Intermediate Holdings ~~deemed to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion of~~ and the ~~exercise price of such stock options or warrants or other incentive interest; (vi) Restricted Payments to Holdings which Holdings~~ Borrower may use to redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted stock units or stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) (or make Restricted Payments to ~~allow any of Holdings’ direct~~ the extent necessary to permit them or ~~indirect parent companies to so redeem~~Holdings to, retire, acquire or repurchase their Equity Interests) held by current or former officers, managers, consultants, directors and employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), Holdings, the Borrowers and the ~~Restricted Subsidiaries~~Borrower or Intermediate Holdings may, ~~upon the death, disability, retirement~~ make payments of or ~~termination~~ on account of ~~employment of any such Person~~ monitoring or ~~otherwise~~ management or similar fees (including reasonable out-of-pocket expenses incurred in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, profits interest, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that the aggregate amount of Restricted Payments permitted by this clause (viconnection therewith) after the Effective Date, together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu thereof, shall not exceed the sum of (A) the greater of $15.0 million and 5.0% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings (which subsequent to an IPO shall be increased to the ~~greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period~~ Sponsor or its Affiliates in ~~any fiscal year of Holdings), (B) the~~ an aggregate amount in any fiscal year ~~equal to the cash proceeds~~ not in excess of ~~key man life insurance policies received by Holdings, the Borrowers or the Restricted Subsidiaries after the Effective Date~~$2,500,000, (Cvi) ~~the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests~~ so long as no Default has occurred and is continuing or ~~Qualified Equity Interests) and~~would result therefrom, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year may be carried forward to succeeding fiscal years; (vii) Holdings and any Intermediate Holdings may make Restricted Payments in cash: (A) without duplication of any Permitted Tax Distribution, the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (a)(vii)(A) shall not exceed the Tax liability that Holdings and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers or their Restricted Subsidiaries; (B) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof or any Intermediate Holdings) attributable to the ownership or operations of Holdings, the Borrowers and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of Holdings, the Borrowers and the Restricted Subsidiaries and (y) otherwise permitted to be paid by Holdings, the Borrowers and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the Borrowers or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x); (C) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence; (D) the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(m); provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) Holdings or any Intermediate Holdings shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to Holdings, the Borrowers or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with Holdings, the Borrowers or any of the Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrowers and the Restricted Subsidiaries; and (G) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful); (viii) in addition to the foregoing Restricted Payments, the Borrowers and any Intermediate Holdings may make additional Restricted Payments (and the Borrower may make Restricted Payments to ~~any~~ Intermediate Holdings the proceeds of which are to be used by Intermediate Holdings to make such additional Restricted Payments) in an aggregate amount not to exceed the Available Basket Amount at the time of such Restricted Payment and (vii) without duplication as to amounts distributable with respect to taxes under clause (iv) above, in the event that Holdings, Intermediate Holdings and the Borrower become pass-through or disregarded entities for U.S. federal income tax purposes, Intermediate Holdings may make Tax Distributions to Holdings (and the Borrower may make distributions to Intermediate Holdings, the proceeds of which ~~may be utilized~~ are used by ~~Holdings to make additional Restricted Payments or by Holdings or by any~~ Intermediate Holdings to make ~~any payments~~ such Tax Distributions) to the extent that the aggregate amount of Tax Distributions made pursuant to this clause (vii) in respect of any ~~Permitted Holdings Debt, in an aggregate amount, when taken together with~~ taxable year does not exceed the aggregate amount of ~~loans~~ U.S. federal, state and advances to Holdings made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii), not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as no Event of Default shall local income taxes that would have occurred and be continuing (or, in the case of the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h) or (i)), the Available Amount that is Not Otherwise Applied plus (C) the Available Equity Amount that is Not Otherwise Applied; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes otherwise been payable by ~~any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of~~ the Borrower for such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; (xi) Holdings may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by taxable year had it remained a ~~holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any~~ corporation for U.S. federal income tax purposes for such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiii) payments made or expected to be made by Holdings, any Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to 5.00 to 1.0 and (B) there is no continuing Event of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make Restricted Payments in cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a)taxable year. (b) Neither ~~Holdings,~~ Intermediate Holdings nor ~~any~~ the Borrower will, nor will they permit any ~~Restricted~~ Subsidiary to, make or ~~pay~~agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any ~~Junior Financing~~Senior Subordinated Notes, Additional Senior Subordinated Notes or Indebtedness set forth on Schedule 6.01, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, ~~cancellation~~ cancelation or termination of any ~~Junior Financing~~such Indebtedness, except: (i) payment of regularly scheduled interest and principal payments ~~as, in the form of payment~~ as and when due in respect of any such Indebtedness, other than payments in respect of any ~~Junior Financing~~ such Indebtedness prohibited by the subordination provisions thereof;; and (ii) refinancings of ~~Junior Financing~~ such Indebtedness ~~with proceeds~~ to the extent permitted by Section 6.01 (in which case the provisions of ~~other Junior Financing Indebtedness permitted~~ this Section 6.08 shall apply to ~~be in~~such refinancing Indebtedness).

Appears in 1 contract

Sources: Credit Agreement (Wix Filtration Media Specialists, Inc.)

Restricted Payments; Certain Payments of Indebtedness. (a) ~~Neither Holdings, Intermediate Holdings nor any~~ The Borrower ~~will~~will not, nor will ~~they~~ it permit any ~~Restricted Subsidiary~~Subsidiary to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, ~~except:~~ or incur any obligation (contingent or otherwise) to do so, except that (i) ~~Each~~ the Borrower may declare and ~~each Restricted Subsidiary~~ pay dividends with respect to its Equity Interests payable solely in additional Equity Interests (other than Disqualified Stock) otherwise permitted hereunder, (ii) Subsidiaries may declare and pay dividends ratably with respect to their Equity Interests, (iii) the Borrower may make Restricted Payments pursuant to ~~Intermediate Holdings~~and in accordance with stock option plans and other benefit plans for directors, a officers, employees, advisors or service providers, (iv) the Borrower ~~or any other Restricted Subsidiary; provided that in the case~~ may make repurchases of any such Restricted Payment by a Restricted Subsidiary that is not a wholly-owned Subsidiary of a Borrower, such Restricted Payment is made to Intermediate Holdings, such Borrower, any Restricted Subsidiary and to each other owner of its Equity Interests ~~of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests;~~ (iiA) ~~payments or distributions to satisfy dissenters’ or appraisal rights, pursuant to or~~ in connection with ~~a consolidation, amalgamation, merger~~ the exercise or transfer of assets (other than with respect to the Transactions) that complies with Section 6.03; (iii) Holdings and any Intermediate Holdings may declare and make dividend payments or other distributions payable solely in the Equity Interests of such Person; (iv) Restricted Payments made in connection with or in order to consummate the Transactions (including, without limitation, (A) cash payments to holders of Equity Interests of Target as provided by the Acquisition Agreement, (B) Restricted Payments to direct and indirect parent companies of Holdings to finance a portion of the consideration for the Acquisition and (C) other payments with respect to working capital adjustments or otherwise, to the extent contemplated by the Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv)); (v) repurchases of Equity Interests in Holdings (or Restricted Payments by Holdings to allow repurchases of Equity Interest in any direct or indirect parent of Holdings) or Intermediate Holdings deemed to occur upon exercise settlement of stock options ~~or warrants or~~ and other incentive ~~interests~~ awards, if such Equity Interests represent all or a portion of the exercise price ~~of such stock options~~ thereof or warrants or other incentive interest; (vi) Restricted Payments to Holdings which Holdings may use to redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted stock units or stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests) held by current or former officers, managers, consultants, directors and employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), Holdings, the Borrowers and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, profits interest, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that the aggregate amount of Restricted Payments permitted by this clause (vi) after the Effective Date, together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu thereof, shall not exceed the sum of (A) the greater of $15.0 million and 5.0% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings (which subsequent to an IPO shall be increased to the greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings), (B) deemed to occur upon the ~~amount in any fiscal year equal to the cash proceeds~~ withholding of key man life insurance policies received by Holdings, the Borrowers or the Restricted Subsidiaries after the Effective Date, (C) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale a portion of such Equity Interests ~~are contributed~~ issued to ~~Holdings in the form of common Equity Interests~~ directors, officers or ~~Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue~~ employees under an equity compensation program of the ~~Available Equity Amount or are otherwise applied~~ Borrower and the Subsidiaries to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year may be carried forward to succeeding fiscal years; (vii) Holdings and any Intermediate Holdings may make Restricted Payments in cash: (A) without duplication of any Permitted Tax Distribution, the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary cover withholding tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) obligations of such Tax Group for such taxable period that are attributable to the income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (a)(vii)(A) shall not exceed the Tax liability that Holdings and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this subclause (A) persons in respect of ~~any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that~~ such ~~Unrestricted Subsidiaries have made cash payments for such purpose to Holdings~~issuance, the Borrowers or their Restricted Subsidiaries; (B) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof or any Intermediate Holdings) attributable to the ownership or operations of Holdings, the Borrowers and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of Holdings, the Borrowers and the Restricted Subsidiaries and (y) otherwise permitted to be paid by Holdings, the Borrowers and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the Borrowers or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x); (C) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence; (D) the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(m); provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) Holdings or any Intermediate Holdings shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to Holdings, the Borrowers or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with Holdings, the Borrowers or any of the Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrowers and the Restricted Subsidiaries; and (G) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful); (viii) in addition to the foregoing Restricted Payments, the Borrowers and any Intermediate Holdings may make additional Restricted Payments to any Intermediate Holdings and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt, in an aggregate amount, when taken together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii), not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (Bv) so long as no ~~Event of~~ Default shall have occurred and be continuing (oror shall result from the payment thereof), the Borrower may make additional Restricted Payments, provided that, at the time of the making thereof, the aggregate amount of Restricted Payments made in reliance upon this clause (v) shall not exceed the Available Amount at such time; provided further that, (1) in the case of clauses (iv) and (v) above, no such Restricted Payment shall be made unless immediately after giving effect thereto the ~~use~~ sum of (I) the aggregate amount of available and unused Revolving Commitments and (II) the aggregate amount of unrestricted cash and cash equivalents owned by the Loan Parties on such date free and clear of all Liens (other than Liens created under the Loan Documents, Liens constituting Permitted Encumbrances (other than Permitted Encumbrances of the ~~Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a),~~ type referred to in clause (~~b), (h~~c) or (~~i)),~~ d) of the ~~Available Amount that is Not Otherwise Applied plus (C~~term “Permitted Encumbrances”) the Available Equity Amount that is Not Otherwise Applied; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; (xi) Holdings may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other ~~similar Investment~~nonconsensual Liens arising as a matter of law) shall exceed $50,000,000 and (b2) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiii) payments made or expected to be made by Holdings, any Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to 5.00 to 1.0 and (B) there is no continuing Event of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of ~~payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments);~~ dividends declared by the Borrower in reliance on clause (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make Restricted Payments in cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (xviiiiv) above, and notwithstanding clause (1) above or the ~~Borrowers will be entitled to classify or later reclassify (based on circumstances existing~~ continuance of a Default, the Borrower may pay any such dividends within 30 days after the date of declaration thereof if such payment would have been permitted on the date of ~~such reclassification) such Restricted Payment (or portion~~ the declaration thereof~~) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a)~~. (b) ~~Neither Holdings, Intermediate Holdings nor any~~ The Borrower ~~will~~will not, nor will ~~they~~ it permit any ~~Restricted~~ Subsidiary to~~, make or pay~~, directly or indirectly, prepay, redeem, purchase, defease or otherwise satisfy prior to the scheduled maturity thereof in any manner, or make any payment ~~or other distribution (whether~~ in cash, securities or other property) of or in respect of principal of or interest on any Junior Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination violation of any ~~Junior Financing~~subordination terms of, ~~except: (i) payment of regularly scheduled interest and principal payments as, in the form of payment and when due in respect of~~ any Indebtedness, ~~other than payments~~ except (a) the prepayment of the Loans in ~~respect~~ accordance with the terms of ~~any Junior Financing prohibited by~~ this Agreement, (b) regularly scheduled or required repayments or redemptions of Indebtedness set forth in Schedule 6.01, (c) with the ~~subordination provisions thereof; (ii) refinancings of Junior Financing Indebtedness with~~ proceeds of ~~other Junior Financing~~ Refinancing Indebtedness permitted to be inincurred in compliance with Section 6.01 and (d) so long as (x) no Default or Event of Default has occurred and is continuing and (y) the Borrower and its Subsidiaries shall be in compliance on a pro forma basis with the covenants set forth in Sections 6.12 and 6.13, such compliance to be determined on the basis of the financial information most recently delivered to the Administrative Agent and the Lenders pursuant to Section 5.01(a) or (b) as though such payment had been made as of the first day of the fiscal period covered thereby, the Borrower and its Subsidiaries may make any such payments in an aggregate amount equal to the portion, if any, of the Available Amount on such date that the Borrower elects to apply to this clause (d), such election to be specified in a written notice of a Financial Officer of the Borrower calculating in reasonable detail the Available Amount immediately prior to such election and the amount thereof elected to be so applied.

Appears in 1 contract

Sources: Credit Agreement (PharMerica CORP)

Restricted Payments; Certain Payments of Indebtedness. (a) ~~Neither Holdings~~The Borrower will not, ~~Intermediate Holdings nor any Borrower will, nor~~ and will ~~they~~ not permit any Restricted ~~Subsidiary~~Subsidiary to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, except: (i) ~~Each Borrower and~~ each Restricted Subsidiary may make Restricted Payments to ~~Intermediate Holdings, a~~ the Borrower or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a ~~wholly-owned~~ Wholly Owned Subsidiary of a the Borrower, such Restricted Payment is made to ~~Intermediate Holdings, such~~ the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests; (ii) ~~payments or distributions to satisfy dissenters’ or appraisal rights, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of assets (other than with respect to~~ the ~~Transactions) that complies with Section 6.03; (iii) Holdings~~ Borrower and ~~any Intermediate Holdings~~ each Restricted Subsidiary may declare and make dividend payments or other distributions payable solely in the Equity Interests of such Person; (iviii) Restricted Payments made ~~in connection~~ on or substantially contemporaneously with ~~or in order~~ the Effective Date to consummate the ~~Transactions (including~~Transactions, ~~without limitation, (A) cash payments to holders of Equity Interests of Target as provided by the Acquisition Agreement, (B) Restricted Payments to direct and indirect parent companies of Holdings~~ including to finance ~~a portion~~ the payment of the consideration for the Acquisition and (C) other payments with respect to working capital adjustments or otherwise, to the extent contemplated by the Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv))Transaction Costs; (viv) repurchases of Equity Interests in Holdings (or ~~Restricted Payments by Holdings to allow repurchases of Equity Interest in~~ any direct or indirect parent of Holdings) ), any Intermediate Parent, the Borrower or ~~Intermediate Holdings~~ any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants ~~or other incentive interests~~ if such Equity Interests represent a portion of the exercise price or withholding taxes payable in connection with the exercise of such ~~stock~~ options or warrants or other incentive ~~interest~~interests; (viv) Restricted Payments to Holdings or any Intermediate Parent, which Holdings or such Intermediate Parent may use to redeem, acquire, ~~retire~~ retire, repurchase or ~~repurchase~~ settle its Equity Interests (or any options, warrants, restricted stock ~~units~~ or stock appreciation rights or ~~other equity-linked interests~~ similar securities issued with respect to any of such Equity Interests) or to service Indebtedness incurred by Holdings or any Intermediate Parent to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred by Holdings or an Intermediate Parent to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests) ), held directly or indirectly by current or former officers, managers, consultants, ~~directors and~~ members of the Board of Directors, employees or independent contractors (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), ~~Holdings~~any Intermediate Parent, the ~~Borrowers~~ Borrower and ~~the~~ its Restricted Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, ~~profits interest,~~ employment termination agreement or any other employment agreements or equity holders’ ~~agreement; provided that the~~ agreement in an aggregate amount ~~of Restricted Payments permitted by this clause (vi)~~ after the Effective Date, together with the aggregate amount of loans and advances to Holdings or an Intermediate Parent made pursuant to Section 6.04(m) in lieu ~~thereof~~of Restricted Payments permitted by this clause (v), ~~shall~~ not to exceed ~~the sum of (A)~~ the greater of $~~15.0 million~~ 20,000,000 and ~~5.0~~17.0% of Consolidated EBITDA ~~for the most recently ended Test Period~~ in any ~~fiscal~~ calendar year ~~of Holdings (which subsequent to an IPO shall be increased to the greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period~~ with unused amounts in any ~~fiscal~~ calendar year ~~of Holdings), (B) the~~ being carried over to succeeding calendar years; provided that such amount in any ~~fiscal~~ calendar year ~~equal~~ may be increased by (1) an amount not to exceed the cash proceeds of key man life insurance policies received by ~~Holdings,~~ the ~~Borrowers~~ Borrower (or by Holdings or an Intermediate Parent and contributed to the Borrower) or the Restricted Subsidiaries after the Effective Date, or (C2) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests amount of any ~~direct or indirect Parent Entity or management investment vehicle~~bona fide cash bonuses otherwise payable to members of the Board of Directors, ~~in each case to any future~~consultants, ~~present or former~~ officers, employees~~, directors~~, managers or ~~consultants~~ independent contractors of Holdings, ~~any of its Subsidiaries~~ an Intermediate Parent, the Borrower or any ~~direct~~ Restricted Subsidiary that are foregone in return for the receipt of Equity Interests, the fair market value of which is equal to or ~~indirect Parent Entity or management investment vehicle that occurs after~~ less than the ~~Effective Date, to the extent the cash proceeds from the sale~~ amount of such ~~Equity Interests are contributed to Holdings~~ cash bonuses, which, if not used in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year year, may be carried forward to ~~succeeding~~ any subsequent fiscal ~~years;~~year; provided further that cancellation of Indebtedness owning to the Borrower or any Restricted Subsidiary from members of the Board of Directors, consultants, officers, employees, managers or independent contractors (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings, any Intermediate Parent, the Borrower or any Restricted Subsidiary in connection with a repurchase of Equity Interests of Holdings, any Intermediate Parent or the Borrower will not be deemed to constitute a Restricted Payment for purposes of this Section 6.07 or any other provisions of this Agreement. (~~vii~~vi) ~~Holdings~~ the Borrower and ~~any Intermediate Holdings~~ its Restricted Subsidiaries may make Restricted Payments in ~~cash~~cash to Holdings and any Intermediate Parent: (A) for the purpose of funding, without duplication ~~of any Permitted Tax Distribution, the proceeds of which shall be used~~ (i) payments by Holdings ~~or any Intermediate Holdings to pay~~ (or ~~to make Restricted Payments to allow~~ any direct or indirect parent of ~~Holdings to pay~~Holdings), ~~for~~ any ~~taxable period for which Holdings and/or~~ Intermediate Parent (and any ~~of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a~~ direct or indirect ~~parent of Holdings~~ Subsidiary thereof with respect to which the Borrower is ~~the common parent (~~a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (a)(vii)(A) shall not exceed the Tax liability that Holdings and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this subclause (ASubsidiary) in respect of Taxes directly payable by such entities, including any franchise or similar taxes, fees and expenses, and (ii) any income Taxes (including quarterly estimated tax payments) required to be paid by Holdings and its direct or indirect equity interest holders and any Intermediate Parent on income attributable to the Borrower and its Subsidiaries for any taxable year; provided that any such amount with respect to the income of any Unrestricted ~~Subsidiaries of Holdings may~~ Subsidiary for any taxable period shall be ~~made only~~ limited to the ~~extent that~~ amount actually paid with respect to such period by such Unrestricted Subsidiary to the Borrower or its Restricted Subsidiaries ~~have made cash payments~~ for the purpose of funding the payment of such ~~purpose to Holdings~~Taxes (collectively, ~~the Borrowers or their Restricted Subsidiaries~~“Tax Distributions”); (B) the proceeds of which shall be used by Holdings (or any direct or indirect parent of Holdings) or any Intermediate ~~Holdings~~ Parent to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, ~~accounting, tax reporting~~ accounting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by ~~directors~~ members of the Board of Directors or ~~officers~~ officers, employees, directors, managers, consultants or independent contractors of Holdings (or any direct or indirect parent ~~thereof~~ thereof) or any Intermediate ~~Holdings)~~ Parent attributable to the ownership or operations of Holdings, the ~~Borrowers~~ Borrower and ~~the~~ its Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of ~~Holdings,~~ the ~~Borrowers~~ Borrower and ~~the~~ its Restricted Subsidiaries and (y) otherwise permitted to be paid by ~~Holdings,~~ the ~~Borrowers~~ Borrower and ~~the~~ its Restricted Subsidiaries under this ~~Agreement and~~ Agreement, (4) ~~payments~~ amounts due and payable pursuant to any investor management agreement entered into with any of the Sponsors as such investor management agreement is in effect on the Effective Date (to the extent that such amounts are reasonably satisfactory to the Administrative Agent) and (5) amounts that would otherwise be permitted to be paid ~~directly by Holdings, the Borrowers or the Restricted Subsidiaries~~ pursuant to Section ~~6.09(iii~~6.08(iii) or (xxi); (C) the proceeds of which shall be used by Holdings or any ~~Intermediate Holdings to pay (or to make Restricted Payments to allow any~~ direct or indirect parent ~~of Holdings~~ thereof or Intermediate Parent to ~~pay)~~ pay franchise and similar Taxes, and other fees and expenses, required to maintain its ~~organizational~~ corporate or other legal existence; (D) ~~the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E)~~ to finance any Investment made by Holdings or any Intermediate Parent that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04 ~~other than Section 6.04(m~~(including required payments of Earn-Outs in connection therewith); provided that (1A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2B) Holdings or any Intermediate ~~Holdings~~ Parent shall, immediately following the closing thereof, cause (x1) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to ~~Holdings,~~ the ~~Borrowers~~ Borrower or ~~the~~ its Restricted Subsidiaries or (y2) the Person formed or acquired to merge into or consolidate with ~~Holdings,~~ the ~~Borrowers~~ Borrower or any of the Restricted Subsidiaries to the extent such ~~merger, amalgamation~~ merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any equity or debt offering not prohibited by this Agreement; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the ~~Borrowers~~ Borrower and ~~the~~ its Restricted Subsidiaries; and (G) the proceeds of which shall be used ~~by Holdings or any Intermediate Holdings to pay (or~~ to make ~~Restricted Payments to allow any direct or indirect parent thereof to pay~~payments permitted by clause (b)(iv) ~~fees~~ and ~~expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement~~ (~~whether or not such offering or other transaction is successful)~~b)(v) of Section 6.07; (~~viii~~vii) in addition to the foregoing Restricted Payments, the ~~Borrowers and any Intermediate Holdings~~ Borrower may make additional Restricted Payments to any Intermediate Holdings and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings DebtPayments, in an aggregate amount, when taken together with the aggregate amount of loans and advances ~~to Holdings~~ previously made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (~~viii~~vii), not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as no Event of Default shall have occurred and be continuing (or, in the case of the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h) or (i)), the Available Amount that is Not Otherwise Applied as in effect immediately prior to the time of making of such Restricted Payment, plus (CB) the Available Equity Amount that is Not Otherwise ~~Applied~~Applied as in effect immediately prior to the time of making of such Restricted Payment; provided that any Restricted Payment made in reliance on preceding clause (A), to the extent made using the Retained ECF Basket, shall be subject to (I) no Event of Default having occurred and be continuing or resulting therefrom and (II) before and after giving Pro Forma Effect to such Restricted Payment, on a Pro Forma Basis, the Total Leverage Ratio being less than or equal to 4.30 to 1.00 as of the end of the mostly recently ended Test Period as of such time (in each case, tested at the time of declaration of such Restricted Payment); (ixviii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed therebycontributions; (xix) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; (xix) Restricted Payments to Holdings or any Intermediate Parent, which Holdings or any Intermediate Parent may use to (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiiixi) payments made or expected to be made by Holdings, any Intermediate Parent, the Borrower or any Restricted Subsidiary in respect of withholding or similar ~~taxes~~ Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled ~~Affiliates, Immediate Family Members~~ Affiliates or ~~Permitted Transferees~~permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xii) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, any Intermediate Parent, the Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xiii) so long as no Event of Default shall have occurred and be continuing or would result therefrom, the annual declaration and payment of Restricted Payments on Holdings’ or the Borrower’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), of up to $79,500,000; (xiv) [reserved]; (xv) so long as no Event of Default shall have occurred and be continuing or would result therefrom, additional Restricted Payments in an amount not to exceed the greater of $50,000,000 and 42.0% of Consolidated EBITDA on a Pro Forma Basis for the most recently ended Test Period; (xvi) the Borrower and its Restricted Subsidiaries may make Restricted Payments in securities or other property (other than cash) to Holdings and any Intermediate Parent so long as the relevant assets are promptly contributed to the Borrower or a Restricted Subsidiary; (xvii) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is equal to or less than ~~or equal~~ 3.55 to ~~5.00 to 1.0~~ 1.00 and (B) ~~there is~~ no ~~continuing~~ Event of ~~Default; (xv) Restricted Payments constituting~~ Default exists or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expensewould result therefrom; and (xviii) ~~Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make~~ additional Restricted Payments to finance any payments required to be made by Public Parent pursuant to the Tax Receivable Agreement, other than any accelerated payments or payments calculated based on valuation assumptions without regard to actual tax savings, including any such payments arising from a “Change of Control” (as defined in ~~cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted~~ the Tax ~~Distributions. For purposes of determining compliance with this Section 6.08(a~~Receivable Agreement), in a contractual breach, or by election of any party to the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a)Tax Receivable Agreement. (b) ~~Neither Holdings~~The Borrower will not, ~~Intermediate Holdings nor any Borrower will, nor~~ and will ~~they~~ not permit any Restricted Subsidiary to, make or ~~pay~~agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoing, in each case, on or prior to the date that is one year prior to the scheduled maturity of such Junior Financing, except: (i) payment of regularly scheduled interest and principal ~~payments as~~payments, ~~in the form~~ mandatory offers to repay, repurchase or redeem, mandatory prepayments of principal premium and interest, and payment of fees, expenses and ~~when due in~~ indemnification obligations, with respect ~~of any Indebtedness~~to such Junior Financing, other than payments in respect of any Junior Financing prohibited by the subordination provisions thereof; (ii) refinancings of Indebtedness to the extent permitted by Section 6.01; (1) the conversion of any Junior Financing ~~Indebtedness with proceeds~~ to Equity Interests (other than Disqualified Equity Interests) of ~~other~~ Holdings or any of its direct or indirect parent companies or any Intermediate Parent and (2) any payment that is intended to prevent any Junior Financing ~~Indebtedness permitted~~ from being treated as an “applicable high yield discount obligation” within the meaning of Section 163(i)(1) of the Code; (iv) prepayments, redemptions, purchases, defeasances and other payments in respect of any Junior Financing prior to ~~be in~~the date that is one year prior to its scheduled maturity; provided that after giving effect to such prepayments, redemptions, purchases, defeasances or other payments (A) on a Pro Forma Basis, the Total Leverage Ratio is equal to or less than 3.55 to 1.00 and (B) no Event of Default exists

Appears in 1 contract

Sources: Credit Agreement (E2open Parent Holdings, Inc.)

Restricted Payments; Certain Payments of Indebtedness. (a) ~~Neither Holdings, Intermediate Holdings nor any~~ The Borrower ~~will~~will not, nor will ~~they~~ it permit any of its Restricted ~~Subsidiary~~Subsidiaries, to pay or make, directly or indirectly, any Restricted Payment, except: (i) ~~Each~~ the Borrower and each Restricted Subsidiary may make Restricted Payments to ~~Intermediate Holdings~~Parent, a the Borrower or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a wholly-owned Subsidiary of a the Borrower, such Restricted Payment is made to ~~Intermediate Holdings, such~~ the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests; (ii) payments or distributions to satisfy dissenters’ or appraisal rights, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of assets ~~(other than with respect to the Transactions)~~ that complies with Section 6.03; (iii) ~~Holdings~~ the Borrower and ~~any Intermediate Holdings~~ each Restricted Subsidiary may declare and make dividend payments or other distributions payable solely in the Equity Interests of such Person; (iv) any Restricted ~~Payments~~ Payment on or after the Effective Date made in connection with or as a result of the Transactions and the fees and expenses related thereto or used to fund amounts owed in ~~order to consummate~~ connection with the Transactions (~~including~~including dividends or distributions to any direct or indirect parent company of the Borrower to permit payment by such parent company of such amounts), ~~without limitation~~including the settlement of claims or actions in connection with or as a result of the Acquisition or to satisfy indemnity or other similar obligations or any other earnouts, ~~(A) cash~~ purchase price adjustments, working capital adjustments and any other payments ~~to holders~~ under or as a result of ~~Equity Interests of Target as provided by~~ the Acquisition Agreement, (B) Restricted Payments to direct and indirect parent companies of Holdings to finance a portion of the consideration for the Acquisition and (C) other payments with respect to working capital adjustments or otherwise, to the extent contemplated by the Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv)); (va) repurchases of Equity Interests in ~~Holdings~~ the Borrower (or Restricted Payments by ~~Holdings~~ the Borrower to allow repurchases of Equity Interest in any direct or indirect parent of ~~Holdings~~the Borrower) or ~~Intermediate Holdings~~ any Restricted Subsidiary of the Borrower deemed to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price of such stock options or warrants or other incentive ~~interest;~~ interest and (vi) Restricted Payments to Holdings which Holdings may use to redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted stock units or stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests) held by current or former officers, managers, consultants, directors and employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), Holdings, the Borrowers and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, profits interest, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that the aggregate amount of Restricted Payments permitted by this clause (vi) after the Effective Date, together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu thereof, shall not exceed the sum of (Ab) the greater of $15.0 million and 5.0% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings (which subsequent to an IPO shall be increased to the greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings), (B) the amount in any fiscal year equal to the cash proceeds of key man life insurance policies received by Holdings, the Borrowers or the Restricted Subsidiaries after the Effective Date, (C) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year may be carried forward to succeeding fiscal years; (vii) Holdings and any Intermediate Holdings may make Restricted Payments in cash: (A) without duplication of any Permitted Tax Distribution, the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (a)(vii)(A) shall not exceed the Tax liability that Holdings and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers or their Restricted Subsidiaries; (B) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof or any Intermediate Holdings) attributable to the ownership or operations of Holdings, the Borrowers and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of Holdings, the Borrowers and the Restricted Subsidiaries and (y) otherwise permitted to be paid by Holdings, the Borrowers and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the Borrowers or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x); (C) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence; (D) the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(m); provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) Holdings or any Intermediate Holdings shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to Holdings, the Borrowers or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with Holdings, the Borrowers or any of the Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrowers and the Restricted Subsidiaries; and (G) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful); (viii) in addition to the foregoing constituting Restricted Payments, the Borrowers and any Intermediate Holdings may make additional Restricted Payments to any Intermediate Holdings and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt, in an aggregate amount, when taken together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii), not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as no Event of Default shall have occurred and be continuing (or, in the case of the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h) or (i)), the Available Amount that is Not Otherwise Applied plus (C) the Available Equity Amount that is Not Otherwise Applied; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases acquisition of Equity Interests ~~in consideration of such payments including deemed repurchases in connection with the exercise of stock options~~ held by joint venture partners pursuant to put and the vesting of restricted stock and restricted stock units; (xi) Holdings may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiii) payments made or expected to be made by Holdings, any Borrower or any Restricted Subsidiary in respect of withholding call or similar ~~taxes payable upon exercise of Equity Interests by~~ arrangements under any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding joint venture or similar ~~taxes~~agreement; (xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to 5.00 to 1.0 and (B) there is no continuing Event of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make Restricted Payments in cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a). (b) Neither Holdings, Intermediate Holdings nor any Borrower will, nor will they permit any Restricted Subsidiary to, make or pay, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, except: (i) payment of regularly scheduled interest and principal payments as, in the form of payment and when due in respect of any Indebtedness, other than payments in respect of any Junior Financing prohibited by the subordination provisions thereof; (ii) refinancings of Junior Financing Indebtedness with proceeds of other Junior Financing Indebtedness permitted to be in

Appears in 1 contract

Sources: Credit Agreement (Sinclair Broadcast Group Inc)

Restricted Payments; Certain Payments of Indebtedness. (a) Neither ~~Holdings, Intermediate Holdings~~ Parent nor ~~any Borrower~~ Borrowers will, nor will they permit any ~~Restricted Subsidiary~~Subsidiary of a Borrower to, to pay or make, directly or indirectly, any Restricted Payment, except: (i) ~~Each~~ each Borrower and each ~~Restricted~~ Subsidiary of a Borrower may make Restricted Payments to ~~Intermediate Holdings,~~ a Borrower or any ~~other Restricted Subsidiary; provided~~ Subsidiary of a Borrower that is a Loan Party (and, in the case of any such ~~Restricted Payment by a Restricted~~ Subsidiary that is not a wholly-owned ~~Subsidiary of a Borrower~~Subsidiary, ~~such Restricted Payment is made to Intermediate Holdings, such Borrower, any Restricted Subsidiary and~~ to each other owner of Equity Interests of such ~~Restricted~~ Subsidiary ratably based on their relative ownership interests of the relevant class of Equity Interests); (ii) ~~payments or distributions~~ to ~~satisfy dissenters’ or appraisal rights~~the extent constituting a Restricted Payment, ~~pursuant to or in connection with~~ any Borrower and any Subsidiary of a ~~consolidation, amalgamation, merger or transfer of assets~~ Borrower may consummate any transaction permitted by Section 7.03 and Section 7.04 (other than ~~with respect to the Transactions~~Section 7.04(j), (m), (n), (q) ~~that complies with Section 6.03~~and (t)); (iii) ~~Holdings and any Intermediate Holdings may declare and make dividend payments or other distributions payable solely in~~ to the extent constituting a Restricted Payment, the conversion of Convertible Notes into Equity Interests ~~of such Person~~pursuant to the terms thereof; (iv) ~~Restricted Payments~~ payments to Parent to enable Parent to make repurchases, redemptions or reductions in number of shares issued (including, by utilization of the "net share" concept) by Parent of any Equity Interests in Parent, as applicable, made in connection with ~~or in order~~ (I) the surrender of shares by employees to ~~consummate~~ (x) facilitate the ~~Transactions (including, without limitation~~payment by such employees of the taxes associated with compensation received by such employees under Parent's stock-based compensation plans and, (Ay) ~~cash payments~~ to ~~holders~~ satisfy the purchase price of ~~Equity Interests~~ nonqualified stock options and (II) the deduction by Parent, of ~~Target as provided by the Acquisition Agreement, (B) Restricted Payments to direct and indirect parent companies of Holdings to finance~~ a portion of restricted stock or performance shares previously (i.e. prior to the ~~consideration~~ date of the deduction) granted to employees under Parent's stock-based compensation plans to facilitate the payment by such employees of the taxes associated with the vesting of such restricted stock and performance shares, in an amount not to exceed (for ~~the Acquisition~~ both clauses (I) and (C) other payments with respect to working capital adjustments or otherwise, to the extent contemplated by the Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (ivII)), together with all Restricted Payments made pursuant to Section 7.08(a)(xiv), $2,000,000 in the aggregate in any fiscal year; provided, in each case, that prior to and after giving effect to such repurchases, redemptions or reductions no Default or Event of Default exists or is continuing; (v) repurchases of Equity Interests in Holdings (or Restricted Payments by Holdings to allow repurchases of Equity Interest in any direct or indirect parent of Holdings) or Intermediate Holdings deemed to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price of such stock options or warrants or other incentive interest; (vi) Restricted Payments to Holdings which Holdings Borrowers may use to redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted stock units or stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) (or make Restricted Payments in cash to ~~allow any~~ Parent to the extent of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests) held by current or former officers, managers, consultants, directors and employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), Holdings, the ~~Borrowers and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise~~ conditions set forth in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, profits interest, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that the aggregate amount of Restricted Payments permitted by this clause (~~vi) after the Effective Date, together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu thereof, shall not exceed the sum of (~~A) the greater of $15.0 million and 5.0% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings (which subsequent to an IPO shall be increased to the greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings), (B) ~~the amount in any fiscal year equal to the cash proceeds of key man life insurance policies received by Holdings, the Borrowers~~ or ~~the Restricted Subsidiaries after the Effective Date,~~ (C) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year may be carried forward to succeeding fiscal years; (vii) Holdings and any Intermediate Holdings may make Restricted Payments in cashbelow: (A) ~~without duplication~~ with respect to any taxable year a Borrower is member (or treated as a disregarded entity of a member) of a consolidated, combined, or unitary income tax group ("Tax Group") with Parent as the corporate parent of such Tax Group that is responsible under applicable law for the income or similar Taxes of Borrower and any ~~Permitted Tax Distribution~~Subsidiary of such Borrower, such Borrower may make cash distributions to Parent the proceeds of which shall be used by ~~Holdings or any Intermediate Holdings~~ Parent to pay (the income or ~~to make~~ similar Taxes of such Borrower and any Subsidiary of such Borrower and the Tax Group; provided that Restricted Payments pursuant to ~~allow any direct or indirect parent~~ this subclause (A) shall not exceed the amount of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, and local income or ~~foreign~~ similar Taxes ~~(as applicable) of~~ such ~~Tax Group~~ Borrowers would have paid for such taxable ~~period that are attributable to the~~ year and any prior taxable year had they solely filed a consolidated, unitary, or combined income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (a)(vii)(A) shall not exceed the Tax liability that Holdings and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers or their Restricted Subsidiariestax return among themselves; (B) the proceeds of which shall be used by ~~Holdings or any Intermediate Holdings~~ Parent to pay ~~(or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay)~~ (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) ), that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by ~~directors~~ directors, officers, members of management, managers, employees or ~~officers~~ consultants of ~~Holdings (or any parent thereof or any Intermediate Holdings)~~ Parent attributable to the ownership or operations of ~~Holdings~~any Borrower and any Subsidiary of a Borrower, ~~the Borrowers~~ and ~~the Restricted Subsidiaries,~~ (3) franchise and similar Taxes, and other fees and expenses ~~(x) due and payable by any of Holdings, the Borrowers and the Restricted Subsidiaries and (y) otherwise permitted~~ required to be paid by Holdings, the Borrowers and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the Borrowers or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x);maintain its organizational existence; and (C) the proceeds of which shall be used by ~~Holdings or any Intermediate Holdings~~ Parent to ~~pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes~~satisfy its obligations under the Convertible Notes, and other fees and expenses, required to maintain its organizational existence; (D) the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(m); provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) Holdings or any Intermediate Holdings shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to Holdings, the Borrowers or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with Holdings, the Borrowers or any of the Restricted Subsidiaries to the extent such ~~merger, amalgamation or consolidation is~~ payments are permitted ~~in Section 6.03) in order to consummate such Investment, in each case in accordance with~~ under the ~~requirements of Sections 5.11 and 5.12~~Intercreditor Agreement; (Fvi) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrowers and the Restricted Subsidiaries; and[reserved]; (Gvii) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful)[reserved]; (viii) ~~in addition~~ to the ~~foregoing~~ extent constituting a Restricted ~~Payments~~Payment, payments of the ~~Borrowers and any Intermediate Holdings may make additional Restricted Payments~~ Convertible Notes made pursuant to ~~any Intermediate Holdings and Holdings,~~ an exchange for or out of the proceeds of ~~which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any~~ Debt constituting a Permitted Holdings Debt, in an aggregate amount, when taken together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii), not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as no Event of Default shall have occurred and be continuing (or, in the case Refinancing of the ~~use of the Starter Basket that is Not Otherwise Applied, no Event of Default~~ Convertible Notes permitted under Section ~~7.01(a~~7.01(xxiii)~~, (b), (h) or (i)), the Available Amount that is Not Otherwise Applied plus (C) the Available Equity Amount that is Not Otherwise Applied~~; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; (xi) ~~Holdings~~ Parent may, and Borrowers may make Restricted Payments to Parent to enable Parent to (aA) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof ~~or any Permitted Acquisition (or other similar Investment)~~ and (bB) honor any conversion request by a holder of convertible ~~Indebtedness~~ Debt and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible ~~Indebtedness~~ Debt in accordance with its terms, in both cases of (A) and (B), in an amount not to exceed $250,000 in the aggregate (or $350,000 in the aggregate so long as no Event of Default has occurred and is continuing); (xii) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO[reserved]; (xiii) any Restricted Payment made on the Effective Date required to consummate the Plan of Reorganization; (xiv) payments made ~~or expected to be made~~ by ~~Holdings~~Parent, any Borrower or any ~~Restricted~~ Subsidiary of a Borrower (including payments to Parent to enable Parent to make such payments) in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled ~~Affiliates, Immediate Family Members~~ Affiliates or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar ~~taxes;~~ taxes (~~xiv) additional~~ including payments to Parent in respect of the foregoing), in an amount not to exceed, together with all Restricted ~~Payments; provided that after giving effect~~ Payments made pursuant to ~~such Restricted Payment (A) on a Pro Forma Basis~~Section 7.08(a)(iv), $2,000,000 in the ~~Total Leverage Ratio is less than or equal to 5.00 to 1.0 and (B) there is no continuing Event of Default~~aggregate in any fiscal year; (xv) Parent may make Restricted Payments ~~constituting or otherwise~~ to holders of Parent Preferred Equity Interests (including, without limitation, Restricted Payments of International Net Proceeds solely to the extent International Net Proceeds exceeds the amount of Escrow Funds), provided that each of the following conditions is satisfied: (1) No such Restricted Payments are made until after both the Term Loan Debt and the Convertible Notes Debt have been paid in ~~connection with or relating to any IPO Reorganization Transactions (limited, in~~ full and the ~~case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments)~~Term Loan Debt Documents and the Convertible Notes Documents have been terminated; (~~xvi~~2) at the ~~distribution~~time of the making such Restricted Payment and after giving pro forma effect thereto, ~~by dividend or otherwise,~~ no Event of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments)Default has occurred and is continuing; (~~xvii~~3) ~~the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01~~ Administrative Agent has received updated financial projections, reasonably satisfactory to Administrative Agent, that demonstrate that after giving pro forma effect to the ~~extent~~ making of such ~~dividends are included~~ Restricted Payment the Loan Parties will be in compliance with the ~~calculation of Consolidated Interest Expense~~financial covenants set forth in Section 6.14 (whether or not an Covenant Testing Period is then in effect); and (~~xviii~~4) ~~Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make~~ either (x) no such Restricted Payments may be made with International Net Proceeds unless the Loan Parties are in ~~cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining~~ compliance with ~~this~~ Section ~~6.08(a),~~ 6.23 and Escrowed Funds have been remitted to the Escrow Account in an amount sufficient to repay the ~~event that a proposed Restricted Payment~~ Obligations in full (~~or a portion thereof~~including the Make-Whole Premium and Prepayment Premium) ~~meets~~ calculated is if the ~~criteria~~ Obligations were paid in full as of ~~clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on~~ the date of ~~such reclassification~~the International Business Disposition, or (y) Administrative Agent has received updated financial projections, reasonably satisfactory to Administrative Agent, that demonstrate that after giving pro forma effect to the making of such Restricted Payment ~~(or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a)~~Availability is not less than $10,000,000. (b) Neither ~~Holdings, Intermediate Holdings~~ Parent nor any Borrower will, nor will they permit any ~~Restricted~~ Subsidiary of a Borrower to, make or pay, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any ~~Junior Financing~~such Debt prior to the scheduled maturity date thereof (collectively, "Restricted Debt Payments"), except: (i) payment of regularly scheduled interest and principal payments, payments asof fees, ~~in the form of payment~~ expenses and indemnification obligations when due in respect of any ~~Indebtedness~~Debt, other than payments in respect of any Junior Financing prohibited by the subordination provisions thereof; (ii) refinancings of ~~Junior Financing Indebtedness~~ Debt with proceeds of ~~other Junior Financing Indebtedness~~ Permitted Refinancing Debt permitted to be inincurred under Section 7.01; (iii) the conversion of any Junior Financing to or payments with Equity Interests (other than Disqualified Equity Interests) of Parent; (iv) prepayments, redemptions, purchases, defeasances and other payments or distributions in respect of Junior Financings prior to their scheduled maturity in an aggregate amount not to exceed an amount at the time of making any such prepayment, redemption, purchase, defeasance or other payment or distributions, together with any other such prepayment, redemption, purchase, defeasance or other payment or distributions made utilizing this clause (iv), not to exceed the portion, if any, of the amount of Restricted Debt Payments that such Borrower elects to apply pursuant to this clause (iv); (v) any Restricted Debt Payments made on the Effective Date required to consummate the Reorganization Plan; (vi) [reserved]; (vii) [reserved]; (viii) [reserved]; (ix) [reserved]; and (x) payments as part of an applicable high yield discount obligation or AHYDO catch-up payment. (c) Neither Parent nor any Borrower will, nor will they permit any Subsidiary of a Borrower to, amend or modify any documentation governing any Junior Financing, in each case if the effect of such amendment or modification (when taken as a whole) is in violation of a Subordination Agreement. (d) [reserved]; (e) No Loan Party shall, or shall permit any other Loan Party to, make any voluntary, optional payment or prepayment including any mandatory excess cash flow prepayment on account of, or optional redemption or acquisition for value of any portion of, any Debt (other than that arising under (i) the Loan Documents in accordance with the provisions thereof, (ii) the Term Loan Documents in accordance with the provisions thereof and the Intercreditor Agreement, and (iii) the Convertible Notes Documents in accordance with the provisions thereof and the Intercreditor Agreement).

Appears in 1 contract

Sources: Loan and Security Agreement (INVACARE HOLDINGS Corp)

Restricted Payments; Certain Payments of Indebtedness. (a) ~~Neither Holdings~~Holdings and the Borrower will not, ~~Intermediate Holdings nor any Borrower will, nor~~ and will ~~they~~ not permit any Restricted ~~Subsidiary~~Subsidiary to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, except: (i) ~~Each Borrower and~~ each Restricted Subsidiary may make Restricted Payments to ~~Intermediate Holdings, a~~ the Borrower or any other Restricted Subsidiary; provided ~~that~~ that, in the case of any such Restricted Payment by a Restricted Subsidiary that is not a ~~wholly-owned~~ Wholly Owned Subsidiary of a the Borrower, such Restricted Payment is made to ~~Intermediate Holdings, such~~ the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary pro rata based on their relative ownership interests of the relevant class of Equity ~~Interests~~Interests of such Restricted Subsidiary; (ii) ~~payments or distributions to satisfy dissenters’ or appraisal rights~~Holdings, ~~pursuant to or in connection with a consolidation, amalgamation, merger or transfer of assets (other than with respect to~~ the ~~Transactions) that complies with Section 6.03; (iii) Holdings~~ Borrower and ~~any Intermediate Holdings~~ each Restricted Subsidiary may declare and make dividend payments or other distributions payable solely in the Equity Interests of such ~~Person~~Person (other than Disqualified Equity Interests) and, in the case of Holdings, subject to the limitations set forth in Section 6.03(c)(v); (iii) cashless redemption or conversion of Equity Interests of Holdings in exchange for common stock of the SPAC; (iv) payments made or expected to be made by Holdings, the Borrower or any Restricted ~~Payments made~~ Subsidiary in ~~connection with~~ respect of withholding or ~~in order to consummate the Transactions (including~~similar taxes payable upon exercise, ~~without limitation, (A) cash payments to holders~~ vesting or settlement of Equity Interests ~~of Target as provided~~ (other than the New Holdings Preferred Equity) by ~~the Acquisition Agreement~~any future, present or former employee, director, officer, manager or consultant (Bor their respective controlled Affiliates or permitted transferees) ~~Restricted Payments to direct~~ and indirect parent companies of Holdings to finance a portion of the consideration for the Acquisition and (C) other payments with respect to working capital adjustments or otherwise, to the extent contemplated by the Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv)); (v) any repurchases of Equity Interests ~~in Holdings (or Restricted Payments by Holdings to allow repurchases of Equity Interest in any direct or indirect parent of Holdings) or Intermediate Holdings~~ deemed to occur upon exercise of stock options or warrants ~~or other incentive interests~~ if such Equity Interests represent a portion of the exercise price of such ~~stock~~ options or warrants or ~~other incentive interest~~required withholding or similar taxes; (viv) Restricted Payments to ~~Holdings~~ Holdings, which Holdings ~~may~~ shall use (A) to redeem, acquire, retire or repurchase shares of its Equity Interests through open market purchases or (B) to redeem, acquire, retire, repurchase or settle its Equity Interests (or any options, warrants, restricted stock ~~units~~ or stock appreciation rights or ~~other equity-linked interests~~ similar securities issued with respect to any of such Equity Interests) or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests) ), in each case in respect of this clause (B), held directly or indirectly by current or former officers, managers, consultants, ~~directors and~~ members of the Board of Directors, employees or independent contractors (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), ~~Holdings,~~ the ~~Borrowers and the~~ Borrower or any of its Restricted Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, ~~profits interest,~~ employment termination agreement or any other employment agreements or equity holders’ ~~agreement; provided that the~~ agreement in an aggregate amount ~~of Restricted Payments permitted by this clause (vi)~~ after the ~~Effective~~ Closing Date, together with (in the case of either preceding clause (A) or (B)) the aggregate amount of loans and advances to Holdings ~~made pursuant to Section 6.04(m) in lieu thereof, shall not exceed the sum of~~ (A) the greater of $15.0 million and 5.0% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings (which subsequent to an IPO shall be increased to the greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings), (B) the amount in any fiscal year equal to the cash proceeds of key man life insurance policies received by Holdings, the Borrowers or the Restricted Subsidiaries after the Effective Date, (C) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect ~~Parent Entity or management investment vehicle that occurs after the Effective Date,~~ parent thereof) made pursuant to ~~the extent the cash proceeds from the sale of such Equity Interests are contributed to Holdings~~ Section 6.04(l) in ~~the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment~~ lieu of Restricted Payments permitted by ~~virtue of~~ this clause (v), not to exceed (x) solely with respect to the ~~Available Equity Amount or are otherwise applied to increase any other basket hereunder~~ preceding clause (A), $1,000,000 in the aggregate, and (Dy) ~~the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of~~ collectively for the preceding ~~basket calculated pursuant to~~ clauses (A) and (B~~) above for~~ ), $1,000,000 in any ~~fiscal~~ calendar year and $5,000,000 in the aggregate; provided that, after giving effect to any such Restricted Payments made in reliance on the foregoing, on a Pro Forma Basis, the Total Net Leverage Ratio is equal to or less than 4.50 to 1.00; provided further that such Restricted Payment may only be ~~carried forward to succeeding fiscal years~~made in reliance on this clause (v); (~~vii~~vi) ~~Holdings~~ the Borrower and ~~any Intermediate Holdings~~ its Restricted Subsidiaries may make the following Restricted Payments in ~~cash~~cash to Holdings: (A) cash distributions from Borrower to Holdings distributed solely for the purpose of funding, without ~~duplication of any Permitted Tax Distribution~~duplication, ~~the proceeds of which shall be used~~ (i) payments by Holdings in respect of taxes directly payable by Holdings, including any franchise or ~~any Intermediate~~ similar taxes directly payable by Holdings, and (ii) so long as the Borrower and Holdings are flow-through entities for U.S. federal and state income tax purposes, payments to ~~pay (or to make Restricted Payments to allow any direct or indirect parent~~ the members of Holdings ~~to pay),~~ for any taxable ~~period for which Holdings and/or any of~~ year, in an aggregate amount not to exceed the amount that the Borrower and its Subsidiaries ~~are~~ would have been required to pay if, for such taxable period, the Borrower and such Subsidiaries had been members of a consolidated, combined or ~~unitary~~ similar income tax group ~~for U.S. federal and/or applicable state, local or foreign income Tax purposes~~ of corporations of which ~~a direct or indirect parent of~~ Holdings is the common parent that files on a consolidated, combined or similar basis (a collectively, “Tax ~~Group~~Distributions”); provided, ~~the portion~~ however, that (x) any distributions pursuant to this clause (ii) in respect of any ~~U.S. federal, state, local~~ Unrestricted Subsidiary shall be permitted only to the extent that cash distributions were made by such Unrestricted Subsidiary to the Borrower or ~~foreign Taxes (as applicable)~~ any of ~~such Tax Group~~ its Restricted Subsidiaries for such ~~taxable period that are attributable to~~ purpose and (y) for the ~~income~~ avoidance of ~~Holdings and/or its Subsidiaries; provided that Restricted Payments~~ doubt, in no event shall any distributions be made pursuant to this clause (a)(vii)(A) shall not exceed the Tax liability that Holdings and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this subclause (Aii) in respect of any ~~Taxes attributable to~~ income that the ~~income~~ holders of the New Holdings Preferred Equity or other Equity Interests of Holdings (or any parent thereof) may have as a result of any ~~Unrestricted Subsidiaries of~~ cash or non-cash dividends on the New Holdings ~~may be made only to the extent that~~ Preferred Equity or any such ~~Unrestricted Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers or their Restricted Subsidiaries~~other Equity Interests; (B) the proceeds of which shall be used by ~~Holdings or any Intermediate~~ Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, ~~accounting, tax reporting~~ accounting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of ~~business~~business and otherwise directly attributable to the operations of the Borrower and its the Restricted Subsidiaries, (2) any reasonable and customary indemnification claims made by ~~directors~~ members of the Board of Directors or ~~officers~~ officers, employees, directors, managers, consultants or independent contractors of Holdings (or any parent ~~thereof or any Intermediate Holdings~~thereof) directly attributable to the ownership or operations of Holdings, the ~~Borrowers~~ Borrower and ~~the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of Holdings, the Borrowers and the~~ its Restricted Subsidiaries and (y3) ~~otherwise permitted to be paid by Holdings, the Borrowers and the Restricted Subsidiaries under this Agreement and (4) payments~~ amounts that would otherwise be permitted to be paid ~~directly by Holdings, the Borrowers or the Restricted Subsidiaries~~ pursuant to Section ~~6.09(iii) or (x~~6.08(iii); (C) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence; (D) the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made pursuant to Section ~~6.04 other than Section 6.04(m)~~6.04; provided that (1A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2B) ~~Holdings or any Intermediate~~ Holdings shall, immediately following the closing thereof, cause (x1) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to ~~Holdings,~~ the ~~Borrowers~~ Borrower or ~~the~~ its Restricted Subsidiaries or (y2) the Person formed or acquired to merge into or consolidate with ~~Holdings,~~ the ~~Borrowers~~ Borrower or any of the Restricted Subsidiaries to the extent such ~~merger, amalgamation~~ merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (FD) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings to pay) fees and expenses related to any equity or debt offering not prohibited by this Agreement; provided, however, notwithstanding the foregoing, any fees or expenses incurred in connection with the issuance of the New Holdings Preferred Equity in respect of periods after the Closing Date only shall be permitted to be made or paid if justified under another clause of this Section 6.07(a) as a permitted Restricted Payment; and (E) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are directly attributable to the ~~ownership or operation~~ operations of Holdings, the ~~Borrowers~~ Borrower and ~~the~~ its Restricted Subsidiaries; and (G) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful); (~~viii~~vii) in addition to the foregoing Restricted ~~Payments~~Payments and so long as no Default or Event of Default shall have occurred and be continuing or would result therefrom, the ~~Borrowers and any Intermediate Holdings~~ Borrower may make additional Restricted Payments to ~~any Intermediate~~ Holdings (and ~~Holdings, the proceeds of which~~ Holdings in turn may ~~be utilized by Holdings to~~ make additional Restricted ~~Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt~~Payments), in an aggregate amount, when taken together with the aggregate amount of loans and advances ~~to Holdings~~ previously made pursuant to Section ~~6.04(m~~6.04(l) in lieu of Restricted Payments permitted by this clause (~~viii~~vii), not to exceed ~~the sum of~~ (A) ~~an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed~~ the greater of $~~75.0 million~~ 15,000,000 and 2520.5% of Consolidated EBITDA for the most recently ended Test Period ~~after giving Pro Forma Effect to the making of such Restricted Payment~~ plus (B) ~~so long as no Event of Default shall have occurred and be continuing (or~~to the extent that after giving effect to such Restricted Payment on a Pro Forma Basis, in the ~~case of the use of the Starter Basket that~~ Total Net Leverage Ratio is ~~Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h)~~ equal to or ~~(i))~~less than 3.9040 to 1.00, the Available Amount that is Not Otherwise Applied ~~plus~~ as in effect immediately prior to the time of making of such Restricted Payment; provided that the foregoing Total Net Leverage Ratio incurrence test shall not apply to uses of the Unrestricted Available Amount for purposes of this clause (~~C) the Available Equity Amount that is Not Otherwise Applied~~vii)(B); (ixviii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other than Disqualified Equity Interests) or with proceeds from substantially concurrent equity contributions or issuances of new Equity ~~Interests~~Interests (other than Disqualified Equity Interests and Cure Amounts); provided that (x) such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed ~~thereby~~thereby and (y) such amounts shall not increase the Available Amount; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; (xiix) Holdings may (and the Borrower may make Restricted Payments to Holdings to enable Holdings to) (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such ~~conversion~~ conversion; (x) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, the Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are cash and ~~may make payments on convertible Indebtedness~~ Permitted Investments); (xi) Restricted Payments in ~~accordance with its terms~~an aggregate amount equal to the sum of (x) Net Proceeds of new public or private issuances of Qualified Equity Interests (excluding Qualified Equity Interests the proceeds of which will be applied as Cure Amounts) of Holdings (or any parent thereof) which are contributed to the Borrower after the Closing Date, plus (y) Net Proceeds of capital contributions received by Holdings (and contributed to the Borrower) after the Closing Date (other than in respect of any Disqualified Equity Interest or applied as Cure Amounts); provided that any such Net Proceeds received by the Borrower pursuant to this clause (xi) shall not build the Available Amount; (xii) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiii) payments made or expected to be made by Holdings, any Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Net Leverage Ratio is equal to or less than ~~or equal~~ 2.6540 to ~~5.00 to 1.0~~ 1.00 and (B) ~~there is~~ no ~~continuing~~ Default or Event of ~~Default;~~Default exists or would result therefrom; and (xvxiii) ~~Restricted Payments constituting or otherwise made~~ the Borrower may pay cash dividends to Holdings for the purpose of enabling Holdings to pay, and Holdings may pay, regularly scheduled quarterly cash dividends on the New Holdings Preferred Equity in ~~connection with or relating~~ an aggregate amount for any quarterly period not to ~~any IPO Reorganization Transactions~~ exceed 1.25% of the aggregate liquidation preference of the New Holdings Preferred Stock as of the last day of the immediately preceding quarterly period of Holdings (~~limited~~or, in the case of ~~payments pursuant to a tax receivable agreement~~the initial quarterly cash dividend payment on the New Holdings Preferred Equity, ~~to Permitted Tax Receivable Payments); (xvi)~~ as of the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration Closing Date and ~~payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01~~ after giving effect to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make Restricted Payments in cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(aTransactions), in ~~the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses~~ each case, so long as (i) ~~through~~ no Specified Default or Event of Default then exists or would result therefrom and (~~xviii~~ii) ~~above~~after giving effect to such Restricted Payment, on a Pro Forma Basis, the ~~Borrowers will be entitled~~ Total Net Leverage Ratio is equal to ~~classify~~ or ~~later reclassify~~ less than 4.50 to 1.00.(x) with respect to each fiscal quarter of the Borrower ending on or prior to June 30, 2021, 4.50 to 1.00 and (~~based on circumstances existing on~~ y) with respect to each fiscal quarter of the ~~date~~ Borrower ending thereafter, 4.00 to 1.00. For the avoidance of ~~such reclassification) such Restricted Payment (~~doubt, Holdings may not issue any additional shares or ~~portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this~~ units of New Holdings Preferred Equity after the Closing Date other than as permitted by Section ~~6.08(a~~6.03(c)(iv). (b) ~~Neither Holdings~~The Borrower will not, ~~Intermediate Holdings nor any Borrower will, nor~~ and will ~~they~~ not permit any Restricted Subsidiary to, pay or make or ~~pay~~agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or premium or interest on any Junior Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, or any other payment that has a substantially similar effect to any of the foregoing, except: (i) (a) to the extent such Junior Financing has such provisions which are permitted by the terms of this Agreement, payment of regularly scheduled interest and principal ~~payments as~~payments, (b) to the extent such Junior Financing has such provisions which are permitted by the terms of this Agreement, mandatory offers to repay, repurchase or redeem, mandatory prepayments of principal, premium and interest, and (c) payment of fees, expenses and indemnification obligations, with respect to such Junior Financing, in ~~the form of payment and when due in respect of any Indebtedness~~each case, other than payments in respect of any Junior Financing prohibited by the subordination provisions thereof; (ii) refinancings of Junior ~~Financing Indebtedness with proceeds~~ Financings to the extent permitted by Section 6.01; (iii) the conversion of ~~other~~ any Junior Financing ~~Indebtedness permitted~~ to Equity Interests (other than Disqualified Equity Interests or New Holdings Preferred Equity) of Holdings or any of its direct or indirect parent companies; (iv) in addition to the foregoing, so long as no Default or Event of Default shall have occurred and be incontinuing or would result therefrom, the Borrower may make additional prepayments, redemptions, purchases, defeasances and other payments in respect of Junior Financing prior to their scheduled maturity in an aggregate amount not to exceed $7,300,000 plus (B) to the extent that after giving effect to such prepayment, redemption, purchase, defeasance or other payment in respect of Junior Financing on a Pro Forma Basis, the Total Net Leverage Ratio is equal to or less than 3.9040 to 1.00, the Available Amount that is Not Otherwise Applied as in effect immediately prior to the time of making of such prepayment, redemption, purchase, defeasance or other payment in respect of Junior Financing; provided that the foregoing Total Net Leverage Ratio incurrence test shall not apply to uses of the Unrestricted Available Amount for purposes of this clause (iv)(B); (v) payments made in connection with the Transactions; (vi) additional prepayments, redemptions, purchases, defeasances and other payments in respect of Junior Financing prior to their scheduled maturity; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Net Leverage Ratio is equal to or less than 2.6540 to 1.00 and (B) no Default or Event of Default then exists or would result therefrom; and (vii) prepayment of Junior Financing owed to the Borrower or a Restricted Subsidiary to the extent not otherwise prohibited by any applicable subordination provisions.

Appears in 1 contract

Sources: Credit Agreement (Atlas Technical Consultants, Inc.)

Restricted Payments; Certain Payments of Indebtedness. (a) ~~Neither Holdings~~Holdings will not, ~~Intermediate Holdings nor any Borrower will, nor~~ and will ~~they~~ not permit any Restricted ~~Subsidiary~~Subsidiary to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, except: : (i) ~~Each Borrower and~~ each Restricted Subsidiary may make Restricted Payments to ~~Intermediate Holdings, a Borrower~~ Holdings or any ~~other~~ Restricted Subsidiary; , provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a ~~wholly-owned Subsidiary of a Borrower~~Wholly Owned Subsidiary, such Restricted Payment is made to ~~Intermediate~~ Holdings~~, such Borrower~~, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests; ; (ii) payments or distributions to satisfy dissenters’ or appraisal rights, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of assets (other than with respect to the Transactions) that complies with Section 6.03; (iii) Holdings and ~~any Intermediate Holdings~~ each Restricted Subsidiary may declare and make dividend payments or other distributions payable solely in the Equity Interests of such Person; ; (iviii) Restricted Payments made in connection with ~~or in order to consummate~~ the Transactions (including, without limitation, (A) cash payments to holders of Equity Interests of Target as provided by the Acquisition Agreement, (B) Restricted Payments to direct and indirect parent companies of Holdings to finance a portion of the consideration for the Acquisition and (C) other payments with respect to working capital adjustments or otherwise, to the extent contemplated by the Acquisition Agreement)Transactions; ~~provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause~~ (iv~~)); (v~~) repurchases of Equity Interests in Holdings (or ~~Restricted Payments by Holdings to allow repurchases of Equity Interest in~~ any direct or indirect parent of Holdings) ), the Borrower or ~~Intermediate Holdings~~ any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants ~~or other incentive interests~~ if such Equity Interests represent a portion of the exercise price or withholding Taxes payable in connection with the exercise of such ~~stock~~ options or warrants or other incentive ~~interest;~~ interests; (viv) Restricted Payments to ~~Holdings~~ Holdings, which Holdings may use to redeem, acquire, ~~retire~~ retire, repurchase or ~~repurchase~~ settle its Equity Interests (or any options, warrants, restricted stock ~~units~~ or stock appreciation rights or ~~other equity-linked interests~~ similar securities issued with respect to any of such Equity Interests) or Indebtedness or to service Indebtedness incurred by Holdings or any direct or indirect parent companies of Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest or Indebtedness (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity ~~Interests)~~ Interests or their Indebtedness or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or Indebtedness or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests or Indebtedness), held directly or indirectly by current or former officers, managers, consultants, directors and employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), Holdings, the Borrowers and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, profits interest, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that the aggregate amount of Restricted Payments permitted by this clause (vi) after the Effective Date, together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu thereof, shall not exceed the sum of (A) the greater of $15.0 million and 5.0% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings (which subsequent to an IPO shall be increased to the greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings), (B) the amount in any fiscal year equal to the cash proceeds of key man life insurance policies received by Holdings, the Borrowers or the Restricted Subsidiaries after the Effective Date, (C) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue members of the ~~Available Equity Amount~~ Board of Directors, employees or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year may be carried forward to succeeding fiscal years; (vii) Holdings and any Intermediate Holdings may make Restricted Payments in cash: (A) without duplication of any Permitted Tax Distribution, the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (a)(vii)(A) shall not exceed the Tax liability that Holdings and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers or their Restricted Subsidiaries; (B) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof or any Intermediate Holdings) attributable to the ownership or operations of Holdings, the Borrowers and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of Holdings, the Borrowers and the Restricted Subsidiaries and (y) otherwise permitted to be paid by Holdings, the Borrowers and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the Borrowers or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x); (C) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence; (D) the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(m); provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) Holdings or any Intermediate Holdings shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to Holdings, the Borrowers or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with Holdings, the Borrowers or any of the Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrowers and the Restricted Subsidiaries; and (G) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful); (viii) in addition to the foregoing Restricted Payments, the Borrowers and any Intermediate Holdings may make additional Restricted Payments to any Intermediate Holdings and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt, in an aggregate amount, when taken together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii), not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as no Event of Default shall have occurred and be continuing (or, in the case of the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h) or (i)), the Available Amount that is Not Otherwise Applied plus (C) the Available Equity Amount that is Not Otherwise Applied; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; (xi) Holdings may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiii) payments made or expected to be made by Holdings, any Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to 5.00 to 1.0 and (B) there is no continuing Event of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make Restricted Payments in cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a). (b) Neither Holdings, Intermediate Holdings nor any Borrower will, nor will they permit any Restricted Subsidiary to, make or pay, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, except: (i) payment of regularly scheduled interest and principal payments as, in the form of payment and when due in respect of any Indebtedness, other than payments in respect of any Junior Financing prohibited by the subordination provisions thereof; (ii) refinancings of Junior Financing Indebtedness with proceeds of other Junior Financing Indebtedness permitted to be inindependent

Appears in 1 contract

Sources: Credit Agreement (LivaNova PLC)

Appears in 1 contract

Sources: Credit Agreement (Virtu Financial, Inc.)

Restricted Payments; Certain Payments of Indebtedness. (a) Neither ~~Holdings, Intermediate Holdings~~ Parent nor ~~any Borrower~~ Borrowers will, nor will they permit any Restricted ~~Subsidiary~~Subsidiary of a Borrower to, to pay or make, directly or indirectly, any Restricted Payment, except: (i) ~~Each~~ each Borrower and each Restricted Subsidiary of a Borrower may make Restricted Payments to ~~Intermediate Holdings,~~ a Borrower or any ~~other Restricted Subsidiary; provided~~ Subsidiary of a Borrower that is a Loan Party (and, in the case of any such ~~Restricted Payment by a~~ Restricted Subsidiary that is not a wholly-owned ~~Subsidiary of a Borrower~~Restricted Subsidiary, ~~such Restricted Payment is made to Intermediate Holdings, such Borrower, any Restricted Subsidiary and~~ to each other owner of Equity Interests of such Restricted Subsidiary ratably based on their relative ownership interests of the relevant class of Equity Interests); (ii) ~~payments or distributions~~ to ~~satisfy dissenters’ or appraisal rights~~the extent constituting a Restricted Payment, ~~pursuant to or in connection with~~ any Borrower and any Restricted Subsidiary of a ~~consolidation, amalgamation, merger or transfer of assets~~ Borrower may consummate any transaction permitted by Section 7.03 and Section 7.04 (other than ~~with respect to the Transactions~~Section 7.04(j), (m), (n), (q) ~~that complies with Section 6.03~~and (t)); (iii) ~~Holdings and any Intermediate Holdings may declare and make dividend payments or other distributions payable solely in~~ to the extent constituting a Restricted Payment, the conversion of Convertible Notes into Equity Interests ~~of such Person~~pursuant to the terms thereof; (iv) ~~Restricted Payments~~ payments to Parent to enable Parent to make repurchases, redemptions or reductions in number of shares issued (including, by utilization of the “net share” concept) by Parent of any Equity Interests in Parent, as applicable, made in connection with ~~or in order~~ (I) the surrender of shares by employees to ~~consummate~~ (x) facilitate the ~~Transactions (including, without limitation~~payment by such employees of the taxes associated with compensation received by such employees under Parent’s stock-based compensation plans and, (Ay) ~~cash payments~~ to ~~holders~~ satisfy the purchase price of ~~Equity Interests~~ nonqualified stock options and (II) the deduction by Parent, of ~~Target as provided by the Acquisition Agreement, (B) Restricted Payments to direct and indirect parent companies of Holdings to finance~~ a portion of restricted stock or performance shares previously (i.e. prior to the ~~consideration~~ date of the deduction) granted to employees under Parent’s stock-based compensation plans to facilitate the payment by such employees of the taxes associated with the vesting of such restricted stock and performance shares, in an amount not to exceed (for ~~the Acquisition~~ both clauses (I) and (C) other payments with respect to working capital adjustments or otherwise, to the extent contemplated by the Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (ivII)), together with all Restricted Payments made pursuant to Section 7.08(a)(xiv), $2,000,000 in the aggregate in any fiscal year; provided, in each case, that prior to and after giving effect to such repurchases, redemptions or reductions no Default or Event of Default exists or is continuing; (v) repurchases of Equity Interests in Holdings (or Restricted Payments by Holdings to allow repurchases of Equity Interest in any direct or indirect parent of Holdings) or Intermediate Holdings deemed to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price of such stock options or warrants or other incentive interest; (vi) Restricted Payments to Holdings which Holdings Borrowers may use to redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted stock units or stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) (or make Restricted Payments in cash to ~~allow any~~ Parent to the extent of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests) held by current or former officers, managers, consultants, directors and employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), Holdings, the ~~Borrowers and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise~~ conditions set forth in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, profits interest, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that the aggregate amount of Restricted Payments permitted by this clause (~~vi) after the Effective Date, together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu thereof, shall not exceed the sum of (~~A) the greater of $15.0 million and 5.0% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings (which subsequent to an IPO shall be increased to the greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings), (B) ~~the amount in any fiscal year equal to the cash proceeds of key man life insurance policies received by Holdings, the Borrowers~~ or ~~the Restricted Subsidiaries after the Effective Date,~~ (C) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year may be carried forward to succeeding fiscal years; (vii) Holdings and any Intermediate Holdings may make Restricted Payments in cashbelow: (A) ~~without duplication~~ with respect to any taxable year a Borrower is member (or treated as a disregarded entity of a member) of a consolidated, combined, or unitary income tax group (“Tax Group”) with Parent as the corporate parent of such Tax Group that is responsible under applicable law for the income or similar Taxes of Borrower and any ~~Permitted Tax Distribution~~Restricted Subsidiary of such Borrower, such Borrower may make cash distributions to Parent the proceeds of which shall be used by ~~Holdings or any Intermediate Holdings~~ Parent to pay (the income or ~~to make~~ similar Taxes of such Borrower and any Restricted Subsidiary of such Borrower and the Tax Group; provided that Restricted Payments pursuant to ~~allow any direct or indirect parent~~ this subclause (A) shall not exceed the amount of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, and local income or ~~foreign~~ similar Taxes ~~(as applicable) of~~ such ~~Tax Group~~ Borrowers would have paid for such taxable ~~period that are attributable to the~~ year and any prior taxable year had they solely filed a consolidated, unitary, or combined income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (a)(vii)(A) shall not exceed the Tax liability that Holdings and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers or their Restricted Subsidiariestax return among themselves; (B) the proceeds of which shall be used by ~~Holdings or any Intermediate Holdings~~ Parent to pay ~~(or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay)~~ (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) ), that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by ~~directors~~ directors, officers, members of management, managers, employees or ~~officers~~ consultants of ~~Holdings (or any parent thereof or any Intermediate Holdings)~~ Parent attributable to the ownership or operations of ~~Holdings~~any Borrower and any Restricted Subsidiary of a Borrower, ~~the Borrowers~~ and ~~the Restricted Subsidiaries,~~ (3) franchise and similar Taxes, and other fees and expenses ~~(x) due and payable by any of Holdings, the Borrowers and the Restricted Subsidiaries and (y) otherwise permitted~~ required to be paid by Holdings, the Borrowers and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the Borrowers or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x);maintain its organizational existence; and (C) the proceeds of which shall be used by ~~Holdings or any Intermediate Holdings~~ Parent to ~~pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes~~satisfy its obligations under the Convertible Notes, and other fees and expenses, required to maintain its organizational existence; (D) the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(m); provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) Holdings or any Intermediate Holdings shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to Holdings, the Borrowers or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with Holdings, the Borrowers or any of the Restricted Subsidiaries to the extent such ~~merger, amalgamation or consolidation is~~ payments are permitted ~~in Section 6.03) in order to consummate such Investment, in each case in accordance with~~ under the ~~requirements of Sections 5.11 and 5.12~~Intercreditor Agreement; (Fvi) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrowers and the Restricted Subsidiaries; and[reserved]; (Gvii) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful)[reserved]; (viii) ~~in addition~~ to the ~~foregoing~~ extent constituting a Restricted ~~Payments~~Payment, payments of the ~~Borrowers and any Intermediate Holdings may make additional Restricted Payments~~ Convertible Notes made pursuant to ~~any Intermediate Holdings and Holdings,~~ an exchange for or out of the proceeds of ~~which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any~~ Debt constituting a Permitted Holdings Debt, in an aggregate amount, when taken together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii), not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as no Event of Default shall have occurred and be continuing (or, in the case Refinancing of the ~~use of the Starter Basket that is Not Otherwise Applied, no Event of Default~~ Convertible Notes permitted under Section ~~7.01(a~~7.01(xxiii)~~, (b), (h) or (i)), the Available Amount that is Not Otherwise Applied plus (C) the Available Equity Amount that is Not Otherwise Applied~~; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; (xi) ~~Holdings~~ Parent may, and Borrowers may make Restricted Payments to Parent to enable Parent to (aA) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof ~~or any Permitted Acquisition (or other similar Investment)~~ and (bB) honor any conversion request by a holder of convertible ~~Indebtedness~~ Debt and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible ~~Indebtedness~~ Debt in accordance with its terms, in both cases of (A) and (B), in an amount not to exceed $250,000 in the aggregate (or $350,000 in the aggregate so long as no Event of Default has occurred and is continuing); (xii) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO[reserved]; (xiii) any Restricted Payment made on the Effective Date required to consummate the Plan of Reorganization; (xiv) payments made ~~or expected to be made~~ by ~~Holdings~~Parent, any Borrower or any Restricted Subsidiary of a Borrower (including payments to Parent to enable Parent to make such payments) in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled ~~Affiliates, Immediate Family Members~~ Affiliates or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar ~~taxes;~~ taxes (~~xiv) additional~~ including payments to Parent in respect of the foregoing), in an amount not to exceed, together with all Restricted ~~Payments; provided that after giving effect~~ Payments made pursuant to ~~such Restricted Payment (A) on a Pro Forma Basis~~Section 7.08(a)(iv), $2,000,000 in the ~~Total Leverage Ratio is less than or equal to 5.00 to 1.0 and (B) there is no continuing Event of Default~~aggregate in any fiscal year; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments)[reserved]; (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make Restricted Payments in cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a). (b) Neither ~~Holdings, Intermediate Holdings~~ Parent nor any Borrower will, nor will they permit any Restricted Subsidiary of a Borrower to, make or pay, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any ~~Junior Financing~~such Debt prior to the scheduled maturity date thereof (collectively, “Restricted Debt Payments”), except: (i) payment of regularly scheduled interest and principal payments, payments asof fees, ~~in the form of payment~~ expenses and indemnification obligations when due in respect of any ~~Indebtedness~~Debt, other than payments in respect of any Junior Financing prohibited by the subordination provisions thereof; (ii) refinancings of ~~Junior Financing Indebtedness~~ Debt with proceeds of ~~other Junior Financing Indebtedness~~ Permitted Refinancing Debt permitted to be inincurred under Section 7.01; (iii) the conversion of any Junior Financing to or payments with Equity Interests (other than Disqualified Equity Interests) of Parent; (iv) prepayments, redemptions, purchases, defeasances and other payments or distributions in respect of Junior Financings prior to their scheduled maturity in an aggregate amount not to exceed an amount at the time of making any such prepayment, redemption, purchase, defeasance or other payment or distributions, together with any other such prepayment, redemption, purchase, defeasance or other payment or distributions made utilizing this clause (iv), not to exceed the portion, if any, of the amount of Restricted Debt Payments that such Borrower elects to apply pursuant to this clause (iv); (v) any Restricted Debt Payments made on the Effective Date required to consummate the Reorganization Plan; (vi) [reserved]; (vii) [reserved]; (viii) [reserved]; (ix) [reserved]; and (x) payments as part of an applicable high yield discount obligation or AHYDO catch-up payment. (c) Neither Parent nor any Borrower will, nor will they permit any Restricted Subsidiary of a Borrower to, amend or modify any documentation governing any Junior Financing, in each case if the effect of such amendment or modification (when taken as a whole) is in violation of a Subordination Agreement. (d) [reserved]; (e) No Loan Party shall, or shall permit any other Loan Party to, make any voluntary, optional payment or prepayment including any mandatory excess cash flow prepayment on account of, or optional redemption or acquisition for value of any portion of, any Debt (other than that arising under (i) the Loan Documents in accordance with the provisions thereof, (ii) the Term Loan Documents in accordance with the provisions thereof and the Intercreditor Agreement, and (iii) the Convertible Notes Documents in accordance with the provisions thereof and the Intercreditor Agreement).

Appears in 1 contract

Sources: Forbearance Agreement and Fourth Amendment to Loan and Security Agreement (TENOR CAPITAL MANAGEMENT Co., L.P.)

Restricted Payments; Certain Payments of Indebtedness. (a) ~~Neither Holdings~~The Borrower will not, ~~Intermediate Holdings nor any Borrower will, nor~~ and will ~~they~~ not permit any ~~Restricted Subsidiary, to pay or make~~Subsidiary to, directly or indirectly~~, any Restricted Payment, except~~: (i) ~~Each Borrower and each Restricted Subsidiary may~~ declare or pay any dividend or make ~~Restricted Payments~~ any distribution on or with respect to ~~Intermediate Holdings, a~~ its Equity Interests held by Persons other than the Borrower or any of its Subsidiaries (other ~~Restricted Subsidiary; provided that~~ than (A) dividends or distributions payable solely in its Equity Interests (other than Disqualified Equity Interests) or in options, warrants or other rights to acquire such Equity Interests, (B) pro rata dividends or distributions on common stock of Subsidiaries held by minority stockholders, (C) dividends or distributions on non-voting preferred Equity Interests the proceeds from the sale of which were invested in the ~~case~~ business of such Regulated Subsidiary (or any ~~such Restricted Payment by a Restricted Subsidiary that is not a wholly-owned~~ Subsidiary of such Regulated Subsidiary which is also a ~~Borrower~~Regulated Subsidiary), ~~such Restricted Payment is made to Intermediate Holdings, such Borrower, any Restricted Subsidiary~~ and ~~to each other owner of~~ (D) pro rata dividends on preferred Equity Interests of ~~such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests~~Subsidiaries that are real estate investment trusts, including Highland REIT, Inc., held by minority stockholders; (ii) purchase, call for redemption or redeem, retire or otherwise acquire for value any Equity Interests of (A) the Borrower (including options, warrants or other rights to acquire such Equity Interests) held by any Person (other than the Borrower or any Subsidiary) or (B) a Subsidiary (including options, warrants or other rights to acquire such Equity Interests) held by any Affiliate of the Borrower (other than the Borrower or a wholly owned Subsidiary); or (iii) make any voluntary or optional principal payment, or voluntary or optional redemption, repurchase, defeasance, or other acquisition or retirement for value, of Indebtedness of the Borrower that is subordinated in right of payment to the Loans; (such payments or any other actions described in clauses (i) through (iii) above being collectively “Restricted Payments”); if, at the time of, and after giving effect to, the proposed Restricted Payment: (A) a Default or Event of Default shall have occurred and be continuing; (B) the Borrower could not incur at least $1.00 of Indebtedness and maintain a Fixed Charge Coverage Ratio as calculated herein of at least 2.00:1:00; (C) the Subsidiary subject to the Restricted Payment is both a Regulated Subsidiary and a Significant Subsidiary that is not in compliance with applicable regulatory capital or other material requirements of its regulators, such as the OCC, FDIC or Board, or any applicable state, federal or self-regulatory organization, or would fail to be in compliance with applicable regulatory requirements as a consequence of the payment; or (D) the aggregate amount of all Restricted Payments made after the Effective Date shall exceed (I) the sum of (w) 50% of the aggregate amount of the Adjusted Consolidated Net Income (or, if the Adjusted Consolidated Net Income is a loss, minus 100% of the amount of such loss) accrued on a cumulative basis during the period (taken as one accounting period) beginning on the first day of the fiscal quarter in which the Effective Date falls and ending on the last day of such fiscal quarter preceding the date such Restricted Payment is to be made for which financial statements shall have been delivered pursuant to Section 5.01(a) or (b), taken as a single accounting period plus (x) the aggregate net proceeds received by the Borrower after the Effective Date as a capital contribution or from the issuance and sale of its Equity Interests (other than Disqualified Equity Interests, preferred Equity Interests, Equity Interests applied pursuant to Section 6.04(q) or Excluded Contributions) to a Person who is not a Subsidiary of the Borrower, including an issuance or sale permitted by this Agreement of Indebtedness of the Borrower for cash subsequent to the Effective Date upon the conversion of such Indebtedness into Equity Interests (other than Disqualified Equity Interests) of the Borrower, or from the issuance to a Person who is not a Subsidiary of the Borrower of any options, warrants or other rights to acquire Equity Interests of the Borrower (in each case, exclusive of any Disqualified Equity Interests or any options, warrants or other rights that are redeemable at the option of the holder, or are required to be redeemed, prior to the Maturity Date of the Loans), plus (y) an amount equal to the net reduction in investments (other than reductions in investments permitted by Section 6.04 (other than Section 6.04(r)(ii)) in any Person resulting from payments of interest on Indebtedness, dividends, repayments of loans or advances, or other transfers of assets, in each case to the Borrower or any Subsidiary or from the net proceeds from the sale of any such investment (except, in each case, to the extent any such payment or proceeds are included in the calculation of Adjusted Consolidated Net Income), not to exceed, in each case, the amount of investments previously made by the Borrower or any Subsidiary in such Person plus (z) $100,000,000 minus (II) the aggregate amount of all investments, loans and advances made in reliance on clause (r)(ii) of Section 6.04 since the Effective Date. (b) The foregoing provision shall not be violated by reason of: (i) the payment of any dividend or redemption of any Equity Interests within 60 days after the related date of declaration or call for redemption if, at said date of declaration or call for redemption, such payment or redemption would comply with the preceding paragraph; (ii) the redemption, repurchase, defeasance or other acquisition or retirement for value of Indebtedness that is subordinated in right of payment to the Loans including premium, if any, and accrued interest, with the proceeds of, or in exchange for, indebtedness incurred under Section 6.01(a)(ii) or Refinancing Indebtedness in respect thereof; (iii) the repurchase, redemption or other acquisition of Equity Interests of the Borrower or a Subsidiary (or options, warrants or other rights to acquire such Equity Interests) or a dividend on such Equity Interests in exchange for, or out of the proceeds of a capital contribution or a substantially concurrent offering of, Equity Interests (other than Disqualified Equity Interests) of the Borrower (or options, warrants or other rights to acquire such Equity Interests); provided that such options, warrants or other rights are not redeemable at the option of the holder, or required to be redeemed, in each case other than in connection with a Change of Control of the Borrower, prior to the Maturity Date; (iv) the making of any principal payment or the repurchase, redemption, retirement, defeasance or other acquisition for value of Indebtedness which is subordinated in right of payment to the Obligations in exchange for, or out of the proceeds of a capital contribution or a substantially concurrent offering of, Equity Interests (other than Disqualified Equity Interests) of the Borrower (or options, warrants or other rights to acquire such Equity Interests); provided that such options, warrants or other rights are not redeemable at the option of the holder, or required to be redeemed, in each case other than in connection with a “change of control” of the Borrower, prior to the Maturity Date; (v) payments or distributions to ~~satisfy dissenters’ or appraisal rights~~dissenting stockholders pursuant to applicable law, pursuant to or in connection with a consolidation, ~~amalgamation,~~ merger or transfer of assets ~~(other than with respect to~~ of the ~~Transactions) that complies with Section 6.03; (iii) Holdings~~ Borrower, any Subsidiary or any Regulated Subsidiary and ~~any Intermediate Holdings may declare and make dividend payments or other distributions payable solely~~ that, in the ~~Equity Interests~~ case of ~~such Person; (iv) Restricted Payments made in connection~~ the Borrower, comply with the provisions of this Indenture applicable to mergers, consolidations and transfers of all or ~~in order to consummate~~ substantially all of the ~~Transactions (including, without limitation, (A) cash payments to holders~~ property and assets of the Borrower; the repurchase of Equity Interests of Target as provided by the Acquisition Agreement, (B) Restricted Payments to direct and indirect parent companies of Holdings to finance a portion of the consideration for the Acquisition and (C) other payments with respect to working capital adjustments or otherwise, to the extent contemplated by the Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv)); (v) repurchases of Equity Interests in Holdings (or Restricted Payments by Holdings to allow repurchases of Equity Interest in any direct or indirect parent of Holdings) or Intermediate Holdings deemed to occur upon the exercise of ~~stock~~ options or warrants ~~or other incentive interests~~ if such Equity Interests ~~represent~~ represents all or a portion of the exercise price ~~of such stock options or warrants or other incentive interest~~thereof; (vi) ~~Restricted Payments~~ the repurchase of Equity Interests deemed to ~~Holdings which Holdings may use to redeem~~occur upon the exercise of options or warrants if such Equity Interests represents all or a portion of the exercise price thereof; (vii) the repurchase, ~~acquire, retire~~ redemption or ~~repurchase its~~ other acquisition of the Borrower’s Equity Interests (or ~~any~~ options, ~~warrants, restricted stock units or stock appreciation rights~~ warrants or other ~~equity-linked interests issued with respect~~ rights to ~~any of~~ acquire such Equity Interests) (from Persons who are, or ~~make Restricted Payments to allow any~~ were formerly directors or employees of ~~Holdings’ direct or indirect parent companies to so redeem~~the Borrower and their Affiliates, ~~retire, acquire or repurchase their Equity Interests) held by current or former officers, managers, consultants, directors~~ heirs and employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), Holdings, the Borrowers and the Restricted Subsidiaries, executors upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any management equity plan or stock option ~~or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, profits interest, employment termination agreement~~ plan or any other ~~employment agreements~~ management or ~~equity holders’ agreement~~employee benefit plan or other agreement or arrangement; provided that the aggregate amount of Restricted Payments permitted by this clause (vi) after the Effective Date, together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu thereof, shall not exceed the sum of (A) the greater of $15.0 million and 5.0% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings (which subsequent to an IPO shall be increased to the greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings), (B) the amount in any fiscal year equal to the cash proceeds of key man life insurance policies received by Holdings, the Borrowers or the Restricted Subsidiaries after the Effective Date, (C) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of all such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year may be carried forward to succeeding fiscal years; (vii) Holdings and any Intermediate Holdings may make Restricted Payments in cash: (A) without duplication of any Permitted Tax Distribution, the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of Holdings and/or its Subsidiaries; provided that Restricted Payments made repurchases pursuant to this clause (~~a)(vii)(A~~iv) shall not exceed the Tax liability that Holdings and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers or their Restricted Subsidiaries; (B) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof or any Intermediate Holdings) attributable to the ownership or operations of Holdings, the Borrowers and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of Holdings, the Borrowers and the Restricted Subsidiaries and (y) otherwise permitted to be paid by Holdings, the Borrowers and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the Borrowers or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x); (C) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence; (D) the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(m); provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) Holdings or any Intermediate Holdings shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to Holdings, the Borrowers or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with Holdings, the Borrowers or any of the Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrowers and the Restricted Subsidiaries; and (G) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful)$50,000,000; (viii) ~~in addition to the foregoing Restricted Payments, the Borrowers and any Intermediate Holdings may make additional~~ Restricted Payments by the Borrower or any Subsidiary to ~~any Intermediate Holdings and Holdings,~~ allow the ~~proceeds~~ payment of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt, in an aggregate amount, when taken together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) cash in lieu of the issuance of fractional shares upon the exercise of options or warrants or upon the conversion or exchange of Equity Interests or debt securities that are convertible into, or exchangeable for, Equity Interests of any such Person; and (ix) Restricted Payments ~~permitted by this clause (viii),~~ in an amount not to exceed the ~~sum~~ amount of ~~(A) an amount at~~ Excluded Contributions received since the ~~time~~ Effective Date; provided that, except in the case of ~~making any such Restricted Payment and together with any other Restricted Payment made utilizing this~~ clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as i), no Default or Event of Default shall have occurred and be continuing ~~(or, in the case~~ or occur as a consequence of the ~~use of~~ actions or payments set forth therein. (c) Each Restricted Payment permitted pursuant to Section 6.08(b) (other than the ~~Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a),~~ Restricted Payment referred to in clause (~~b), (h~~ii) ~~or (i))~~thereof, the Available Amount that is Not Otherwise Applied plus (C) the Available Equity Amount that is Not Otherwise Applied; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases repurchase of Equity Interests referred to in ~~consideration~~ clause (iv) thereof and Restricted Payments referred to in clause (vii) thereof), shall be included in calculating whether the conditions in Section 6.08(a) have been met with respect to any subsequent Restricted Payments. If the proceeds of ~~such payments including deemed repurchases in connection with the exercise~~ an issuance of ~~stock options and the vesting of restricted stock and restricted stock units; (xi) Holdings may (a) pay cash in lieu of fractional~~ Equity Interests ~~in connection with any dividend~~of the Borrower are used for the redemption, ~~split or combination thereof or any Permitted Acquisition (~~repurchase or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum acquisition of the Loans, or Indebtedness that is pari passu with such Loans, then the net ~~cash~~ proceeds of such ~~IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b~~issuance shall be included in Section 6.08(a) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiii) payments made or expected to be made by Holdings, any Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to 5.00 to 1.0 and (B) there is no continuing Event of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 only to the extent such ~~dividends~~ proceeds are ~~included in the calculation~~ not used for such redemption, repurchase or other acquisition of ~~Consolidated Interest Expense; and~~Indebtedness. (~~xviii~~d) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make Restricted Payments in cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section ~~6.08(a)~~6.08, the amount, if other than in ~~the event that a proposed~~ cash, of any Restricted Payment shall be determined in good faith by the board of directors of the Borrower (or a ~~portion~~ committee thereof) ), whose determination shall be conclusive and evidenced by a resolution of the board of directors of the Borrower (or such committee). If a Restricted Payment meets the criteria of ~~clauses (i) through (xviii) above~~more than one of the types of Restricted Payments described in the above clauses, including the first paragraph of this Section 6.08, the ~~Borrowers will be entitled~~ Borrower, in its sole discretion, may order and classify, and from time to ~~classify or later reclassify (based on circumstances existing on~~ time may reclassify, such Restricted Payment if it would have been permitted at the ~~date~~ time such Restricted Payment was made and at the time of such reclassification~~) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a)~~. (b) Neither Holdings, Intermediate Holdings nor any Borrower will, nor will they permit any Restricted Subsidiary to, make or pay, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, except: (i) payment of regularly scheduled interest and principal payments as, in the form of payment and when due in respect of any Indebtedness, other than payments in respect of any Junior Financing prohibited by the subordination provisions thereof; (ii) refinancings of Junior Financing Indebtedness with proceeds of other Junior Financing Indebtedness permitted to be in

Appears in 1 contract

Sources: Credit Agreement (E TRADE FINANCIAL Corp)

Restricted Payments; Certain Payments of Indebtedness. (a) ~~Neither Holdings, Intermediate Holdings nor any~~ The Borrower ~~will~~will not, nor will ~~they~~ it permit any Restricted ~~Subsidiary~~Subsidiary to, to pay or make, directly or indirectly, any Restricted Payment, except: (i) ~~Each Borrower and~~ each Restricted Subsidiary of the Borrower may make Restricted Payments to ~~Intermediate Holdings, a~~ the Borrower or any ~~other~~ Restricted ~~Subsidiary; provided that~~ Subsidiary of the Borrower (and, in the case of any such ~~Restricted Payment by a Restricted~~ Subsidiary that is not a wholly-owned ~~Subsidiary of a Borrower~~Subsidiary, ~~such Restricted Payment is made to Intermediate Holdings, such Borrower, any Restricted Subsidiary and~~ to each other owner of Equity Interests of such ~~Restricted~~ Subsidiary ratably based on their relative ownership interests of the relevant class of Equity Interests); (ii) ~~payments or distributions~~ to ~~satisfy dissenters’ or appraisal rights~~the extent constituting a Restricted Payment, ~~pursuant to or in connection with a consolidation, amalgamation, merger or transfer of assets~~ the Borrower may consummate any transaction permitted by Section 6.03 and Section 6.04 (other than ~~with respect to the Transactions~~Section 6.04(j), (m), (n), (q) ~~that complies with Section 6.03~~and (t)); (iii) ~~Holdings and any Intermediate Holdings may declare and make dividend payments or other distributions payable solely in the Equity Interests of such Person~~[reserved]; (iv) Restricted Payments made in connection with or in order to consummate the Transactions (including, without limitation, (A) cash payments to holders of Equity Interests of Target as provided by the Acquisition Agreement, (B) Restricted Payments to direct and indirect parent companies of Holdings to finance a portion of the consideration for the Acquisition and (C) other payments with respect to working capital adjustments or otherwise, to the extent contemplated by the Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv))[reserved]; (v) repurchases of Equity Interests in Holdings (or Restricted Payments by Holdings to allow repurchases of Equity Interest in any direct or indirect parent of Holdings) or Intermediate Holdings deemed to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price of such stock options or warrants or other incentive interest[reserved]; (vi) Restricted Payments to Holdings which Holdings may use to redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted stock units or stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests) held by current or former officers, managers, consultants, directors and employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), Holdings, the Borrowers and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, profits interest, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that the aggregate amount of Restricted Payments permitted by this clause (vi) after the Effective Date, together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu thereof, shall not exceed the sum of (A) the greater of $15.0 million and 5.0% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings (which subsequent to an IPO shall be increased to the greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings), (B) the amount in any fiscal year equal to the cash proceeds of key man life insurance policies received by Holdings, the Borrowers or the Restricted Subsidiaries after the Effective Date, (C) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year may be carried forward to succeeding fiscal years[reserved]; (vii) Holdings and any Intermediate Holdings may make Restricted Payments in cash: (A) without duplication of any Permitted Tax Distribution, the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (a)(vii)(A) shall not exceed the Tax liability that Holdings and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers or their Restricted Subsidiaries; (B) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof or any Intermediate Holdings) attributable to the ownership or operations of Holdings, the Borrowers and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of Holdings, the Borrowers and the Restricted Subsidiaries and (y) otherwise permitted to be paid by Holdings, the Borrowers and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the Borrowers or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x); (C) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence; (D) the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(m); provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) Holdings or any Intermediate Holdings shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to Holdings, the Borrowers or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with Holdings, the Borrowers or any of the Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrowers and the Restricted Subsidiaries; and (G) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful)[reserved]; (viii) in addition to the foregoing Restricted Payments, the Borrowers and any Intermediate Holdings may make additional Restricted Payments to any Intermediate Holdings and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt, in an aggregate amount, when taken together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii), not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as no Event of Default shall have occurred and be continuing (or, in the case of the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h) or (i)), the Available Amount that is Not Otherwise Applied plus (C) the Available Equity Amount that is Not Otherwise Applied[reserved]; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity 106 Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; (xi) Holdings may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms[reserved]; (xii) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO[reserved]; (xiii) payments made or expected to be made by Holdings, any Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;[reserved]; and (xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to 5.00 to 1.0 and (B) there is no continuing Event of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make Restricted Payments in cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a)[reserved]. (b) ~~Neither Holdings, Intermediate Holdings nor any~~ The Borrower ~~will~~will not, nor will ~~they~~ it permit any Restricted Subsidiary to, make or pay, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, repayment, prepayment, redemption, retirement, acquisition, cancellation or termination of any ~~Junior Financing~~such Indebtedness prior to the scheduled maturity date thereof (collectively, “Restricted Debt Payments”), except: (i) payment of regularly scheduled interest and principal payments, payments asof fees, ~~in the form of payment~~ expenses and indemnification obligations when due in respect of any Indebtedness, other than payments in respect of any Junior Financing prohibited by the subordination provisions thereof; (ii) ~~refinancings~~ [reserved]; and (iii) the conversion of any Junior Financing ~~Indebtedness~~ to or payments with ~~proceeds~~ Equity Interests (other than Disqualified Equity Interests) of the Borrower; (c) The Borrower will not, nor will it permit any Restricted Subsidiary to, amend or modify any documentation governing any Junior Financing, in each case if the effect of such amendment or modification (when taken as a whole) is in violation of any Intercreditor Agreement or other ~~Junior Financing Indebtedness permitted to be in~~applicable intercreditor agreement or subordination agreement.

Appears in 1 contract

Sources: Superpriority Secured Debtor in Possession Credit Agreement (Invacare Corp)

Restricted Payments; Certain Payments of Indebtedness. (a) ~~Neither Holdings, Intermediate Holdings nor any Borrower~~ No Loan Party will, nor will ~~they~~ it permit any of its Restricted ~~Subsidiary~~Subsidiaries to, ~~to pay~~ declare or make, directly or indirectly, any Restricted Payment, ~~except~~except that: (i) ~~Each Borrower and each~~ any Loan Party or any Restricted Subsidiary of a Loan Party may ~~make~~ declare and pay Restricted Payments to ~~Intermediate Holdings,~~ a ~~Borrower~~ Loan Party or ~~any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by~~ a Restricted Subsidiary that is ~~not a wholly-owned Subsidiary of a Borrower, such Restricted Payment is made to Intermediate Holdings, such Borrower, any Restricted Subsidiary and to each other owner of Equity Interests~~ the direct parent of such Restricted Subsidiary ~~based on their relative ownership interests~~ and a pro rata Restricted Payment to any third party in respect of ~~the relevant class of Equity Interests~~non-wholly owned Restricted Subsidiaries; (ii) Restricted Payments made to BCF Holdings or Parent (or any other direct or indirect parent of the Borrower) (w) to pay general corporate and overhead expenses incurred by BCF Holdings, Parent or Burlington Stores, Inc. in the ordinary course of business, or the amount of any indemnification claims made by any director or officer of BCF Holdings, Parent or Burlington Stores, Inc., (x) to pay franchise taxes and other fees, taxes and expenses required to maintain the corporate existence of BCF Holdings, Parent or Burlington Stores, Inc. (or any other direct or indirect Parent of the Borrower), (y) to pay taxes that are due and payable by BCF Holdings as the parent of a consolidated group that includes Parent and its Restricted Subsidiaries or (z) to make other payments ~~or distributions to satisfy dissenters’ or appraisal rights,~~ that BCF Holdings and Parent are not otherwise prohibited from making pursuant to or this Agreement (including to pay fees and expenses in connection with ~~a consolidation, amalgamation, merger~~ unsuccessful equity (or ~~transfer of assets (other than with respect to the Transactions~~debt offering) ~~that complies with Section 6.03~~permitted by this Agreement); (iii) ~~Holdings~~ the Loan Parties and ~~any Intermediate Holdings~~ their Restricted Subsidiaries may ~~declare and~~ make ~~dividend payments~~ Restricted Payments made prior to or ~~other distributions payable solely in~~ substantially concurrently with the ~~Equity Interests~~ initial public offering of ~~such Person~~Burlington Stores, Inc. for the purpose of paying amounts owing under the advisory agreement with the Sponsor, to the extent permitted under SECTION 6.07; (iv) the Loan Parties and their Restricted Subsidiaries may make Restricted Payments ~~made in connection with or in order to consummate the Transactions (including, without limitation, (A) cash payments to holders~~ consisting of ~~Equity Interests of Target as provided by the Acquisition Agreement, (B) Restricted Payments to direct and indirect parent companies of Holdings to finance a portion~~ Permitted Dispositions of the ~~consideration for the Acquisition~~ type described, and ~~(C) other payments with respect to working capital adjustments or otherwise,~~ subject to the ~~extent contemplated by~~ limitations contained, in the ~~Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv))~~definition thereof; (v) the Loan Parties and their Restricted Subsidiaries may make Restricted Payments constituting repurchases of ~~Equity Interests~~ Capital Stock in ~~Holdings~~ BCF Holdings, Burlington Stores, Inc. or any Restricted Subsidiary (or ~~Restricted Payments by~~ distributions to BCF Holdings ~~to allow repurchases of Equity Interest in~~ or Burlington Stores, Inc. or any direct or indirect ~~parent~~ Parent of ~~Holdings~~the Borrower for such purpose) ~~or Intermediate Holdings deemed to occur upon~~ in connection with the exercise of stock options or warrants ~~or other incentive interests~~ if such ~~Equity Interests represent~~ Capital Stock represents a portion of the exercise price of such ~~stock options~~ option or ~~warrants or other incentive interest; (vi) Restricted Payments to Holdings which Holdings may use to redeem, acquire, retire or repurchase its Equity Interests (or any options,~~ warrants, restricted stock units or stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests) held by current or former officers, managers, consultants, directors and employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), Holdings, the Borrowers and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, profits interest, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that the aggregate amount of Restricted Payments permitted by this clause (vi) after the Effective Date, together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu thereof, shall not exceed the sum of (A) the greater of $15.0 million and 5.0% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings (which subsequent to an IPO shall be increased to the greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings), (B) the amount in any fiscal year equal to the cash proceeds of key man life insurance policies received by Holdings, the Borrowers or the Restricted Subsidiaries after the Effective Date, (C) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year may be carried forward to succeeding fiscal years; (vii) Holdings and any Intermediate Holdings may make Restricted Payments in cash: (A) without duplication of any Permitted Tax Distribution, the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (~~a)(vii)(A~~iv) shall not exceed $10,000,000 in any Fiscal Year of BCF Holdings (with unused amounts from any Fiscal Year available for carry-forward to future Fiscal Years subject to a maximum amount of $20,000,000 in any Fiscal Year); (vi) the Tax liability that Holdings and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Loan Parties may make Restricted Payments ~~under~~ to Burlington Stores, Inc. using a portion of the net proceeds of the Additional Term B-3 Loans on or after the Closing Date to fund Burlington Stores, Inc.’s repurchase or redemption, defeasance or other retirement of the Holdco Notes; (vii) so long as (x) no Event of Default has occurred and is continuing or would result therefrom and (y) the Consolidated Leverage Ratio as of the last day of the most recently ended Fiscal Quarter for which financial statements have been or are then required to have been delivered would be less than or equal to 3.5 to 1.0, any Loan Party or any Restricted Subsidiary may make any Restricted Payment; (viii) so long as (x) no Event of Default has occurred and is continuing or would result therefrom and (y) on a Pro Forma Basis the Consolidated Interest Coverage Ratio is at least 2.00 to 1.00 for the most recently ended period of four Fiscal Quarters for which financial statements have been or were required to be delivered, any Loan Party and any of its Restricted Subsidiaries may make any Restricted Payments from the portion of the Available Amount such Loan Party or such Restricted Subsidiary elects to apply pursuant to this ~~subclause~~ clause (viii); (ix) the Borrower and the Restricted Subsidiaries may declare and make Restricted Payments with respect to its Capital Stock payable solely in shares of Capital Stock of the Borrower that is not Disqualified Capital Stock; (x) the Borrower may make payments (or may make Restricted Payments to any parent, the proceeds of which will be used to make payments) at such times and in such amounts as are necessary to make payments of or on account of (1) monitoring or management or similar fees or transaction fees and (2) reimbursement of out-of-pocket costs, expenses and indemnities, in each case to the Sponsor or any of its Affiliates, in each case to the extent permitted by SECTION 6.07(o) (assuming the Borrower was party thereto); (xi) the Restricted Subsidiaries may make a Restricted Payment as consideration for the acquisition of additional Capital Stock in any Restricted Subsidiary from minority shareholders that are not Affiliates; (xii) Restricted Payments made (A) in respect of working capital adjustments or purchase price adjustments pursuant to any ~~Taxes attributable~~ Permitted Acquisition or other permitted Investments and (B) to ~~the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers~~ satisfy indemnity and other similar obligations under Permitted Acquisitions or ~~their Restricted Subsidiaries~~other Permitted Investments,; (Bxiii) ~~the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make~~ Restricted Payments necessary to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof or any Intermediate Holdings) attributable to the ownership or operations of Holdings, the Borrowers and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of Holdings, the Borrowers and the Restricted Subsidiaries and (y) otherwise consummate Investments permitted to be paid by Holdings, the Borrowers and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the Borrowers or the Restricted Subsidiaries pursuant to ~~Section 6.09(iii) or (x)~~SECTION 6.04; (Cxiv) the ~~proceeds of which shall be used by Holdings~~ Borrower or any ~~Intermediate Holdings to pay (or to make~~ Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence; (D) the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(m); provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) Holdings or any Intermediate Holdings shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to Holdings, the Borrowers or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with Holdings, the Borrowers or any of the Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrowers and the Restricted Subsidiaries; and (G) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful); (viii) in addition to the foregoing Restricted Payments, the Borrowers and any Intermediate Holdings Subsidiary may make additional Restricted Payments to the extent that such Restricted Payments are made with Net Proceeds received by the Borrower (or any ~~Intermediate Holdings and Holdings,~~ parent entity) after the Amendment No. 4 Effective Date from the issuance or sale of Capital Stock of the Borrower that is not Disqualified Capital Stock (or any parent entity) or proceeds of ~~which~~ an equity contribution initially made to Parent, in each case to the extent such proceeds have been contributed to the common equity of the Borrower and have not been applied pursuant to (gg) of the definition of “Permitted Investment”, clause (aa) of the definition of “Permitted Indebtedness” or utilized to also increase the Available Amount; (xv) the Borrower and the Restricted Subsidiaries may ~~be utilized by Holdings to~~ make ~~additional~~ Restricted Payments to BCF Holdings (or any parent entity) to pay cash in lieu of fractional Capital Stock in connection with (a) any dividend, split or combination thereof or any Acquisition, Investment or other transaction otherwise permitted hereunder and (b) any conversion request by a holder of convertible Indebtedness (to the extent such conversion request is paid solely in shares of Capital Stock of BCF Holdings (or any parent entity) that is not Disqualified Capital Stock); (xvi) the Borrower and the Restricted Subsidiaries may make Restricted Payments to its direct or indirect parent to declare and pay regular quarterly dividends on its common stock (or similar Capital Stock of its direct or indirect parent) in an amount not to exceed 6% per year of the aggregate net cash proceeds of the initial public offering of such parent that were actually received by or contributed to the Capital Stock of the Borrower in or from such initial public offering; (xvii) the Borrower and the Restricted Subsidiaries may make Restricted Payments consisting of Capital Stock in any ~~Intermediate Holdings~~ Unrestricted Subsidiary, whether pursuant to ~~make~~ a distribution, dividend or any ~~payments in respect~~ other transaction not prohibited hereunder; (xviii) the making of any ~~Permitted Holdings Debt~~Restricted Payment within 60 days after the date of declaration thereof, if at the date of such declaration such Restricted Payment would have complied with another provision of this SECTION 6.06(a); provided that the making of such Restricted Payment will reduce capacity for Restricted Payments pursuant to such other provision when so made; (xix) the Loan Parties and their Restricted Subsidiaries may make other Restricted Payments in an aggregate amount, when taken together with ~~the aggregate amount of loans and advances to Holdings~~ all other Restricted Payments made pursuant to ~~Section 6.04(m) in lieu of Restricted Payments permitted by~~ this clause (~~viii), not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A~~xix) not to exceed the greater of $~~75.0 million~~ 50,000,000 and 252.0% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as no Event of Default shall have occurred and be continuing (or, in the case of the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h) or (i)), the Available Amount that is Not Otherwise Applied plus (C) the Available Equity Amount that is Not Otherwise Applied; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; (xi) Holdings may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiii) payments made or expected to be made by Holdings, any Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to 5.00 to 1.0 and (B) there is no continuing Event of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest ExpenseAssets; and (~~xviii~~xx) ~~Holdings~~distributions or payments of Securitization Fees, ~~Intermediate Holdings, any Borrower~~ sales contributions and other transfers of Securitization Assets or ~~any Restricted Subsidiary may make Restricted Payments in cash~~ Receivables Assets and purchases of Securitization Assets or Receivables Assets pursuant to ~~Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a)~~a Securitization Repurchase Obligations, in ~~the event that~~ each case in connection with a ~~proposed Restricted Payment (~~Qualified Securitization Financing or a portion thereof) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a)Receivables Facility. (b) ~~Neither Holdings, Intermediate Holdings nor any Borrower~~ No Loan Party will, nor will ~~they~~ it permit any of its Restricted ~~Subsidiary~~ Subsidiaries to, make ~~or pay, directly or indirectly,~~ any voluntary payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any ~~Junior Financing~~Specified Indebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any ~~Junior Financing~~Specified Indebtedness, except: (i) ~~payment of regularly scheduled interest and principal payments as, in the form of payment and when due in respect of any Indebtedness, other than~~ payments in ~~respect~~ Capital Stock (so long as no Change in Control would result therefrom) and payments of ~~any Junior Financing prohibited by~~ interest in-kind of the ~~subordination provisions thereof~~Loan Parties and their Restricted Subsidiaries; (ii) ~~refinancings~~ payments of ~~Junior Financing~~ regularly scheduled interest in respect of any Specified Indebtedness (subject to applicable subordination provisions relating thereto); (iii) [Reserved]; (iv) prepayment in whole or in part of Specified Indebtedness from any refinancing of such Specified Indebtedness with the proceeds of (x) any equity securities issued or capital contributions received by any Loan Party (or direct or indirect parent of such Person) or any Restricted Subsidiary for the purpose of making such payment or prepayment and/or (y) other ~~Junior Financing~~ Indebtedness ~~permitted~~ not prohibited hereunder; (v) so long as (x) no Event of Default has occurred and is continuing or would result therefrom and (y) on a Pro Forma Basis the Consolidated Interest Coverage Ratio is at least 2.00 to 1.00 for the most recently ended period of four Fiscal Quarters for which financial statements have been or were required to be indelivered, any Loan Party and any of its Restricted Subsidiaries may make payments in respect of Specified Indebtedness from the portion of the Available Amount such Loan Party or such Restricted Subsidiary elects to apply pursuant to this clause (v); (vi) refinancings, replacements and renewals of Specified Indebtedness to the extent permitted under this Agreement; (vii) AHYDO catch-up payments relating to Permitted Indebtedness of the Borrower and its Restricted Subsidiaries; (viii) any such payments or other distributions in an amount not to exceed the greater of $50,000,000 and 2.0% of Consolidated Total Assets; and (ix) so long as (x) no Event of Default has occurred and is continuing or would result therefrom and (y) on a Pro Forma Basis, the Consolidated Leverage Ratio as of the last day of the most recently ended Fiscal Quarter for which financial statements have been or are then required to have been delivered would be less than or equal to 3.5 to 1.0, any Loan Party or any Restricted Subsidiary may make any payment on Specified Indebtedness.

Appears in 1 contract

Sources: Credit Agreement (Burlington Stores, Inc.)

Restricted Payments; Certain Payments of Indebtedness. (a) Neither ~~Holdings, Intermediate~~ Holdings nor ~~any~~ the Parent Borrower will, nor will they permit any Restricted ~~Subsidiary~~Subsidiary or Intermediate Parent to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, except: (i) ~~Each Borrower and~~ each Restricted Subsidiary may make Restricted Payments to ~~Intermediate Holdings, a~~ the Parent Borrower or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a ~~wholly-owned~~ Wholly Owned Subsidiary of a the Parent Borrower, such Restricted Payment is made to ~~Intermediate Holdings, such~~ the Parent Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests; (ii) payments or distributions to satisfy dissenters’ or appraisal rights, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of assets (other than with respect to the Transactions) that complies with Section 6.03[Reserved]; (iii) ~~Holdings and~~ Holdings, any Intermediate ~~Holdings~~ Parent and the Parent Borrower may declare and make dividend payments or other distributions payable solely in the Equity Interests of such Person; (iv) Restricted Payments made in connection with or in order to consummate the Transactions (including, without limitation, (A) cash payments to holders of Equity Interests of Target as provided by the Acquisition Agreement, (B) Restricted Payments to direct and indirect parent companies of Holdings to finance a portion of the consideration for the Acquisition and (C) other payments with respect to working capital adjustments or otherwise, to the extent contemplated by the Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv)); (v) repurchases of Equity Interests in Holdings (or Restricted Payments by Holdings to allow repurchases of Equity Interest in any direct or indirect parent of Holdings) ), any Intermediate Parent, the Parent Borrower or ~~Intermediate Holdings~~ any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price of such ~~stock~~ options or warrants or other incentive ~~interest~~interests; (viv) Restricted Payments to Holdings which Holdings may use to redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted ~~stock units or~~ stock, stock appreciation rights or other ~~equity-~~equity linked interests issued with respect to any of such Equity Interests) (or make Restricted Payments to allow any of the Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests) held by current or former officers, managers, consultants, directors and employees (or their respective spouses, former spouses, other immediate family members, successors, executors, administrators, heirs, legatees or ~~distributees~~distributes of any of the foregoing) of Holdings (or any direct or indirect parent thereof), ~~Holdings~~any Intermediate Parent, the ~~Borrowers~~ Parent Borrower and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, ~~profits interest,~~ employment termination agreement or any other employment agreements with any director, officer or consultant or equity holders’ agreement; , provided ~~that~~ that, expect with respect to non-discretionary repurchases, the an aggregate amount ~~of Restricted Payments permitted by this clause (vi)~~ after the Effective ~~Date,~~ Date together with the aggregate amount of loans and advances to Holdings made pursuant to Section ~~6.04(m~~6.04(l) in lieu ~~thereof,~~ of Restricted Payments permitted by this clause (v) shall not exceed the sum of (Aa) the greater of $~~15.0 million~~ 15,000,000 and ~~5.0~~15% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of ~~Holdings~~ the Parent Borrower (~~which subsequent~~ net of any proceeds from the reissuance or resale of such Equity Interests to ~~an IPO shall be increased to~~ another Person received by Holdings, the ~~greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in~~ Parent Borrower or any ~~fiscal year of Holdings~~Restricted Subsidiary), (Ba) the amount in any fiscal year equal to the cash proceeds of key man life insurance policies received by Holdings, the ~~Borrowers~~ Parent Borrower or the Restricted Subsidiaries after the Effective Date, and (Cb) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket ~~hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision~~hereunder; provided that any unused portion of the preceding basket calculated pursuant to clauses (Aa) and (Bb) above for any fiscal year may be carried forward to succeeding fiscal years; provided, further, that any Indebtedness Incurred or Investments or payments made in reliance upon the Available RP Capacity Amount utilizing the unused amounts available pursuant to this Section 6.08(a)(v) shall reduce the amounts available pursuant to this Section 6.08(a)(v); (vi) dividends and distribution in cash to any Intermediate Parent, Holdings or any direct or indirect parent of Holdings (x) to pay its operating costs and expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting and similar expenses provided by third parties) incurred in the ordinary course of business and attributable to the ownership or operations of Holdings, the Parent Borrower and its subsidiaries, Transaction Costs and any fees and expenses of and indemnification claims made by directors or officers of such parent attributable to the ownership or operations of Holdings, the Parent Borrower and its subsidiaries and (y) to pay (or make dividends or distributions to allow any direct or indirect parent thereof to pay) franchise, excise or similar taxes, or other fees and expenses required to maintain its (or any of its direct or indirect parents) organization existence; (vii) any Intermediate Parent, the Parent Borrower and the Restricted Subsidiaries may make Restricted Payments in cash to Holdings and any Intermediate Parent and, where applicable, Holdings and such Intermediate Parent may make Restricted Payments in cash: (A) ~~without duplication of any Permitted Tax Distribution,~~ the proceeds of which shall be used by Holdings or any Intermediate ~~Holdings~~ Parent to pay ~~(or~~ its Tax liability to ~~make Restricted Payments to allow any direct or indirect parent~~ the relevant jurisdiction in respect of ~~Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a~~ consolidated, ~~combined~~ combined, unitary or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are affiliated returns attributable to the income of ~~Holdings~~ the Parent Borrower and/or its ~~Subsidiaries~~Subsidiaries (as applicable); provided that Restricted Payments made pursuant to this clause (~~a)(vii)(A~~a)(vi)(A) shall not exceed the Tax liability that ~~Holdings~~ the Parent Borrower and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone ~~group~~group for all relevant taxable years; and provided, further, that Restricted Payments under this ~~subclause~~ clause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of ~~Holdings~~ the Parent Borrower may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to ~~Holdings, the Borrowers~~ Parent Borrower or ~~their~~ its Restricted Subsidiaries; (B) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof or any Intermediate Holdings) attributable to the ownership or operations of Holdings, the Borrowers and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of Holdings, the Borrowers and the Restricted Subsidiaries and (y) otherwise permitted to be paid by Holdings, the Borrowers and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the Borrowers or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x)[Reserved]; (C) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence[Reserved]; (D) the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section ~~6.08(a)(vi~~6.08(a)(v); (E) to finance any Investment permitted to be made pursuant to Section 6.04 (other than Section ~~6.04(m~~6.04(l)); provided that (1A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2B) Holdings or any Intermediate ~~Holdings~~ Parent shall, immediately following the closing thereof, cause (x1) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to ~~Holdings,~~ the ~~Borrowers~~ Parent Borrower or the Restricted Subsidiaries or (y2) the Person formed or acquired to merge into or consolidate with ~~Holdings,~~ the ~~Borrowers~~ Parent Borrower or any of the Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the ~~Borrowers~~ Parent Borrower and the Restricted Subsidiaries; and (G) the proceeds of which shall be used ~~by Holdings or any Intermediate Holdings~~ to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity ~~offering,~~ or debt offering ~~or other non-ordinary course transaction~~ not prohibited by this Agreement (whether or not such offering ~~or other transaction~~ is successful); and (H) the proceeds of which shall be used to make payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.08; (viii) in addition to the foregoing Restricted Payments, the ~~Borrowers~~ Parent Borrower and any Intermediate ~~Holdings~~ Parent may make additional Restricted Payments to any Intermediate ~~Holdings~~ Parent and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate ~~Holdings~~ Parent to make any payments in respect of any Permitted Holdings Debt, in an aggregate amount, when taken together with the aggregate amount of loans and advances to Holdings previously made pursuant to Section ~~6.04(m~~6.04(l) in lieu of Restricted Payments permitted by this clause (viii), not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as no Significant Event of Default shall have occurred and be continuing ~~(or, in the case of the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h)~~ or ~~(i))~~would result therefrom, the Available Amount that is Not Otherwise Applied plus (CB) the Available Equity Amount that is Not Otherwise Applied; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;. (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units[Reserved]; (xi) Holdings or any Intermediate Parent may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment of Restricted ~~Payment~~ Payments on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, in an annual amount for each fiscal year of up Holdings equal to the sum of (a) an amount equal to 6.0% ~~per annum~~ of the net cash proceeds of such IPO (and any subsequent public offerings) received by or contributed to ~~Intermediate Parent or Parent~~Holdings and/or its Subsidiaries, other than public offerings with respect to ~~Intermediate Parent’s or Parent’s~~ common stock registered on Form S-8 and (b) an amount equal to 7.0% of the market capitalization of ~~Intermediate Parent or Parent~~ the IPO Entity at the time of such IPO; provided that any Indebtedness Incurred or Investments or payments made in reliance upon the Available RP Capacity Amount utilizing the unused amounts available pursuant to this Section 6.08(a)(xii) shall reduce the amounts available pursuant to this Section 6.08(a)(xii); (xiii) payments made or expected to be made by Holdings, any Intermediate Parent, the Parent Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled ~~Affiliates, Immediate Family Members~~ Affiliates or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to ~~5.00~~ 4.00 to ~~1.0~~ 1.00 as of the most recent Test Period and (B) there is no continuing Significant Event of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, any Intermediate Parent, a Borrower or a Restricted Subsidiary by, an Unrestricted Subsidiary (other than an Unrestricted Subsidiary, the primary assets of which are Permitted Investments) to the extent that all Investments made by Holdings, Parent Borrower or any other Restricted Subsidiary in such Unrestricted Subsidiary were made in reliance on Section 6.04(s); (xvi) additional Restricted Payments (including Restricted Payments to Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments, to make any payments in respect of any Permitted Holdings Debt or otherwise) (A) in an aggregate amount not to exceed, at the time of making any such Restricted Payment and when taken together with the aggregate amount of loans and advances to Holdings (or any direct or indirect parent thereof) made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (viii) and the aggregate amount of any other Restricted Payments made utilizing this clause (A), the greater of $31,000,000 and 30% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment, (B) so long as, immediately after giving effect to any such Restricted Payment, no Significant Event of Default has occurred and is continuing, in an amount not to exceed the Available Amount that is Not Otherwise Applied and (C) in an amount not to exceed the Available Equity Amount that is Not Otherwise Applied; provided that any Indebtedness Incurred or Investments or payments made in reliance upon the Available RP Capacity Amount utilizing the unused amounts available pursuant to this Section 6.08(a)(xvi) shall reduce the amounts available pursuant to this Section 6.08(a)(xvi); (xvii) Convertible Instrument Payments; (xviii) Restricted Payments to satisfy appraisal or other dissenters’ rights, pursuant to or in connection with a consolidation, amalgamation, merger, transfer of assets or acquisition that complies with Section 6.03 or Section 6.04; (xix) (a) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases, in each case, in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units and (b) payments or other adjustments to outstanding Equity Interests in accordance with any management equity plan, stock option plan or any other similar employee benefit plan, agreement or arrangement in connection with any Restricted Payment; and (xx) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, the Parent Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make Restricted Payments in cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (~~xviii~~xx) ~~above~~above (or any sub-clause therein), the ~~Borrowers~~ Parent Borrower will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (~~xviii~~xx) (or any sub-clause therein), in a manner that otherwise complies with this Section 6.08(a)~~. (b) Neither Holdings~~; provided that, ~~Intermediate Holdings nor~~ if all or any ~~Borrower will, nor will they permit~~ portion of any Restricted ~~Subsidiary to~~Payment that is not initially made in reliance on Section 6.08(a)(xiv) subsequently could be made in reliance on ‎Section 6.08(a)(xiv), ~~make or pay, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior Financing~~such Restricted Payment, or ~~any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of~~ the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, except: (i) payment of regularly scheduled interest and principal payments as, in the form of payment and when due in respect of any Indebtedness, other than payments in respect of any Junior Financing prohibited by the subordination provisions thereof; (ii) refinancings of Junior Financing Indebtedness with proceeds of other Junior Financing Indebtedness permitted to be inrelevan

Appears in 1 contract

Sources: Credit Agreement (SMART Global Holdings, Inc.)

Restricted Payments; Certain Payments of Indebtedness. (a) ~~Neither Holdings, Intermediate Holdings nor any~~ Such Borrower ~~will~~will not, nor will ~~they~~ it permit any of its Restricted ~~Subsidiary~~Subsidiaries to, ~~to pay~~ declare or make, directly or indirectly, any Restricted Payment, except: (i) ~~Each~~ such Borrower and ~~each~~ its Restricted ~~Subsidiary~~ Subsidiaries may ~~make Restricted Payments~~ declare and pay dividends with respect to Intermediate Holdings, a Borrower or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a wholly-owned Subsidiary of a Borrower, such Restricted Payment is made to Intermediate Holdings, such Borrower, any Restricted Subsidiary and to each other owner of its Equity Interests payable solely in additional shares of ~~such Restricted Subsidiary based on their relative ownership interests of the relevant class of~~ its Equity Interests; (ii) ~~payments or distributions to satisfy dissenters’ or appraisal rights, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of assets (other than~~ Restricted Subsidiaries may declare and pay dividends ratably with respect to ~~the Transactions) that complies with Section 6.03~~their Equity Interests; (iii) ~~Holdings~~ to the extent constituting Restricted Payments, the Parent Borrower and ~~any Intermediate Holdings~~ its Restricted Subsidiaries may ~~declare and make dividend payments~~ enter into transactions expressly permitted by Sections 6.03, 6.05 or ~~other distributions payable solely in the Equity Interests of such Person;~~6.09; CREDIT AGREEMENT, Page 97 (iv) ~~Restricted Payments made~~ repurchases by Parent Borrower of partial interests in its Equity Interests for nominal amounts which are required to be repurchased in connection with ~~or in order to consummate~~ the Transactions (including, without limitation, (A) cash payments to holders of Equity Interests of Target as provided by the Acquisition Agreement, (B) Restricted Payments to direct and indirect parent companies of Holdings to finance a portion of the consideration for the Acquisition and (C) other payments with respect to working capital adjustments or otherwise, to the extent contemplated by the Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv)); (v) repurchases of Equity Interests in Holdings (or Restricted Payments by Holdings to allow repurchases of Equity Interest in any direct or indirect parent of Holdings) or Intermediate Holdings deemed to occur upon exercise of stock options or warrants ~~or other incentive interests if such~~ to permit the issuance of only whole shares of Equity ~~Interests represent a portion of the exercise price of such stock options or warrants or other incentive interest~~Interests; (viv) ~~Restricted Payments to Holdings which Holdings~~ the Parent Borrower may ~~use to redeem~~pay for the repurchase, ~~acquire, retire~~ retirement or ~~repurchase its~~ other acquisition or retirement for value of Equity Interests of the Parent Borrower (~~or any options, warrants, restricted stock units or~~ including related stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interestssimilar securities) held by ~~current~~ any future, present or former ~~officers~~director, ~~managers~~officer, ~~consultants~~member of management, ~~directors and employees~~ employee or consultant of the Parent Borrower or any of its Subsidiaries (or ~~their respective spouses, former spouses, successors, executors, administrators~~the estate, heirs, ~~legatees~~ family members, spouse or ~~distributees~~former spouse of any of the foregoing); provided that (A) at the time of ~~Holdings (or~~ any ~~direct or indirect parent thereof), Holdings, the Borrowers and the Restricted Subsidiaries, upon the death, disability~~such repurchase, retirement or ~~termination of employment of any such Person~~ other acquisition or ~~otherwise in accordance with any stock option~~ retirement for value no Default exists or ~~stock appreciation rights plan~~would result, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, profits interest, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that (B) the aggregate amount of Restricted Payments ~~permitted by~~ made under this clause (viv) after the Effective Date, together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu thereof, shall not exceed the sum of (A) the greater of $15.0 million and 5.0% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year does not exceed (x) $3,000,000 (the “Yearly Limit”) plus (y) the portion of ~~Holdings~~ the Yearly Limit from each of the immediately preceding four fiscal years (~~which subsequent to an IPO shall be increased to the greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in~~ not including any fiscal year ~~of Holdings),~~ ending prior to 2010) which was not expended by Parent Borrower for Restricted Payments in such fiscal years (B) the ~~amount~~ “Carryover Amount” and in calculating the Carryover Amount for any fiscal ~~year~~ year, the Yearly Limit applicable to the previous fiscal years shall be deemed to have been utilized first by any Restricted Payments made under this clause (v) in such fiscal year) plus (z) an amount equal to ~~the cash proceeds of key man life insurance policies received by Holdings, the Borrowers or the Restricted Subsidiaries after the Effective Date, (C)~~ the cash proceeds from the sale of Equity Interests to directors, officers, members of management, employees or consultants of the Parent Borrower or of its Subsidiaries (~~other than Disqualified Equity Interests~~or the estate, heirs, family members, spouse or former spouse of any of the foregoing) ~~of Holdings~~ in such fiscal year; (to vi) the ~~extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale~~ repurchase of Equity Interests of ~~any direct or indirect~~ the Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle Borrower that occurs ~~after~~ upon the ~~Effective Date~~cashless exercise of stock options, to warrants or other convertible securities as a result of the ~~extent~~ Parent Borrower accepting such options or warrants as satisfaction of the ~~cash proceeds from the sale~~ exercise price of such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year may be carried forward to succeeding fiscal yearsInterests; (vii) ~~Holdings~~ such Borrower and ~~any Intermediate Holdings~~ its Subsidiaries may make ~~Restricted Payments in cash: (A) without duplication of~~ any Permitted Tax Distribution, the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (a)(vii)(A) shall not exceed the Tax liability that Holdings and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers or their Restricted Subsidiaries; (B) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof or any Intermediate Holdings) attributable to the ownership or operations of Holdings, the Borrowers and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of Holdings, the Borrowers and the Restricted Subsidiaries and (y) otherwise permitted to be paid by Holdings, the Borrowers and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the Borrowers or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x); (C) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence; (D) the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(m); provided that (1) such Restricted Payment ~~shall be made substantially concurrently~~ in connection with the ~~closing of such Investment and (2) Holdings or any Intermediate Holdings shall, immediately following~~ Rothsay Acquisition as contemplated by the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to Holdings, the Borrowers or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with Holdings, the Borrowers or any of the Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrowers and the Restricted Subsidiaries; and (G) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful)Rothsay Acquisition Agreement; (viii) in addition to the foregoing Restricted Payments, the Borrowers and any Intermediate Holdings may make additional Restricted Payments to any Intermediate Holdings and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt, in an aggregate amount, when taken together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii), not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as no Event of Default shall have occurred and be continuing (or, in the case of the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h) or (i)), the Available Amount that is Not Otherwise Applied plus (C) the Available Equity Amount that is Not Otherwise Applied; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; (xi) Holdings may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiii) payments made or expected to be made by Holdings, any Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases repurchase of Equity Interests deemed to occur upon the non-cash exercise of ~~stock options or warrants if such~~ Equity Interests ~~represent a portion of the exercise price of such options or warrants or required withholding or similar~~ to pay taxes; (~~xiv~~ix) the Parent Borrower and its Restricted Subsidiaries may make Restricted Payments in an aggregate amount that, together with (A) the aggregate amount of all other Restricted Payments made by the Parent Borrower and its Restricted Subsidiaries pursuant to this Section 6.08(a)(ix) after the date hereof, (B) the aggregate amount of all Investments made by the Parent Borrower and its Restricted Subsidiaries pursuant to Section 6.04(y)(i) after the date hereof and (C) the aggregate amount of all payments or distributions made by the Parent Borrower and its Restricted Subsidiaries pursuant to Section 6.08(b)(v) after the date hereof, shall not exceed the Available Amount; provided that as of the date of any such Restricted Payment and after giving effect thereto no Default shall exist or result therefrom; and (x) the Parent Borrower may make additional Restricted Payments; provided that ~~after giving effect to such Restricted Payment~~ (A) no Default shall exist or result therefrom and (B) if the Total Leverage Ratio on a Pro Forma ~~Basis~~Basis as of the end of the most recent fiscal quarter for which financial statements were required to be delivered under Section 5.01(a) or (b) is greater than 2.25 to 1.00, then the ~~Total Leverage Ratio is less than or equal to 5.00 to 1.0~~ aggregate amount of Restricted Payments made under this clause (x) in respect of a fiscal year (including the Restricted Payment in question) shall not at any time exceed (A) 25% of the Consolidated Net Income of the Parent Borrower and its Restricted Subsidiaries for the immediately preceding fiscal year minus (B) ~~there is no continuing Event~~ the amount of ~~Default; (xv) Restricted Payments constituting or otherwise~~ Investments made ~~in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments~~ pursuant to ~~a tax receivable agreement, to Permitted Tax Receivable Payments);~~ Section 6.04(y)(ii) during such fiscal year (~~xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other~~ which amount shall not be less than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make Restricted Payments in cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(azero). (b) ~~Neither Holdings, Intermediate Holdings nor any~~ Such Borrower ~~will~~will not, nor will ~~they~~ it permit any of its Restricted ~~Subsidiary~~ Subsidiaries to, make ~~or pay~~any payment, directly or indirectly, ~~any payment or other distribution (whether in cash, securities or other property) of or~~ in respect of ~~principal~~ any purchase, redemption, retirement, acquisition, cancellation or termination of any Subordinated Indebtedness or any Indebtedness issued in lieu of or ~~interest~~ representing a refinancing or replacement of any Indebtedness in respect of the Pari Passu Notes outstanding on ~~any Junior Financing~~the Effective Date (but, for the avoidance of doubt not the Pari Passu Notes existing on the Effective Date themselves) (such Indebtedness, collectively, “Restricted Indebtedness”), or any other payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any ~~Junior Financing~~Restricted Indebtedness or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoing, except: (i) ~~payment~~ refinancings of ~~regularly scheduled interest and principal payments as, in~~ Restricted Indebtedness to the ~~form of payment and when due in respect of any Indebtedness, other than payments in respect of any Junior Financing prohibited~~ extent permitted by ~~the subordination provisions thereof~~Section 6.01; (ii) ~~refinancings~~ (A) any payment or other distribution in respect of ~~Junior Financing~~ principal or interest on, or payment or other distribution on account of the purchase, redemption, retirement, acquisition, cancellation or termination of, Restricted Indebtedness, in each case in exchange for, or out of the net proceeds of, the substantially concurrent sale of Equity Interests (other than Disqualified Equity Interests and so long as no Change of Control would result therefrom) of the Parent Borrower, or (B) the conversion of any Restricted Indebtedness to Equity Interests (other than Disqualified Equity Interests). (iii) payments or other distributions in respect of the purchase, redemption, retirement, acquisition, cancellation or termination of, Restricted Indebtedness, in an aggregate amount not to exceed $25,000,000; provided that (x) at the time of any such payment or other distribution, no Default shall have occurred and be continuing or would result therefrom and (y) at the time of such payment or other distribution and after giving effect thereto and to any borrowing in connection therewith, the Parent Borrower is in compliance, on a pro forma basis, with ~~proceeds~~ the Financial Covenants; (iv) payments or other distributions in respect of principal or interest on, or payment or other ~~Junior Financing Indebtedness permitted~~ distribution on account of the purchase, redemption, retirement, acquisition, cancellation or termination of, Restricted Indebtedness, if on a Pro Forma Basis the Secured Leverage Ratio as of the end of the most recent fiscal quarter for which financial statements were required to be indelivered under Section 5.01(a) or (b) is less than the greater of (A) 2.75 to 1.00 and (B) 0.50 to 1.00 less than the applicable Secured Leverage Ratio under the Financial Covenants for the most recently ended fiscal quarter for which financial statements have been delivered at the time of such payment or other distribution, and in each case, the Parent Borrower has delivered to the Administrative Agent a certificate of a Financial Officer, together with all relevant financial information reasonably requested by the Administrative Agent demonstrating compliance with this clause (iv); (v) payments or other distributions in respect of the purchase, redemption, retirement, acquisition, cancellation or termination of, Restricted Indebtedness, in an aggregate amount that, together with (A) the aggregate amount of all other such payments or other distributions made by the Parent Borrower and its Restricted Subsidiaries pursuant to this Section 6.08(b)(v) after the date hereof, (B) the aggregate amount of all other Restricted Payments made by the Parent Borrower and its Restricted Subsidiaries pursuant to Section 6.08(a)(ix) after the date hereof and (C) the aggregate amount of all Investments made by the Parent Borrower and its Restricted Subsidiaries pursuant to Section 6.04(y)(i) after the date hereof, shall not exceed the Available Amount; provided that as of the date of any such payments or distribution and after giving effect thereto no Default shall exist or result therefrom. Notwithstanding the foregoing, the making of any dividend, payment or other distribution or the consummation of any irrevocable redemption within 60 days after the date of declaration of such dividend, payment or other distribution or giving of the redemption notice, as applicable, will not be prohibited if, at the date of declaration or notice such dividend, payment or other distribution or redemption would have complied with the terms of this Agreement.

Appears in 1 contract

Sources: Credit Agreement (Darling International Inc)

Restricted Payments; Certain Payments of Indebtedness. ~~(a) Neither Holdings~~Each Loan Party shall not, ~~Intermediate Holdings nor any Borrower will, nor will they~~ and shall not permit any ~~Restricted Subsidiary, to pay~~ of its Subsidiaries through any manner or ~~make~~means or through any other Person to, directly or indirectly~~, any Restricted Payment, except~~: (ia) ~~Each Borrower and each Restricted Subsidiary may make Restricted Payments to Intermediate Holdings~~declare or pay any dividends, ~~a Borrower or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a wholly-owned Subsidiary of a Borrower~~purchase, such Restricted Payment is made to Intermediate Holdings, such Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests; (ii) payments or distributions to satisfy dissenters’ or appraisal rights, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of assets (other than with respect to the Transactions) that complies with Section 6.03; (iii) Holdings and any Intermediate Holdings may declare and make dividend payments or other distributions payable solely in the Equity Interests of such Person; (iv) Restricted Payments made in connection with or in order to consummate the Transactions (including, without limitation, (A) cash payments to holders of Equity Interests of Target as provided by the Acquisition Agreement, (B) Restricted Payments to direct and indirect parent companies of Holdings to finance a portion of the consideration for the Acquisition and (C) other payments with respect to working capital adjustments or otherwise, to the extent contemplated by the Acquisition Agreement); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis of this clause (iv)); (v) repurchases of Equity Interests in Holdings (or Restricted Payments by Holdings to allow repurchases of Equity Interest in any direct or indirect parent of Holdings) or Intermediate Holdings deemed to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price of such stock options or warrants or other incentive interest; (vi) Restricted Payments to Holdings which Holdings may use to redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted stock units or stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, defease or otherwise acquire ~~or repurchase their~~ for value any of its Equity Interests~~) held by current~~ , return any capital to its stockholders, partners or ~~former officers, managers, consultants, directors and employees~~ members (or ~~their respective spouses~~the equivalent Persons thereof) as such, ~~former spouses~~make any distribution of assets, ~~successors~~obligations, ~~executors~~Equity Interests, ~~administrators~~other Securities or other property to its stockholders, ~~heirs, legatees~~ partners or ~~distributees) of Holdings~~ members (or ~~any direct or indirect parent~~ the equivalent Persons thereof), ~~Holdings~~or purchase, ~~the Borrowers and the Restricted Subsidiaries~~redeem, ~~upon the death~~retire, ~~disability, retirement or termination of employment of any such Person~~ defease or otherwise acquire for value any Equity Interests in ~~accordance with any stock option or stock appreciation rights plan~~such Loan Party, ~~any management~~based on their ownership interest in such Subsidiary, director and/or employee stock ownership or incentive plan, stock subscription plan, profits interest, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that except (i) payments in the aggregate amount of Restricted Payments permitted by this clause (vi) after the Effective Date, together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu thereof, shall not exceed the sum of (A) the greater of $15.0 million and 5.0% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings (which subsequent to an IPO shall be increased to the greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in any fiscal year of Holdings), (B) the amount in any fiscal year equal to the cash proceeds of key man life insurance policies received by Holdings, the Borrowers or the Restricted Subsidiaries after the Effective Date, (C) the cash proceeds from the sale form of Equity Interests (other than Disqualified Equity Interests) of ~~Holdings~~ the Borrower, (ii) Subsidiaries of the Borrower may declare and pay dividends ratably with respect to ~~the extent contributed to Holdings in the form of common~~ their Equity Interests ~~or Qualified Equity Interests) and,~~ ratably to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year may be carried forward to succeeding fiscal years; (vii) Holdings and any Intermediate Holdings may make Restricted Payments in cash: (A) without duplication of any Permitted Tax Distribution, the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (a)(vii)(A) shall not exceed the Tax liability that Holdings and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings, the Borrowers or their Restricted Subsidiaries; (B) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of businessequityholders, (2iii) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof or any Intermediate Holdings) attributable to the ownership or operations of Holdings, the Borrowers and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of Holdings, the Borrowers and the Restricted Subsidiaries and (y) otherwise permitted to be paid by Holdings, the Borrowers and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the Borrowers or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x); (C) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence; (D) the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(m); provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) Holdings or any Intermediate Holdings shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to Holdings, the Borrowers or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with Holdings, the Borrowers or any of the Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrowers and the Restricted Subsidiaries; and (G) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful); (viii) in addition to the foregoing Restricted Payments, the Borrowers and any Intermediate Holdings may make additional Restricted Payments to any Intermediate Holdings and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt, in an aggregate amount, when taken together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii), not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as no Event of Default shall have occurred and be continuing (or, in the case of the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h) or (i)), the Available Amount that is Not Otherwise Applied plus (C) the Available Equity Amount that is Not Otherwise Applied; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the ~~exercise~~ conversion of ~~stock options~~ Securities of the Borrower into Equity Interests (other than Disqualified Equity Interests) and the ~~vesting of restricted stock and restricted stock units; (xi) Holdings may (a) pay~~ payment in cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection ~~with any~~ therewith, (iv) so long as no Default or Event of Default has occurred and is continuing, payments made from the Net Cash Proceeds of the issuance of Equity Interests (other than Disqualified Equity Interests) by the Borrower within 180 days of such ~~conversion and may make~~ issuance; (v) payments ~~on convertible Indebtedness in accordance with its terms; (xii)~~ by the ~~declaration and payment of Restricted Payment on Holdings’ common stock (or~~ Borrower to allow the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum cash in lieu of the ~~net cash proceeds~~ issuance of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of fractional shares upon the market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiii) payments made or expected to be made by Holdings, any Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or ~~required withholding~~ upon the conversion or ~~similar taxes; (xiv) additional Restricted Payments~~exchange of its Equity Interests; provided ~~that after giving effect~~ such payments are not made for the purpose of evading the restrictions of this Section 6.4; (vi) payments to ~~such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than~~ satisfy dissenters’ rights pursuant to or ~~equal to 5.00 to 1.0 and (B) there is no continuing Event of Default; (xv) Restricted Payments constituting or otherwise made~~ in connection with a merger, amalgamation, consolidation or ~~relating~~ transfer of assets not otherwise prohibited by this Agreement; (vii) payments to redeem or retire any ~~IPO Reorganization Transactions~~ warrants held by any Lender or Affiliate thereof, (~~limited, in the case of~~ viii) payments pursuant to ~~a tax receivable agreement~~stock compensation or similar plans in the Ordinary Course, or to ~~Permitted Tax Receivable Payments); (xvi) the distribution~~repurchase, ~~by dividend~~ redeem or ~~otherwise, of shares of~~ otherwise acquire Equity Interests ofof a Loan Party or its Subsidiaries held by any former employees, officers, directors or ~~Indebtedness owed~~ consultants, not to ~~Holdings~~exceed $1,000,000 in any Fiscal Year, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends with unused amounts in ~~respect of JV Preferred Equity Interests issued in accordance with Section 6.01~~ any Fiscal Year being carried over to the ~~extent~~ next succeeding Fiscal Year (subject to a maximum of $2,500,000 of such ~~dividends are included~~ payments in any Fiscal Year), (ix) regularly scheduled interest payments with respect to the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make Restricted Payments in cash to Holdings to permit Holdings to makeConvertible Notes[reserved], and ~~Holdings may make, Restricted Payments in respect of Permitted~~ (x) Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (xviii) above, the Borrowers will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a).; or (b) ~~Neither Holdings, Intermediate Holdings nor~~ make any ~~Borrower will, nor will they permit any Restricted Subsidiary to, make or pay, directly or indirectly, any payment~~ voluntary prepayment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest ~~on any Junior Financing~~on, or redeem, repurchase, retire or otherwise acquire, any ~~payment or other distribution (whether in cash~~Indebtedness for borrowed money, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, except: except (i) ~~payment~~ payments to the Agent or the Lenders in respect of ~~regularly~~ the Obligations, (ii) regular scheduled payments of interest and principal ~~payments as, in the form of payment~~ as and when due (to the extent not prohibited by applicable subordination provisions in ~~respect~~ favor of the Agent), and (iii) the conversion of any ~~Indebtedness, other than payments in respect of any Junior Financing prohibited by the subordination provisions thereof; (ii) refinancings of Junior Financing~~ Indebtedness ~~with proceeds of other Junior Financing Indebtedness permitted to be in~~into common Equity Interests.

Appears in 1 contract

Sources: Term Loan Agreement (Sorrento Therapeutics, Inc.)

Restricted Payments; Certain Payments of Indebtedness. (a) Neither ~~Holdings, Intermediate~~ Holdings nor ~~any~~ the Borrower will, nor will they permit any Restricted ~~Subsidiary~~Subsidiary to, to pay or make, directly or indirectly, any Restricted Payment, except: (i) ~~Each~~ the Borrower and each Restricted Subsidiary may make Restricted Payments to ~~Intermediate Holdings, a~~ the Borrower or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a wholly-owned Subsidiary of a the Borrower, such Restricted Payment is made to ~~Intermediate Holdings, such~~ the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests; (ii) ~~payments or distributions~~ Restricted Payments to satisfy appraisal or other dissenters’ ~~or appraisal~~ rights, pursuant to or in connection with a consolidation, amalgamation, ~~merger or~~ merger, transfer of assets ~~(other than with respect to the Transactions)~~ or acquisition that complies with Section ~~6.03~~6.03 or Section 6.04; (iii) ~~Holdings and any Intermediate~~ Holdings may declare and make dividend payments or other distributions payable solely in the Equity Interests of such Person; (iv) Restricted Payments made in connection with or in order to consummate the Transactions (including, without limitation, (A) cash payments to holders of Equity ~~Interests~~ Interests, restricted stock units, options or other equity-linked interests of Target (or any Parent Entity) as provided by the Acquisition Agreement, (B) Restricted Payments (x) to direct and indirect parent companies of Holdings to finance a portion of the consideration for the Acquisition and (y) to holders of Equity Interests of the Target (immediately prior to giving effect to the Acquisition) in connection with, or as a result of, their exercise of appraisal rights and the settlement of any claims or actions (whether actual, contingent or potential) with respect thereto, in each case, with respect to the Transactions and (C) other payments with respect to working capital adjustments or ~~otherwise,~~ otherwise to the extent contemplated by the Acquisition Agreement~~); provided that the earnout contemplated by Exhibit F to the Acquisition Agreement shall not be permitted on the basis~~ , including any payments in respect of ~~this clause (iv)~~any warranty and indemnity insurance policy); (v) repurchases of Equity Interests in Holdings (or Restricted Payments by Holdings to allow repurchases of Equity ~~Interest~~ Interests in any direct or indirect parent of Holdings) ~~or Intermediate Holdings~~ deemed to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price of such stock options or warrants or other incentive interest; (vi) Restricted Payments to Holdings which Holdings may use to redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted stock units or stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) (or to make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity ~~Interests~~Interests or other such interests) held by current or former officers, managers, consultants, directors and employees (or their respective Affiliates, spouses, former spouses, other Permitted Transferees, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), ~~Holdings,~~ the ~~Borrowers~~ Borrower and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, profits interest, employment termination agreement or any other employment agreements or equity holders’ agreement; provided ~~that~~ that, except with respect to non-discretionary repurchases, the aggregate amount of Restricted Payments permitted by this clause (vi) after the Effective Date, together with the aggregate amount of loans and advances to Holdings (or any direct or indirect parent thereof) made pursuant to Section 6.04(m) in lieu thereof, shall not exceed the sum of (Aa) the greater of $~~15.0 million~~ 11,000,000 and ~~5.0~~7.5% of Consolidated EBITDA (provided that, after the occurrence of an IPO, such amount shall be the greater of $22,000,000 and 15% of Consolidated EBITDA) for the most recently ended Test Period in any fiscal year of ~~Holdings~~ the Borrower (~~which subsequent~~ net of any proceeds from the reissuance or resale of such Equity Interests to ~~an IPO shall be increased to~~ another Person received by Holdings, the ~~greater of $30.0 million and 10% of Consolidated EBITDA for the most recently ended Test Period in~~ Borrower or any ~~fiscal year of Holdings~~Restricted Subsidiary), (Bb) the amount in any fiscal year equal to the cash proceeds of key man life insurance policies received by Holdings, the ~~Borrowers~~ Borrower or the Restricted Subsidiaries after the Effective Date, and (Cc) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity Interests) of Holdings (to the extent contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests) and, to the extent contributed to Holdings, the cash proceeds from the sale of Equity Interests of any direct or indirect Parent Entity or management investment vehicle, in each case to any future, present or former employees, directors, managers or consultants of Holdings, any of its Subsidiaries or any direct or indirect Parent Entity or management investment vehicle that occurs after the Effective Date, to the extent the cash proceeds from the sale of such Equity Interests are contributed to Holdings in the form of common Equity Interests or Qualified Equity Interests and are not Cure Amounts and have not otherwise been applied to the payment of Restricted Payments by virtue of the Available Equity Amount or are otherwise applied to increase any other basket ~~hereunder and (D) the aggregate amount required to be paid under the ▇▇▇▇ ▇▇▇▇▇ Employment Provision~~hereunder; provided that any unused portion of the preceding basket calculated pursuant to clauses (Aa) and (Bb) above for any fiscal year may be carried forward to succeeding fiscal years; provided, further, that any Indebtedness Incurred or Investments or payments made in reliance upon the Available RP Capacity Amount utilizing the unused amounts available pursuant to this Section 6.08(a)(vi) shall reduce the amounts available pursuant to this Section 6.08(a)(vi); (vii) ~~Holdings and~~ Holdings, the Borrower and/or any ~~Intermediate Holdings~~ Restricted Subsidiary may make Restricted Payments in cash: (A) ~~without duplication~~ the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof) attributable to the ownership or operations of Holdings, the Borrower and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of Holdings, the Borrower and the Restricted Subsidiaries and (y) otherwise permitted to be paid by Holdings, the Borrower and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the Borrower or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x); (B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence; (C) the proceeds of which shall be used by Holdings (or any other direct or indirect parent thereof) to make Restricted Payments of the type permitted by Section 6.08(a)(iv),Section 6.08(a)(vi) or Section 6.08(a)(xi); (D) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(m); provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) Holdings shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to the Borrower or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (E) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrower and the Restricted Subsidiaries; and (F) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful); (viii) additional Restricted Payments (including Restricted Payments to Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments, to make any payments in respect of any Permitted ~~Tax Distribution~~Holdings Debt or otherwise) (A) in an aggregate amount not to exceed, at the time of making any such Restricted Payment and when taken together with the aggregate amount of loans and advances to Holdings (or any direct or indirect parent thereof) made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii) and the aggregate amount of any other Restricted Payments made utilizing this clause (A), the greater of $43,000,000 and 30% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment, (B) so long as, immediately after giving effect to any such Restricted Payment, no Event of Default under Section 7.01(a), (b), (h) or (i) has occurred and is continuing, in an amount not to exceed the Available Amount that is Not Otherwise Applied and (C) in an amount not to exceed the Available Equity Amount that is Not Otherwise Applied; provided that any Indebtedness Incurred or Investments or payments made in reliance upon the Available RP Capacity Amount utilizing the unused amounts available pursuant to this Section 6.08(a)(viii) shall reduce the amounts available pursuant to this Section 6.08(a)(viii); (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (a) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases, in each case, in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units and (b) payments or other adjustments to outstanding Equity Interests in accordance with any management equity plan, stock option plan or any other similar employee benefit plan, agreement or arrangement in connection with any Restricted Payment; (xi) Holdings or any Restricted Subsidiary may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment of Restricted Payments on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, in an annual amount for each fiscal year of Holdings equal to the sum of (a) an amount equal to 6.0% of the net cash proceeds of such IPO (and any subsequent public offerings) received by or contributed to Holdings and/or its Subsidiaries, other than public offerings with respect to common stock registered on Form S-8 and (b) an amount equal to 7.0% of the market capitalization of the IPO Entity at the time of such IPO; provided that any Indebtedness Incurred or Investments or payments made in reliance upon the Available RP Capacity Amount utilizing the unused amounts available pursuant to this Section 6.08(a)(xii) shall reduce the amounts available pursuant to this Section 6.08(a)(xii); (xiii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to 5.00 to 1.00 and (B) there is no continuing Event of Default under Section 7.01(a), (b), (h) or (i); (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions; (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, the Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, the Borrower or any Restricted Subsidiary may make Restricted Payments in cash, the proceeds of which shall be used by ~~Holdings or any Intermediate~~ Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries are members of a consolidated, combined or unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”), the portion of any U.S. federal, state, local or foreign Taxes (as applicable) of such Tax Group for such taxable period that are attributable to the income of Holdings and/or its Subsidiaries; provided that Restricted Payments made pursuant to this clause (~~a)(vii)(A~~a)(xviii) shall not exceed the Tax liability that Holdings and/or its Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; and provided, further, that Restricted Payments under this ~~subclause~~ clause (Aa)(xviii) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to ~~Holdings,~~ the ~~Borrowers~~ Borrower or their Restricted Subsidiaries; (B) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof or any Intermediate Holdings) attributable to the ownership or operations of Holdings, the Borrowers and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of Holdings, the Borrowers and the Restricted Subsidiaries and (y) otherwise permitted to be paid by Holdings, the Borrowers and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings, the Borrowers or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (x); (C) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence; (D) the proceeds of which shall be used by Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(vi); (E) to finance any Investment permitted to be made pursuant to Section 6.04 other than Section 6.04(m); provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) Holdings or any Intermediate Holdings shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to Holdings, the Borrowers or the Restricted Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with Holdings, the Borrowers or any of the Restricted Subsidiaries to the extent such merger, amalgamation or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (F) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrowers and the Restricted Subsidiaries; and (G) the proceeds of which shall be used by Holdings or any Intermediate Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any equity offering, debt offering or other non-ordinary course transaction not prohibited by this Agreement (whether or not such offering or other transaction is successful); (viii) in addition to the foregoing Restricted Payments, the Borrowers and any Intermediate Holdings may make additional Restricted Payments to any Intermediate Holdings and Holdings, the proceeds of which may be utilized by Holdings to make additional Restricted Payments or by Holdings or by any Intermediate Holdings to make any payments in respect of any Permitted Holdings Debt, in an aggregate amount, when taken together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (viii), not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $75.0 million and 25% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as no Event of Default shall have occurred and be continuing (or, in the case of the use of the Starter Basket that is Not Otherwise Applied, no Event of Default under Section 7.01(a), (b), (h) or (i)), the Available Amount that is Not Otherwise Applied plus (C) the Available Equity Amount that is Not Otherwise Applied; (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units; (xi) Holdings may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xii) the declaration and payment of Restricted Payment on Holdings’ common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to sum of (a) 6.0% per annum of the net cash proceeds of such IPO received by or contributed to Intermediate Parent or Parent, other than public offerings with respect to Intermediate Parent’s or Parent’s common stock registered on Form S-8 and (b) 7.0% of the market capitalization of Intermediate Parent or Parent at the time of such IPO; (xiii) payments made or expected to be made by Holdings, any Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates, Immediate Family Members or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to 5.00 to 1.0 and (B) there is no continuing Event of Default; (xv) Restricted Payments constituting or otherwise made in connection with or relating to any IPO Reorganization Transactions (limited, in the case of payments pursuant to a tax receivable agreement, to Permitted Tax Receivable Payments); (xvi) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, a Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); (xvii) the declaration and payment of dividends in respect of JV Preferred Equity Interests issued in accordance with Section 6.01 to the extent such dividends are included in the calculation of Consolidated Interest Expense; and (xviii) Holdings, Intermediate Holdings, any Borrower or any Restricted Subsidiary may make Restricted Payments in cash to Holdings to permit Holdings to make, and Holdings may make, Restricted Payments in respect of Permitted Tax Distributions. For purposes of determining compliance with this Section 6.08(a), in the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (i) through (~~xviii~~xvii) ~~above~~above (or any sub-clause therein), the ~~Borrowers~~ Borrower will be entitled to classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) between such clauses (i) through (xviii), in a manner that otherwise complies with this Section 6.08(a). (b) Neither Holdings, Intermediate Holdings nor any Borrower will, nor will they permit any Restricted Subsidiary to, make or pay, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, except: (i) payment of regularly scheduled interest and principal payments as, in the form of payment and when due in respect of any Indebtedness, other than payments in respect of any Junior Financing prohibited by the subordination provisions thereof; (ii) refinancings of Junior Financing Indebtedness with proceeds of other Junior Financing Indebtedness permitted to be incircumstan

Appears in 1 contract

Sources: First Lien Credit Agreement (First Advantage Corp)

Common use of Restricted Payments; Certain Payments of Indebtedness Clause in Contracts