Restricted Payments; Certain Payments of Indebtedness. (a) The Parent Borrower shall not pay or make, directly or indirectly, any Restricted Payment, except that: (i) the Parent Borrower may make Restricted Payments to the extent necessary to permit any Parent Company: (A) to pay general operating and compliance costs and expenses (including corporate overhead, legal or similar expenses and customary salary, bonus and other benefits payable to directors, officers, employees, members of management, managers and/or consultants of any Parent Company), in each case, which are reasonable and customary and incurred in the ordinary course of business, plus any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of any Parent Company, in each case, to the extent attributable to the ownership or operations of any Parent Company (but excluding, for the avoidance of doubt, the portion of any such amount, if any, that is attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and/or its subsidiaries; (B) to pay franchise, excise and similar Taxes, and other fees, Taxes and expenses, required to maintain the organizational existence of such Parent Company; (C) to pay customary salary, bonus, long-term incentive, severance and other benefits (including payment to certain service providers of the Parent Borrower or its Subsidiaries pursuant to any equity plan (whether in the form of options, cash settled options or otherwise)) payable to Permitted Payees, as well as applicable employment, social security or similar taxes in connection therewith, to the extent such salary, bonuses, severance and other benefits are attributable and reasonably allocated to the operations of the Parent Borrower and/or its subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose; (D) to pay audit and other accounting and reporting expenses of such Parent Company to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such expenses, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries; (E) for the payment of insurance premiums to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries; (F) to pay (x) fees and expenses related to any debt and/or equity offerings (including refinancings), investments and/or acquisitions permitted or not restricted by this Agreement (whether or not consummated, and including advisory, refinancing, subsequent transaction and exit fees of any Parent Company of the Parent Borrower) and expenses and indemnities of any trustee, agent, arranger, underwriter or similar role and (y) Public Company Costs; and (G) to finance any Investment permitted under Section 6.06 as if such Parent Company were subject to Section 6.06 (provided that (x) any Restricted Payment under this clause (a)(i)(G) 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 (y) the relevant Parent Company shall, promptly following the closing 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 (I) all property acquired to be contributed to the Parent Borrower or one or more of its Restricted Subsidiaries or (II) the merger, consolidation or amalgamation of the Person formed or acquired into the Parent Borrower or one or more of its Restricted Subsidiaries, in order to consummate such Investment in compliance with the applicable requirements of Section 6.06 as if undertaken as a direct Investment by the Parent Borrower or the relevant Restricted Subsidiary); (ii) the Parent Borrower may pay (or make Restricted Payments to allow any Parent Company to pay) for the repurchase, redemption, retirement or other acquisition or retirement for value of Capital Stock of any Parent Company or any subsidiary held by any Permitted Payee: (A) in accordance with the terms of promissory notes issued pursuant to Section 6.01(o), so long as the aggregate amount of all Cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments made pursuant to sub-clause (D) of this clause (ii) below, (1) does not exceed the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied)) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under clause (D) below; plus (B) with the proceeds of any sale or issuance of, or of any capital contribution in respect of, the Capital Stock of the Parent Borrower or any Parent Company (to the extent such proceeds are contributed to the Parent Borrower or any Restricted Subsidiary in respect of Qualified Capital Stock issued by the Parent Borrower or such Restricted Subsidiary) (other than amounts constituting a Cure Amount or an Available Excluded Contribution Amount); plus (C) with the net proceeds of any key-man life insurance policies; plus (D) with Cash and Cash Equivalents in an amount not to exceed, together with the aggregate amount of all cash payments made pursuant to sub-clause (A) of this clause (ii) in respect of promissory notes issued pursuant to Section 6.01(o), (1) the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under the immediately preceding clause (1); plus (E) with the amount of any Cash bonuses otherwise payable to any Permitted Payee that are foregone in exchange for the receipt of Capital Stock of the Parent Borrower or any Parent Company pursuant to any compensation arrangement, including any deferred compensation plan; (iii) the Parent Borrower may make additional Restricted Payments in an amount not to exceed (A) the portion, if any, of the Available Amount on such date that the Parent Borrower elects to apply to this clause (iii)(A) plus (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Parent Borrower elects to apply to this clause (iii)(B) (plus, without duplication of amounts 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 with Available Excluded Contribution Amounts up to the amount of such Available Excluded Contribution Amount, less any application thereof under Sections 6.04(b)(vi) or 6.06(r)); (iv) the Parent Borrower may make Restricted Payments (i) to any Parent Company to enable such Parent Company to (A) make Cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of such Parent Company, dividends, share splits, reverse share splits (or any combination thereof) and, mergers, consolidations, amalgamations or other business combinations, and acquisitions and other Investments permitted hereunder and/or (B) honor any conversion request by a holder of Convertible Indebtedness by payment of cash and/or delivery of Capital Stock, make any cash payments in lieu of fractional shares in connection with any conversion of Convertible Indebtedness and otherwise make payments on Convertible Indebtedness in accordance with its terms (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments upon redemption thereof), or, in the case of each of sub-clauses (A) and (B) above, make Restricted Payments to any Parent Company to enable such Parent Company to make the payments and/or deliveries described in such sub-clauses (A) and (B), and (ii) consisting of (A) payments made or expected to be made in respect of withholding or similar Taxes payable by any Permitted Payee and/or (B) repurchases of Capital Stock in consideration of the payments described in sub clause (A) above, including demand repurchases in connection with the exercise of stock options and the issuance of restricted stock units or similar stock based awards; (v) the Parent Borrower may repurchase, redeem, acquire or retire Capital Stock upon (or make provisions for withholdings in connection with), or make Restricted Payments to any Parent Company to enable it to repurchase, redeem, acquire or retire Capital Stock upon (or make provisions for withholdings in connection with), the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represents all or a portion of the exercise price of, or tax withholdings with respect to, such warrants, options or other securities convertible into or exchangeable for Capital Stock as part of a “cashless” exercise; (vi) the Parent Borrower may make Restricted Payments the proceeds of which are applied (i) on the Closing Date, solely to effect the consummation of the Transactions and on or about the Amendment No. 1 Effective Date, solely to effect the consummation of the Amendment No. 1 Transactions, (ii) on and after the Closing Date, to satisfy any payment obligations owing, or as otherwise required, under the Acquisition Agreement (including payment of working capital and/or purchase price adjustments) and to pay Transaction Costs, in each case, with respect to the Transactions, (iii) to satisfy obligations to direct or indirect holders of Capital Stock of the Parent Borrower (immediately prior to giving effect to the Transactions) in connection with, or as a result of, any working capital and/or purchase price adjustments, in each case, with respect to the Transactions and (iv) to satisfy any settlement of claims or actions in connection with the Transactions or to satisfy indemnity or other similar obligations in connection with the Transactions; (vii) the Parent Borrower may (or may make Restricted Payments to any Parent Company to enable it to) make Restricted Payments with respect to any Capital Stock in an amount not to exceed (A) the greater of (x) an amount equal to 7.00% per annum of the net Cash proceeds received by or contributed to the Parent Borrower in connection with the merger of Isos Acquisition Corporation and Bowlero Corp. on December 15, 2021 and the other transactions consummated in connection therewith and (y) an amount equal to 7.00% per annum of the Market Capitalization of the Parent Borrower (or its direct or indirect Parent Company, as applicable) and its subsidiaries minus (B) any utilization of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A); (viii) the Parent Borrower may make Restricted Payments to (i) redeem, repurchase, defease, discharge, retire or otherwise acquire any (A) Capital Stock (“Treasury Capital Stock”) of the Parent Borrower and/or any Restricted Subsidiary or (B) Capital Stock of any Parent Company, in the case of each of subclauses (A) and (B), in exchange for, or out of the proceeds of the substantially concurrent sale (other than to the Parent Borrower and/or any Restricted Subsidiary) of, Qualified Capital Stock of the Parent Borrower or any Parent Company to the extent any such proceeds are contributed to the capital of the Parent Borrower and/or any Restricted Subsidiary 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 the Parent Borrower or a Restricted Subsidiary) of any Refunding Capital Stock; (ix) to the extent constituting a Restricted Payment, the Parent Borrower may consummate any transaction permitted by Section 5.19 (other than Section 5.19(d)), Section 6.06 (other than Sections 6.06(j) and (t)) and Section 6.07 (other than Section 6.07(g)); (x) the Parent Borrower may make additional Restricted Payments in an aggregate amount not to exceed (A) the greater of $85,000,000 and 25% of Consolidated Adjusted EBITDA 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); (xi) the Parent Borrower may pay any dividend or other distribution or consummate any redemption within 60 days after the date of 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); (xii) the Parent Borrower may make any Restricted Payment constituting the distribution or payment of Receivables Fees; (xiii) the Parent Borrower may make additional Restricted 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 Event of Default hereunder or shall result therefrom; (xiv) the Parent Borrower may make additional Restricted Payments in an amount not to exceed the amount of proceeds received by the Parent Borrower and/or any Restricted Subsidiary under the Representation and Warranty Insurance Policy during the term of this Agreement; (xv) (A) for any taxable period for which the Parent Borrower and/or any of its Subsidiaries are members of a consolidated, combined or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which a direct or indirect parent of the Parent Borrower is the common parent (a “Tax Group”), or for which the Parent Borrower is a disregarded entity for U.S. federal income tax purposes wholly-owned by a corporate parent (a “Corporate Parent”), the Parent Borrower and each of its Subsidiaries may make Restricted Payments the proceeds of which shall be used by such common parent to pay the portion of any consolidated, combined or similar U.S. federal, state or local income Taxes of such Tax Group, or by the Corporate Parent to pay the portion of the U.S. federal, state or local income Taxes of such Corporate Parent, or any franchise taxes imposed in lieu thereof, for such taxable period that are attributable to the income of the Parent Borrower and/or its Subsidiaries, provided that such amount shall not be greater than the amount of such U.S. federal, state or local income taxes that would be paid (for such taxable period) by the Parent Borrower and its Subsidiaries if the Parent Borrower and/or such Subsidiaries had been a stand-alone corporate taxpayer (or stand-alone group of corporate taxpayers filing on a consolidated, combined or similar basis) for all taxable years ending after the Closing Date (taking into account any net operating loss carryforwards attributable to the Parent Borrower and its Subsidiaries, as the case may be) and (B) without duplication of Restricted Payments made under Section 6.04(a)(xv)(A), for any taxable period for which the Parent Borrower is treated as a partnership for U.S. federal and/or applicable state or local income tax purposes, the Parent Borrower may make Restricted Payments to its equity owners at the times and in the amoun
Appears in 6 contracts
Sources: First Lien Credit Agreement (Lucky Strike Entertainment Corp), First Lien Credit Agreement (Lucky Strike Entertainment Corp), First Lien Credit Agreement (Lucky Strike Entertainment Corp)
Restricted Payments; Certain Payments of Indebtedness. (a) The Parent Canadian Borrower shall not, and shall not permit any of its Restricted Subsidiaries to, pay or make, directly or indirectly, any Restricted Payment, except that:
(i) the Parent The Canadian Borrower may make customary Restricted Payments to the extent necessary to permit any Parent Company:
(A) to pay general operating and compliance administrative costs and expenses (including corporate overhead, legal or similar expenses and customary salary, bonus and other benefits payable to directors, officers, employees, members of management, managers and/or consultants of any Parent Company)) and franchise fees and Taxes and similar fees, Taxes and expenses required to enable such Parent Company to maintain its organizational existence or qualification to do business, in each case, which are reasonable and customary and incurred in the ordinary course of business, plus any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of any Parent Company, in each case, to the extent attributable to the ownership or operations of any Parent Company and its subsidiaries (but excluding, for the avoidance of doubt, excluding the portion of any such amount, if any, amount that is attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its Borrowers and their subsidiaries), the Parent Borrower and/or its subsidiaries;
(B) to pay franchise, excise and similar Taxes, and other fees, Taxes and expenses, required to maintain the organizational existence of such Parent Company[reserved];
(C) to pay customary salary, bonus, long-term incentive, severance and other benefits (including payment to certain service providers of the Parent Borrower or its Subsidiaries pursuant to any equity plan (whether in the form of options, cash settled options or otherwise)) payable to Permitted Payees, as well as applicable employment, social security or similar taxes in connection therewith, to the extent such salary, bonuses, severance and other benefits are attributable and reasonably allocated to the operations of the Parent Borrower and/or its subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose;
(D) to pay audit and other accounting and reporting expenses of such Parent Company to the extent such expenses are attributable to any Parent Company and/or its subsidiaries (but excluding, for the avoidance of doubt, the portion of any such expenses, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower Borrowers and/or its their subsidiaries), the Parent Borrower and its subsidiaries;
(ED) for the payment of insurance premiums to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower Borrowers and/or its their subsidiaries), the Parent Borrower Borrowers and its their subsidiaries;
(FE) to pay (x) fees and expenses related to any debt and/or or equity offerings (including refinancings)offerings, investments and/or or acquisitions permitted or not restricted by this Agreement (whether or not consummated, and including advisory, refinancing, subsequent transaction and exit fees of any Parent Company of the Parent Borrower) and expenses and indemnities of any trustee, agent, arranger, underwriter or similar role and (y) Public Company Costs; and;
(GF) to finance any Investment permitted under Section 6.06 as if such Parent Company were subject to Section Section 6.06 (provided provided, that (x) any Restricted Payment under this clause (a)(i)(G(a)(i)(F) 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 Investment, (y) the relevant Parent Company shall, promptly following the closing 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 therewiththereof, cause (I) all property acquired to be contributed to the Parent Borrower Borrowers or one or more of its their Restricted Subsidiaries Subsidiaries, or (II) the merger, consolidation or amalgamation of the Person formed or acquired into the Parent Borrower Borrowers or one or more of its their Restricted Subsidiaries, in order to consummate such Investment in compliance with the applicable requirements of Section Section 6.06 as if undertaken as a direct Investment by the Parent relevant Borrower or the relevant Restricted SubsidiarySubsidiary and (z) such Investment shall not build the Available Amount); and
(G) to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, employees or consultants of any Parent Company (or any Immediate Family Member of any of the foregoing) to the extent such salary, bonuses, severance and other benefits are attributable and reasonably allocated to the operations of the Borrowers and/or their subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose;
(ii) the Parent Canadian Borrower may pay (or make Restricted Payments to allow any Parent Company to pay) for the repurchase, redemption, retirement or other acquisition or retirement for value of Capital Stock of any Parent Company or any subsidiary held by any Permitted Payeefuture, present or former employee, director, member of management, officer, manager or consultant (or any Affiliate or Immediate Family Member thereof) of any Parent Company, any Borrower or any subsidiary:
(A) with Cash and Cash Equivalents (and including, to the extent constituting a Restricted Payment, amounts paid in accordance with the terms respect of promissory notes issued pursuant to Section 6.01(o)evidence any obligation to repurchase, so long as redeem, retire or otherwise acquire or retire for value the Capital Stock of any Parent Company or any subsidiary held by any future, present or former employee, director, member of management, officer, manager or consultant (or any Affiliate or Immediate Family Member thereof) of any Parent Company, any Borrower or any subsidiary) in an aggregate amount of all Cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments made pursuant not to sub-clause (D) of this clause (ii) below, (1) does not exceed the greater of $68,000,000 US$11,000,000 and 2010% of Consolidated Adjusted EBITDA as of the last day of Borrowers and their Restricted Subsidiaries for the most recently ended Test Period in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to subsequent the next two succeeding Fiscal Years (until so applied)) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under clause (D) below; plusYears;
(B) with the proceeds of any sale or issuance of, or of any capital contribution in respect of, the Qualified Capital Stock of the Parent any Borrower or any Parent Company (to the extent such proceeds are contributed to the Parent Borrower or any Restricted Subsidiary in respect of Qualified Capital Stock issued by the Parent to any Borrower or such any Restricted Subsidiary) (other than amounts constituting a Cure Amount or an Available Excluded Contribution Amount); plusor
(C) with the net proceeds of any key-man life insurance policies; plus
(D) with Cash and Cash Equivalents in an amount not to exceed, together with the aggregate amount of all cash payments made pursuant to sub-clause (A) of this clause (ii) in respect of promissory notes issued pursuant to Section 6.01(o), (1) the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under the immediately preceding clause (1); plus
(E) with the amount of any Cash bonuses otherwise payable to any Permitted Payee that are foregone in exchange for the receipt of Capital Stock of the Parent Borrower or any Parent Company pursuant to any compensation arrangement, including any deferred compensation plan;
(iii) the Parent Canadian Borrower may make additional Restricted Payments in an amount not to exceed (A) the portion, if any, of the Available Amount on such date that the Parent Canadian Borrower elects to apply to this clause (iii)(A(iii)(A); provided, that (x) no Event of Default has occurred and is continuing at the time of declaration of such Restricted Payment and (y) the Total Leverage Ratio, calculated on a Pro Forma Basis, would not exceed 6.50:1.00 plus (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Parent Canadian Borrower elects to apply to this clause (iii)(B) (plus, without duplication of amounts 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 with Available Excluded Contribution Amounts up to the amount of such Available Excluded Contribution Amount, less any application thereof under Sections 6.04(b)(vi) or 6.06(r)iii)(B);
(iv) the Parent Canadian Borrower may make Restricted Payments (i) to any Parent Company to enable such Parent Company to (A) make Cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of such Parent Company, dividends, share splits, reverse share splits (or any combination thereof) and, mergers, consolidations, amalgamations or other business combinations, and acquisitions and other Investments permitted hereunder and/or (B) honor any conversion request by a holder of Convertible Indebtedness by payment of cash and/or delivery of Capital Stock, make any cash payments in lieu of fractional shares in connection with any conversion of Convertible Indebtedness and otherwise make payments on Convertible Indebtedness in accordance with its terms (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments upon redemption thereof), or, in the case of each of sub-clauses (A) and (B) above, make Restricted Payments to any Parent Company to enable such Parent Company to make the payments and/or deliveries described in such sub-clauses (A) and (B), and (ii) consisting of (A) payments made or expected to be made in respect of withholding or similar Taxes payable by any Permitted Payee future, present or former officers, directors, employees, members of management, managers or consultants of any Borrower, any Restricted Subsidiary or any Parent Company or any of their respective Immediate Family Members and/or (B) repurchases of Capital Stock in consideration of the payments described in sub clause (A(A) above, including demand repurchases in connection with the exercise of stock options and the issuance of restricted stock units or similar stock based awardsoptions;
(v) the Parent Canadian Borrower may repurchase, redeem, acquire or retire Capital Stock upon repurchase (or make provisions for withholdings in connection with), or make Restricted Payments to any Parent Company to enable it to repurchase, redeem, acquire or retire ) Capital Stock upon (or make provisions for withholdings in connection with), the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represents all or a portion of the exercise price of, or tax withholdings with respect to, of such warrants, options or other securities convertible into or exchangeable for Capital Stock as part of a “cashless” exercise;
(vi) the Canadian Borrower may pay (or make Restricted Payments to allow any Parent Company to pay) fees and expenses under the Management Agreement subject to the restrictions set forth in, and in an amount not to exceed the amount set forth in, Section 6.09(f)(i);
(vii) the Canadian Borrower may make Restricted Payments Payments, the proceeds of which are applied (i) on the Closing Date, solely to effect the consummation of the Transactions and on or about the Amendment No. 1 Effective Date, solely to effect the consummation of the Amendment No. 1 Transactions, (ii) on and after the Closing Date, to satisfy any payment obligations owing, or as otherwise required, owing under the Acquisition Share Purchase Agreement (including payment of working capital and/or capital, purchase price adjustmentsadjustments and/or deferred transaction fees) and to pay Transaction Costs, in each case, with respect to the Transactions, (iii) to satisfy obligations to direct or indirect holders of Capital Stock of the Parent Borrower (immediately prior to giving effect to the Transactions) in connection with, or as a result of, any working capital and/or purchase price adjustments, in each case, with respect to the Transactions and (iv) to satisfy any settlement of claims or actions in connection with the Transactions or to satisfy indemnity or other similar obligations in connection with the Transactions;
(viiviii) so long as no Event of Default exists, following the Parent consummation of a Qualifying IPO, the Canadian Borrower may (or may make Restricted Payments to any Parent Company to enable it to) make Restricted Payments with respect to any Capital Stock in an amount not equal to exceed the sum of (A) the greater of (x) an amount equal to 7.006% per annum of the net Cash proceeds received by or contributed to the Parent Canadian Borrower in connection with the merger of Isos Acquisition Corporation from such Qualifying IPO and Bowlero Corp. on December 15, 2021 and the other transactions consummated in connection therewith and (y) an amount equal to 7.00% per annum of the Market Capitalization of the Parent Borrower (or its direct or indirect Parent Company, as applicable) and its subsidiaries minus (B) any utilization 5% of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A)market capitalization at the time of such Qualifying IPO;
(viiiix) the Parent Canadian Borrower may make Restricted Payments to (i) redeem, repurchase, defease, discharge, retire or otherwise acquire any (A) Capital Stock (“Treasury Capital Stock”) of the Parent any Borrower and/or any Restricted Subsidiary or (B) Capital Stock of any Parent Company, in the case of each of subclauses (Asub clauses (A) and (B(B), in exchange for, or out of the proceeds of the substantially concurrent sale (other than to the Parent any Borrower and/or any Restricted Subsidiary) of, Qualified Capital Stock of the Parent any Borrower or any Parent Company to the extent any such proceeds are contributed to the capital of the Parent Borrower Borrowers and/or any Restricted Subsidiary 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 the Parent a Borrower or a Restricted Subsidiary) of any Refunding Capital Stock;
(ixx) to the extent constituting a Restricted Payment, the Parent Canadian Borrower may consummate any transaction permitted by Section 5.19 (other than Section 5.19(d)), Section Section 6.06 (other than Sections 6.06(j6.06(j) and (t(t)) ), and Section 6.07 Section 6.09 (other than Section 6.07(gSection 6.09(d));
(xxi) so long as no Event of Default exists or would result therefrom, the Parent Canadian Borrower may make additional Restricted Payments in an aggregate amount not to exceed (A) the greater of $85,000,000 US$21,000,000 and 2520% of Consolidated Adjusted EBITDA as of the last day of Borrowers and their Restricted Subsidiaries for the most recently ended Test Period minus (BA) the amount of Restricted Debt Payments made by any utilization of the Available RP Capacity Amount Borrower or any Restricted Subsidiary in reliance on unused capacity under immediately preceding clause (ASection 6.04(b)(iv), minus (B) the outstanding amount of Investments made by any Borrower or any Restricted Subsidiary in reliance on Section 6.06(q)(ii);
(xixii) the Parent Canadian Borrower may pay any dividend or other distribution or consummate any redemption within 60 days after the date of 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 dividend or redemption notice would have complied with the provisions of this Section 6.04(a);
(xii) the Parent Borrower may make any Restricted Payment constituting the distribution or payment of Receivables Feeshereof;
(xiii) the Parent Canadian Borrower may make additional Restricted Payments so long as, as measured at the time provided for in Section 1.04(e), (iA) no Event of Default exists or would result therefrom and (B) the Total First Lien Leverage Ratio would not exceed 4.00:1.00Ratio, calculated on a Pro Forma Basis Basis, would not exceed 4.00:1.00; and
(xiv) each Restricted Subsidiary may make Restricted Payments to any Borrower and other Restricted Subsidiaries of any Borrower (and, in the case of a Restricted Payment by a non-Wholly Owned Subsidiary that is a Restricted Subsidiary, to the Borrower and any other Restricted Subsidiary, as compared to the other owners of Capital Stock in such Restricted Subsidiary, on a pro rata or more than pro rata basis based on their ownership interests of the relevant class of Capital Stock).
(b) The Borrowers shall not, nor shall they permit any Restricted Subsidiary to, make any payment (whether in Cash, securities or other property) on or in respect of principal of or interest on (x) any Junior Lien Indebtedness or (y) any Junior Indebtedness (such Indebtedness under clauses (x) and (y), collectively, the “Restricted Debt”), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Restricted Debt prior to its scheduled maturity (collectively, “Restricted Debt Payments”), except:
(i) any purchase, defeasance, redemption, repurchase, repayment or other acquisition or retirement of any Restricted Debt permitted hereunder made by exchange for, or out of the proceeds of, Refinancing Indebtedness permitted by Section 6.01(p);
(ii) there shall exist payments as part of an “applicable high yield discount obligation” catch- up payment;
(iii) payments of regularly scheduled interest and payments of fees, expenses and indemnification obligations as and when due in respect of any Restricted Debt, except for any payments with respect to any Subordinated Indebtedness that are prohibited by the subordination provisions thereof;
(iv) so long as no Event of Default hereunder exists or shall would result therefrom;
(xiv) the Parent Borrower may make , additional Restricted Debt Payments in an aggregate amount not to exceed the greater of US$21,000,000 and 20% of Consolidated Adjusted EBITDA of the Borrowers and their Restricted Subsidiaries as of the last day of the most recently ended Test Period, minus (A) the amount of proceeds received Restricted Payments made by the Parent Borrowers in reliance on Section 6.04(a)(xi) and (B) the outstanding amount of Investments made by any Borrower or any Restricted Subsidiary in reliance on Section 6.06(q)(ii);
(A) Restricted Debt Payments in exchange for, or with proceeds of any issuance of, Qualified Capital Stock of any Borrower and/or any Restricted Subsidiary and/or any capital contribution in respect of Qualified Capital Stock of any Borrower or any Restricted Subsidiary, (B) Restricted Debt Payments as a result of the conversion of all or any portion of any Restricted Debt into Qualified Capital Stock of any Borrower 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 the Representation and Warranty Insurance Policy during the term of this AgreementSection 6.01;
(xvvi) Restricted Debt Payments in an aggregate amount not to exceed (A) for any taxable period for which the Parent Borrower and/or any of its Subsidiaries are members of a consolidatedportion, combined or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which a direct or indirect parent if any, of the Parent Available Amount on such date that either Borrower elects to apply to this clause (vi)(A); provided, that (x) no Event of Default has occurred and is continuing at the common parent (a “Tax Group”), or for which the Parent Borrower is a disregarded entity for U.S. federal income tax purposes wholly-owned by a corporate parent (a “Corporate Parent”), the Parent Borrower and each time of its Subsidiaries may make Restricted Payments the proceeds of which shall be used by such common parent to pay the portion of any consolidated, combined or similar U.S. federal, state or local income Taxes declaration of such Tax GroupRestricted Debt Payment and (y) the Total Leverage Ratio, or by calculated on a Pro Forma Basis, would not exceed 6.50:1.00 plus (B) the Corporate Parent to pay the portion portion, if any, of the U.S. federalAvailable Excluded Contribution Amount on such date that either Borrower elects to apply to this clause (vi)(B);
(vii) additional Restricted Debt Payments; provided, state or local income Taxes of such Corporate Parent, or any franchise taxes imposed in lieu thereof, for such taxable period that are attributable to the income of the Parent Borrower and/or its Subsidiaries, provided that such amount shall not be greater than the amount of such U.S. federal, state or local income taxes that would be paid (for such taxable periodA) by the Parent Borrower both before and its Subsidiaries if the Parent Borrower and/or such Subsidiaries had been a stand-alone corporate taxpayer (or stand-alone group of corporate taxpayers filing after giving effect thereto on a consolidatedPro Forma Basis, combined or similar basis) for all taxable years ending after the Closing Date (taking into account any net operating loss carryforwards attributable to the Parent Borrower and its Subsidiaries, as the case may be) no Event of Default exists and (B) without duplication of Restricted Payments made under Section 6.04(a)(xv)(A)the First Lien Leverage Ratio, for any taxable period for which the Parent Borrower is treated as calculated on a partnership for U.S. federal and/or applicable state or local income tax purposesPro Forma Basis, the Parent Borrower may make Restricted Payments to its equity owners at the times and in the amounwould not exceed 4.25:1.00.
Appears in 4 contracts
Sources: Incremental Amendment to Credit Agreement (Knowlton Development Corp Inc), Credit Agreement (Knowlton Development Corp Inc), Incremental Amendment to Credit Agreement (Knowlton Development Parent, Inc.)
Restricted Payments; Certain Payments of Indebtedness. (a) The Parent Borrower shall not pay or make, directly or indirectly, any Restricted Payment, except that:
(i) the Parent Borrower may make Restricted Payments to the extent necessary to permit any Parent Company:
(A) to pay general operating and compliance costs and expenses (including corporate overhead, legal or similar expenses and customary salary, bonus and other benefits payable to directors, officers, employees, members of management, managers and/or consultants of any Parent Company), in each case, which are reasonable and customary and incurred in the ordinary course of business, plus any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of any Parent Company, in each case, to the extent attributable to the ownership or operations of any Parent Company (but excluding, for the avoidance of doubt, the portion of any such amount, if any, that is attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and/or its subsidiaries;
(B) to pay franchise, excise and similar Taxes, and other fees, Taxes and expenses, required to maintain the organizational existence of such Parent Company;
(C) to pay customary salary, bonus, long-term incentive, severance and other benefits (including payment to certain service providers of the Parent Borrower or its Subsidiaries pursuant to any equity plan (whether in the form of options, cash settled options or otherwise)) payable to Permitted Payees, as well as applicable employment, social security or similar taxes in connection therewith, to the extent such salary, bonuses, severance and other benefits are attributable and reasonably allocated to the operations of the Parent Borrower and/or its subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose;
(D) to pay audit and other accounting and reporting expenses of such Parent Company to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such expenses, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries;
(E) for the payment of insurance premiums to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries;
(F) to pay (x) fees and expenses related to any debt and/or equity offerings (including refinancings), investments and/or acquisitions permitted or not restricted by this Agreement (whether or not consummated, and including advisory, refinancing, subsequent transaction and exit fees of any Parent Company of the Parent Borrower) and expenses and indemnities of any trustee, agent, arranger, underwriter or similar role and (y) after the consummation of an initial public offering or the issuance of debt securities, Public Company Costs; and
(G) to finance any Investment permitted under Section Section 6.06 as if such Parent Company were subject to Section Section 6.06 (provided that (x) any Restricted Payment under this clause (a)(i)(G(a)(i)(G) 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 (y) the relevant Parent Company shall, promptly following the closing 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 (I) all property acquired to be contributed to the Parent Borrower or one or more of its Restricted Subsidiaries or (II) the merger, consolidation or amalgamation of the Person formed or acquired into the Parent Borrower or one or more of its Restricted Subsidiaries, in order to consummate such Investment in compliance with the applicable requirements of Section Section 6.06 as if undertaken as a direct Investment by the Parent Borrower or the relevant Restricted Subsidiary);
(ii) the Parent Borrower may pay (or make Restricted Payments to allow any Parent Company to pay) for the repurchase, redemption, retirement or other acquisition or retirement for value of Capital Stock of any Parent Company or any subsidiary held by any Permitted Payee:
(A) in accordance with the terms of promissory notes issued pursuant to Section Section 6.01(o), so long as the aggregate amount of all Cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments made pursuant to sub-clause (D(D) of this clause (ii(ii) below, (1) does not exceed the greater of $68,000,000 5,500,000 and 204% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period (which amount shall, following a Qualifying IPO, increase to the greater of $7,500,000 and 6% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period) in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied)) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under clause (D(D) below; plus
(B) with the proceeds of any sale or issuance of, or of any capital contribution in respect of, the Capital Stock of the Parent Borrower or any Parent Company (to the extent such proceeds are contributed to the Parent Borrower or any Restricted Subsidiary in respect of Qualified Capital Stock issued by the Parent Borrower or such Restricted Subsidiary) (other than amounts constituting a Cure Amount or an Available Excluded Contribution Amount); plus
(C) with the net proceeds of any key-man life insurance policies; plus
(D) with Cash and Cash Equivalents in an amount not to exceed, together with the aggregate amount of all cash payments made pursuant to sub-clause (A(A) of this clause (ii(ii) in respect of promissory notes issued pursuant to Section Section 6.01(o), (1) the greater of $68,000,000 5,500,000 and 204% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period (which amount shall, following a Qualifying IPO, increase to the greater of $7,500,000 and 6% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period) in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under the immediately preceding clause (1(1); plus
(E) with the amount of any Cash bonuses otherwise payable to any Permitted Payee that are foregone in exchange for the receipt of Capital Stock of the Parent Borrower or any Parent Company pursuant to any compensation arrangement, including any deferred compensation plan;
(iii) the Parent Borrower may make additional Restricted Payments in an amount not to exceed (A) the portion, if any, of the Available Amount on such date that the Parent Borrower elects to apply to this clause (iii)(A(iii)(A) plus (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Parent Borrower elects to apply to this clause (iii)(B(iii)(B) (plus, without duplication of amounts referred to in this clause (B(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 with Available Excluded Contribution Amounts up to the amount of such Available Excluded Contribution Amount, less any application thereof under Sections 6.04(b)(vi6.04(b)(vi) or 6.06(r6.06(r));
(iv) the Parent Borrower may make Restricted Payments (i) to any Parent Company to enable such Parent Company to (A) make Cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of such Parent Company, dividends, share splits, reverse share splits (or any combination thereof) and, mergers, consolidations, amalgamations or other business combinations, and acquisitions and other Investments permitted hereunder and/or (B) honor any conversion request by a holder of Convertible Indebtedness by payment of cash and/or delivery of Capital Stockconvertible Indebtedness, make any cash payments in lieu of fractional shares in connection with any conversion of Convertible Indebtedness and otherwise make payments on Convertible convertible Indebtedness in accordance with its terms (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments upon redemption thereof), or, in the case of each of sub-clauses (A) and (B) above, make Restricted Payments to any Parent Company to enable such Parent Company to make the payments and/or deliveries described in such sub-clauses (A) and (B), and (ii) consisting of (A) payments made or expected to be made in respect of withholding or similar Taxes payable by any Permitted Payee and/or (B) repurchases of Capital Stock in consideration of the payments described in sub clause (A(A) above, including demand repurchases in connection with the exercise of stock options and the issuance of restricted stock units or similar stock based awards;
(v) the Parent Borrower may repurchase, redeem, acquire or retire Capital Stock upon (or make provisions for withholdings in connection with), or make Restricted Payments to any Parent Company to enable it to repurchase, redeem, acquire or retire Capital Stock upon (or make provisions for withholdings in connection with), the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represents all or a portion of the exercise price of, or tax withholdings with respect to, such warrants, options or other securities convertible into or exchangeable for Capital Stock as part of a “cashless” exercise;
(vi) the Parent Borrower may make Restricted Payments the proceeds of which are applied (i) on the Closing Date, solely to effect the consummation of the Transactions and on or about the Amendment No. 1 Effective Date, solely to effect the consummation of the Amendment No. 1 Transactions, (ii) on and after the Closing Date, to satisfy any payment obligations owing, or as otherwise required, under the Acquisition Agreement (including payment of working capital and/or purchase price adjustments) and to pay Transaction Costs, in each case, with respect to the Transactions, (iii) to satisfy obligations to direct or indirect holders of Capital Stock of the Parent Borrower (immediately prior to giving effect to the Transactions) in connection with, or as a result of, any working capital and/or purchase price adjustments, in each case, with respect to the Transactions and (iv) to satisfy any settlement of claims or actions in connection with the Transactions or to satisfy indemnity or other similar obligations in connection with the Transactions;
(vii) following the Parent consummation of the first Qualifying IPO, the Borrower may (or may make Restricted Payments to any Parent Company to enable it to) make Restricted Payments with respect to any Capital Stock in an amount not to exceed (A) the greater of (x) an amount equal to 7.006.00% per annum of the net Cash proceeds received by or contributed to the Parent Borrower in connection with the merger of Isos Acquisition Corporation and Bowlero Corp. on December 15, 2021 and the other transactions consummated in connection therewith from any Qualifying IPO and (y) an amount equal to 7.006.00% per annum of the Market Capitalization of the Parent Borrower (or its direct or indirect Parent Company, as applicable) and its subsidiaries minus (B) any utilization of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A(A);
(viii) the Parent Borrower may make Restricted Payments to (i) redeem, repurchase, defease, discharge, retire or otherwise acquire any (A) Capital Stock (“Treasury Capital Stock”) of the Parent Borrower and/or any Restricted Subsidiary or (B) Capital Stock of any Parent Company, in the case of each of subclauses (A(A) and (B(B), in exchange for, or out of the proceeds of the substantially concurrent sale (other than to the Parent Borrower and/or any Restricted Subsidiary) of, Qualified Capital Stock of the Parent Borrower or any Parent Company to the extent any such proceeds are contributed to the capital of the Parent Borrower and/or any Restricted Subsidiary 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 the Parent Borrower or a Restricted Subsidiary) of any Refunding Capital Stock;
(ix) to the extent constituting a Restricted Payment, the Parent Borrower may consummate any transaction permitted by Section 5.19 (other than Section 5.19(d)), Section Section 6.06 (other than Sections 6.06(j6.06(j) and (t(t)) and Section ), Section 6.07 (other than Section Section 6.07(g)) and Section 6.09 (other than Section 6.09(d));
(x) the Parent Borrower may make additional Restricted Payments in an aggregate amount not to exceed (A) the greater of $85,000,000 20,000,000 and 2515% of Consolidated Adjusted EBITDA 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(A);
(xi) the Parent Borrower may pay any dividend or other distribution or consummate any redemption within 60 days after the date of 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 Section 6.04(a);
(xii) the Parent Borrower may make any Restricted Payment constituting the distribution or payment of Receivables Fees;
(xiii) the Parent Borrower may make additional Restricted Payments so long as, as measured at the time provided for in Section 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 Event of Default hereunder or shall result therefrom;
(xiv) the Parent Borrower may make additional Restricted Payments in an amount not to exceed the amount of proceeds received by the Parent Borrower and/or any Restricted Subsidiary under the Representation and Warranty Insurance Policy during the term of this Agreement;
(xv) (A) for any taxable period for which the Parent Borrower and/or any of its Subsidiaries are members of a consolidated, combined or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which a direct or indirect parent of the Parent Borrower is the common parent (a “Tax Group”), or for which the Parent Borrower is a disregarded entity for U.S. federal income tax purposes wholly-owned by a corporate parent (a “Corporate Parent”), the Parent Borrower and each of its Subsidiaries may make Restricted Payments (including pursuant to any Tax sharing agreement entered into by the Borrower and any of its Subsidiaries and Comcast Corporation, a Pennsylvania corporation or its Affiliates) the proceeds of which shall be used by such common parent to pay the portion of any consolidated, combined or similar U.S. federal, state or local income Taxes of such Tax Group, or by the Corporate Parent to pay the portion of the U.S. federal, state or local income Taxes of such Corporate Parent, or any franchise taxes imposed in lieu thereof, for such taxable period that are attributable to the income of the Parent Borrower and/or its Subsidiaries, provided that such amount shall not be greater than the amount of such U.S. federal, state or local income taxes that would be paid (for such taxable period) by the Parent Borrower and its Subsidiaries if the Parent Borrower and/or such Subsidiaries had been a stand-alone corporate taxpayer (or stand-alone group of corporate taxpayers filing on a consolidated, combined or similar basis) for all taxable years ending after the Closing Date (taking into account any net operating loss carryforwards attributable to the Parent Borrower and its Subsidiaries, as the case may be) and (B) without duplication of Restricted Payments made under Section Section 6.04(a)(xv)(A), for any taxable period for which the Parent Borrower is treated as a partnership for U.S. federal and/or applicable state or local income tax purposes, the Parent Borrower may make Restricted Payments to its equity owners at the times and in the amounamounts necessary to enable such owners (and their direct or indirect owners) to pay their Tax obligations attributable to their direct or indirect ownership interests in the Borrower in an aggregate amount equal to the product of (1) 50% (or such higher tax rate as shall be applicable to a resident of New York City or California that indirectly o
Appears in 4 contracts
Sources: First Lien Credit Agreement (Isos Acquisition Corp.), First Lien Credit Agreement (Isos Acquisition Corp.), First Lien Credit Agreement (Isos Acquisition Corp.)
Restricted Payments; Certain Payments of Indebtedness. (a) The Parent None of the Borrower shall not pay or any Subsidiary will declare or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so (other than dividends and distributions on Equity Interests payable solely by the issuance of additional Equity Interests (other than Disqualified Equity Interests) of the person paying such dividends or distributions), except that, without duplication:
(i) any Subsidiary of the Parent Borrower may declare and pay dividends or make other distributions with respect to its capital stock, partnership or membership interests or other similar Equity Interests, or make other Restricted Payments in respect of its Equity Interests, in each case ratably to the extent holders of such Equity Interests;
(ii) the Borrower or any Subsidiary may declare and pay dividends or make other distributions to Parent at such times and in such amounts as necessary to permit any Parent CompanyParent:
(A) to pay general (or to make a payment to any Controlling Company to enable it to pay) franchise taxes or similar taxes, and other fees and expenses, required to maintain the corporate existence of Parent or any Controlling Company;
(B) to pay (or to make a payment to any Controlling Company to enable it to pay) such entities’ operating expenses incurred in the ordinary course of business and compliance other corporate overhead costs and expenses (including corporate overheadincluding, legal or without limitation, administrative, legal, accounting and similar expenses and customary salary, bonus and other benefits payable to directors, officers, employees, members of management, managers and/or consultants of any Parent Companyprovided by third parties), in each case, which are reasonable and customary and incurred in the ordinary course of business, to the extent such expenses are directly attributable to the ownership or operation of the Borrower and its Subsidiaries plus any reasonable and customary indemnification claims made by directors, officers, members directors or officers of management, managers, employees Parent or consultants of any Parent Company, in each case, to the extent Controlling Company attributable to the ownership or operations of any Parent Company (but excluding, for the avoidance of doubtParent, the portion of any such amount, if any, that is attributable Borrower and its Subsidiaries; and to the ownership or operations of any subsidiary of any Parent Company discharge its other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and/or its subsidiaries;
(B) to pay franchise, excise and similar Taxes, and other fees, Taxes and expenses, required to maintain the organizational existence of such Parent Companypermitted liabilities when due;
(C) to pay customary salary, bonus, long-term incentive, severance and other benefits finance (including payment or to certain service providers of the Parent Borrower or its Subsidiaries pursuant make a Restricted Payment to any equity plan (whether in the form of options, cash settled options or otherwise)) payable to Permitted Payees, as well as applicable employment, social security or similar taxes in connection therewith, to the extent such salary, bonuses, severance and other benefits are attributable and reasonably allocated to the operations of the Parent Borrower and/or its subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose;
(D) to pay audit and other accounting and reporting expenses of such Parent Controlling Company to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such expenses, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries;
(Efinance) for the payment of insurance premiums to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries;
(F) to pay (x) fees and expenses related to any debt and/or equity offerings (including refinancings), investments and/or acquisitions permitted or not restricted by this Agreement (whether or not consummated, and including advisory, refinancing, subsequent transaction and exit fees of any Parent Company of the Parent Borrower) and expenses and indemnities of any trustee, agent, arranger, underwriter or similar role and (y) Public Company Costs; and
(G) to finance any Investment permitted under Section 6.06 as if such Parent Company were subject to Section 6.06 (be made pursuant to Section 6.04; provided that (x) any such Restricted Payment under this clause (a)(i)(G) 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 (y) Parent or the relevant Parent applicable Controlling Company shall, promptly immediately following the closing 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 therewiththereof, cause (I1) all property acquired (whether assets or Equity Interests) to be contributed to the Parent Borrower or one a Loan Party other than Parent (or more a Person that will become a Loan Party (other than Parent) upon receipt of its Restricted Subsidiaries such contribution) or (II2) the merger, consolidation or amalgamation merger (to the extent permitted in Section 6.04) of the Person formed or acquired into the Parent Borrower or one or more of its Restricted Subsidiaries, a Loan Party (other than Parent) in order to consummate such Investment in compliance with the applicable requirements of Section 6.06 as if undertaken as a direct Investment by the Parent Borrower or the relevant Restricted Subsidiary)Investment;
(iiD) the Parent Borrower may to pay (or to make a payment to any Controlling Company to enable it to pay) fees and expenses (other than to Affiliates) related to any unsuccessful equity or debt offering not prohibited by this Agreement;
(E) the Borrower may make Restricted Payments to allow Parent (or to make a Restricted Payment to a Controlling Company to enable it to fund), not exceeding $10,000,000 in the aggregate during the term of the Agreement, to fund the repurchase or redemption of capital stock of Parent or a Controlling Company, in each case, held pursuant to and in accordance with stock option plans or other benefit plans or agreements for future, present or former directors, officers or employees of Parent, the Borrower and the other Subsidiaries (or any Immediate Family Member thereof); provided that the Borrower may make such Restricted Payments with respect to any such director, officer or employee without regard to such restriction for consideration consisting of the proceeds of key man life insurance held by Parent, any Controlling Company, the Borrower or a Subsidiary regarding such director, officer of employee or pursuant to any right to acquire capital stock of Parent or a Controlling Company at a price not less than, or any right to the appreciation in value of such capital stock exceeding the fair market value of such capital stock;
(F) to make Restricted Payments to Parent expressly permitted to be made by Parent under this Section;
(G) to pay (or to make a Restricted Payment to any Controlling Company to enable it to pay) for the repurchasecustomary salary, redemption, retirement or bonus and other acquisition or retirement for value benefits payable to officers and employees of Capital Stock of any Parent Company or any subsidiary held by any Permitted Payee:
(A) in accordance with the terms of promissory notes issued pursuant to Section 6.01(o), so long as the aggregate amount of all Cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments made pursuant to sub-clause (D) of this clause (ii) below, (1) does not exceed the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied)) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under clause (D) below; plus
(B) with the proceeds of any sale or issuance of, or of any capital contribution in respect of, the Capital Stock of the Parent Borrower or any Parent Controlling Company (to the extent such proceeds salaries, bonuses and other benefits are contributed directly attributable to the Parent ownership or operations of the Borrower or any Restricted Subsidiary in respect of Qualified Capital Stock issued by the Parent Borrower or such Restricted Subsidiary) (other than amounts constituting a Cure Amount or an Available Excluded Contribution Amount)and its Subsidiaries; plusand
(CH) with the net proceeds of to pay (or to make a Restricted Payment to any key-man life insurance policies; plus
(DControlling Company to enable it to pay) with Cash and Cash Equivalents in an amount not to exceed, together with the aggregate amount of all cash payments made pursuant to sub-clause (A) of this clause (ii) in respect of promissory notes issued pursuant to Section 6.01(o), (1) the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as amounts of the last day of type described in Section 6.09(b) to the most recently ended Test Period in any Fiscal Year, which, if not used in any Fiscal Year, may extent such payment would be carried forward to subsequent Fiscal Years (until so applied) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity permitted under the immediately preceding clause (1such Section 6.09(b); plus
(E) with the amount of any Cash bonuses otherwise payable to any Permitted Payee that are foregone in exchange for the receipt of Capital Stock of the Parent Borrower or any Parent Company pursuant to any compensation arrangement, including any deferred compensation plan;
(iii) the Parent Borrower may make additional Restricted Payments in an amount not to exceed (A) non-cash repurchases of its Equity Interests upon the portion, exercise of stock options if any, such Equity Interests represent a portion of the Available Amount on such date that the Parent Borrower elects to apply to this clause (iii)(A) plus (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Parent Borrower elects to apply to this clause (iii)(B) (plus, without duplication of amounts 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 exercise price of such property options or assets was financed with Available Excluded Contribution Amounts up taxes to the amount of such Available Excluded Contribution Amount, less any application thereof under Sections 6.04(b)(vi) or 6.06(r))be paid in connection therewith;
(iv) the Parent Borrower may make Restricted Payments (i) to any Parent Company to enable such Parent Company to (A) make Cash cash payments in lieu of the issuance of fractional shares representing insignificant interests in the Borrower or similar Equity Interests in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of such capital stock in the Borrower, Parent Company, dividends, share splits, reverse share splits (or any combination thereof) andControlling Person, mergers, consolidations, amalgamations or other business combinations, and acquisitions and other Investments permitted hereunder and/or (B) honor any conversion request by a holder of Convertible Indebtedness by payment of cash and/or delivery of Capital Stock, make any cash payments in lieu of fractional shares in connection with any conversion of Convertible Indebtedness and otherwise make payments on Convertible Indebtedness in accordance with its terms (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments upon redemption thereof), or, in the case of each of sub-clauses (A) and (B) above, make Restricted Payments to any Parent Company to enable such Parent Company to make the payments and/or deliveries described in such sub-clauses (A) and (B), and (ii) consisting of (A) payments made or expected to be made in respect of withholding or similar Taxes payable by any Permitted Payee and/or (B) repurchases of Capital Stock in consideration of the payments described in sub clause (A) above, including demand repurchases in connection with the exercise of stock options and the issuance of restricted stock units or similar stock based awardsas applicable;
(v) during the Parent Borrower may repurchase, redeem, acquire or retire Capital Stock upon (or make provisions for withholdings in connection with), or make Restricted Payments period commencing on the Closing Date and ending immediately prior to any Parent Company to enable it to repurchase, redeem, acquire or retire Capital Stock upon (or make provisions for withholdings in connection with)the Qualified MLP IPO, the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represents all or a portion of the exercise price of, or tax withholdings with respect to, such warrants, options or other securities convertible into or exchangeable for Capital Stock as part of a “cashless” exercise;
(vi) the Parent Borrower and each Subsidiary may make Restricted Payments the proceeds of which are applied (i) on the Closing DatePayments, solely to effect the consummation of the Transactions and on or about the Amendment No. 1 Effective Date, solely to effect the consummation of the Amendment No. 1 Transactions, (ii) on and after the Closing Date, to satisfy any payment obligations owing, or as otherwise required, under the Acquisition Agreement (including payment of working capital and/or purchase price adjustments) and to pay Transaction Costs, in each case, with respect to the Transactions, (iii) to satisfy obligations to direct or indirect holders of Capital Stock of the Parent Borrower (immediately prior to giving effect to the Transactions) in connection with, or as a result of, any working capital and/or purchase price adjustments, in each case, with respect to the Transactions and (iv) to satisfy any settlement of claims or actions in connection with the Transactions or to satisfy indemnity or other similar obligations in connection with the Transactions;
(vii) the Parent Borrower may (or may make Restricted Payments to any Parent Company to enable it to) make Restricted Payments with respect to any Capital Stock in an amount not to exceed (A) the greater of (x) an amount equal to 7.00% per annum of the net Cash proceeds received by or contributed to the Parent Borrower in connection with the merger of Isos Acquisition Corporation and Bowlero Corp. on December 15, 2021 and the other transactions consummated in connection therewith and (y) an amount equal to 7.00% per annum of the Market Capitalization of the Parent Borrower (or its direct or indirect Parent Company, as applicable) and its subsidiaries minus (B) any utilization of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A);
(viii) the Parent Borrower may make Restricted Payments to (i) redeem, repurchase, defease, discharge, retire or otherwise acquire any (A) Capital Stock (“Treasury Capital Stock”) of the Parent Borrower and/or any Restricted Subsidiary or (B) Capital Stock of any Parent Company, in the case of each of subclauses (A) and (B), in exchange for, or out of the proceeds of the substantially concurrent sale (other than to the Parent Borrower and/or any Restricted Subsidiary) of, Qualified Capital Stock of the Parent Borrower or any Parent Company to the extent any such proceeds are contributed to the capital of the Parent Borrower and/or any Restricted Subsidiary 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 the Parent Borrower or a Restricted Subsidiary) of any Refunding Capital Stock;
(ix) to the extent constituting a Restricted Payment, the Parent Borrower may consummate any transaction permitted by Section 5.19 (other than Section 5.19(d)), Section 6.06 (other than Sections 6.06(j) and (t)) and Section 6.07 (other than Section 6.07(g));
(x) the Parent Borrower may make additional Restricted Payments in an aggregate amount not to exceed the sum of (A) the greater of $85,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period minus 100,000,000; plus (B) any utilization of if the Qualified MLP IPO occurs after September 30, 2012, an additional $100,000,000; plus (C) the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A)Amount; plus (D) the Closing Date Dividend; and plus (E) the Permitted Tax Distributions;
(xivi) during the Parent Borrower may pay any dividend or other distribution or consummate any redemption within 60 days after period upon the date of the declaration thereof or the provision of a redemption notice with respect theretoQualified MLP IPO and thereafter, 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);
(xii) the Parent Borrower may make any Restricted Payment constituting the distribution or payment of Receivables Fees;
(xiii) the Parent Borrower may make additional Restricted 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 Event of Default hereunder or shall result therefrom;
(xiv) the Parent by Borrower may make additional Restricted Payments in an amount not to exceed the amount of proceeds received by the Parent Borrower and/or any Restricted Subsidiary under the Representation and Warranty Insurance Policy during the term of this Agreement;MLP Distribution Amount; and
(xvvii) (A) for any taxable period for which the Parent Borrower and/or any of its Subsidiaries are members of a consolidated, combined or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which a direct or indirect parent of the Parent Borrower is the common parent (a “Tax Group”), or for which the Parent Borrower is a disregarded entity for U.S. federal income tax purposes wholly-owned by a corporate parent (a “Corporate Parent”), the Parent Borrower and each of its Subsidiaries may make Restricted Payments the proceeds of which shall be used by such common parent to pay the portion of any consolidated, combined or similar U.S. federal, state or local income Taxes of such Tax Group, or by the Corporate Parent to pay the portion of the U.S. federal, state or local income Taxes of such Corporate Parent, or any franchise taxes imposed in lieu thereof, for such taxable period that are attributable to the income of the Parent Borrower and/or its Subsidiaries, provided that such amount shall not be greater than the amount of such U.S. federal, state or local income taxes that would be paid (for such taxable period) by the Parent Borrower and its Subsidiaries if the Parent Borrower and/or such Subsidiaries had been a stand-alone corporate taxpayer (or stand-alone group of corporate taxpayers filing on a consolidated, combined or similar basis) for all taxable years ending after the Closing Date (taking into account any net operating loss carryforwards attributable to the Parent Borrower and its Subsidiaries, as the case may be) and (B) without duplication of Restricted Payments made under Section 6.04(a)(xv)(A), for any taxable period for which the Parent Borrower is treated as a partnership for U.S. federal and/or applicable state or local income tax purposes, the Parent Borrower Subsidiary may make Restricted Payments to its equity owners at consummate the times MLP Formation Transactions and the Qualified MLP IPO.
(b) None of the Borrower or any Subsidiary will make or agree with the holder thereof to pay or make, directly or indirectly, any cash payment or other distribution in respect of any material Subordinated Indebtedness including any sinking fund or similar deposit, on account of the amounpurchase, redemption, retirement, acquisition, defeasance, cancellation or termination of any material Subordinated Indebtedness, except for:
(i) regularly scheduled interest payments, fees, expenses and indemnification obligations as and when due in respect of any such Subordinated Indebtedness;
(ii) refinancings or exchanges of any such Subordinated Indebtedness for like or junior debt with the proceeds of other Indebtedness permitted under Section 6.01;
(iii) conversions of any such Subordinated Indebtedness to Equity Interests of the Parent, any Controlling Person, the Borrower or any other Subsidiary;
(iv) additional payments in respect of any such Subordinated Indebtedness in an aggregate amount not to exceed the Available Amount; provided that no Event of Default shall have occurred and be continuing or would result therefrom; and
(v) any AHYDO “catchup” payments.
Appears in 2 contracts
Sources: Credit Agreement (PetroLogistics LP), Credit Agreement (PetroLogistics LP)
Restricted Payments; Certain Payments of Indebtedness. (a) The Parent Borrower shall not pay or make, directly or indirectly, make any Restricted Payment, except that:
(i) the Parent Borrower may make Restricted Payments to the extent necessary to permit any Parent Company:
(A) to pay general operating and compliance administrative costs and expenses (including corporate overhead, legal or similar expenses and customary wages, salary, bonus and other benefits payable to directors, officers, employees, members of management, managers consultants and/or consultants independent contractors of any Parent Company), franchise fees, franchise Taxes and similar fees, Taxes and expenses required to maintain the organizational existence of such Parent Company, in each case, which are reasonable and customary and incurred in the ordinary course of business, plus any reasonable and customary indemnification claims made by current or former directors, officers, members of management, managers, employees or consultants of any Parent Company, in each case, to the extent attributable to the ownership or operations of any Parent Company (but excluding, for the avoidance of doubt, the portion of any such amount, if any, that is attributable to the ownership or operations operation of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries); provided that Restricted Payments under this clause (a)(i)(A) that are attributable to any Unrestricted Subsidiary shall be permitted only to the extent that either (x) such Unrestricted Subsidiary has made one or more Cash distributions, advances or loans to the Parent Borrower and/or or any of its subsidiariesSubsidiaries for such purpose in an amount up to the amount of such Unrestricted Subsidiary’s proportionate share of such costs, expenses, franchise fees and Taxes and similar fees, Taxes and expenses or (y) the amount of such Restricted Payments made by the Borrower on behalf of such Unrestricted Subsidiary is treated as an Investment subject to Section 6.06 hereof;
(B) to pay franchise, excise and similar Taxes, and other fees, Taxes and expenses, required to maintain the organizational existence of such Parent Company[reserved];
(C) to pay customary salary, bonus, long-term incentive, severance and other benefits (including payment to certain service providers of the Parent Borrower or its Subsidiaries pursuant to any equity plan (whether in the form of options, cash settled options or otherwise)) payable to Permitted Payees, as well as applicable employment, social security or similar taxes in connection therewith, to the extent such salary, bonuses, severance and other benefits are attributable and reasonably allocated to the operations of the Parent Borrower and/or its subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose;
(D) to pay audit and other accounting and reporting expenses of at such Parent Company to the extent attributable relating to the ownership or operations of any Parent Company (but excluding, for the avoidance of doubt, the portion of any such expenses, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and and/or its subsidiaries; provided that Restricted Payments under this clause (a)(i)(C) that are attributable to any Unrestricted Subsidiary shall be permitted only to the extent that either (x) such Unrestricted Subsidiary has made one or more Cash distributions, advances or loans to the Borrower or any of its Subsidiaries for such purpose in an amount up to the amount of such Unrestricted Subsidiary’s proportionate share of such accounting and reporting expenses or (y) the amount of such Restricted Payments made by Borrower on behalf of such Unrestricted Subsidiary is treated as an Investment subject to Section 6.06 hereof;
(ED) for the payment of insurance premiums to the extent attributable relating to the ownership or operations of any Parent Company (but excluding, for the avoidance of doubt, the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and and/or its subsidiaries; provided that Restricted Payments under this clause (a)(i)(D) that are attributable to any Unrestricted Subsidiary shall be permitted only to the extent that either (x) such Unrestricted Subsidiary has made one or more Cash distributions advances or loans to Borrower or any of its Subsidiaries for such purpose in an amount up to the amount of such Unrestricted Subsidiary’s proportionate share of such insurance premiums or (y) the amount of such Restricted Payments made by Borrower on behalf of such Unrestricted Subsidiary is treated as an Investment subject to Section 6.06 hereof;
(FE) to pay (x) fees and expenses related to any debt and/or or equity offerings (including refinancings)offerings, investments and/or or acquisitions permitted or not restricted by this Agreement (whether or not consummated, and including advisory, refinancing, subsequent transaction and exit fees of any Parent Company of the Parent Borrower) and expenses and indemnities of any trustee, agent, arranger, underwriter or similar role and (y) Public Company Costs; and);
(GF) to pay the consideration to finance any Investment permitted under Section 6.06 as if such Parent Company were subject to Section Section 6.06 (provided that (x) any such Restricted Payment Payments under this clause (a)(i)(G(a)(i)(F) 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 (y) the relevant such Parent Company shall, promptly following the closing 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 therewiththereof, cause (I) all such property acquired to be contributed to the Parent Borrower or one or more of its Restricted Subsidiaries Subsidiaries, or (II) the merger, consolidation or amalgamation of the Person formed or acquired into the Parent Borrower or one or more of its Restricted Subsidiaries, in order to consummate such Investment in compliance a manner that causes such Investment to comply with the applicable requirements of Section Section 6.06 as if undertaken as a direct Investment by the Parent Borrower or the relevant Restricted such Subsidiary);; and
(G) to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, employees or consultants (or any Immediate Family Member thereof) of any Parent Company plus any reasonable and customary indemnification claims made by current or former directors, officers, members of management, managers, employees or consultants of any Parent Company, to the extent such salary, bonuses, severance and other benefits or claims in respect of any of the foregoing) are directly attributable and reasonably allocated to the ownership or operations of any Parent Company (but excluding, for the avoidance of doubt, the portion of any amount, if any, that is attributable to the ownership or operation of any subsidiary of any Parent Company other than the Borrower and/or its subsidiaries), the Borrower and/or its subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose; provided that Restricted Payments under this clause (a)(i)(G) that are attributable to any Unrestricted Subsidiary shall be permitted only to the extent that either (x) such Unrestricted Subsidiary has made one or more Cash distributions, advances or loans to Borrower or any of its Subsidiaries for such purpose in an amount up to the amount of such Unrestricted Subsidiary’s proportionate share of such salary, bonus, severance and other benefits or (y) the amount of such Restricted Payments made by Borrower on behalf of such Unrestricted Subsidiary is treated as an Investment subject to Section 6.06 hereof.
(ii) the Parent Borrower may make Tax Distributions;
(iii) the Borrower may pay (or make Restricted Payments to allow any Parent Company to pay) for the repurchase, redemption, retirement or other acquisition or retirement for value of Capital Stock of any Parent Company Company, the Borrower or any subsidiary held by any Permitted Payeefuture, present or former employee, director, member of management, officer, manager or consultant (or any Immediate Family Member thereof) of any Parent Company, the Borrower or any subsidiary:
(A) in accordance with the terms of promissory notes issued pursuant to Section 6.01(oSection 6.01(n), so long as the aggregate amount of all Cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments made pursuant to sub-clause (D(D) of this clause (ii) below(iii), (1) does not exceed the greater of (x) $68,000,000 12,000,000 and 20(y) 10% of Consolidated Adjusted EBITDA of the Borrower as of the last day of the most recently ended Test Period for which financial statements are available, as determined on a Pro Forma Basis in any Fiscal Year (or, after a Qualifying IPO, the greater of (i) $25,000,000 and (ii) 20% of Consolidated Adjusted EBITDA of the Borrower as of the last day of the most recently ended Test Period for which financial statements are available, as determined on a Pro Forma Basis in any Fiscal Year), which, if not used in any Fiscal Year, may be carried forward to the next subsequent Fiscal Years (until so applied)) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under clause (D) below; plusYear;
(B) with the proceeds of any sale or issuance of, or of any capital contribution in respect of, the Capital Stock of the Parent Borrower or any Parent Company (to the extent such proceeds are have been contributed to the Parent Borrower or any Restricted Subsidiary in respect capital of Qualified Capital Stock issued by the Parent Borrower or such Restricted Subsidiary) (other than amounts constituting a Cure Amount or an Available Excluded Contribution Amount); plusBorrower;
(C) with the net proceeds of any key-man life insurance policiespolicies received during such Fiscal Year; plusor
(D) with Cash and Cash Equivalents in an amount not to exceed, together with the aggregate amount of all cash Cash payments made pursuant to sub-clause (A) of this clause (ii) in respect of promissory notes issued pursuant to Section 6.01(oSection 6.01(n), (1) the greater of (i) $68,000,000 12,000,000 and 20(ii) 10% of Consolidated Adjusted EBITDA of the Borrower as of the last day of the most recently ended Test Period for which financial statements are available, as determined on a Pro Forma Basis in any Fiscal Year (or, after a Qualifying IPO, the greater of (x) $25,000,000 and (y) 20% of Consolidated Adjusted EBITDA of the Borrower as of the last day of the most recently ended Test Period for which financial statements are available, as determined on a Pro Forma Basis in any Fiscal Year), which, if not used in any Fiscal Year, may be carried forward to the next subsequent Fiscal Years (until so applied) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under the immediately preceding clause (1); plus
(E) with the amount of any Cash bonuses otherwise payable to any Permitted Payee that are foregone in exchange for the receipt of Capital Stock of the Parent Borrower or any Parent Company pursuant to any compensation arrangement, including any deferred compensation planYear;
(iiiiv) the Parent Borrower may make additional Restricted Payments in an amount not to exceed (A) the portion, if any, of the Available Amount on such date that the Parent Borrower elects to apply to this clause (iii)(A(a)(iv)(A); provided that the portion of the Available Amount attributed to clause (a)(i) plus of the definition thereof shall not be available for any Restricted Payment pursuant to this clause (iv)(A) for so long as, on the date of the declaration thereof, an Event of Default shall have occurred and be continuing; provided further that the portion of the Available Amount attributed to clause (a)(ii) of the definition thereof shall not be available for any Restricted Payment pursuant to this clause (iv)(A) for so long as, on the date of the declaration thereof, an Event of Default described in Section 7.01(a), (f) or (g) shall have occurred and be continuing or would result therefrom or the Interest Coverage Ratio as determined on a Pro Forma Basis as of the last day of the most recently ended Test Period for which financial statements are available, would be less than 2.00:1.00 and (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Parent Borrower elects to apply to this clause (iii)(B(iv)(B) (plus, without duplication of amounts referred to in this clause (B), in an amount equal to the Net Proceeds from a Disposition extent such Restricted Payment is made within 12 months of property or assets acquired after the Closing Date, if the acquisition date of such property or assets was financed with Available Excluded Contribution Amounts up to the amount designation of such Available Excluded Contribution Amount, less any application thereof under Sections 6.04(b)(vi) or 6.06(r));
(ivv) the Parent Borrower may make Restricted Payments (i) and may make Restricted Payments to any Parent Company to enable such Parent Company to make Restricted Payments consisting of (A1) make Cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of such Parent Company, dividends, share splits, reverse share splits Company or (or any combination thereof2) and, mergers, consolidations, amalgamations or other business combinations, and acquisitions and other Investments permitted hereunder and/or (B) honor any conversion request by a holder of Convertible Indebtedness by payment of cash and/or delivery of Capital Stock, make any cash payments in lieu of fractional shares in connection with any conversion of Convertible Indebtedness and otherwise make payments on Convertible Indebtedness in accordance with its terms (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments upon redemption thereof), or, in the case of each of sub-clauses (A) and (B) above, make Restricted Payments to any Parent Company to enable such Parent Company to make the payments and/or deliveries described in such sub-clauses (A) and (B), and (ii) consisting of (A) payments made or expected to be made in respect of withholding or similar Taxes payable by any Permitted Payee future, present or former officers, directors, employees, members of management, managers or consultants of the Borrower, any subsidiary or Parent Company or any of their respective Immediate Family Members and/or (B) repurchases of Capital Stock in consideration of the payments described in sub clause (A) above(A), including demand repurchases in connection with the exercise of stock options and the issuance of restricted stock units or similar stock based awardsoptions;
(vvi) the Parent Borrower may repurchase, redeem, acquire or retire Capital Stock upon repurchase (or make provisions for withholdings in connection with), or make Restricted Payments to any Parent Company to enable it to repurchase, redeem, acquire or retire ) Capital Stock upon (or make provisions for withholdings in connection with), the exercise of warrants, options or warrants or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represents all or a portion of the exercise price of, of such options or tax withholdings with respect to, such warrants, options warrants or other securities convertible into or exchangeable for Capital Stock as part of a “cashless” exercise;
(vivii) the Parent Borrower may make Restricted Payments the proceeds of which are applied (iA) on or after the Closing Date, solely to effect the consummation of the Transactions and on or about the Amendment No. 1 Effective Date, solely to effect the consummation of the Amendment No. 1 Transactions, (iiB) on and after the Closing Date, to satisfy any payment obligations owing, or as otherwise required, owing under the Acquisition Agreement (including as in effect on the date hereof) and the payment of working capital and/or purchase price adjustments) and to pay any Transaction Costs, in each case, with respect to the Transactions, (iii) to satisfy obligations to direct or indirect holders of Capital Stock of the Parent Borrower (immediately prior to giving effect to the Transactions) in connection with, or as a result of, any working capital and/or purchase price adjustments, in each case, with respect to the Transactions and (iv) to satisfy any settlement of claims or actions in connection with the Transactions or to satisfy indemnity or other similar obligations in connection with the Transactions;
(viiviii) so long as no Event of Default shall have occurred and be continuing at the Parent time of the declaration thereof, following the consummation of a Qualifying IPO, the Borrower may (or may make Restricted Payments to any Parent Company to enable it to) make Restricted Payments with respect to any Capital Stock in an amount not of up to exceed (A) the greater of (x) an amount equal to 7.006.00% per annum of the net Cash proceeds received by or contributed to the Parent Borrower in connection with the merger of Isos Acquisition Corporation and Bowlero Corp. on December 15, 2021 and the other transactions consummated in connection therewith and (y) an amount equal to 7.00% per annum of the Market Capitalization of the Parent Borrower (or its direct or indirect Parent Company, as applicable) and its subsidiaries minus (B) from any utilization of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A)such Qualifying IPO;
(viiiix) the Parent Borrower may make Restricted Payments to (i1) redeem, repurchase, defease, discharge, retire or otherwise acquire any (A) Capital Stock (“Treasury Capital Stock”) of the Parent Borrower and/or or any Restricted Subsidiary or (B) Capital Stock of any Parent Company, in the case of each of subclauses (A(A) and (B(B), in exchange for, or out of the proceeds of the substantially concurrent sale (other than to the Parent Borrower and/or any Restricted or a Subsidiary) of, Qualified Capital Stock of the Parent Borrower or any Parent Company to the extent any such proceeds are contributed to the capital of the Parent Borrower and/or or any Restricted Subsidiary in respect of Qualified Capital Stock (“Refunding Capital Stock”) and (ii2) declare and pay dividends on any the Treasury Capital Stock out of the proceeds of the substantially concurrent sale or issuance (other than to the Parent Borrower or a Restricted Subsidiary) of any the Refunding Capital Stock;
(ixx) to the extent constituting a Restricted Payment, the Parent Borrower may consummate any transaction permitted by Section 5.19 (other than Section 5.19(d)), Section Section 6.06 (other than Sections 6.06(j6.06(j) and (t(t)) and Section ), Section 6.07 (other than Section Section 6.07(g)) and Section 6.09 (other than Section 6.09(d));
(xxi) so long as no Event of Default described in Section 7.01(a), (f) or (g) shall have occurred and be continuing or would result therefrom, the Parent Borrower may make additional Restricted Payments in an aggregate amount not to exceed (A) the greater of (i) $85,000,000 58,000,000 and 25(ii) 50% of Consolidated Adjusted EBITDA of the Borrower, as of the last day of the most recently ended Test Period minus (B) any utilization for which financial statements are available, prior to the date of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A)applicable incurrence;
(xixii) the Parent Borrower may make additional Restricted Payments if on the date of the distribution thereof, (1) no Default or Event of Default shall have occurred and be continuing or would result therefrom and (2) the Total Leverage Ratio as determined on a Pro Forma Basis as of the last day of the most recently ended Test Period for which financial statements are available, would not exceed 4.75:1.00;
(xiii) the Borrower may pay any dividend or other distribution or consummate any redemption within 60 days after the date of 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 dividend or redemption notice would have complied with the provisions of this Section 6.04(a);
(xii) the Parent Borrower may make any Restricted Payment constituting the distribution or payment of Receivables Fees;
(xiii) the Parent Borrower may make additional Restricted 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 Event of Default hereunder or shall result therefromhereof;
(xiv) the Parent Borrower may pay any dividend or consummate any redemption required by provisions in shareholder agreements, partnership agreements, limited liability company organizational governance documents, corporate organizational documents (including, without limitation, certificates of designation), joint venture agreements and other similar agreements that restrict the transfer of ownership interests in such partnership, limited liability company, joint venture or similar Person;
(xv) Borrower may make additional Restricted Payments in an amount not corresponding to exceed the amount Net Proceeds of proceeds received by the Parent Borrower and/or any Restricted Subsidiary under the Representation Sale and Warranty Insurance Policy during the term of this Agreement;Lease-Back Transaction permitted pursuant to Section 6.08; and
(xvxvi) any distributions or payments of Securitization Fees, sales or contributions and other transfers of Securitization Assets and proceeds thereof and purchases of Securitization Assets, in each case in connection with any Securitization Facility.
(Ab) for The Borrower shall not, nor shall it permit any taxable period Subsidiary to, make any payment in Cash, securities or other property on or in respect of principal of or interest on any (x) Subordinated Indebtedness or (y) Indebtedness secured by Liens on the Collateral that are junior to the Liens securing the Secured Obligations, in each case with an outstanding principal amount in excess of the greater of (i) $30,000,000 and (ii) 25% of Consolidated Adjusted EBITDA of the Borrower, as of the last day of the most recently ended Test Period for which financial statements are available (such Indebtedness, the Parent Borrower and/or any of its Subsidiaries are members of a consolidated, combined or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which a direct or indirect parent of the Parent Borrower is the common parent (a “Tax GroupRestricted Debt”), including any sinking fund or for which similar deposit, on account of the Parent Borrower is a disregarded entity for U.S. federal income tax purposes wholly-owned by a corporate parent purchase, redemption, retirement, acquisition, cancellation or termination of any Restricted Debt (a collectively, “Corporate ParentRestricted Debt Payments”), except:
(i) the Parent Borrower and each of its Subsidiaries may make Restricted Payments the proceeds of which shall be used by such common parent to pay the portion of any consolidatedpurchase, combined or similar U.S. federaldefeasance, state or local income Taxes of such Tax Group, or by the Corporate Parent to pay the portion of the U.S. federal, state or local income Taxes of such Corporate Parent, or any franchise taxes imposed in lieu thereof, for such taxable period that are attributable to the income of the Parent Borrower and/or its Subsidiaries, provided that such amount shall not be greater than the amount of such U.S. federal, state or local income taxes that would be paid (for such taxable period) by the Parent Borrower and its Subsidiaries if the Parent Borrower and/or such Subsidiaries had been a stand-alone corporate taxpayer (or stand-alone group of corporate taxpayers filing on a consolidated, combined or similar basis) for all taxable years ending after the Closing Date (taking into account any net operating loss carryforwards attributable to the Parent Borrower and its Subsidiaries, as the case may be) and (B) without duplication of Restricted Payments made under Section 6.04(a)(xv)(A), for any taxable period for which the Parent Borrower is treated as a partnership for U.S. federal and/or applicable state or local income tax purposes, the Parent Borrower may make Restricted Payments to its equity owners at the times and in the amounredemptio
Appears in 2 contracts
Sources: Incremental Joinder to First Lien Credit Agreement (Post Holdings, Inc.), First Lien Credit Agreement (Post Holdings, Inc.)
Restricted Payments; Certain Payments of Indebtedness. (a) The Parent No Borrower shall not pay or make, directly or indirectly, any Restricted Payment, except that:
(i) the Parent Borrower Borrowers may make Restricted Payments to the extent necessary to permit any Parent Company (and so long as such amounts are promptly applied by such Parent Company:):
(A) to pay general operating and compliance administrative costs and expenses (including corporate overhead, legal or similar expenses and customary salary, bonus and other benefits payable to directors, officers, employees, members of management, managers and/or consultants of any Parent Company)) and franchise fees and Taxes and similar fees, Taxes and expenses required to enable such Parent Company to maintain its organizational existence or qualification to do business, in each case, which are reasonable and customary and incurred in the ordinary course of business, plus any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of any Parent Company, in each case, to the extent attributable to the ownership or operations of any Parent Company and its subsidiaries (but excluding, for the avoidance of doubt, excluding the portion of any such amount, if any, amount that is attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its Borrowers and their subsidiaries), the Parent Borrower and/or its subsidiaries;
(B) to pay franchisedischarge the consolidated combined, excise and unitary or similar Taxes, and other fees, Taxes and expenses, required to maintain the organizational existence Tax liabilities of such Parent Company and its subsidiaries when and as due determined without taking into account adjustments pursuant to Section 743 of the Code and using an assumed uniform tax rate, and to the extent such liabilities are attributable to the Parent Company’s direct or indirect ownership of the Borrowers and their subsidiaries;
(C) to pay customary salary, bonus, long-term incentive, severance and other benefits (including payment to certain service providers of the Parent Borrower or its Subsidiaries pursuant to any equity plan (whether in the form of options, cash settled options or otherwise)) payable to Permitted Payees, as well as applicable employment, social security or similar taxes in connection therewith, to the extent such salary, bonuses, severance and other benefits are attributable and reasonably allocated to the operations of the Parent Borrower and/or its subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose;
(D) to pay audit and other accounting and reporting expenses of such Parent Company to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such expenses, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower Borrowers and/or its their subsidiaries), the Parent Borrower Borrowers and its their subsidiaries;
(ED) for the payment of insurance premiums to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower Representative and/or its subsidiaries), the Parent Borrower any Borrowers and its subsidiaries;
(FE) to pay (x) fees and expenses related to any debt and/or or equity offerings (including refinancings)offerings, investments and/or or acquisitions permitted or not restricted by this Agreement (whether or not consummated, ) relating to any Borrower and including advisory, refinancing, subsequent transaction and exit fees of any Parent Company of the Parent Borrower) and expenses and indemnities of any trustee, agent, arranger, underwriter or similar role its Restricted Subsidiaries and (y) Public Company Costs; and;
(GF) to finance any Investment permitted under Section 6.06 as if such Parent Company were subject to Section Section 6.06 (provided that (x) any Restricted Payment under this clause (a)(i)(G(a)(i)(F) 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 (y) the relevant Parent Company shall, promptly following the closing 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 therewiththereof, cause (I) all property acquired to be contributed to the Parent a Borrower or one or more of its Restricted Subsidiaries Subsidiaries, or (II) the merger, consolidation or amalgamation of the Person formed or acquired into the Parent a Borrower or one or more of its Restricted Subsidiaries, in order to consummate such Investment in compliance with the applicable requirements of Section Section 6.06 as if undertaken as a direct Investment by the Parent such Borrower or the relevant Restricted Subsidiary);
(G) to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, employees or consultants of any Parent Company (or any Immediate Family Member of any of the foregoing) to the extent such salary, bonuses and other benefits are attributable and reasonably allocated to the operations of the Borrowers and/or their subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose; and
(H) to pay costs, expenses and fees associated with litigation or governmental proceedings, investigations or inquires, in each case to the extent such costs, expenses and fees are attributable and reasonably allocated to the operations of the Borrowers and/or their subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose; provided, that with respect to Restricted Payments under clauses (A), (B), (C), (D), (G) and (H) above, such Restricted Payments that are attributable to any Unrestricted Subsidiary shall be permitted only to the extent that either (x) such Unrestricted Subsidiary has made one or more cash distributions, advances or loans to a Borrower or any of its Restricted Subsidiaries for such purpose in an amount up to the amount of such Unrestricted Subsidiary’s proportionate share of such Restricted Payment or (y) the amount of any such Restricted Payment made by a Borrower on behalf of such Unrestricted Subsidiary is treated as an Investment subject to Section 6.06 hereof;
(ii) the Parent Borrower Borrowers may pay (or make Restricted Payments to allow any Parent Company to pay) for the repurchase, redemption, retirement or other acquisition or retirement for value of Capital Stock of any Parent Company or any subsidiary held by any Permitted Payeefuture, present or former employee, director, member of management, officer, manager or consultant (or any Affiliate or Immediate Family Member thereof) of any Parent Company, any Borrower or any subsidiary:
(A) in accordance with the terms of exchange for promissory notes issued pursuant to Section Section 6.01(o), so long as the aggregate amount of all Cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments made pursuant to sub-clause (D(D) of this clause (ii(ii) below, (1) does not exceed the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period 10,000,000 in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to the next subsequent Fiscal Years (until so applied)) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under clause (D) below; plusYear;
(B) with the proceeds of any sale or issuance of, or of any capital contribution in respect of, the Capital Stock of the Parent any Borrower or any Parent Company (to the extent such proceeds are contributed to the Parent Borrower or any Restricted Subsidiary in respect of Qualified Capital Stock issued by the Parent to any Borrower or such any Restricted Subsidiary) (other than amounts constituting a Cure Amount or an Available Excluded Contribution Amount); plus;
(C) with the net proceeds of any key-man life insurance policies; plusor
(D) with Cash and Cash Equivalents in an amount not to exceed, together with the aggregate amount of all cash payments made pursuant to sub-clause (A(A) of this clause (ii(ii) in respect of promissory notes issued pursuant to Section Section 6.01(o), (1) the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period 10,000,000 in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to the next subsequent Fiscal Years (until so applied) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under the immediately preceding clause (1); plus
(E) with the amount of any Cash bonuses otherwise payable to any Permitted Payee that are foregone in exchange for the receipt of Capital Stock of the Parent Borrower or any Parent Company pursuant to any compensation arrangement, including any deferred compensation planYear;
(iii) so long as no Event of Default then exists or would result therefrom, the Parent Borrower Borrowers may make additional Restricted Payments in an amount not to exceed (A) the portion, if any, of the Available Amount on such date that the Parent such Borrower elects to apply to this clause (iii)(A(iii)(A) plus (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Parent such Borrower elects to apply to this clause (iii)(B) (plus, without duplication of amounts referred to in this clause (Biii)(B); provided that, in an amount equal to the Net Proceeds from case of clause (A) above, the Total Leverage Ratio, calculated on a Disposition of property or assets acquired after the Closing DatePro Forma Basis, if the acquisition of such property or assets was financed with Available Excluded Contribution Amounts up to the amount of such Available Excluded Contribution Amount, less any application thereof under Sections 6.04(b)(vi) or 6.06(r))would not exceed 3.00:1.00;
(iv) the Parent Borrower Borrowers may make Restricted Payments (i) to any Parent Company to enable such Parent Company to (A) make Cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of such Parent Company, dividends, share splits, reverse share splits (or any combination thereof) and, mergers, consolidations, amalgamations or other business combinations, and acquisitions and other Investments permitted hereunder and/or (B) honor any conversion request by a holder of Convertible Indebtedness by payment of cash and/or delivery of Capital Stock, make any cash payments in lieu of fractional shares in connection with any conversion of Convertible Indebtedness and otherwise make payments on Convertible Indebtedness in accordance with its terms (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments upon redemption thereof), or, in the case of each of sub-clauses (A) and (B) above, make Restricted Payments to any Parent Company to enable such Parent Company to make the payments and/or deliveries described in such sub-clauses (A) and (B), and (ii) consisting of (A) payments made or expected to be made in respect of withholding or similar Taxes payable by any Permitted Payee future, present or former officers, directors, employees, members of management, managers or consultants of any Borrower, any Restricted Subsidiary or any Parent Company or any of their respective Immediate Family Members and/or (B) repurchases of Capital Stock in consideration of the payments described in sub sub-clause (A(A) above, including demand repurchases in connection with the exercise of stock options and the issuance of restricted stock units or similar stock based awardsoptions;
(v) the Parent Borrower Borrowers may repurchase, redeem, acquire or retire Capital Stock upon repurchase (or make provisions for withholdings in connection with), or make Restricted Payments to any Parent Company to enable it to repurchase, redeem, acquire or retire ) Capital Stock upon (or make provisions for withholdings in connection with), the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represents all or a portion of the exercise price of, or tax withholdings with respect to, of such warrants, options or other securities convertible into or exchangeable for Capital Stock as part of a “cashless” exercise;
(vi) the Parent Borrower Borrowers may make Restricted Payments Payments, the proceeds of which are applied (i) on the Closing Date, solely to effect the consummation of the Transactions and on or about the Amendment No. 1 Effective Date, solely to effect the consummation of the Amendment No. 1 Transactions, (ii) on and after the Closing Date, to satisfy any payment obligations owing, or as otherwise required, under the Acquisition Agreement (including payment of working capital and/or purchase price adjustments) and to pay the Transaction Costs, in each case, with respect to the Transactions, (iii) to satisfy obligations to direct or indirect holders of Capital Stock of the Parent Borrower (immediately prior to giving effect to the Transactions) in connection with, or as a result of, any working capital and/or purchase price adjustments, in each case, with respect to the Transactions and (iv) to satisfy any settlement of claims or actions in connection with the Transactions or to satisfy indemnity or other similar obligations in connection with the TransactionsDividend);
(vii) the Parent any Borrower may (or may make Restricted Payments to any Parent Company to enable it to) make Restricted Payments with respect to any Capital Stock in an amount not to exceed (A) the greater of (x) an amount equal to 7.00% per annum of the net Cash proceeds received by or contributed to the Parent Borrower in connection with the merger of Isos Acquisition Corporation and Bowlero Corp. on December 15, 2021 and the other transactions consummated in connection therewith and (y) an amount equal to 7.00% per annum of the Market Capitalization of the Parent Borrower (or its direct or indirect Parent Company, as applicable) and its subsidiaries minus (B) any utilization of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A)Borrower;
(viii) the Parent Borrower Borrowers may make Restricted Payments to (i) redeem, repurchase, defease, discharge, retire or otherwise acquire any (A) Capital Stock (“Treasury Capital Stock”) of the Parent any Borrower and/or any Restricted Subsidiary or (B) Capital Stock of any Parent Company, in the case of each of subclauses (A(A) and (B(B), in exchange for, or out of the proceeds of the substantially concurrent sale (other than to the Parent a Borrower and/or any Restricted Subsidiary) of, Qualified Capital Stock of the Parent any Borrower or any Parent Company to the extent any such proceeds are contributed to the capital of the Parent any Borrower and/or any Restricted Subsidiary 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 the Parent a Borrower or a Restricted Subsidiary) of any Refunding Capital Stock;
(ix) to the extent constituting a Restricted Payment, the Parent any Borrower may consummate any transaction permitted by Section 5.19 (other than Section 5.19(d)), Section Section 6.06 (other than Sections 6.06(j6.06(j) and (t(t)) and Section Section 6.07 (other than Section Section 6.07(g));
(x) the Parent Borrower Borrowers may make additional other Restricted Payments in an aggregate amount not to exceed (A) the greater $50,000,000, so long as no Event of $85,000,000 Default shall have occurred and 25% of Consolidated Adjusted EBITDA 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)be continuing or shall result therefrom;
(xi) the Parent Borrower Borrowers may pay any dividend or other distribution or consummate any redemption within 60 days after the date of 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 dividend or redemption notice would have complied with the provisions of this Section 6.04(a);hereof; and
(xii) the Parent Borrower Borrowers may make Restricted Payments in an aggregate amount not to exceed $100,000,000 to allow Indivior plc to repurchase, redeem and/or retire Capital Stock of Indivior plc from time to time, so long as no Event of Default shall have occurred and be continuing or shall result therefrom.
(b) Neither Holdings nor any Borrower shall, nor shall they permit any Restricted Payment constituting Subsidiary to, make any payment (whether in Cash, securities or other property) on or in respect of principal of or interest on (x) any Junior Lien Indebtedness or (y) any unsecured Indebtedness or Junior Indebtedness (such Indebtedness under clauses (x), (y) and (z), the distribution “Restricted Debt”), including any sinking fund or payment similar deposit, on account of Receivables Feesthe purchase, redemption, retirement, acquisition, cancellation or termination of any Restricted Debt prior to its scheduled maturity (collectively, “Restricted Debt Payments”), except:
(i) any purchase, defeasance, redemption, repurchase, repayment or other acquisition or retirement of any Restricted Debt made by exchange for, or out of the proceeds of, the substantially concurrent incurrence of Refinancing Indebtedness permitted by Section 6.01(p);
(xiiiii) payments as part of an “applicable high yield discount obligation” catch-up payment;
(iii) payments of regularly scheduled interest as and when due in respect of any Restricted Debt, except for any payments with respect to any Subordinated Indebtedness that are prohibited by the subordination provisions thereof;
(iv) [Reserved];
(A) Restricted Debt Payments in exchange for, or with proceeds of any issuance of, Qualified Capital Stock of any Borrower and/or any Restricted Subsidiary and/or any capital contribution in respect of Qualified Capital Stock of any Borrower or any Restricted Subsidiary, (B) Restricted Debt Payments as a result of the conversion of all or any portion of any Restricted Debt into Qualified Capital Stock of any Borrower 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 to the extent that the incurrence of such additional Restricted Debt is permitted under Section 6.01; and
(vi) so long as no Event of Default exists or would result therefrom, Restricted Debt Payments in an aggregate amount not to exceed (A) the Parent portion, if any, of the Available Amount on such date that any Borrower may make additional Restricted Payments so long aselects to apply to this clause (vi)(A) plus (B) the portion, as measured at if any, of the time Available Excluded Contribution Amount on such date that any Borrower elects to apply to this clause (vi)(B); provided for that, in Section 1.04(e)the case of clause (A) above, (i) the Total Leverage Ratio would not exceed 4.00:1.00Ratio, calculated on a Pro Forma Basis and (ii) there shall exist no Event of Default hereunder or shall result therefrom;
(xiv) the Parent Borrower may make additional Restricted Payments in an amount Basis, would not to exceed the amount of proceeds received by the Parent Borrower and/or any Restricted Subsidiary under the Representation and Warranty Insurance Policy during the term of this Agreement;
(xv) (A) for any taxable period for which the Parent Borrower and/or any of its Subsidiaries are members of a consolidated, combined or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which a direct or indirect parent of the Parent Borrower is the common parent (a “Tax Group”), or for which the Parent Borrower is a disregarded entity for U.S. federal income tax purposes wholly-owned by a corporate parent (a “Corporate Parent”), the Parent Borrower and each of its Subsidiaries may make Restricted Payments the proceeds of which shall be used by such common parent to pay the portion of any consolidated, combined or similar U.S. federal, state or local income Taxes of such Tax Group, or by the Corporate Parent to pay the portion of the U.S. federal, state or local income Taxes of such Corporate Parent, or any franchise taxes imposed in lieu thereof, for such taxable period that are attributable to the income of the Parent Borrower and/or its Subsidiaries, provided that such amount shall not be greater than the amount of such U.S. federal, state or local income taxes that would be paid (for such taxable period) by the Parent Borrower and its Subsidiaries if the Parent Borrower and/or such Subsidiaries had been a stand-alone corporate taxpayer (or stand-alone group of corporate taxpayers filing on a consolidated, combined or similar basis) for all taxable years ending after the Closing Date (taking into account any net operating loss carryforwards attributable to the Parent Borrower and its Subsidiaries, as the case may be) and (B) without duplication of Restricted Payments made under Section 6.04(a)(xv)(A), for any taxable period for which the Parent Borrower is treated as a partnership for U.S. federal and/or applicable state or local income tax purposes, the Parent Borrower may make Restricted Payments to its equity owners at the times and in the amoun3.00:1.00.
Appears in 2 contracts
Sources: Credit Agreement (Indivior PLC), Credit Agreement (Indivior PLC)
Restricted Payments; Certain Payments of Indebtedness. (a) The Parent Borrower Agent shall not pay or make, directly or indirectly, any Restricted Payment, except that:
(i) the Parent Borrower Agent may make Restricted Payments to the extent necessary to permit any Parent Holding Company:;
(A) to pay (x) general operating and compliance administrative costs and expenses (including corporate overhead, legal or similar expenses) and franchise and similar fees, taxes and expenses and customary salary, bonus and other benefits payable required to directors, officers, employees, members maintain the organizational existence of management, managers and/or consultants of any Parent such Holding Company), in each case, which are reasonable and customary and incurred in the ordinary course of business, plus plus, subject to Section 6.19, if applicable, any reasonable and customary Post-Petition indemnification claims made by directors, officers, members of management, managers, management or employees or consultants of any Parent Holding Company, in each case, to the extent attributable to the ownership or operations of any Parent Company (but excluding, for the avoidance of doubtHoldings, the portion Borrowers and their Subsidiaries, and (y) without duplication of preceding clause (x), any Public Company Costs;
(B) for any taxable period in which the Borrower Agent and/or any of its Subsidiaries is a member of a consolidated, combined, unitary or similar income tax group of which a direct or indirect parent of the Borrowers is the common parent (a “Tax Group”), to discharge the consolidated, combined, unitary or similar income Tax liabilities of such amountTax Group when and as due, if any, that is to the extent such liabilities are attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Holding Companies, Borrower and/or Agent and its subsidiaries), Subsidiaries; provided that the Parent Borrower and/or its subsidiaries;
permitted payment pursuant to this paragraph (B) with respect to pay franchiseany taxes of any Unrestricted Subsidiary for any taxable period shall be limited to the amount actually paid with respect to such period by such Unrestricted Subsidiary to the Borrower Agent and its Subsidiaries for the purposes of paying such consolidated, excise and combined, unitary or similar Taxes, and other fees, Taxes and expenses, required to maintain the organizational existence of such Parent Companytaxes;
(C) to pay audit and other accounting and reporting expenses at such Holding Company to the extent relating to the ownership or operations of the Borrowers and their Subsidiaries;
(D) for the payment of insurance premiums to the extent relating to the ownership or operations of the Borrowers and their Subsidiaries;
(E) [Reserved];
(F) [Reserved]; and
(G) without duplication of clause (A)(y) above and subject to Section 6.19, if applicable, to pay customary salary, bonus, long-term incentive, severance bonus and other benefits (including payment to certain service providers of the Parent Borrower or its Subsidiaries pursuant to any equity plan (whether in the form of options, cash settled options or otherwise)) payable to Permitted Payeesdirectors, as well as applicable employmentofficers, social security members of management or similar taxes in connection therewith, employees of any Holding Company to the extent such salary, bonuses, severance bonuses and other benefits are directly attributable and reasonably allocated to the operations of the Parent Borrower and/or its subsidiariesBorrowers and their Subsidiaries, in each case, so long as such Parent Holding Company applies the amount of any such Restricted Payment for such purpose;
(D) to pay audit and other accounting and reporting expenses of such Parent Company to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such expenses, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries;
(E) for the payment of insurance premiums to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries;
(F) to pay (x) fees and expenses related to any debt and/or equity offerings (including refinancings), investments and/or acquisitions permitted or not restricted by this Agreement (whether or not consummated, and including advisory, refinancing, subsequent transaction and exit fees of any Parent Company of the Parent Borrower) and expenses and indemnities of any trustee, agent, arranger, underwriter or similar role and (y) Public Company Costs; and
(G) to finance any Investment permitted under Section 6.06 as if such Parent Company were subject to Section 6.06 (provided that (x) any Restricted Payment under this clause (a)(i)(G) 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 (y) the relevant Parent Company shall, promptly following the closing 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 (I) all property acquired to be contributed to the Parent Borrower or one or more of its Restricted Subsidiaries or (II) the merger, consolidation or amalgamation of the Person formed or acquired into the Parent Borrower or one or more of its Restricted Subsidiaries, in order to consummate such Investment in compliance with the applicable requirements of Section 6.06 as if undertaken as a direct Investment by the Parent Borrower or the relevant Restricted Subsidiary);
(ii) the Parent Borrower may pay (or make Restricted Payments to allow any Parent Company to pay) for the repurchase, redemption, retirement or other acquisition or retirement for value of Capital Stock of any Parent Company or any subsidiary held by any Permitted Payee:
(A) in accordance with the terms of promissory notes issued pursuant to Section 6.01(o), so long as the aggregate amount of all Cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments made pursuant to sub-clause (D) of this clause (ii) below, (1) does not exceed the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied)) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under clause (D) below; plus
(B) with the proceeds of any sale or issuance of, or of any capital contribution in respect of, the Capital Stock of the Parent Borrower or any Parent Company (to the extent such proceeds are contributed to the Parent Borrower or any Restricted Subsidiary in respect of Qualified Capital Stock issued by the Parent Borrower or such Restricted Subsidiary) (other than amounts constituting a Cure Amount or an Available Excluded Contribution Amount); plus
(C) with the net proceeds of any key-man life insurance policies; plus
(D) with Cash and Cash Equivalents in an amount not to exceed, together with the aggregate amount of all cash payments made pursuant to sub-clause (A) of this clause (ii) in respect of promissory notes issued pursuant to Section 6.01(o), (1) the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under the immediately preceding clause (1); plus
(E) with the amount of any Cash bonuses otherwise payable to any Permitted Payee that are foregone in exchange for the receipt of Capital Stock of the Parent Borrower or any Parent Company pursuant to any compensation arrangement, including any deferred compensation plan[Reserved];
(iii) the Parent Borrower may make additional Restricted Payments in an amount not to exceed (A) the portion, if any, of the Available Amount on such date that the Parent Borrower elects to apply to this clause (iii)(A) plus (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Parent Borrower elects to apply to this clause (iii)(B) (plus, without duplication of amounts 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 with Available Excluded Contribution Amounts up to the amount of such Available Excluded Contribution Amount, less any application thereof under Sections 6.04(b)(vi) or 6.06(r))[Reserved];
(iv) the Parent Borrower may make Restricted Payments (i) to any Parent Company to enable such Parent Company to (A) make Cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of such Parent Company, dividends, share splits, reverse share splits (or any combination thereof) and, mergers, consolidations, amalgamations or other business combinations, and acquisitions and other Investments permitted hereunder and/or (B) honor any conversion request by a holder of Convertible Indebtedness by payment of cash and/or delivery of Capital Stock, make any cash payments in lieu of fractional shares in connection with any conversion of Convertible Indebtedness and otherwise make payments on Convertible Indebtedness in accordance with its terms (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments upon redemption thereof), or, in the case of each of sub-clauses (A) and (B) above, make Restricted Payments to any Parent Company to enable such Parent Company to make the payments and/or deliveries described in such sub-clauses (A) and (B), and (ii) consisting of (A) payments made or expected to be made in respect of withholding or similar Taxes payable by any Permitted Payee and/or (B) repurchases of Capital Stock in consideration of the payments described in sub clause (A) above, including demand repurchases in connection with the exercise of stock options and the issuance of restricted stock units or similar stock based awards[Reserved];
(v) the Parent Borrower may repurchase, redeem, acquire or retire Capital Stock upon (or make provisions for withholdings in connection with), or make Restricted Payments to any Parent Company to enable it to repurchase, redeem, acquire or retire Capital Stock upon (or make provisions for withholdings in connection with), the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represents all or a portion of the exercise price of, or tax withholdings with respect to, such warrants, options or other securities convertible into or exchangeable for Capital Stock as part of a “cashless” exercise[Reserved];
(vi) the Parent Borrower may make Restricted Payments the proceeds of which are applied (i) on the Closing Date, solely to effect the consummation of the Transactions and on or about the Amendment No. 1 Effective Date, solely to effect the consummation of the Amendment No. 1 Transactions, (ii) on and after the Closing Date, to satisfy any payment obligations owing, or as otherwise required, under the Acquisition Agreement (including payment of working capital and/or purchase price adjustments) and to pay Transaction Costs, in each case, with respect to the Transactions, (iii) to satisfy obligations to direct or indirect holders of Capital Stock of the Parent Borrower (immediately prior to giving effect to the Transactions) in connection with, or as a result of, any working capital and/or purchase price adjustments, in each case, with respect to the Transactions and (iv) to satisfy any settlement of claims or actions in connection with the Transactions or to satisfy indemnity or other similar obligations in connection with the Transactions;[Reserved]
(vii) the Parent Borrower may (or may make Restricted Payments to any Parent Company to enable it to) make Restricted Payments with respect to any Capital Stock in an amount not to exceed (A) the greater of (x) an amount equal to 7.00% per annum of the net Cash proceeds received by or contributed to the Parent Borrower in connection with the merger of Isos Acquisition Corporation and Bowlero Corp. on December 15, 2021 and the other transactions consummated in connection therewith and (y) an amount equal to 7.00% per annum of the Market Capitalization of the Parent Borrower (or its direct or indirect Parent Company, as applicable) and its subsidiaries minus (B) any utilization of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A)[Reserved];
(viii) [Reserved];
(ix) [Reserved];
(x) [Reserved]; and
(xi) [Reserved].
(b) The Borrowers and the Parent Borrower may make Restricted Subsidiary Guarantors shall not, nor shall they permit any Subsidiary to, make, directly or indirectly, any Prepetition Payments or payments in respect of Indebtedness that is subordinated in right of payment to the Obligations other than (i) redeemas permitted by the Orders, repurchase, defease, discharge, retire (ii) as permitted by any Approved Bankruptcy Court Order and consistent with the Approved Budget (subject to permitted variances) or otherwise acquire (iii) as permitted by any (A) Capital Stock (“Treasury Capital Stock”) other order of the Parent Borrower and/or any Restricted Subsidiary or (B) Capital Stock of any Parent CompanyBankruptcy Court in amounts reasonably satisfactory to the Required Lenders, but in the case of each of subclauses (A) and (B), in exchange for, or out of the proceeds of the substantially concurrent sale clauses (other than to the Parent Borrower and/or any Restricted Subsidiary) of, Qualified Capital Stock of the Parent Borrower or any Parent Company to the extent any such proceeds are contributed to the capital of the Parent Borrower and/or any Restricted Subsidiary in respect of Qualified Capital Stock (“Refunding Capital Stock”i) and (ii) declare and pay dividends on any Treasury Capital Stock out in amounts not in excess of the proceeds of amounts set forth for such payments in the substantially concurrent sale or issuance Approved Budget (other than subject to the Parent Borrower or a Restricted Subsidiary) of any Refunding Capital Stock;permitted variances).
(ixc) to The Borrowers and the extent constituting a Restricted Payment, the Parent Borrower may consummate any transaction permitted by Section 5.19 (other than Section 5.19(d)), Section 6.06 (other than Sections 6.06(j) and (t)) and Section 6.07 (other than Section 6.07(g));
(x) the Parent Borrower may make additional Restricted Payments in an aggregate amount not to exceed (A) the greater of $85,000,000 and 25% of Consolidated Adjusted EBITDA 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);
(xi) the Parent Borrower may pay any dividend or other distribution or consummate any redemption within 60 days after the date of 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);
(xii) the Parent Borrower may make any Restricted Payment constituting the distribution or payment of Receivables Fees;
(xiii) the Parent Borrower may make additional Restricted Payments so long as, as measured at the time provided for in Section 1.04(e), Subsidiary Guarantors shall (i) not permit the Total Leverage Ratio would not exceed 4.00:1.00Anagram Parties to reimburse or otherwise pay (or enter into an agreement to reimburse or pay) any advisors to any Anagram Party or advisors to any material creditors of any Anagram Party except on reasonable market terms or as otherwise acceptable to the Required Lenders, calculated on a Pro Forma Basis in their reasonable discretion and (ii) there shall exist no Event of Default hereunder provide the Ad Hoc Group Advisors with not less than three (3) Business Days’ prior written before entering into any such agreement to reimburse or shall result therefrom;
(xiv) the Parent Borrower may make additional Restricted Payments in an amount not to exceed the amount of proceeds received by the Parent Borrower and/or any Restricted Subsidiary under the Representation and Warranty Insurance Policy during the term of this Agreement;
(xv) (A) for any taxable period for which the Parent Borrower and/or any of its Subsidiaries are members of a consolidated, combined or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which a direct or indirect parent of the Parent Borrower is the common parent (a “Tax Group”), or for which the Parent Borrower is a disregarded entity for U.S. federal income tax purposes wholly-owned by a corporate parent (a “Corporate Parent”), the Parent Borrower and each of its Subsidiaries may make Restricted Payments the proceeds of which shall be used by such common parent to pay the portion of any consolidated, combined or similar U.S. federal, state or local income Taxes of such Tax Group, or by the Corporate Parent to pay the portion of the U.S. federal, state or local income Taxes of such Corporate Parent, or any franchise taxes imposed in lieu thereof, for such taxable period that are attributable to the income of the Parent Borrower and/or its Subsidiaries, provided that such amount shall not be greater than the amount of such U.S. federal, state or local income taxes that would be paid (for such taxable period) by the Parent Borrower and its Subsidiaries if the Parent Borrower and/or such Subsidiaries had been a stand-alone corporate taxpayer (or stand-alone group of corporate taxpayers filing on a consolidated, combined or similar basis) for all taxable years ending after the Closing Date (taking into account any net operating loss carryforwards attributable to the Parent Borrower and its Subsidiaries, as the case may be) and (B) without duplication of Restricted Payments made under Section 6.04(a)(xv)(A), for any taxable period for which the Parent Borrower is treated as a partnership for U.S. federal and/or applicable state or local income tax purposes, the Parent Borrower may make Restricted Payments to its equity owners at the times and in the amounpay.
Appears in 2 contracts
Sources: Term Loan Credit Agreement (Party City Holdco Inc.), Restructuring Support Agreement (Party City Holdco Inc.)
Restricted Payments; Certain Payments of Indebtedness. (a) The Parent Lead Borrower shall not pay or make, directly or indirectly, any Restricted Payment, except that:
(i) the Parent Lead Borrower may make Restricted Payments to the extent necessary to permit any Parent Company:
(A) to pay general operating and compliance administrative costs and expenses (including corporate overhead, legal or similar expenses and customary salary, bonus and other benefits payable to directors, officers, employees, members of management, managers and/or consultants of any Parent Company)) and franchise fees and Taxes and similar fees, Taxes and expenses required to enable such Parent Company to maintain its organizational existence or qualification to do business, in each case, which are reasonable and customary and incurred in the ordinary course of business, plus any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of any Parent Company, in each case, to the extent attributable to the ownership or operations of any Parent Company and its subsidiaries (but excluding, for the avoidance of doubt, excluding the portion of any such amount, if any, amount that is attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or and its subsidiaries), the Parent Borrower and/or its subsidiaries;
(B) to pay franchise, excise scheduled and similar Taxes, overdue interest and other fees, Taxes and expenses, required to maintain the organizational existence payments as part of such Parent Company;
(C) to pay customary salary, bonus, longan AHYDO catch-term incentive, severance and other benefits (including payment to certain service providers of the Parent Borrower or its Subsidiaries pursuant to any equity plan (whether in the form of options, cash settled options or otherwise)) payable to Permitted Payees, as well as applicable employment, social security or similar taxes in connection therewith, to the extent such salary, bonuses, severance and other benefits are attributable and reasonably allocated to the operations of the Parent Borrower and/or its subsidiariesup payment, in each case, so long as such in respect of any Indebtedness of any Parent Company applies to the amount of any such Restricted Payment for such purposeextent the Net Proceeds thereof were contributed to the Lead Borrower;
(DC) to pay audit and other accounting and reporting expenses of such Parent Company to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such expenses, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Lead Borrower and/or its subsidiaries), the Parent Lead Borrower and its subsidiaries;
(ED) for the payment of insurance premiums to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Lead Borrower and/or its subsidiaries), the Parent Lead Borrower and its subsidiaries;
(FE) to pay (x) fees and expenses related to any debt and/or or equity offerings (including refinancings)by any Parent Company, investments and/or or acquisitions permitted or not restricted by this Agreement (whether or not consummated, and including advisory, refinancing, subsequent transaction and exit fees of any Parent Company of the Parent Borrower) and expenses and indemnities of any trustee, agent, arranger, underwriter or similar role and (y) Public Company Costs; and;
(GF) to finance any Investment permitted under Section 6.06 as if such Parent Company were subject to Section Section 6.06 (provided that (x) any Restricted Payment under this clause (a)(i)(G(a)(i)(F) 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 (y) the relevant Parent Company shall, promptly following the closing 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 therewiththereof, cause (I) all property acquired to be contributed to the Parent Lead Borrower or one or more of its Restricted Subsidiaries Subsidiaries, or (II) the merger, consolidation or amalgamation of the Person formed or acquired into the Parent Lead Borrower or one or more of its Restricted Subsidiaries, in order to consummate such Investment in compliance with the applicable requirements of Section Section 6.06 as if undertaken as a direct Investment by the Parent Lead Borrower or the relevant Restricted Subsidiary); and
(G) to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, employees or consultants of any Parent Company (or any Immediate Family Member of any of the foregoing) to the extent such salary, bonuses and other benefits are attributable and reasonably allocated to the operations of the Lead Borrower and/or its subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose;
(ii) the Parent Lead Borrower may pay (or make Restricted Payments to allow any Parent Company to pay) for the repurchase, redemption, retirement or other acquisition or retirement for value of Capital Stock of any Parent Company or any subsidiary held by any Permitted Payeefuture, present or former employee, director, member of management, officer, manager or consultant (or any Affiliate or Immediate Family Member thereof) of any Parent Company, the Lead Borrower or any subsidiary:
(A) in accordance with the terms of promissory notes issued pursuant to Section Section 6.01(o), so long as the aggregate amount of all Cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments made pursuant to sub-clause (D(D) of this clause (ii(ii) below, (1) does not exceed in any Fiscal Year the greater of $68,000,000 20,000,000 and 2012.0% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period in any Fiscal YearEBITDA, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied)) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under clause (D) below; plusYears;
(B) with the proceeds of any sale or issuance of, or of any capital contribution in respect of, the Capital Stock of the Parent Lead Borrower or any Parent Company (to the extent such proceeds are contributed to the Parent Borrower or any Restricted Subsidiary in respect of Qualified Capital Stock issued by to the Parent Lead Borrower or such any Restricted Subsidiary) (other than amounts constituting a Cure Amount or an Available Excluded Contribution Amount); plus;
(C) with the net proceeds of any key-man life insurance policies; plusor
(D) with Cash and Cash Equivalents in an amount not to exceedexceed in any Fiscal Year, together with the aggregate amount of all cash payments made pursuant to sub-clause (A(A) of this clause (ii(ii) in respect of promissory notes issued pursuant to Section Section 6.01(o), (1) the greater of $68,000,000 20,000,000 and 2012.0% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period in any Fiscal YearEBITDA, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under the immediately preceding clause (1); plus
(E) with the amount of any Cash bonuses otherwise payable to any Permitted Payee that are foregone in exchange for the receipt of Capital Stock of the Parent Borrower or any Parent Company pursuant to any compensation arrangement, including any deferred compensation planYears;
(iii) the Parent Lead Borrower may make additional Restricted Payments in an amount not to exceed (A) the portion, if any, of the Available Amount on such date that the Parent Borrower elects to apply to this clause (iii)(A) plus (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Parent Lead Borrower elects to apply to this clause (iii)(B) (plus, without duplication of amounts 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 with Available Excluded Contribution Amounts up to the amount of such Available Excluded Contribution Amount, less any application thereof under Sections 6.04(b)(vi) or 6.06(r)iii);
(iv) the Parent Lead Borrower may make Restricted Payments (i) to any Parent Company to enable such Parent Company to (A) make Cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of such Parent Company, dividends, share splits, reverse share splits (or any combination thereof) and, mergers, consolidations, amalgamations or other business combinations, and acquisitions and other Investments permitted hereunder and/or (B) honor any conversion request by a holder of Convertible Indebtedness by payment of cash and/or delivery of Capital Stock, make any cash payments in lieu of fractional shares in connection with any conversion of Convertible Indebtedness and otherwise make payments on Convertible Indebtedness in accordance with its terms (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments upon redemption thereof), or, in the case of each of sub-clauses (A) and (B) above, make Restricted Payments to any Parent Company to enable such Parent Company to make the payments and/or deliveries described in such sub-clauses (A) and (B), and (ii) consisting of (A) payments made or expected to be made in respect of withholding or similar Taxes payable by any Permitted Payee future, present or former officers, directors, employees, members of management, managers or consultants of the Lead Borrower, any Restricted Subsidiary or any Parent Company or any of their respective Immediate Family Members and/or (B) repurchases of Capital Stock in consideration of the payments described in sub sub-clause (A(A) above, including demand repurchases in connection with the exercise of stock options and the issuance of restricted stock units or similar stock based awardsoptions;
(v) the Parent Lead Borrower may repurchase, redeem, acquire or retire Capital Stock upon repurchase (or make provisions for withholdings in connection with), or make Restricted Payments to any Parent Company to enable it to repurchase, redeem, acquire or retire ) Capital Stock upon (or make provisions for withholdings in connection with), the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represents all or a portion of the exercise price of, or tax withholdings with respect to, such warrants, options or other securities convertible into or exchangeable for Capital Stock as part of a “cashless” exercise;
(vi) for any taxable period (or portion thereof) that a Parent Company is treated as a corporation for U.S. federal income tax purposes and for which the Lead Borrower and/or any of its subsidiaries are members (or are pass-through entities of such members) of a consolidated, combined, unitary or similar income Tax group for U.S. federal, state, local or foreign income Tax purposes for which such Parent Company is the common parent, the Borrower may make Restricted Payments to such Parent Company to pay the proceeds portion of which any U.S. federal, state, local or foreign income Taxes (as applicable) of such Parent Company for such taxable period that are applied (i) on attributable to the Closing Date, solely to effect the consummation income of the Transactions and on or about Lead Borrower and/or its applicable subsidiaries; provided that, the Amendment No. 1 Effective Dateaggregate amount of such distributions shall not exceed the aggregate Taxes the Lead Borrower and/or its subsidiaries, solely to effect the consummation of the Amendment No. 1 Transactionsas applicable, (ii) on and after the Closing Date, to satisfy any payment obligations owing, or as otherwise required, under the Acquisition Agreement (including payment of working capital and/or purchase price adjustments) and would be required to pay Transaction Costsin respect of such U.S. federal, in each casestate, local and foreign Taxes on a stand-alone basis for such taxable period; provided further that the amount of such distributions with respect to the Transactions, (iii) to satisfy obligations to direct or indirect holders of Capital Stock of the Parent Borrower (immediately prior to giving effect any Unrestricted Subsidiary for any taxable period shall be limited to the Transactions) in connection with, or as a result of, any working capital and/or purchase price adjustments, in each case, with respect to the Transactions and (iv) to satisfy any settlement of claims or actions in connection with the Transactions or to satisfy indemnity or other similar obligations in connection with the Transactionsamount actually paid by such Unrestricted Subsidiary for such purpose;
(vii) the Parent Lead Borrower may make Restricted Payments to consummate the Transactions on the Closing Date and to the extent not paid on the Closing Date, thereafter to pay working capital and purchase price adjustments and other payment obligations under the Merger Agreement and Transaction Costs;
(viii) so long as no Event of Default exists at the time of declaration of such Restricted Payment, following the consummation of the first Qualifying IPO, the Lead Borrower may (or may make Restricted Payments to any Parent Company to enable it to) make Restricted Payments with respect to any Capital Stock in an amount not to exceed (A) the greater of (x) an amount equal to 7.006% per annum of the net Cash proceeds received by or contributed to the Parent Lead Borrower in connection with the merger of Isos Acquisition Corporation and Bowlero Corp. on December 15, 2021 and the other transactions consummated in connection therewith and (y) an amount equal to 7.00% per annum of the Market Capitalization of the Parent Borrower (or its direct or indirect Parent Company, as applicable) and its subsidiaries minus (B) from any utilization of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A)Qualifying IPO;
(viiiix) the Parent Lead Borrower may make Restricted Payments to (i) redeem, repurchase, defease, discharge, retire or otherwise acquire any (A) Capital Stock (“Treasury Capital Stock”) of the Parent Lead Borrower and/or any Restricted Subsidiary or (B) Capital Stock of any Parent Company, in the case of each of subclauses (A(A) and (B(B), in exchange for, or out of the proceeds of the substantially concurrent sale (other than to the Parent Lead Borrower and/or any Restricted Subsidiary) of, Qualified Capital Stock of the Parent Lead Borrower or any Parent Company to the extent any such proceeds are contributed to the capital of the Parent Lead Borrower and/or any Restricted Subsidiary 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 the Parent Lead Borrower or a Restricted Subsidiary) of any Refunding Capital Stock;
(ixx) to the extent constituting a Restricted Payment, the Parent Lead Borrower may consummate any transaction permitted by Section 5.19 (other than Section 5.19(d)), Section Section 6.06 (other than Sections 6.06(j6.06(j) and (t(t)) and Section ), Section 6.07 (other than Section Section 6.07(g)) and Section 6.09 (other than Section 6.09(d));
(xxi) the Parent Lead Borrower may make additional Restricted Payments in an aggregate amount not to exceed (A) the greater of $85,000,000 40,000,000 and 2525.0% of Consolidated Adjusted EBITDA as minus the sum of the last day of the most recently ended Test Period minus (Bi) any utilization of the Available RP Capacity Amount in reliance on unused capacity amounts under immediately preceding clause (Athis Section 6.04(a)(xi) reallocated to make Restricted Debt Payments pursuant to Section 6.04(b)(iv)(B), (ii) any amounts under this Section 6.04(a)(xi) reallocated to make Investments pursuant to Section 6.06(q), and (iii) any amounts under this Section 6.04(a)(xi) reallocated to incur Indebtedness pursuant to Section 6.01(u);
(xixii) the Parent Lead Borrower may pay any dividend or other distribution or consummate any redemption within 60 days after the date of 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 dividend or redemption notice would have complied with the provisions of this Section 6.04(a);
(xii) the Parent Borrower may make any Restricted Payment constituting the distribution or payment of Receivables Feeshereof;
(xiii) the Parent Lead Borrower may make additional Restricted Payments so long asas the Payment Conditions applicable to Restricted Payments have been satisfied, 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 Event of Default hereunder or shall result therefromBasis;
(xiv) the Parent Lead Borrower may make additional Restricted Payments to enable any Parent Company to make Restricted Payments solely in the Qualified Capital Stock of such Parent Company; and
(xv) the Lead Borrower may make Restricted Payments to pay amounts permitted under Section 6.09 (f) and (g).
(b) Holdings and the Lead Borrower shall not, nor shall they permit any Restricted Subsidiary to, make any payment (whether in Cash, securities or other property) on or in respect of principal of or interest on (x) any Junior Lien Indebtedness, (y) any Subordinated Indebtedness or (z) solely to the extent proceeds of Revolving Loans are being used to make such payment, unsecured Indebtedness, in each cases of clauses (x), (y) and (z), with an individual outstanding principal amount in excess of the Threshold Amount (such Indebtedness under clauses (x), (y) and (z), in each case, with an individual outstanding principal amount in excess of the Threshold Amount, the “Restricted Debt”), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Restricted Debt prior to its scheduled maturity (collectively, “Restricted Debt Payments”), except:
(i) any 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 (except to the extent subject to clause (iv)(C) of the proviso to Section 6.01(p);
(ii) payments as part of an AHYDO catch-up payment;
(iii) payments of regularly scheduled interest as and when due in respect of any Restricted Debt, except for any payments with respect to any such Subordinated Indebtedness that are prohibited by the subordination provisions thereof;
(iv) so long as, at the time of delivery of irrevocable notice with respect thereto, no Event of Default exists or would result therefrom, Restricted Debt Payments in an aggregate amount not to exceed (i) the sum of (A) the greater of $40,000,000 and 25.0% of Consolidated Adjusted EBITDA and (B) any amounts reallocated to this Section 6.04(b)(iv) from Section 6.04(a)(xi) and Section 6.06(q), minus (ii) any amounts reallocated from Section 6.04(b)(iv)(A) to make Investments pursuant to Section 6.06(q);
(A) Restricted Debt Payments in exchange for, or with proceeds of any issuance of, Qualified Capital Stock of the Lead Borrower and/or any Restricted Subsidiary and/or any capital contribution in respect of Qualified Capital Stock of the Lead Borrower or any Restricted Subsidiary, in each case, other than any amounts constituting a Cure Amount, (B) Restricted Debt Payments as a result of the conversion of all or any portion of any Restricted Debt into Qualified Capital Stock of the Lead Borrower 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 amount not to exceed the amount of proceeds received by the Parent Borrower and/or any Restricted Subsidiary under the Representation and Warranty Insurance Policy during the term of this Agreement;
(xv) (A) for any taxable period for which the Parent Borrower and/or any of its Subsidiaries are members of a consolidatedportion, combined or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which a direct or indirect parent if any, of the Parent Available Excluded Contribution Amount on such date that the Lead Borrower is the common parent elects to apply to this clause (a “Tax Group”vi), or for which the Parent Borrower is a disregarded entity for U.S. federal income tax purposes wholly-owned by a corporate parent (a “Corporate Parent”), the Parent Borrower and each of its Subsidiaries may make Restricted Payments the proceeds of which shall be used by such common parent to pay the portion of any consolidated, combined or similar U.S. federal, state or local income Taxes of such Tax Group, or by the Corporate Parent to pay the portion of the U.S. federal, state or local income Taxes of such Corporate Parent, or any franchise taxes imposed in lieu thereof, for such taxable period that are attributable to the income of the Parent Borrower and/or its Subsidiaries, provided that such amount shall not be greater than the amount of such U.S. federal, state or local income taxes that would be paid (for such taxable period) by the Parent Borrower and its Subsidiaries if the Parent Borrower and/or such Subsidiaries had been a stand-alone corporate taxpayer (or stand-alone group of corporate taxpayers filing on a consolidated, combined or similar basis) for all taxable years ending after the Closing Date (taking into account any net operating loss carryforwards attributable to the Parent Borrower and its Subsidiaries, as the case may be) and (B) without duplication of Restricted Payments made under Section 6.04(a)(xv)(A), for any taxable period for which the Parent Borrower is treated as a partnership for U.S. federal and/or applicable state or local income tax purposes, the Parent Borrower may make Restricted Payments to its equity owners at the times and in the amoun;
Appears in 2 contracts
Sources: Abl Credit Agreement (Hayward Holdings, Inc.), Abl Credit Agreement (Hayward Holdings, Inc.)
Restricted Payments; Certain Payments of Indebtedness. (a) The Parent Lead Borrower shall not pay or make, directly or indirectly, any Restricted Payment, except that:
(i) the Parent Lead Borrower may make Restricted Payments to the extent necessary to permit any Parent Company:
(A) to pay general operating and compliance administrative costs and expenses (including corporate overhead, legal or similar expenses, expenses to prepare any Tax returns or defend any Tax claims and customary salary, bonus and other benefits payable to directors, officers, employees, members of management, managers and/or consultants of any Parent Company)) and franchise fees and Taxes and similar fees, Taxes and expenses required to enable such Parent Company to maintain its organizational existence or qualification to do business, in each case, which are reasonable and customary and incurred in the ordinary course of business, plus any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of any Parent Company, in each case, to the extent attributable to the ownership or operations of any Parent Company and its subsidiaries (but excluding, for the avoidance of doubt, excluding the portion of any such amount, if any, amount that is attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Lead Borrower and/or and its subsidiaries), the Parent Borrower and/or its subsidiaries;
(B) to pay franchise, excise scheduled and similar Taxes, overdue interest and other fees, Taxes and expenses, required to maintain the organizational existence payments as part of such Parent Company;
(C) to pay customary salary, bonus, longan AHYDO catch-term incentive, severance and other benefits (including payment to certain service providers of the Parent Borrower or its Subsidiaries pursuant to any equity plan (whether in the form of options, cash settled options or otherwise)) payable to Permitted Payees, as well as applicable employment, social security or similar taxes in connection therewith, to the extent such salary, bonuses, severance and other benefits are attributable and reasonably allocated to the operations of the Parent Borrower and/or its subsidiariesup payment, in each case, so long as such in respect of any Indebtedness of any Parent Company applies to the amount of any such Restricted Payment for such purpose;extent the Net Proceeds thereof were contributed to the Lead Borrower; .
(DC) to pay audit and other accounting and reporting expenses of such Parent Company to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such expenses, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Lead Borrower and/or its subsidiaries), the Parent Lead Borrower and its subsidiaries;
(ED) for the payment of insurance premiums to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Lead Borrower and/or its subsidiaries), the Parent Lead Borrower and its subsidiaries;
(FE) to pay (x) fees and expenses related to any debt and/or or equity offerings (including refinancings)by any Parent Company, investments and/or or acquisitions permitted or not restricted by this Agreement (whether or not consummated, and including advisory, refinancing, subsequent transaction and exit fees of any Parent Company of the Parent Borrower) and expenses and indemnities of any trustee, agent, arranger, underwriter or similar role and (y) Public Company Costs; and;
(GF) to finance any Investment permitted under Section 6.06 as if such Parent Company were subject to Section Section 6.06 (provided that (x) any Restricted Payment under this clause (a)(i)(G(a)(i)(F) 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 (y) the relevant Parent Company shall, promptly following the closing 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 therewiththereof, cause (I) all property acquired to be contributed to the Parent Lead Borrower or one or more of its Restricted Subsidiaries Subsidiaries, or (II) the merger, consolidation or amalgamation of the Person formed or acquired into the Parent Lead Borrower or one or more of its Restricted Subsidiaries, in order to consummate such Investment in compliance with the applicable requirements of Section Section 6.06 as if undertaken as a direct Investment by the Parent Lead Borrower or the relevant Restricted Subsidiary); and
(G) to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, employees or consultants of any Parent Company (or any Immediate Family Member of any of the foregoing) to the extent such salary, bonuses and other benefits are attributable and reasonably allocated to the operations of the Lead Borrower and/or its subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose;
(ii) the Parent Lead Borrower may pay (or make Restricted Payments to allow any Parent Company to pay) for the repurchase, redemption, retirement or other acquisition or retirement for value of Capital Stock of any Parent Company or any subsidiary held by any Permitted Payeefuture, present or former employee, director, member of management, officer, manager or consultant (or any Affiliate or Immediate Family Member thereof) of any Parent Company, the Lead Borrower or any subsidiary:
(A) in accordance with the terms of promissory notes issued pursuant to Section Section 6.01(o), so long as the aggregate amount of all Cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments made pursuant to sub-clause (D(D) of this clause (ii(ii) below, (1) does not exceed in any Fiscal Year the greater of $68,000,000 25,000,000 and 2012.0% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period in any Fiscal YearEBITDA, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied)) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under clause (D) below; plusYears;
(B) with the proceeds of any sale or issuance of, or of any capital contribution in respect of, the Capital Stock of the Parent Lead Borrower or any Parent Company (to the extent such proceeds are contributed to the Parent Borrower or any Restricted Subsidiary in respect of Qualified Capital Stock issued by to the Parent Lead Borrower or such any Restricted Subsidiary) (other than any amounts constituting a Cure Amount or an any amount that has been added to the Available Excluded Contribution Amount); plus;
(C) with the net proceeds of any key-man life insurance policies; plusor
(D) with Cash and Cash Equivalents in an amount not to exceedexceed in any Fiscal Year, together with the aggregate amount of all cash payments made pursuant to sub-clause (A(A) of this clause (ii(ii) in respect of promissory notes issued pursuant to Section Section 6.01(o), (1) the greater of $68,000,000 25,000,000 and 2012.0% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period in any Fiscal YearEBITDA, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under the immediately preceding clause (1); plus
(E) with the amount of any Cash bonuses otherwise payable to any Permitted Payee that are foregone in exchange for the receipt of Capital Stock of the Parent Borrower or any Parent Company pursuant to any compensation arrangement, including any deferred compensation planYears;
(iii) the Parent Lead Borrower may make additional Restricted Payments in an amount not to exceed (A) the portion, if any, of the Available Amount on such date that the Parent Borrower elects to apply to this clause (iii)(A) plus (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Parent Lead Borrower elects to apply to this clause (iii)(B) (plus, without duplication of amounts 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 with Available Excluded Contribution Amounts up to the amount of such Available Excluded Contribution Amount, less any application thereof under Sections 6.04(b)(vi) or 6.06(r)iii);
(iv) the Parent Lead Borrower may make Restricted Payments (i) to any Parent Company to enable such Parent Company to (A) make Cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of such Parent Company, dividends, share splits, reverse share splits (or any combination thereof) and, mergers, consolidations, amalgamations or other business combinations, and acquisitions and other Investments permitted hereunder and/or (B) honor any conversion request by a holder of Convertible Indebtedness by payment of cash and/or delivery of Capital Stock, make any cash payments in lieu of fractional shares in connection with any conversion of Convertible Indebtedness and otherwise make payments on Convertible Indebtedness in accordance with its terms (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments upon redemption thereof), or, in the case of each of sub-clauses (A) and (B) above, make Restricted Payments to any Parent Company to enable such Parent Company to make the payments and/or deliveries described in such sub-clauses (A) and (B), and (ii) consisting of (A) payments made or expected to be made in respect of withholding or similar Taxes payable by any Permitted Payee future, present or former officers, directors, employees, members of management, managers or consultants of the Lead Borrower, any Restricted Subsidiary or any Parent Company or any of their respective Immediate Family Members and/or (B) repurchases of Capital Stock in consideration of the payments described in sub sub-clause (A(A) above, including demand repurchases in connection with the exercise of stock options and the issuance of restricted stock units or similar stock based awardsoptions;
(v) the Parent Lead Borrower may repurchase, redeem, acquire or retire Capital Stock upon repurchase (or make provisions for withholdings in connection with), or make Restricted Payments to any Parent Company to enable it to repurchase, redeem, acquire or retire ) Capital Stock upon (or make provisions for withholdings in connection with), the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represents all or a portion of the exercise price ofof , or tax Tax withholdings with respect to, to such warrants, options or other securities convertible into or exchangeable for Capital Stock as part of a “cashless” exercise;
(vi) (A) for any taxable period (or portion thereof) that a Parent Company is treated as a corporation for U.S. federal income tax purposes and for which a Borrower and/or any of its subsidiaries are members (or are pass-through entities of such members) of a consolidated, combined, unitary or similar income Tax group for U.S. federal, state, local or foreign income Tax purposes (a “Tax Group”) for which a parent is the Parent common parent, the Lead Borrower may make Restricted Payments to such parent to pay the proceeds portion of which any U.S. federal, state, local or foreign income Taxes (as applicable) of such parent for such taxable period that are applied (i) on attributable to the Closing Date, solely to effect the consummation income of the Transactions Lead Borrower and/or its applicable subsidiaries; provided that the aggregate amount of such distributions shall not exceed the aggregate Taxes the Lead Borrower and/or its subsidiaries, as applicable, would be required to pay in respect of such U.S. federal, state, local and foreign Taxes on a stand-alone consolidated basis for such taxable period; provided further that the amount of such distributions with respect to any Unrestricted Subsidiary for any taxable period shall be limited to the amount actually paid by such Unrestricted Subsidiary to a Borrower or about any of its Restricted Subsidiaries for such purpose and (B) without duplication of amounts payable under clause (A), the Amendment No. 1 Effective DateLead Borrower may make Restricted Payments to pay the Taxes of such Tax Group attributable to the Performance Chemicals Sale.
(vii) to the extent constituting Restricted Payments, solely the Lead Borrower may make Restricted Payments to effect consummate the consummation of the Amendment No. 1 Transactions, (ii) on and after the Closing Date, to satisfy any payment obligations owing, or as otherwise required, under the Acquisition Agreement (including payment of working capital and/or purchase price adjustments) Permitted Restructuring and to pay Transaction Costs, in each case, with respect to the Transactions, (iii) to satisfy obligations to direct or indirect holders of Capital Stock of the Parent Borrower (immediately prior to giving effect to the Transactions) in connection with, or as a result of, any working capital and/or purchase price adjustments, in each case, with respect to the Transactions and (iv) to satisfy any settlement of claims or actions in connection with the Transactions or to satisfy indemnity or other similar obligations in connection with the Transactions;
(viiviii) so long as no Event of Default exists at the Parent time of declaration of such Restricted Payment the Lead Borrower may (or may make Restricted Payments to any Parent Company to enable it to) make Restricted Payments with respect to any Capital Stock in an amount not to exceed an aggregate amount per annum equal to the sum of (A) the greater of $30,000,000 and (xB) an amount equal to 7.007% per annum of the net Cash proceeds received by or contributed to the Parent Borrower in connection with the merger of Isos Acquisition Corporation and Bowlero Corp. on December 15, 2021 and the other transactions consummated in connection therewith and (y) an amount equal to 7.00% per annum of the Market Capitalization of the Parent Borrower (or its direct or indirect Parent Company, as applicable) and its subsidiaries minus (B) any utilization of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A)Capitalization;
(viiiix) the Parent Lead Borrower may make Restricted Payments to (i) redeem, repurchase, defease, discharge, retire or otherwise acquire any (A) Capital Stock (“Treasury Capital Stock”) of the Parent Lead Borrower and/or any Restricted Subsidiary or (B) Capital Stock of any Parent Company, in the case of each of subclauses (A(A) and (B(B), in exchange for, or out of the proceeds of the substantially concurrent sale (other than to the Parent Lead Borrower and/or any Restricted Subsidiary) of, Qualified Capital Stock of the Parent Lead Borrower or any Parent Company to the extent any such proceeds are contributed to the capital of the Parent Lead Borrower and/or any Restricted Subsidiary 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 the Parent Lead Borrower or a Restricted Subsidiary) of any Refunding Capital Stock;
(ixx) to the extent constituting a Restricted Payment, the Parent Lead Borrower may consummate any transaction permitted by Section 5.19 (other than Section 5.19(d)), Section Section 6.06 (other than Sections 6.06(j6.06(j) and (t(t)) and Section ), Section 6.07 (other than Section Section 6.07(g)) and Section 6.09 (other than Section 6.09(d));
(xxi) the Parent Lead Borrower may make additional Restricted Payments in an aggregate amount not to exceed (A) the greater of $85,000,000 71,000,000 and 2535.0% of Consolidated Adjusted EBITDA as minus the sum of the last day of the most recently ended Test Period minus (A) any amounts under this Section 6.04(a)(xi) reallocated to make Restricted Debt Payments pursuant to Section 6.04(b)(iv) (B) any utilization of the Available RP Capacity Amount in reliance on unused capacity amounts under immediately preceding clause (Athis Section 6.04(a)(xi) reallocated to make Investments pursuant to Section 6.06(q), and (C) any amounts under this Section 6.04(a)(xi) reallocated to incur Indebtedness pursuant to Section 6.01(u) (which may be further reallocated as provided therein);
(xixii) the Parent Lead Borrower may pay any dividend or other distribution or consummate any redemption within 60 sixty (60) days after the date of 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 dividend or redemption notice would have complied with the provisions of this Section 6.04(a);
(xii) the Parent Borrower may make any Restricted Payment constituting the distribution or payment of Receivables Feeshereof;
(xiii) the Parent Lead Borrower may make additional Restricted Payments so long as, as measured at the time provided for in Section 1.04(e), (iA) no Event of Default exists or would result therefrom and (B) the Total Leverage Ratio would not exceed 4.00:1.00Payment Conditions applicable to Restricted Payments have been satisfied, calculated on a Pro Forma Basis and (ii) there shall exist no Event of Default hereunder or shall result therefromBasis;
(xiv) the Parent Lead Borrower may make additional Restricted Payments to enable any Parent Company to make Restricted Payments solely in the Qualified Capital Stock of such Parent Company;
(xv) the Lead Borrower may make Restricted Payments (A) to pay amounts permitted under Section 6.09(f), (g), (h), (i), (k) and (m) and (B) otherwise in an amount not to exceed $500,000 per calendar year;
(xvi) the Lead Borrower may make Restricted Payments in the form of Capital Stock of, or Indebtedness owed to Holdings, the Lead Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Cash and Cash Equivalents (except to the extent constituting proceeds from the Disposition of all or substantially all of the assets of such Unrestricted Subsidiary) and/or intellectual property material (as determined by the Lead Borrower in good faith) to the business of the Lead Borrower and its Restricted Subsidiaries, taken as a whole); and
(xvii) the Lead Borrower may make Restricted Payments in an aggregate amount not to exceed $450,000,000 (the “Special Dividend”).
(b) The Lead Borrower shall not, nor shall it permit any Restricted Subsidiary to, make any payment (whether in Cash, securities or other property) on or in respect of principal of (x) any Junior Lien Indebtedness or (y) any Subordinated Indebtedness, in each cases of clauses (x) and (y), with an individual outstanding principal amount in excess of the Threshold Amount (such Indebtedness under clauses (x) and (y), in each case, with an individual outstanding principal amount in excess of the Threshold Amount, the “Restricted Debt”), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Restricted Debt prior to its scheduled maturity (collectively, “Restricted Debt Payments”), except:
(i) any 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 (except to the extent subject to clause (iv)(C) of the proviso to Section 6.01(p));
(ii) payments as part of an AHYDO catch-up payment;
(iii) payments of regularly scheduled interest as and when due in respect of any Restricted Debt, except for any payments with respect to any such Subordinated Indebtedness that are prohibited by the subordination provisions thereof;
(iv) so long as, at the time of delivery of irrevocable notice with respect thereto, no Event of Default exists or would result therefrom, Restricted Debt Payments in an aggregate amount not to exceed (i) the sum of (A) the greater of $71,000,000 and 35.0% of Consolidated Adjusted EBITDA and (B) any amounts reallocated to this Section 6.04(b)(iv) from Section 6.04(a)(xi) and Section 6.06(q), minus (ii) any amounts reallocated from this Section 6.04(b)(iv) to make Investments pursuant to Section 6.06(q);
(A) Restricted Debt Payments in exchange for, or with proceeds of any issuance of, Qualified Capital Stock of the Lead Borrower and/or any Restricted Subsidiary and/or any capital contribution in respect of Qualified Capital Stock of the Lead Borrower or any Restricted Subsidiary, (B) Restricted Debt Payments as a result of the conversion of all or any portion of any Restricted Debt into Qualified Capital Stock of the Lead Borrower 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 amount not to exceed the amount of proceeds received by the Parent Borrower and/or any Restricted Subsidiary under the Representation and Warranty Insurance Policy during the term of this Agreement;
(xv) (A) for any taxable period for which the Parent Borrower and/or any of its Subsidiaries are members of a consolidatedportion, combined or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which a direct or indirect parent if any, of the Parent Available Excluded Contribution Amount on such date that the Lead Borrower is the common parent elects to apply to this clause (a “Tax Group”vi), or for which the Parent Borrower is a disregarded entity for U.S. federal income tax purposes wholly-owned by a corporate parent (a “Corporate Parent”), the Parent Borrower and each of its Subsidiaries may make Restricted Payments the proceeds of which shall be used by such common parent to pay the portion of any consolidated, combined or similar U.S. federal, state or local income Taxes of such Tax Group, or by the Corporate Parent to pay the portion of the U.S. federal, state or local income Taxes of such Corporate Parent, or any franchise taxes imposed in lieu thereof, for such taxable period that are attributable to the income of the Parent Borrower and/or its Subsidiaries, provided that such amount shall not be greater than the amount of such U.S. federal, state or local income taxes that would be paid (for such taxable period) by the Parent Borrower and its Subsidiaries if the Parent Borrower and/or such Subsidiaries had been a stand-alone corporate taxpayer (or stand-alone group of corporate taxpayers filing on a consolidated, combined or similar basis) for all taxable years ending after the Closing Date (taking into account any net operating loss carryforwards attributable to the Parent Borrower and its Subsidiaries, as the case may be) and (B) without duplication of Restricted Payments made under Section 6.04(a)(xv)(A), for any taxable period for which the Parent Borrower is treated as a partnership for U.S. federal and/or applicable state or local income tax purposes, the Parent Borrower may make Restricted Payments to its equity owners at the times and in the amoun;
Appears in 2 contracts
Sources: Fifth Amendment Agreement (Ecovyst Inc.), Abl Credit Agreement (Ecovyst Inc.)
Restricted Payments; Certain Payments of Indebtedness. (a) The Parent Borrower shall not pay or make, directly or indirectly, any Restricted Payment, except that:
(i) the Parent Borrower may make Restricted Payments to the extent necessary to permit any Parent Company:
(A) to pay general operating and compliance administrative costs and expenses (including corporate overhead, legal or similar expenses, expenses to prepare any Tax returns or defend any Tax claims, and customary salary, bonus and other benefits payable to directors, officers, employees, members of management, managers and/or consultants of any Parent Company)) and franchise fees and Taxes and similar fees, Taxes and expenses required to enable such Parent Company to maintain its organizational existence or qualification to do business, in each case, which are reasonable and customary and incurred in the ordinary course of business, plus any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of any Parent Company, in each case, to the extent attributable to the ownership or operations of any Parent Company and its subsidiaries (but excluding, for the avoidance of doubt, excluding the portion of any such amount, if any, amount that is attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or and its subsidiaries), the Parent Borrower and/or its subsidiaries;
(B) to pay franchise, excise scheduled and similar Taxes, overdue interest and other fees, Taxes and expenses, required to maintain the organizational existence payments as part of such Parent Company;
(C) to pay customary salary, bonus, longan AHYDO catch-term incentive, severance and other benefits (including payment to certain service providers of the Parent Borrower or its Subsidiaries pursuant to any equity plan (whether in the form of options, cash settled options or otherwise)) payable to Permitted Payees, as well as applicable employment, social security or similar taxes in connection therewith, to the extent such salary, bonuses, severance and other benefits are attributable and reasonably allocated to the operations of the Parent Borrower and/or its subsidiariesup payment, in each case, so long as such in respect of any Indebtedness of any Parent Company applies to the amount of any such Restricted Payment for such purposeextent the Net Proceeds thereof were contributed to the Parent Borrower;
(DC) to pay audit and other accounting and reporting expenses of such Parent Company to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such expenses, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries;
(ED) for the payment of insurance premiums to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries;
(FE) to pay (x) fees and expenses related to any debt and/or or equity offerings (including refinancings)by any Parent Company, investments and/or or acquisitions permitted or not restricted by this Agreement (whether or not consummated, and including advisory, refinancing, subsequent transaction and exit fees of any Parent Company of the Parent Borrower) and expenses and indemnities of any trustee, agent, arranger, underwriter or similar role and (y) Public Company Costs; and;
(GF) to finance any Investment permitted under Section 6.06 as if such Parent Company were subject to Section Section 6.06 (provided that (x) any Restricted Payment under this clause (a)(i)(G(a)(i)(F) 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 (y) the relevant Parent Company shall, promptly following the closing 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 therewiththereof, cause (I) all property acquired to be contributed to the Parent Borrower or one or more of its Restricted Subsidiaries Subsidiaries, or (II) the merger, consolidation or amalgamation of the Person formed or acquired into the Parent Borrower or one or more of its Restricted Subsidiaries, in order to consummate such Investment in compliance with the applicable requirements of Section Section 6.06 as if undertaken as a direct Investment by the Parent Borrower or the relevant Restricted Subsidiary); and
(G) to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, employees or consultants of any Parent Company (or any Immediate Family Member of any of the foregoing) to the extent such salary, bonuses and other benefits are attributable and reasonably allocated to the operations of the Parent Borrower and/or its subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose;
(ii) the Parent Borrower may pay (or make Restricted Payments to allow any Parent Company to pay) for the repurchase, redemption, retirement or other acquisition or retirement for value of Capital Stock of any Parent Company or any subsidiary held by any Permitted Payeefuture, present or former employee, director, member of management, officer, manager or consultant (or any Affiliate or Immediate Family Member thereof) of any Parent Company, the Parent Borrower or any subsidiary:
(A) in accordance with the terms of promissory notes issued pursuant to Section Section 6.01(o), so long as the aggregate amount of all Cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments made pursuant to sub-clause (D(D) of this clause (ii(ii) below, (1) does not exceed in any Fiscal Year the greater of $68,000,000 25,000,000 and 2012.0% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period in any Fiscal YearEBITDA, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied)) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under clause (D) below; plusYears;
(B) with the proceeds of any sale or issuance of, or of any capital contribution in respect of, the Capital Stock of the Parent Borrower or any Parent Company (to the extent such proceeds are contributed in respect of Qualified Capital Stock to the Parent Borrower or any Restricted Subsidiary in respect of Qualified Capital Stock issued by the Parent Borrower or such Restricted Subsidiary) (other than amounts constituting a Cure Amount or an Available Excluded Contribution Amount); plus;
(C) with the net proceeds of any key-man life insurance policies; plusor
(D) with Cash and Cash Equivalents in an amount not to exceedexceed in any Fiscal Year, together with the aggregate amount of all cash payments made pursuant to sub-clause (A(A) of this clause (ii(ii) in respect of promissory notes issued pursuant to Section Section 6.01(o), (1) the greater of $68,000,000 25,000,000 and 2012.0% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period in any Fiscal YearEBITDA, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under the immediately preceding clause (1); plus
(E) with the amount of any Cash bonuses otherwise payable to any Permitted Payee that are foregone in exchange for the receipt of Capital Stock of the Parent Borrower or any Parent Company pursuant to any compensation arrangement, including any deferred compensation planYears;
(iii) the Parent Borrower may make additional Restricted Payments in an amount not to exceed (A) the portion, if any, of the Available Amount on such date that the Parent Borrower elects to apply to this clause (iii)(A) plus (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Parent Borrower elects to apply to this clause (iii)(B) (plus, without duplication of amounts 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 with Available Excluded Contribution Amounts up to the amount of such Available Excluded Contribution Amount, less any application thereof under Sections 6.04(b)(vi) or 6.06(r)iii);
(iv) the Parent Borrower may make Restricted Payments (i) to any Parent Company to enable such Parent Company to (A) make Cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of such Parent Company, dividends, share splits, reverse share splits (or any combination thereof) and, mergers, consolidations, amalgamations or other business combinations, and acquisitions and other Investments permitted hereunder and/or (B) honor any conversion request by a holder of Convertible Indebtedness by payment of cash and/or delivery of Capital Stock, make any cash payments in lieu of fractional shares in connection with any conversion of Convertible Indebtedness and otherwise make payments on Convertible Indebtedness in accordance with its terms (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments upon redemption thereof), or, in the case of each of sub-clauses (A) and (B) above, make Restricted Payments to any Parent Company to enable such Parent Company to make the payments and/or deliveries described in such sub-clauses (A) and (B), and (ii) consisting of (A) payments made or expected to be made in respect of withholding or similar Taxes payable by any Permitted Payee future, present or former officers, directors, employees, members of management, managers or consultants of the Parent Borrower, any Restricted Subsidiary or any Parent Company or any of their respective Immediate Family Members and/or (B) repurchases of Capital Stock in consideration of the payments described in sub sub-clause (A(A) above, including demand repurchases in connection with the exercise of stock options and the issuance of restricted stock units or similar stock based awardsoptions;
(v) the Parent Borrower may repurchase, redeem, acquire or retire Capital Stock upon repurchase (or make provisions for withholdings in connection with), or make Restricted Payments to any Parent Company to enable it to repurchase, redeem, acquire or retire ) Capital Stock upon (or make provisions for withholdings in connection with), the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represents all or a portion of the exercise price of, or tax Tax withholdings with respect to, such warrants, options or other securities convertible into or exchangeable for Capital Stock as part of a “cashless” exercise;
(vi) (A) for any taxable period (or portion thereof) that a Parent Company is treated as a corporation for U.S. federal income tax purposes and for which a Borrower and/or any of its subsidiaries are members (or are pass-through entities of such members) of a consolidated, combined, unitary or similar income Tax group for U.S. federal, state, local or foreign income Tax purposes (a “Tax Group”) for which a parent is the common parent, the Parent Borrower may make Restricted Payments to such parent to pay the proceeds portion of which any U.S. federal, state, local or foreign income Taxes (as applicable) of such parent for such taxable period that are applied (i) on attributable to the Closing Date, solely to effect the consummation income of the Transactions Parent Borrower and/or its applicable subsidiaries; provided that the aggregate amount of such distributions shall not exceed the aggregate Taxes the Parent Borrower and/or its subsidiaries, as applicable, would be required to pay in respect of such U.S. federal, state, local and foreign Taxes on a stand-alone consolidated basis for such taxable period; provided further that the amount of such distributions with respect to any Unrestricted Subsidiary for any taxable period shall be limited to the amount actually paid by such Unrestricted Subsidiary to a Borrower or about any of its Restricted Subsidiaries for such purpose and (B) without duplication of amounts payable under clause (A), the Amendment No. 1 Effective DateParent Borrower may make Restricted Payments to pay the Taxes of such Tax Group attributable to the Performance Chemicals Sale;
(vii) to the extent constituting Restricted Payments, solely the Parent Borrower may make Restricted Payments to effect consummate the consummation of the Amendment No. 1 Transactions, (ii) on and after the Closing Date, to satisfy any payment obligations owing, or as otherwise required, under the Acquisition Agreement (including payment of working capital and/or purchase price adjustments) Permitted Restructuring and to pay Transaction Costs, in each case, with respect to the Transactions, (iii) to satisfy obligations to direct or indirect holders of Capital Stock of the Parent Borrower (immediately prior to giving effect to the Transactions) in connection with, or as a result of, any working capital and/or purchase price adjustments, in each case, with respect to the Transactions and (iv) to satisfy any settlement of claims or actions in connection with the Transactions or to satisfy indemnity or other similar obligations in connection with the Transactions;
(viiviii) so long as no Event of Default exists at the time of declaration of such Restricted Payment the Parent Borrower may (or may make Restricted Payments to any Parent Company to enable it to) make Restricted Payments with respect to any Capital Stock in an amount not to exceed an aggregate amount per annum equal to the sum of (A) the greater of $30,000,000 and (xB) an amount equal to 7.007% per annum of the net Cash proceeds received by or contributed to the Parent Borrower in connection with the merger of Isos Acquisition Corporation and Bowlero Corp. on December 15, 2021 and the other transactions consummated in connection therewith and (y) an amount equal to 7.00% per annum of the Market Capitalization of the Parent Borrower (or its direct or indirect Parent Company, as applicable) and its subsidiaries minus (B) any utilization of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A)Capitalization;
(viiiix) the Parent Borrower may make Restricted Payments to (i) redeem, repurchase, defease, discharge, retire or otherwise acquire any (A) Capital Stock (“Treasury Capital Stock”) of the Parent Borrower and/or any Restricted Subsidiary or (B) Capital Stock of any Parent Company, in the case of each of subclauses (A(A) and (B(B), in exchange for, or out of the proceeds of the substantially concurrent sale (other than to the Parent Borrower and/or any Restricted Subsidiary) of, Qualified Capital Stock of the Parent Borrower or any Parent Company to the extent any such proceeds are contributed to the capital of the Parent Borrower and/or any Restricted Subsidiary 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 the Parent Borrower or a Restricted Subsidiary) of any Refunding Capital Stock;
(ixx) to the extent constituting a Restricted Payment, the Parent Borrower may consummate any transaction permitted by Section 5.19 (other than Section 5.19(d)), Section Section 6.06 (other than Sections 6.06(j6.06(j) and (t(t)) and Section ), Section 6.07 (other than Section Section 6.07(g)) and Section 6.09 (other than Section 6.09(d);
(x) the Parent Borrower may make additional Restricted Payments in an aggregate amount not to exceed (A) the greater of $85,000,000 and 25% of Consolidated Adjusted EBITDA 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);
(xi) the Parent Borrower may make Restricted Payments in an aggregate amount not to exceed the greater of $71,000,000 and 35.0% of Consolidated Adjusted EBITDA minus the sum of (A) any amounts under this Section 6.04(a)(xi) reallocated to make Restricted Debt Payments pursuant to Section 6.04(b)(iv) (B) any amounts under this Section 6.04(a)(xi) reallocated to make Investments pursuant to Section 6.06(q), and (C) any amounts under this Section 6.04(a)(xi) reallocated to incur Indebtedness pursuant to Section 6.01(u) (which may be further reallocated as provided therein);
(xii) the Parent Borrower may pay any dividend or other distribution or consummate any redemption within 60 sixty (60) days after the date of 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 dividend or redemption notice would have complied with the provisions of this Section 6.04(a);
(xii) the Parent Borrower may make any Restricted Payment constituting the distribution or payment of Receivables Feeshereof;
(xiii) the Parent Borrower may make additional Restricted Payments so long as, as measured at the time provided for in Section 1.04(e), (iA) no Event of Default exists or would result therefrom and (B) the Total Leverage Ratio would not exceed 4.00:1.00Ratio, calculated on a Pro Forma Basis and (ii) there shall exist no Event at the time of Default hereunder or shall result therefromdeclaration thereof, would not exceed 4.50:1.00;
(xiv) the Parent Borrower may make additional Restricted Payments to enable any Parent Company to make Restricted Payments solely in the Qualified Capital Stock of such Parent Company;
(xv) the Parent Borrower may make Restricted Payments (A) to pay amounts permitted under Section 6.09(f), (g), (h), (i), (k) and (m) and (B) otherwise in an amount not to exceed $500,000 per calendar year;
(xvi) the Parent Borrower may make Restricted Payments in the form of Capital Stock 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 Cash and Cash Equivalents (except to the extent constituting proceeds from the Disposition of all or substantially all of the assets of such Unrestricted Subsidiary) and/or intellectual property material (as determined by the Parent Borrower in good faith) to the business of the Parent Borrower and its Restricted Subsidiaries, taken as a whole); and
(xvii) the Parent Borrower may make Restricted Payments in an aggregate amount not to exceed $450,000,000 (the “Special Dividend”).
(b) The Parent Borrower shall not, nor shall it permit any Restricted Subsidiary to, make any payment (whether in Cash, securities or other property) on or in respect of principal of (x) any Junior Lien Indebtedness or (y) any Subordinated Indebtedness, in each cases of clauses (x) and (y), with an individual outstanding principal amount in excess of the Threshold Amount (such Indebtedness under clauses (x) and (y), in each case, with an individual outstanding principal amount in excess of the Threshold Amount, the “Restricted Debt”), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Restricted Debt prior to its scheduled maturity (collectively, “Restricted Debt Payments”), except:
(i) any 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 (except to the extent subject to clause (iv)(C) of the proviso to Section 6.01(p));
(ii) payments as part of an AHYDO catch-up payment;
(iii) payments of regularly scheduled interest as and when due in respect of any Restricted Debt, except for any payments with respect to any such Subordinated Indebtedness that are prohibited by the subordination provisions thereof;
(iv) so long as, at the time of delivery of irrevocable notice with respect thereto, no Event of Default exists or would result therefrom, Restricted Debt Payments in an aggregate amount not to exceed (i) the sum of (A) the greater of $71,000,000 and 35.0% of Consolidated Adjusted EBITDA and (B) any amounts reallocated to this Section 6.04(b)(iv) from Section 6.04(a)(xi) and Section 6.06(q), minus (ii) any amounts reallocated from this Section 6.04(b)(iv) to make Investments pursuant to Section 6.06(q);
(A) Restricted Debt Payments in exchange for, or with proceeds of any issuance of, Qualified Capital Stock of the Parent Borrower and/or any Restricted Subsidiary and/or any capital contribution in respect of Qualified Capital Stock of the Parent Borrower or any Restricted Subsidiary, (B) Restricted Debt Payments as a result of the conversion of all or any portion of any Restricted Debt into Qualified Capital Stock of the Parent Borrower 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 amount not to exceed the amount portion, if any, of proceeds received by the Available Amount on such date that the Parent Borrower and/or any Restricted Subsidiary under the Representation and Warranty Insurance Policy during the term of elects to apply to this Agreementclause (vi);
(xv) (A) for any taxable period for which the Parent Borrower and/or any of its Subsidiaries are members of a consolidated, combined or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which a direct or indirect parent of the Parent Borrower is the common parent (a “Tax Group”), or for which the Parent Borrower is a disregarded entity for U.S. federal income tax purposes wholly-owned by a corporate parent (a “Corporate Parent”), the Parent Borrower and each of its Subsidiaries may make Restricted Payments the proceeds of which shall be used by such common parent to pay the portion of any consolidated, combined or similar U.S. federal, state or local income Taxes of such Tax Group, or by the Corporate Parent to pay the portion of the U.S. federal, state or local income Taxes of such Corporate Parent, or any franchise taxes imposed in lieu thereof, for such taxable period that are attributable to the income of the Parent Borrower and/or its Subsidiaries, provided that such amount shall not be greater than the amount of such U.S. federal, state or local income taxes that would be paid (for such taxable period) by the Parent Borrower and its Subsidiaries if the Parent Borrower and/or such Subsidiaries had been a stand-alone corporate taxpayer (or stand-alone group of corporate taxpayers filing on a consolidated, combined or similar basis) for all taxable years ending after the Closing Date (taking into account any net operating loss carryforwards attributable to the Parent Borrower and its Subsidiaries, as the case may be) and (B) without duplication of Restricted Payments made under Section 6.04(a)(xv)(A), for any taxable period for which the Parent Borrower is treated as a partnership for U.S. federal and/or applicable state or local income tax purposes, the Parent Borrower may make Restricted Payments to its equity owners at the times and in the amoun
Appears in 2 contracts
Sources: Term Loan Credit Agreement (Ecovyst Inc.), Term Loan Credit Agreement (PQ Group Holdings Inc.)
Restricted Payments; Certain Payments of Indebtedness. (a) The Parent Lead Borrower shall not pay or make, directly or indirectly, any Restricted Payment, except that:
(i) the Parent Lead Borrower may make Restricted Payments to the extent necessary to permit any Parent Company:
(A) to pay general operating and compliance administrative costs and expenses (including corporate overhead, legal or similar expenses and customary salary, fees, bonus and other benefits payable to directors, officers, employees, members of management, managers and/or consultants of any Parent Company)) and franchise fees and Taxes and similar fees, Taxes and expenses required to enable such Parent Company to maintain its organizational existence or qualification to do business, in each case, which are reasonable and customary and incurred in the ordinary course of business, plus any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of any Parent Company, in each case, to the extent attributable to the ownership or operations of any Parent Company and its subsidiaries (but excluding, for the avoidance of doubt, excluding the portion of any such amount, if any, amount that is attributable to the ownership or operations of any subsidiary of any Parent Company other than the Borrowers and their subsidiaries);
(B) to discharge the consolidated, combined, unitary or similar Tax liabilities of such Parent Company and its subsidiaries when and as due, to the extent such liabilities are attributable to the operations of any Parent Company (but excluding, for the avoidance of doubt, the portion of any such Tax liabilities, if any, that is attributable to the operations of any subsidiary of any Parent Company other than the Lead Borrower and/or its subsidiaries), the Parent Lead Borrower and/or and its subsidiaries;
; provided that the amount paid by the Lead Borrower pursuant to this paragraph (B) to pay franchise, excise shall not exceed the amount of Tax liabilities that would be due if the Lead Borrower and each Restricted Subsidiary were separate corporations filing income and similar TaxesTax returns on a consolidated, and other feescombined, Taxes and expenses, required to maintain unitary or similar basis with the organizational existence Lead Borrower as the common parent of such Parent Company;
affiliated group (Ccalculated at the highest combined applicable federal, state, local and foreign Tax rate); provided further that Restricted Payments under this Section 6.04(a)(i)(B) to pay customary salary, bonus, long-term incentive, severance and other benefits (including payment to certain service providers of the Parent Borrower or its Subsidiaries pursuant that are attributable to any equity plan (whether in the form of options, cash settled options Unrestricted Subsidiary or otherwise)) payable to Permitted Payees, as well as applicable employment, social security or similar taxes in connection therewith, any joint venture shall be permitted only to the extent that either (x) such salaryUnrestricted Subsidiary has made one or more Cash distributions, bonuses, severance and other benefits are attributable and reasonably allocated advances or loans to the operations Lead Borrower or any of its Restricted Subsidiaries for such purpose in an amount up to the Parent Borrower and/or its subsidiariesamount of such Unrestricted Subsidiary’s or joint venture’s, in each caseas applicable, so long as proportionate share of such Parent Company applies Tax liabilities or (y) the amount of any such Restricted Payment for made by the Lead Borrower on behalf of such purpose;Unrestricted Subsidiary or joint venture is treated as an Investment subject to Section 6.06 hereof; #94168740v7#95106251v8
(DC) to pay audit and other accounting and reporting expenses of such Parent Company to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such expenses, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower Borrowers and/or its their subsidiaries), the Parent Borrower Borrowers and its their subsidiaries;
(ED) for the payment of insurance premiums and deductibles to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower Borrowers and/or its their subsidiaries), the Parent Borrower Borrowers and its their subsidiaries;
(FE) to pay (x) fees and expenses related to any debt and/or or equity offerings (including refinancings)offerings, investments and/or or acquisitions permitted or not restricted by this Agreement (whether or not consummated, ) relating to the Borrowers and including advisory, refinancing, subsequent transaction and exit fees of any Parent Company of the Parent Borrower) and expenses and indemnities of any trustee, agent, arranger, underwriter or similar role their Restricted Subsidiaries and (y) Public Company Costs; and;
(GF) to finance any Investment permitted under Section 6.06 as if such Parent Company were subject to Section Section 6.06 (provided that (x) any Restricted Payment under this clause (a)(i)(G(a)(i)(F) 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 (y) the relevant Parent Company shall, promptly following the closing 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 therewiththereof, cause (I) all property acquired to be contributed to the Parent Borrower Borrowers or one or more of its their Restricted Subsidiaries Subsidiaries, or (II) the merger, consolidation or amalgamation of the Person formed or acquired into the Parent Borrower Borrowers or one or more of its their Restricted Subsidiaries, in order to consummate such Investment in compliance with the applicable requirements of Section Section 6.06 as if undertaken as a direct Investment by the Parent Borrower Borrowers or the relevant Restricted Subsidiary); and
(G) to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, employees or consultants of any Parent Company (or any Immediate Family Member of any of the foregoing) to the extent such salary, bonuses and other benefits are attributable and reasonably allocated to the operations of the Borrowers and/or their subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose; provided that with respect to Restricted Payments under clauses (A), (B), (C), (D) and (G) above, such Restricted Payments that are attributable to any Unrestricted Subsidiary shall be permitted only to the extent that either (x) such Unrestricted Subsidiary has made one or more Cash distributions, advances or loans to the Borrowers or any of their Restricted Subsidiaries for such purpose in an amount up to the amount of such Unrestricted Subsidiary’s proportionate share of such Restricted Payment or (y) the amount of any such Restricted Payment made by the applicable Borrower on behalf of such Unrestricted Subsidiary is treated as an Investment subject to Section 6.06 hereof;
(ii) the Parent Lead Borrower may pay (or make Restricted Payments to allow any Parent Company to pay) for the repurchase, redemption, retirement or other acquisition or retirement for value of Capital Stock of any Parent Company Company, any subsidiary or any subsidiary of their respective Affiliates held by any Permitted Payeefuture, present or former employee, director, member of management, officer, manager, advisor or consultant (or any Affiliate or Immediate Family Member thereof) of any Parent Company, the Borrowers, any subsidiary or any of their respective Affiliates:
(A) in accordance with the terms of promissory notes issued pursuant to Section Section 6.01(o), so long as the aggregate amount of all Cash payments made in #94168740v7#95106251v8 respect of such promissory notes, together with the aggregate amount of Restricted Payments made pursuant to sub-clause (Dsubclause (D) of this clause (ii(ii) below, (1) does not exceed the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period 5,000,000 in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to the next subsequent Fiscal Years Year (until so appliedprovided that no more than $10 million may be carried forward in any Fiscal Year)) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under clause (D) below; plus;
(B) with the proceeds of any sale or issuance of, or of any capital contribution in respect of, the Capital Stock of the Parent Borrower Borrowers or any Parent Company (to the extent such proceeds are contributed to the Parent Borrower or any Restricted Subsidiary in respect of Qualified Capital Stock issued by to the Parent Borrower Borrowers or such any Restricted Subsidiary) (other than amounts constituting a Cure Amount or an Available Excluded Contribution Amount); plus;
(C) with the net proceeds of any key-man keyman life insurance policies; plusor
(D) with Cash and Cash Equivalents in an amount not to exceed, together with the aggregate amount of all cash Cash payments made pursuant to sub-clause (Asubclause (A) of this clause (ii(ii) in respect of promissory notes issued pursuant to Section Section 6.01(o), (1) the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period 5,000,000 in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to the next subsequent Fiscal Years Year (until so applied) minus (2) provided that no more than $10 million may be carried forward in any utilization of the Available RP Capacity Amount in reliance on unused capacity under the immediately preceding clause (1Fiscal Year); plus
(E) with the amount of any Cash bonuses otherwise payable to any Permitted Payee that are foregone in exchange for the receipt of Capital Stock of the Parent Borrower or any Parent Company pursuant to any compensation arrangement, including any deferred compensation plan;
(iii) the Parent Lead Borrower may make additional Restricted Payments in an amount not to exceed (A) the portion, if any, of the Available Amount on such date that the Parent Lead Borrower elects to apply to this clause (iii)(A(iii)(A); provided that (A) no Default or Event of Default has occurred and is continuing or would result therefrom and (B) the Fixed Charge Coverage Ratio, calculated on a Pro Forma Basis, would not be less than 2.00:1.00 as of the last day of the Test Period most recently ended prior to such Restricted Payment for which the financial statements required by Section 5.01(a) or 5.01(b), as the case may be, have been delivered plus (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Parent Lead Borrower elects to apply to this clause (iii)(B) (plus, without duplication of amounts 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 with Available Excluded Contribution Amounts up to the amount of such Available Excluded Contribution Amount, less any application thereof under Sections 6.04(b)(vi) or 6.06(r)iii)(B);
(iv) the Parent Lead Borrower may make Restricted Payments (i) to any Parent Company to enable such Parent Company to (A) make Cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of such Parent Company, dividends, share splits, reverse share splits (or any combination thereof) and, mergers, consolidations, amalgamations or other business combinations, and acquisitions and other Investments permitted hereunder and/or (B) honor any conversion request by a holder of Convertible Indebtedness by payment of cash and/or delivery of Capital Stock, make any cash payments in lieu of fractional shares in connection with any conversion of Convertible Indebtedness and otherwise make payments on Convertible Indebtedness in accordance with its terms (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments upon redemption thereof), or, in the case of each of sub-clauses (A) and (B) above, make Restricted Payments to any Parent Company to enable such Parent Company to make the payments and/or deliveries described in such sub-clauses (A) and (B), and (ii) consisting of (A) payments made or expected to be made in respect of withholding or similar Taxes payable by any Permitted Payee future, present or former officers, directors, employees, members of management, managers or consultants of the Borrowers, any Restricted Subsidiary or any Parent Company or any of their respective Immediate Family Members and/or (B) repurchases of Capital Stock in consideration of the payments described in sub clause (Asubclause (A) above, including demand repurchases in connection with the exercise of stock options and the issuance of restricted stock units or similar stock based awardsoptions;
(v) the Parent Lead Borrower may repurchase, redeem, acquire or retire Capital Stock upon repurchase (or make provisions for withholdings in connection with), or make Restricted Payments to any Parent Company to enable it to repurchase, redeem, acquire or retire ) Capital Stock upon (or make provisions for withholdings in connection with), the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represents all or a portion of the exercise price of, or tax withholdings with respect to, of such warrants, options or other securities convertible into or exchangeable for Capital Stock as part of a “cashless” exercise;
(vi) the Parent Lead Borrower may make Restricted Payments Payments, the proceeds of which are applied (i) on the Closing Date, solely to effect the consummation of the Transactions and on or about the Amendment No. 1 Effective Date, solely to effect the consummation of the Amendment No. 1 Transactions, (ii) on and after the Closing Date, to satisfy any payment obligations owing, or as otherwise required, under the Acquisition Agreement (including payment of working capital and/or purchase price adjustments) and to pay Transaction Costs, in each case, with respect to the Transactions, (iii) to satisfy obligations to direct or indirect holders of Capital Stock of the Parent Borrower (immediately prior to giving effect to the Transactions) in connection with, or as a result of, any working capital and/or purchase price adjustments, in each case, with respect to the Transactions and (iv) to satisfy any settlement of claims or actions in connection with the Transactions or to satisfy indemnity or other similar obligations in connection with the Transactions;
(vii) the Parent Lead Borrower may (or may make Restricted Payments to any Parent Company to enable it to) Holdings (and Holdings may in turn make such Restricted Payments with respect to any Capital Stock Super Holdco) from time to time #94168740v7#95106251v8 in an amount not sufficient to exceed enable Super Holdco to fund each scheduled payment of the Regular Cash Dividend; provided that (A) the greater no Default or Event of (x) an amount equal to 7.00% per annum of the net Cash proceeds received by Default exists or contributed to the Parent Borrower in connection with the merger of Isos Acquisition Corporation would result therefrom and Bowlero Corp. on December 15, 2021 and the other transactions consummated in connection therewith and (y) an amount equal to 7.00% per annum of the Market Capitalization of the Parent Borrower (or its direct or indirect Parent Company, as applicable) and its subsidiaries minus (B) any utilization the Fixed Charge Coverage Ratio, calculated on a Pro Forma Basis, would not be less than 2.00:1.00 as of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (Alast day of the Test Period most recently ended prior to such Restricted Payment for which the financial statements required by Section 5.01(a) or 5.01(b), as the case may be, have been delivered;
(viii) the Parent Lead Borrower may make Restricted Payments to (i) redeem, repurchase, defease, discharge, retire or otherwise acquire any (A) Capital Stock (“Treasury Capital Stock”) of the Parent Borrower Borrowers and/or any Restricted Subsidiary or Subsidiary, (B) Capital Stock of any Parent Company, in the case of each of subclauses (A(A) and (B(B), in exchange for, or out of the proceeds of the substantially concurrent sale (other than to the Parent Lead Borrower and/or any Restricted Subsidiary) of, Qualified Capital Stock of the Parent Borrower Borrowers or any Parent Company to the extent any such proceeds are contributed to the capital of the Parent Borrower Borrowers and/or any Restricted Subsidiary in respect of Qualified Capital Stock (“Refunding Capital Stock”), and/or (C) Capital Stock of any Parent Company owned by any present or former employees, directors, members of management, officers, managers or consultants or independent contractors (or their respective Immediate Family Members) of any Parent Company in an amount equal to any tax liability paid on behalf of such employee, director, member of management, officer, manager or consultant or independent contractor (or their respective Immediate Family Members) arising from the vesting of such 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 the Parent applicable Lead Borrower or a Restricted Subsidiary) of any Refunding Capital Stock;
(ix) to the extent constituting a Restricted Payment, the Parent Lead Borrower may consummate any transaction permitted by Section 5.19 (other than Section 5.19(d)), Section Section 6.06 (other than Sections 6.06(j6.06(j) and (t(t)) and Section ), Section 6.07 (other than Section Section 6.07(g)) and Section 6.09 (other than Section 6.09(d));
(x) the Parent Lead Borrower may make additional Restricted Payments in an aggregate amount not to exceed (A) the greater of $85,000,000 75,000,000 and 2510% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period minus (BA) the amount of Restricted Debt Payments made by the Borrowers or any utilization of the Available RP Capacity Amount Restricted Subsidiary in reliance on unused capacity under immediately preceding clause (ASection 6.04(b)(iv), minus (B) the outstanding amount of Investments made by a Borrower or any Restricted Subsidiary in reliance on Section 6.06(q)(ii);
(xi) the Parent Lead Borrower may pay any dividend or other distribution or consummate any redemption within 60 days after the date of 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 dividend or redemption notice would have complied with the provisions of this Section 6.04(a)hereof;
(xii) the Parent Lead Borrower may make any Restricted Payment constituting purchase, redeem or otherwise acquire its common Capital Stock with the distribution or payment proceeds received from the substantially concurrent issuance of Receivables Fees;new common Capital Stock of the Borrowers; and
(xiii) the Parent Lead Borrower may make additional Restricted Payments so long as, as measured at the time provided for in Section 1.04(e), (iA) no Default or Event of Default exists or would result therefrom and (B) the Total Net Leverage Ratio would not exceed 4.00:1.00. calculated on a Pro Forma Basis as of the last day of the most recently ended Test Period.
(b) The Borrowers shall not, nor shall they permit any Restricted Subsidiary to, make any payment (whether in Cash, securities or other property) on or in respect of principal of or interest on (x) any Junior Lien Indebtedness or (y) any Junior Indebtedness (such Indebtedness under clauses (x) and (y), the “Restricted Debt”), including any sinking fund or similar deposit, on account of the purchase, #94168740v7#95106251v8 redemption, retirement, acquisition, cancellation or termination of any Restricted Debt prior to its scheduled maturity (collectively, “Restricted Debt Payments”), except:
(i) any 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 an “applicable high yield discount obligation” catchup payment;
(iii) payments of regularly scheduled interest as and when due in respect of any Restricted Debt, except for any payments with respect to any Subordinated Indebtedness that are prohibited by the subordination provisions thereof;
(iv) so long as, at the time of delivery of irrevocable notice with respect thereto, no Event of Default exists or would result therefrom, additional Restricted Debt Payments in an aggregate amount not to exceed the greater of $75,000,000 and 10% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period, minus (A) the outstanding amount of Investments made in reliance on Section 6.06(q)(ii), minus (B) the amount of Restricted Payments made in reliance on Section 6.04(a)(x);
(A) Restricted Debt Payments in exchange for, or with proceeds of any issuance of, Qualified Capital Stock of the Borrowers and/or any Restricted Subsidiary and/or any capital contribution in respect of Qualified Capital Stock of the Borrowers or any Restricted Subsidiary, (B) Restricted Debt Payments as a result of the conversion of all or any portion of any Restricted Debt into Qualified Capital Stock of the Borrowers and/or any Restricted Subsidiary and (C) to the extent constituting a Restricted Debt Payment, paymentinkind interest with respect to any Restricted Debt that is permitted under Section 6.01;
(vi) Restricted Debt Payments in an aggregate amount not to exceed (A) the portion, if any, of the Available Amount on such date that the Borrowers elect to apply to this clause (vi)(A); provided, that (A) no Default or Event of Default has occurred and is continuing or would result therefrom and (B) the Fixed Charge Coverage Ratio, calculated on a Pro Forma Basis and (ii) there shall exist no Event of Default hereunder or shall result therefrom;
(xiv) the Parent Borrower may make additional Restricted Payments in an amount not to exceed the amount of proceeds received by the Parent Borrower and/or any Restricted Subsidiary under the Representation and Warranty Insurance Policy during the term of this Agreement;
(xv) (A) for any taxable period for which the Parent Borrower and/or any of its Subsidiaries are members of a consolidatedBasis, combined or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which a direct or indirect parent of the Parent Borrower is the common parent (a “Tax Group”), or for which the Parent Borrower is a disregarded entity for U.S. federal income tax purposes wholly-owned by a corporate parent (a “Corporate Parent”), the Parent Borrower and each of its Subsidiaries may make Restricted Payments the proceeds of which shall be used by such common parent to pay the portion of any consolidated, combined or similar U.S. federal, state or local income Taxes of such Tax Group, or by the Corporate Parent to pay the portion of the U.S. federal, state or local income Taxes of such Corporate Parent, or any franchise taxes imposed in lieu thereof, for such taxable period that are attributable to the income of the Parent Borrower and/or its Subsidiaries, provided that such amount shall would not be greater than the amount of such U.S. federal, state or local income taxes that would be paid (for such taxable period) by the Parent Borrower and its Subsidiaries if the Parent Borrower and/or such Subsidiaries had been a stand-alone corporate taxpayer (or stand-alone group of corporate taxpayers filing on a consolidated, combined or similar basis) for all taxable years ending after the Closing Date (taking into account any net operating loss carryforwards attributable to the Parent Borrower and its Subsidiaries, as the case may be) and (B) without duplication of Restricted Payments made under Section 6.04(a)(xv)(A), for any taxable period for which the Parent Borrower is treated as a partnership for U.S. federal and/or applicable state or local income tax purposes, the Parent Borrower may make Restricted Payments to its equity owners at the times and in the amounless than
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. 146
(a) The Parent Borrower shall not No Loan Party will declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, except that:
(i) any Subsidiary of the Parent Lead Borrower may declare and pay Restricted Payments to its direct equity holders.
(ii) the Loan Parties may make Restricted Payments to the extent necessary to permit any Parent Company:
(A) to pay general solely for the purpose of paying operating and compliance costs and expenses (including corporate overhead, legal or similar expenses and customary salary, bonus and other benefits payable to directors, officers, employees, members of management, managers and/or consultants of any Parent Company), in each case, which are reasonable and customary and incurred in the ordinary course of business, plus any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of any Parent Company, in each case, to the extent attributable to the ownership or operations of any Parent Company (but excluding, for the avoidance of doubt, the portion of any such amount, if any, that is attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and/or its subsidiaries;
(B) to pay franchise, excise and similar Taxes, and other fees, Taxes and expenses, required to maintain the organizational existence of such Parent Company;
(C) to pay customary salary, bonus, long-term incentive, severance and other benefits (including payment to certain service providers of the Parent Borrower or its Subsidiaries pursuant to any equity plan (whether in the form of options, cash settled options or otherwise)) payable to Permitted Payees, as well as applicable employment, social security or similar taxes in connection therewith, to the extent such salary, bonuses, severance and other benefits are attributable and reasonably allocated to the operations of the Parent Borrower and/or its subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose;
(D) to pay audit and other accounting and reporting expenses of such Parent Company to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such expenses, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries;
(E) for the payment of insurance premiums to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries;
(F) to pay (x) fees and expenses related to any debt and/or equity offerings (including refinancings), investments and/or acquisitions permitted or not restricted by this Agreement (whether or not consummated, and including advisory, refinancing, subsequent transaction and exit fees of any Parent Company of the Parent Borrower) and expenses and indemnities of any trustee, agent, arranger, underwriter or similar role and (y) Public Company Costs; and
(G) to finance any Investment permitted under Section 6.06 as if such Parent Company were subject to Section 6.06 (provided that (x) any Restricted Payment under this clause (a)(i)(G) 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 (y) the relevant Parent Company shall, promptly following the closing 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 (I) all property acquired to be contributed to the Parent Borrower or one or more of its Restricted Subsidiaries or (II) the merger, consolidation or amalgamation of the Person formed or acquired into the Parent Borrower or one or more of its Restricted Subsidiaries, in order to consummate such Investment in compliance with the applicable requirements of Section 6.06 as if undertaken as a direct Investment business by the Parent Borrower or the relevant Restricted Subsidiary);
(ii) the Parent Borrower may pay (or make Restricted Payments to allow any Parent Company to pay) for the repurchase, redemption, retirement or other acquisition or retirement for value of Capital Stock of any Parent Company or any subsidiary held by any Permitted Payee:
(A) in accordance with the terms of promissory notes issued pursuant to Section 6.01(o), so long as the aggregate amount of all Cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments made pursuant to sub-clause (D) of this clause (ii) below, (1) does not exceed the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied)) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under clause (D) below; plus
(B) with the proceeds of any sale or issuance of, or of any capital contribution in respect of, the Capital Stock of the Parent Borrower or any Parent Company (to the extent such proceeds are contributed to the Parent Borrower or any Restricted Subsidiary in respect of Qualified Capital Stock issued by the Parent Borrower or such Restricted Subsidiary) (other than amounts constituting a Cure Amount or an Available Excluded Contribution Amount); plus
(C) with the net proceeds of any key-man life insurance policies; plus
(D) with Cash and Cash Equivalents in an amount not to exceed, together with the aggregate amount of all cash payments made pursuant to sub-clause (A) of this clause (ii) in respect of promissory notes issued pursuant to Section 6.01(o), (1) the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under the immediately preceding clause (1); plus
(E) with the amount of any Cash bonuses otherwise payable to any Permitted Payee that are foregone in exchange for the receipt of Capital Stock of the Parent Borrower or any Parent Company pursuant to any compensation arrangement, including any deferred compensation planParent;
(iii) the Parent Borrower may make additional Restricted Payments in an amount not to exceed (A) the portion, if any, of the Available Amount on such date that the Parent Borrower elects to apply to this clause (iii)(A) plus (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Parent Borrower elects to apply to this clause (iii)(B) (plus, without duplication of amounts 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 with Available Excluded Contribution Amounts up to the amount of such Available Excluded Contribution Amount, less any application thereof under Sections 6.04(b)(vi) or 6.06(r));
(iv) the Parent Borrower may make Restricted Payments (i) to any Parent Company to enable such Parent Company to (A) make Cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of such Parent Company, dividends, share splits, reverse share splits (or any combination thereof) and, mergers, consolidations, amalgamations or other business combinations, and acquisitions and other Investments permitted hereunder and/or (B) honor any conversion request by a holder of Convertible Indebtedness by payment of cash and/or delivery of Capital Stock, make any cash payments in lieu of fractional shares in connection with any conversion of Convertible Indebtedness and otherwise make payments on Convertible Indebtedness in accordance with its terms (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments upon redemption thereof), or, in the case of each of sub-clauses (A) and (B) above, make Restricted Payments to any Parent Company to enable such Parent Company to make the payments and/or deliveries described in such sub-clauses (A) and (B), and (ii) consisting of (A) payments made or expected to be made in respect of withholding or similar Taxes payable by any Permitted Payee and/or (B) repurchases of Capital Stock in consideration of the payments described in sub clause (A) above, including demand repurchases in connection with the exercise of stock options and the issuance of restricted stock units or similar stock based awards;
(v) the Parent Borrower may repurchase, redeem, acquire or retire Capital Stock upon (or make provisions for withholdings in connection with), or make Restricted Payments to any Parent Company to enable it to repurchase, redeem, acquire or retire Capital Stock upon (or make provisions for withholdings in connection with), the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represents all or a portion of the exercise price of, or tax withholdings with respect to, such warrants, options or other securities convertible into or exchangeable for Capital Stock as part of a “cashless” exercise;
(vi) the Parent Borrower may make Restricted Payments the proceeds of which are applied (i) on the Closing Date, solely to effect the consummation of the Transactions and on or about the Amendment No. 1 Effective Date, solely to effect the consummation of the Amendment No. 1 Transactions, (ii) on and after the Closing Date, to satisfy any payment obligations owing, or as otherwise required, under the Acquisition Agreement (including payment of working capital and/or purchase price adjustments) and to pay Transaction Costs, in each case, with respect to the Transactions, (iii) to satisfy obligations to direct or indirect holders of Capital Stock of the Parent Borrower (immediately prior to giving effect to the Transactions) in connection with, or as a result of, any working capital and/or purchase price adjustments, in each case, with respect to the Transactions and (iv) to satisfy any settlement of claims or actions in connection with the Transactions or to satisfy indemnity or other similar obligations in connection with the Transactions;
(vii) the Parent Borrower may (or may make Restricted Payments to any Parent Company to enable it to) make Restricted Payments with respect to any Capital Stock in an amount not to exceed (A) the greater of (x) an amount equal to 7.00% per annum of the net Cash proceeds received by or contributed to the Parent Borrower in connection with the merger of Isos Acquisition Corporation and Bowlero Corp. on December 15, 2021 and the other transactions consummated in connection therewith and (y) an amount equal to 7.00% per annum of the Market Capitalization of the Parent Borrower (or its direct or indirect Parent Company, as applicable) and its subsidiaries minus (B) any utilization of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A);
(viii) the Parent Borrower may make Restricted Payments to (i) redeem, repurchase, defease, discharge, retire or otherwise acquire any (A) Capital Stock (“Treasury Capital Stock”) of the Parent Borrower and/or any Restricted Subsidiary or (B) Capital Stock of any Parent Company, in the case of each of subclauses (A) and (B), in exchange for, or out of the proceeds of the substantially concurrent sale (other than to the Parent Borrower and/or any Restricted Subsidiary) of, Qualified Capital Stock of the Parent Borrower or any Parent Company to the extent any such proceeds are contributed to the capital of the Parent Borrower and/or any Restricted Subsidiary 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 the Parent Borrower or a Restricted Subsidiary) of any Refunding Capital Stock;
(ix) to the extent constituting a Restricted Payment, the Parent Borrower may consummate any transaction permitted by Section 5.19 (other than Section 5.19(d)), Section 6.06 (other than Sections 6.06(j) Permitted Dispositions and (t)) and Section 6.07 (other than Section 6.07(g));Permitted Investments; and
(xiv) the Parent Borrower may make additional Restricted Payments in an aggregate amount not to exceed (A) the greater of $85,000,000 and 25% of Consolidated Adjusted EBITDA 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);
(xi) the Parent Borrower may pay any dividend or other distribution or consummate any redemption within 60 days after the date of 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);
(xii) the Parent Borrower may make any Restricted Payment constituting the distribution or payment of Receivables Fees;
(xiii) the Parent Borrower may make additional Restricted 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 Event of Default hereunder or shall result therefrom;
(xiv) the Parent Borrower may make additional Restricted Payments in an amount not to exceed the amount of proceeds received by the Parent Borrower and/or any Restricted Subsidiary under the Representation and Warranty Insurance Policy during the term of this Agreement;
(xv) (A) for any taxable period for which the Parent Borrower and/or any of its Subsidiaries are members of a consolidated, combined or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which a direct or indirect parent of the Parent Borrower is the common parent (a “Tax Group”), or for which the Parent Borrower is a disregarded entity for U.S. federal income tax purposes wholly-owned by a corporate parent (a “Corporate Parent”), the Parent Borrower and each of its Subsidiaries Loan Parties may make Restricted Payments to the Parent:
(A) the proceeds of which shall be used by such common parent the Parent to pay franchise Taxes and other fees, Taxes and expenses required to maintain its (or any of its direct or indirect parents’) corporate existence; and
(B) the proceeds of which shall be used by the Parent to pay the portion of Tax liability for any consolidated, combined or similar U.S. foreign, federal, state or local income Taxes or similar tax group that includes the Loan Parties and/or their Subsidiaries that is attributable to the taxable income, revenue, receipts, gross receipts, gross profits, capital or margin of the Loan Parties and/or their applicable Subsidiaries; provided that such Tax Group, or by liability shall not exceed the Corporate Parent amount that the Loan Parties and/or their applicable Subsidiaries would have been required to pay the portion in respect of the U.S. relevant foreign, federal, state or local income or similar Taxes of for such Corporate Parentfiscal year had the Loan Parties and their Subsidiaries paid such Taxes separately from any such parent as a standalone consolidated, combined, or any franchise taxes imposed in lieu thereofsimilar foreign, for such taxable period that are attributable to the income of the Parent Borrower and/or its Subsidiaries, provided that such amount shall not be greater than the amount of such U.S. federal, federal state or local income taxes that or similar tax group.
(b) No Loan Party nor any Subsidiary will make or agree to pay or make any voluntary or optional prepayment or other similar distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Indebtedness incurred after the Petition Date (other than Indebtedness under the Loan Documents), 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 Indebtedness incurred after the Petition Date (other than Indebtedness under the Loan Documents), except:
(i) Payments in Capital Stock (as long as no Change in Control would be paid result therefrom) or payments of interest in-kind; 147
(ii) prepayments in connection with a refinancing of Permitted Indebtedness permitted hereunder;
(iii) prepayments on account of Permitted Indebtedness due to any of the Loan Parties;
(iv) prepayments as expressly provided for such taxable period) in the DIP Budget, the “first day” orders or the Orders entered by the Parent Bankruptcy Court or the Canadian Court that are reasonably acceptable to the Administrative Agent;
(v) prepayments in respect of Permitted Indebtedness described in clause (h) of the definition thereof with the proceeds of the disposition of assets other than any such assets constituting ABL Collateral (as defined in the Intercreditor Agreement) and any assets of the Canadian Borrower and its Subsidiaries if the Parent Borrower and/or such Subsidiaries had been a stand-alone corporate taxpayer other Canadian Loan Parties; and
(or stand-alone group of corporate taxpayers filing on a consolidated, combined or similar basisvi) for all taxable years ending after the Closing Date (taking into account any net operating loss carryforwards attributable other prepayments in an aggregate amount not to the Parent Borrower and its Subsidiaries, as the case may be) and (B) without duplication of Restricted Payments made under Section 6.04(a)(xv)(A), for any taxable period for which the Parent Borrower is treated as a partnership for U.S. federal and/or applicable state or local income tax purposes, the Parent Borrower may make Restricted Payments to its equity owners at the times and in the amounexceed $25,000,000.
Appears in 1 contract
Sources: Superpriority Secured Debtor in Possession Credit Agreement (Toys R Us Inc)
Restricted Payments; Certain Payments of Indebtedness. (a) The Parent Lead Borrower shall not pay or make, directly or indirectly, any Restricted Payment, except that:
(i) the Parent Lead Borrower may make Restricted Payments to the extent necessary to permit any Parent Company:
(A) to pay general operating and compliance administrative costs and expenses (including corporate overhead, legal or similar expenses, expenses to prepare any Tax returns or defend any Tax claims, and customary salary, bonus and other benefits payable to directors, officers, employees, members of management, managers and/or consultants of any Parent Company)) and franchise fees and Taxes and similar fees, Taxes and expenses required to enable such Parent Company to maintain its organizational existence or qualification to do business, in each case, which are reasonable and customary and incurred in the ordinary course of business, plus any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of any Parent Company, in each case, to the extent attributable to the ownership or operations of any Parent Company and its subsidiaries (but excluding, for the avoidance of doubt, excluding the portion of any such amount, if any, amount that is attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Lead Borrower and/or and its subsidiaries), the Parent Borrower and/or its subsidiaries;
(B) to pay franchise, excise scheduled and similar Taxes, overdue interest and other fees, Taxes and expenses, required to maintain the organizational existence payments as part of such Parent Company;
(C) to pay customary salary, bonus, longan AHYDO catch-term incentive, severance and other benefits (including payment to certain service providers of the Parent Borrower or its Subsidiaries pursuant to any equity plan (whether in the form of options, cash settled options or otherwise)) payable to Permitted Payees, as well as applicable employment, social security or similar taxes in connection therewith, to the extent such salary, bonuses, severance and other benefits are attributable and reasonably allocated to the operations of the Parent Borrower and/or its subsidiariesup payment, in each case, so long as such in respect of any Indebtedness of any Parent Company applies to the amount of any such Restricted Payment for such purposeextent the Net Proceeds thereof were contributed to the Lead Borrower;
(DC) to pay audit and other accounting and reporting expenses of such Parent Company to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such expenses, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Lead Borrower and/or its subsidiaries), the Parent Lead Borrower and its subsidiaries;
(ED) for the payment of insurance premiums to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Lead Borrower and/or its subsidiaries), the Parent Lead Borrower and its subsidiaries;
(FE) to pay (x) fees and expenses related to any debt and/or or equity offerings (including refinancings)by any Parent Company, investments and/or or acquisitions permitted or not restricted by this Agreement (whether or not consummated, and including advisory, refinancing, subsequent transaction and exit fees of any Parent Company of the Parent Borrower) and expenses and indemnities of any trustee, agent, arranger, underwriter or similar role and (y) Public Company Costs; and;
(GF) to finance any Investment permitted under Section 6.06 as if such Parent Company were subject to Section Section 6.06 (provided that (x) any Restricted Payment under this clause (a)(i)(G(a)(i)(F) 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 (y) the relevant Parent Company shall, promptly following the closing 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 therewiththereof, cause (I) all property acquired to be contributed to the Parent Lead Borrower or one or more of its Restricted Subsidiaries Subsidiaries, or (II) the merger, consolidation or amalgamation of the Person formed or acquired into the Parent Lead Borrower or one or more of its Restricted Subsidiaries, in order to consummate such Investment in compliance with the applicable requirements of Section Section 6.06 as if undertaken as a direct Investment by the Parent Lead Borrower or the relevant Restricted Subsidiary); and
(G) to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, employees or consultants of any Parent Company (or any Immediate Family Member of any of the foregoing) to the extent such salary, bonuses and other benefits are attributable and reasonably allocated to the operations of the Lead Borrower and/or its subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose;
(ii) the Parent Lead Borrower may pay (or make Restricted Payments to allow any Parent Company to pay) for the repurchase, redemption, retirement or other acquisition or retirement for value of Capital Stock of any Parent Company or any subsidiary held by any Permitted Payeefuture, present or former employee, director, member of management, officer, manager or consultant (or any Affiliate or Immediate Family Member thereof) of any Parent Company, the Lead Borrower or any subsidiary:
(A) in accordance with the terms of promissory notes issued pursuant to Section Section 6.01(o), so long as the aggregate amount of all Cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments made pursuant to sub-clause (D(D) of this clause (ii(ii) below, (1) does not exceed in any Fiscal Year the greater of $68,000,000 40,000,000 and 2012.0% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period in any Fiscal YearEBITDA, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied)) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under clause (D) below; plusYears;
(B) with the proceeds of any sale or issuance of, or of any capital contribution in respect of, the Capital Stock of the Parent Lead Borrower or any Parent Company (to the extent such proceeds are contributed to the Parent Borrower or any Restricted Subsidiary in respect of Qualified Capital Stock issued by to the Parent Lead Borrower or such any Restricted Subsidiary) (other than amounts constituting a Cure Amount or an Available Excluded Contribution Amount); plus;
(C) with the net proceeds of any key-man life insurance policies; plusor
(D) with Cash and Cash Equivalents in an amount not to exceedexceed in any Fiscal Year, together with the aggregate amount of all cash payments made pursuant to sub-clause (A(A) of this clause (ii(ii) in respect of promissory notes issued pursuant to Section Section 6.01(o), (1) the greater of $68,000,000 40,000,000 and 2012.0% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period in any Fiscal YearEBITDA, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under the immediately preceding clause (1); plus
(E) with the amount of any Cash bonuses otherwise payable to any Permitted Payee that are foregone in exchange for the receipt of Capital Stock of the Parent Borrower or any Parent Company pursuant to any compensation arrangement, including any deferred compensation planYears;
(iii) the Parent Lead Borrower may make additional Restricted Payments in an amount not to exceed (A) the portion, if any, of the Available Amount on such date that the Parent Lead Borrower elects to apply to this clause (iii)(A) plus (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Parent Borrower elects to apply to this clause (iii)(B) (plus, without duplication of amounts 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 with Available Excluded Contribution Amounts up to the amount of such Available Excluded Contribution Amount, less any application thereof under Sections 6.04(b)(vi) or 6.06(r)iii);
(iv) the Parent Lead Borrower may make Restricted Payments (i) to any Parent Company to enable such Parent Company to (A) make Cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of such Parent Company, dividends, share splits, reverse share splits (or any combination thereof) and, mergers, consolidations, amalgamations or other business combinations, and acquisitions and other Investments permitted hereunder and/or (B) honor any conversion request by a holder of Convertible Indebtedness by payment of cash and/or delivery of Capital Stock, make any cash payments in lieu of fractional shares in connection with any conversion of Convertible Indebtedness and otherwise make payments on Convertible Indebtedness in accordance with its terms (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments upon redemption thereof), or, in the case of each of sub-clauses (A) and (B) above, make Restricted Payments to any Parent Company to enable such Parent Company to make the payments and/or deliveries described in such sub-clauses (A) and (B), and (ii) consisting of (A) payments made or expected to be made in respect of withholding or similar Taxes payable by any Permitted Payee future, present or former officers, directors, employees, members of management, managers or consultants of the Lead Borrower, any Restricted Subsidiary or any Parent Company or any of their respective Immediate Family Members and/or (B) repurchases of Capital Stock in consideration of the payments described in sub sub-clause (A(A) above, including demand repurchases in connection with the exercise of stock options and the issuance of restricted stock units or similar stock based awardsoptions;
(v) the Parent Lead Borrower may repurchase, redeem, acquire or retire Capital Stock upon repurchase (or make provisions for withholdings in connection with), or make Restricted Payments to any Parent Company to enable it to repurchase, redeem, acquire or retire ) Capital Stock upon (or make provisions for withholdings in connection with), the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represents all or a portion of the exercise price of, or tax Tax withholdings with respect to, such warrants, options or other securities convertible into or exchangeable for Capital Stock as part of a “cashless” exercise;
(vi) for any taxable period (or portion thereof) that a Parent Company is treated as a corporation for U.S. federal income tax purposes and for which the Lead Borrower and/or any of its subsidiaries are members (or are pass-through entities of such members) of a consolidated, combined, unitary or similar income Tax group for U.S. federal, state, local or foreign income Tax purposes for which such Parent Company is the common parent, the Lead Borrower may make Restricted Payments to such Parent Company to pay the proceeds portion of which any U.S. federal, state, local or foreign income Taxes (as applicable) of such Parent Company for such taxable period that are applied (i) on attributable to the Closing Date, solely to effect the consummation income of the Transactions and on or about Lead Borrower and/or its applicable subsidiaries; provided that, the Amendment No. 1 Effective Dateaggregate amount of such distributions shall not exceed the aggregate Taxes the Lead Borrower and/or its subsidiaries, solely to effect the consummation of the Amendment No. 1 Transactionsas applicable, (ii) on and after the Closing Date, to satisfy any payment obligations owing, or as otherwise required, under the Acquisition Agreement (including payment of working capital and/or purchase price adjustments) and would be required to pay Transaction Costsin respect of such U.S. federal, in each casestate, local and foreign Taxes on a stand-alone basis for such taxable period; provided further that the amount of such distributions with respect to the Transactions, (iii) to satisfy obligations to direct or indirect holders of Capital Stock of the Parent Borrower (immediately prior to giving effect any Unrestricted Subsidiary for any taxable period shall be limited to the Transactions) in connection with, or as a result of, any working capital and/or purchase price adjustments, in each case, with respect to the Transactions and (iv) to satisfy any settlement of claims or actions in connection with the Transactions or to satisfy indemnity or other similar obligations in connection with the Transactionsamount actually paid by such Unrestricted Subsidiary for such purpose;
(vii) the Parent Lead Borrower may make Restricted Payments (A) to consummate, to the extent constituting Restricted Payments, the Transactions and (B) to pay Transaction Costs;
(viii) so long as no Event of Default exists at the time of declaration of such Restricted Payment, the Lead Borrower may (or may make Restricted Payments to any Parent Company to enable it to) make Restricted Payments with respect to any Capital Stock in an amount not to exceed an aggregate amount per annum equal to the sum of (A) the greater of (x) an amount equal to 7.006% per annum of the net Cash proceeds received by or contributed to the Parent Borrower in connection with the merger of Isos Acquisition Corporation and Bowlero Corp. on December 15, 2021 and the other transactions consummated in connection therewith from an initial public offering and (yB) an amount equal to 7.007% per annum of the Market Capitalization of the Parent Borrower (or its direct or indirect Parent Company, as applicable) and its subsidiaries minus (B) any utilization of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A)Capitalization;
(viiiix) the Parent Lead Borrower may make Restricted Payments to (i) redeem, repurchase, defease, discharge, retire or otherwise acquire any (A) Capital Stock (“Treasury Capital Stock”) of the Parent Lead Borrower and/or any Restricted Subsidiary or (B) Capital Stock of any Parent Company, in the case of each of subclauses (A(A) and (B(B), in exchange for, or out of the proceeds of the substantially concurrent sale (other than to the Parent Lead Borrower and/or any Restricted Subsidiary) of, Qualified Capital Stock of the Parent Lead Borrower or any Parent Company to the extent any such proceeds are contributed to the capital of the Parent Lead Borrower and/or any Restricted Subsidiary 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 the Parent Lead Borrower or a Restricted Subsidiary) of any Refunding Capital Stock;
(ixx) to the extent constituting a Restricted Payment, the Parent Lead Borrower may consummate any transaction permitted by Section 5.19 (other than Section 5.19(d)), Section Section 6.06 (other than Sections 6.06(j6.06(j) and (t(t)) and Section ), Section 6.07 (other than Section Section 6.07(g)) and Section 6.09 (other than Section 6.09(d));
(xxi) the Parent Lead Borrower may make additional Restricted Payments in an aggregate amount not to exceed (A) the greater of $85,000,000 120,000,000 and 2535.0% of Consolidated Adjusted EBITDA as minus the sum of the last day of the most recently ended Test Period minus (A) any amounts under this Section 6.04(a)(xi) reallocated to make Restricted Debt Payments pursuant to Section 6.04(b)(iv), (B) any utilization of the Available RP Capacity Amount in reliance on unused capacity amounts under immediately preceding clause (Athis Section 6.04(a)(xi) reallocated to make Investments pursuant to Section 6.06(q), and (C) any amounts under this Section 6.04(a)(xi) reallocated to incur Indebtedness pursuant to Section 6.01(u) (which may be further reallocated as provided therein);
(xixii) the Parent Lead Borrower may pay any dividend or other distribution or consummate any redemption within 60 sixty (60) days after the date of 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 dividend or redemption notice would have complied with the provisions of this Section 6.04(a);
(xii) the Parent Borrower may make any Restricted Payment constituting the distribution or payment of Receivables Feeshereof;
(xiii) the Parent Lead Borrower may make additional Restricted Payments so long asas the Payment Conditions applicable to Restricted Payments have been satisfied, 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 Event of Default hereunder or shall result therefromBasis;
(xiv) the Parent Lead Borrower may make additional Restricted Payments to enable any Parent Company to make Restricted Payments solely in the Qualified Capital Stock of such Parent Company;
(xv) the Lead Borrower may make Restricted Payments (A) to pay amounts permitted under Section 6.09(f), (g), (h), (i), (k) and (m) and (B) otherwise in an amount not to exceed $500,000 per calendar year; and
(xvi) the Borrower may make Restricted Payments in the form of Capital Stock of, or Indebtedness owed to Holdings, the Borrowers or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Cash and Cash Equivalents (except to the extent constituting proceeds from the Disposition of all or substantially all of the assets of such Unrestricted Subsidiary) and/or intellectual property material (as determined by the Lead Borrower in good faith) to the business of the Lead Borrower and its Restricted Subsidiaries, taken as a whole).
(b) The Lead Borrower shall not, nor shall it permit any Restricted Subsidiary to, make any payment (whether in Cash, securities or other property) on or in respect of principal of (x) any Junior Lien Indebtedness, (y) any Subordinated Indebtedness or (z) solely to the extent proceeds of Revolving Loans are being used to make such payment, unsecured Indebtedness, in each cases of clauses (x), (y) and (z), with an individual outstanding principal amount in excess of the Threshold Amount (such Indebtedness under clauses (x), (y) and (z), in each case, with an individual outstanding principal amount in excess of the Threshold Amount, the “Restricted Debt”), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Restricted Debt prior to its scheduled maturity (collectively, “Restricted Debt Payments”), except:
(i) any 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 (except to the extent subject to clause (iv)(C) of the proviso to Section 6.01(p));
(ii) payments as part of an AHYDO catch-up payment;
(iii) payments of regularly scheduled interest as and when due in respect of any Restricted Debt, except for any payments with respect to any such Subordinated Indebtedness that are prohibited by the subordination provisions thereof;
(iv) so long as, at the time of delivery of irrevocable notice with respect thereto, no Event of Default exists or would result therefrom, Restricted Debt Payments in an aggregate amount not to exceed (i) the sum of (A) the greater of $120,000,000 and 35.0% of Consolidated Adjusted EBITDA and (B) any amounts reallocated to this Section 6.04(b)(iv) from Section 6.04(a)(xi) and Section 6.06(q), minus (ii) any amounts reallocated from this Section 6.04(b)(iv) to make Investments pursuant to Section 6.06(q);
(A) Restricted Debt Payments in exchange for, or with proceeds of any issuance of, Qualified Capital Stock of the Lead Borrower and/or any Restricted Subsidiary and/or any capital contribution in respect of Qualified Capital Stock of the Lead Borrower or any Restricted Subsidiary, in each case, other than any amounts constituting a Cure Amount, (B) Restricted Debt Payments as a result of the conversion of all or any portion of any Restricted Debt into Qualified Capital Stock of the Lead Borrower 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 amount not to exceed the amount portion, if any, of proceeds received by the Parent Available Amount on such date that the Lead Borrower and/or any Restricted Subsidiary under the Representation and Warranty Insurance Policy during the term of elects to apply to this Agreementclause (vi);
(xvvii) Restricted Debt Payments; provided that the Payment Conditions applicable to Restricted Debt Payments have been satisfied on a Pro Forma Basis; and
(viii) mandatory prepayments of Restricted Debt (and related payments of interest) made with “Declined Proceeds” (as defined in the First Lien Credit Agreement) (Ait being understood that any “Declined Proceeds” (as defined in the First Lien Credit Agreement) for any taxable period for which applied to make Restricted Debt Payments in reliance on this Section 6.04(b)(viii) shall not increase the Parent Borrower and/or any of its Subsidiaries are members of a consolidated, combined or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which a direct or indirect parent amount available under clause (a)(viii) of the Parent Borrower is the common parent (a definition of “Tax Group”), or for which the Parent Borrower is a disregarded entity for U.S. federal income tax purposes wholly-owned by a corporate parent (a “Corporate Parent”), the Parent Borrower and each of its Subsidiaries may make Restricted Payments the proceeds of which shall be used by such common parent to pay the portion of any consolidated, combined or similar U.S. federal, state or local income Taxes of such Tax Group, or by the Corporate Parent to pay the portion of the U.S. federal, state or local income Taxes of such Corporate Parent, or any franchise taxes imposed in lieu thereof, for such taxable period that are attributable Available Amount” to the income of the Parent Borrower and/or its Subsidiaries, provided that such amount shall not be greater than the amount of such U.S. federal, state or local income taxes that would be paid (for such taxable period) by the Parent Borrower and its Subsidiaries if the Parent Borrower and/or such Subsidiaries had been a stand-alone corporate taxpayer (or stand-alone group of corporate taxpayers filing on a consolidated, combined or similar basis) for all taxable years ending after the Closing Date (taking into account any net operating loss carryforwards attributable to the Parent Borrower and its Subsidiaries, as the case may be) and (B) without duplication of Restricted Payments made under Section 6.04(a)(xv)(Aextent so applied), for any taxable period for which the Parent Borrower is treated as a partnership for U.S. federal and/or applicable state or local income tax purposes, the Parent Borrower may make Restricted Payments to its equity owners at the times and in the amoun.
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) The Parent Borrower Borrowers shall not pay or make, directly or indirectly, any Restricted Payment, except that:
(i) the Parent Borrower Borrowers may make Restricted Payments to the extent necessary to permit any Parent Company:
(A) to pay general operating and compliance administrative costs and expenses (including corporate overhead, legal or similar expenses and customary wages, salary, bonus and other benefits payable to directors, officers, employees, members of management, managers consultants and/or consultants independent contractors of any Parent Company), franchise fees, franchise Taxes and similar fees, Taxes and expenses required to maintain the organizational existence of such Parent Company, in each case, which are reasonable and customary and incurred in the ordinary course of business, plus any reasonable and customary indemnification claims made by current or former directors, officers, members of management, managers, employees or consultants of any Parent Company, in each case, to the extent attributable to the ownership or operations of any Parent Company (but excluding, for the avoidance of doubt, the portion of any such amount, if any, that is attributable to the ownership or operations operation of any subsidiary of any Parent Company other than the Parent Borrower Holdings and/or its subsidiaries), the Parent Borrower and/or its subsidiaries;
(B) to pay franchise, excise and similar Taxes, and other fees, Taxes and expenses, required to maintain the organizational existence of such Parent Company[Reserved];
(C) to pay customary salary, bonus, long-term incentive, severance and other benefits (including payment to certain service providers of the Parent Borrower or its Subsidiaries pursuant to any equity plan (whether in the form of options, cash settled options or otherwise)) payable to Permitted Payees, as well as applicable employment, social security or similar taxes in connection therewith, to the extent such salary, bonuses, severance and other benefits are attributable and reasonably allocated to the operations of the Parent Borrower and/or its subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose;
(D) to pay audit and other accounting and reporting expenses of at such Parent Company to the extent attributable relating to the ownership or operations of any Parent Company (but excluding, for the avoidance of doubt, the portion of any such expenses, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower Holdings and/or its subsidiaries), Holdings, the Parent Borrower and its subsidiariesBorrowers and/or their respective Subsidiaries;
(ED) for the payment of insurance premiums to the extent attributable relating to the ownership or operations of any Parent Company (but excluding, for the avoidance of doubt, the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower Holdings and/or its subsidiaries), Holdings, the Parent Borrower and its subsidiariesBorrowers and/or their respective Subsidiaries;
(FE) to pay (x) fees and expenses related to any debt and/or or equity offerings (including refinancings)offerings, investments and/or or acquisitions permitted or not restricted by this Agreement (whether or not consummated, and including advisory, refinancing, subsequent transaction and exit fees of any Parent Company of the Parent Borrower) and expenses and indemnities of any trustee, agent, arranger, underwriter or similar role and (y) Public Company Costs; and);
(GF) to pay the consideration to finance any Investment permitted under Section 6.06 as if such Parent Company were subject to Section Section 6.06 (provided that (x) any such Restricted Payment Payments under this clause (a)(i)(G(a)(i)(F) 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 (y) the relevant such Parent Company shall, promptly following the closing 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 therewiththereof, cause (I) all such property acquired to be contributed to the Parent Borrower Borrowers or one of their respective Subsidiaries, or more of its Restricted Subsidiaries or (II) the merger, consolidation or amalgamation of the Person formed or acquired into the Parent Borrower Borrowers or one or more of its Restricted their respective Subsidiaries, in order to consummate such Investment in compliance a manner that causes such Investment to comply with the applicable requirements of Section Section 6.06 as if undertaken as a direct Investment by the Parent such Borrower or such Subsidiary) (it being agreed that such contribution or merger, consolidation or amalgamation shall not increase the relevant Available Amount except to the extent in excess of such Restricted SubsidiaryPayment made in reliance on this clause (a)(i)(F))); and
(G) to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, employees or consultants (or any Immediate Family Member thereof) of any Parent Company plus any reasonable and customary indemnification claims made by current or former directors, officers, members of management, managers, employees or consultants of any Parent Company, to the extent such salary, bonuses, severance and other benefits or claims in respect of any of the foregoing) are directly attributable and reasonably allocated to the ownership or operations of any Parent Company (but excluding, for the avoidance of doubt, the portion of any amount, if any, that is attributable to the ownership or operation of any subsidiary of any Parent Company other than Holdings and/or its subsidiaries), Holdings, the Borrowers and/or their respective Subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose;
(ii) the Parent Borrower Borrowers may pay (or make Restricted Payments to allow any Parent Company to pay) for the repurchase, redemption, retirement or other acquisition or retirement for value of Capital Stock of any Parent Company Company, any Borrower or any subsidiary Subsidiary held by any Permitted Payeefuture, present or former employee, director, member of management, officer, manager or consultant (or any Immediate Family Member thereof) of any Parent Company, any Borrower or any Subsidiary:
(A) in accordance with the terms of promissory notes issued pursuant to Section 6.01(oSection 6.01(n), so long as the aggregate amount of all Cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments made pursuant to sub-clause (D(D) of this clause (ii) below(ii), (1) does not exceed the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period 4,000,000 in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to the next subsequent Fiscal Years (until so applied)) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under clause (D) below; plusYear;
(B) with the proceeds of any sale or issuance of, or of any capital contribution in respect of, the Capital Stock of the Parent Borrower or any Parent Company (to the extent such proceeds that are contributed to the Parent Borrower or any Restricted Subsidiary in respect of Qualified Capital Stock issued by the Parent Borrower or such Restricted Subsidiary) (other than amounts constituting a Cure Amount or an Available Excluded Contribution Amount); plusnot otherwise applied;
(C) with the net proceeds of any key-man life insurance policiespolicies received during such Fiscal Year; plusor
(D) with Cash and Cash Equivalents in an amount not to exceed, together with the aggregate amount of all cash Cash payments made in respect of notes issued pursuant to sub-Section 6.01(n) and clause (A(A) of this clause (ii) in respect of promissory notes issued pursuant to Section 6.01(o(ii), (1) the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period 4,000,000 in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to the next subsequent Fiscal Years (until so applied) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under the immediately preceding clause (1); plus
(E) with the amount of any Cash bonuses otherwise payable to any Permitted Payee that are foregone in exchange for the receipt of Capital Stock of the Parent Borrower or any Parent Company pursuant to any compensation arrangement, including any deferred compensation planYear;
(iii) so long as no Event of Default then exists or would result therefrom and, to the Parent Borrower extent applicable, subject to the conditions set forth in clause (a)(ii) of the definition of Available Amount, the Borrowers may make additional Restricted Payments in an amount not to exceed (A) the portion, if any, of the Available Amount on such date that the Parent Borrower elects Borrowers elect to apply to this clause (iii)(A) plus (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Parent Borrower elects to apply to this clause (iii)(B) (plus, without duplication of amounts 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 with Available Excluded Contribution Amounts up to the amount of such Available Excluded Contribution Amount, less any application thereof under Sections 6.04(b)(vi) or 6.06(r)iii);
(iv) the Parent Borrower Borrowers may make Restricted Payments (i) to any Parent Company to enable such Parent Company to (A) make Cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of such Parent Company, dividends, share splits, reverse share splits (Company or any combination thereof) and, mergers, consolidations, amalgamations or other business combinations, and acquisitions and other Investments permitted hereunder and/or (B) honor any conversion request by a holder of Convertible Indebtedness by payment of cash and/or delivery of Capital Stock, make any cash payments in lieu of fractional shares in connection with any conversion of Convertible Indebtedness and otherwise make payments on Convertible Indebtedness in accordance with its terms (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments upon redemption thereof), or, in the case of each of sub-clauses (A) and (B) above, make Restricted Payments to any Parent Company to enable such Parent Company to make the payments and/or deliveries described in such sub-clauses (A) and (B), and (ii) consisting of (A) payments made or expected to be made in respect of withholding or similar Taxes payable by any Permitted Payee future, present or former officers, directors, employees, members of management, managers or consultants of any Borrower, any Subsidiary or Parent Company or any of their respective Immediate Family Members and/or (B) repurchases of Capital Stock in consideration of the payments described in sub clause (A(A) above, including demand repurchases in connection with the exercise of stock options and the issuance of restricted stock units or similar stock based awardsoptions;
(v) the Parent Borrower Borrowers may repurchase, redeem, acquire or retire Capital Stock upon repurchase (or make provisions for withholdings in connection with), or make Restricted Payments to any Parent Company to enable it to repurchase, redeem, acquire or retire ) Capital Stock upon (or make provisions for withholdings in connection with), the exercise of warrants, options or warrants or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represents all or a portion of the exercise price of, of such options or tax withholdings with respect to, such warrants, options warrants or other securities convertible into or exchangeable for Capital Stock as part of a “cashless” exercise;
(vi) the Parent Borrower Borrowers may make Restricted Payments the proceeds of which are applied (iA) on the Closing Date, solely to effect the consummation of the Transactions and on or about the Amendment No. 1 Effective Date, solely to effect the consummation of the Amendment No. 1 Transactions, (iiB) on and after the Closing Date, to satisfy any payment obligations owing, or as otherwise required, owing under the Acquisition Agreement (including as in effect on the date hereof) and the payment of working capital and/or purchase price adjustments) and to pay any Transaction Costs, in each case, with respect to the Transactions, (iii) to satisfy obligations to direct or indirect holders of Capital Stock of the Parent Borrower (immediately prior to giving effect to the Transactions) in connection with, or as a result of, any working capital and/or purchase price adjustments, in each case, with respect to the Transactions and (iv) to satisfy any settlement of claims or actions in connection with the Transactions or to satisfy indemnity or other similar obligations in connection with the Transactions;
(vii) so long as no Event of Default shall have occurred and be continuing at the Parent Borrower time of the declaration thereof or would result therefrom, following the consummation of an IPO, the Borrowers may (or may make Restricted Payments to any Parent Company to enable it to) make Restricted Payments with respect to any Capital Stock in an amount not of up to exceed (A) the greater of (x) an amount equal to 7.006.0% per annum of the net Cash proceeds received by or contributed to the Parent Borrower in connection with the merger of Isos Acquisition Corporation and Bowlero Corp. on December 15, 2021 and the other transactions consummated in connection therewith and (y) an amount equal to 7.00% per annum of the Market Capitalization of the Parent Borrower (or its direct or indirect Parent Company, as applicable) and its subsidiaries minus (B) Borrowers from any utilization of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A)such IPO;
(viii) the Parent Borrower Borrowers may make Restricted Payments to (i) redeem, repurchase, defease, discharge, retire or otherwise acquire any (A) Capital Stock (“Treasury Capital Stock”) of the Parent any Borrower and/or or any Restricted Subsidiary or (B) Capital Stock of any Parent Company, in the case of each of subclauses (A(A) and (B)(B) above, in exchange for, or out of the proceeds of the substantially concurrent sale (other than to the Parent any Borrower and/or any Restricted or a Subsidiary) of, Qualified Capital Stock of the Parent any Borrower or any Parent Company to the extent any such proceeds are contributed to the capital of the Parent any Borrower and/or or any Restricted Subsidiary in respect of Qualified Capital Stock (“Refunding Capital Stock”) and (ii) declare and pay dividends on any the Treasury Capital Stock out of the proceeds of the substantially concurrent sale or issuance (other than to the Parent any Borrower or a Restricted Subsidiary) of any the Refunding Capital Stock;
(ix) to the extent constituting a Restricted Payment, the Parent Borrower Borrowers may consummate any transaction permitted by Section 5.19 (other than Section 5.19(d)), Section Section 6.06 (other than Sections 6.06(j6.06(j) and (t(t)) and Section ), Section 6.07 (other than Section Section 6.07(g)) and Section 6.09 (other than Section 6.09(d) and (j);); and
(x) the Parent Borrower may make additional Restricted Payments in an aggregate amount not to exceed (A) the greater of $85,000,000 and 25% of Consolidated Adjusted EBITDA 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)[Reserved];
(xi) the Parent Borrower Borrowers may pay any dividend or other distribution or consummate any redemption within 60 days after the date of 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 dividend or redemption notice would have complied with the provisions of this Section 6.04(a)hereof;
(xii) the Parent any Borrower or any Subsidiary may make any additional Restricted Payments; provided that after giving Pro Forma Effect thereto, (i) the Total Net Leverage Ratio (calculated on a Pro Forma Basis) is not greater than 4.75:1.00 as of the last day of the most recently ended Test Period for which financial statements have been delivered pursuant to Section 5.01(b) or (c), as applicable, on or prior to the making of such Restricted Payment constituting the distribution and (ii) no Event of Default shall have occurred and be continuing or payment of Receivables Feeswould result therefrom;
(xiii) the Parent Borrowers may make Restricted Payments to the extent necessary to make Tax Distributions; and
(xiv) so long as no Event of Default then exists or would result therefrom, any Borrower or any Subsidiary may make additional Restricted Payments so long as, as measured up to an amount equal to the greater of $5,000,000 and 5.0% of Consolidated Adjusted EBITDA at the time provided for such payment is made less the aggregate amount previously or concurrently used to make Investments pursuant to Section 6.06(q)(iii) or Restricted Debt Payments pursuant to Section 6.04(b)(viii)(B); and
(b) The Borrowers shall not, nor shall they permit any Subsidiary to, make any payment in Section 1.04(eCash, securities or other property on or in respect of principal of or interest on any Junior Indebtedness (such Indebtedness, the “Restricted Debt”), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Restricted Debt (collectively, “Restricted Debt Payments”), except:
(i) the purchase, defeasance, redemption, repurchase, repayment or other acquisition or retirement of any Restricted Debt made by exchange for, or out of the proceeds of the substantially concurrent incurrence of, Refinancing Indebtedness permitted by Section 6.01;
(ii) payments as part of an “applicable high yield discount obligation” catch-up payment;
(iii) payments of regularly scheduled interest and payments of fees, expenses and indemnification obligations as and when due in respect of any Restricted Debt (other than payments with respect to Subordinated Indebtedness prohibited by the subordination provisions thereof);
(iv) payments with respect to intercompany Indebtedness permitted under Section 6.01, subject to the subordination provisions applicable thereto;
(A) Restricted Debt Payments in exchange for, or with proceeds of any issuance of Capital Stock of any Parent Company or Qualified Capital Stock of any Borrower or any Subsidiary Guarantor (other than issuances to any Borrower or any Subsidiary), and/or any capital contribution in respect of Qualified Capital Stock of any Borrower, (B) Restricted Debt Payments as a result of the conversion of all or any portion of Restricted Debt into Qualified Capital Stock of any Parent Company, any Borrower or any 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) so long as no Event of Default then exists or would result therefrom and, to the extent applicable, subject to the conditions set forth in clause (a)(ii) of the definition of Available Amount, Restricted Debt Payments in an aggregate amount not to exceed the portion, if any, of the Available Amount on such date that the Borrowers elect to apply to this clause (vi);
(vii) so long as no Event of Default then exists or would result therefrom, additional Restricted Debt Payments provided that the Total Net Leverage Ratio would not exceed 4.00:1.00, 4.75:1.00 calculated on a Pro Forma Basis and as of the last day of the most recently ended Test Period for which financial statements have been delivered pursuant to Section 5.01(b) or (iic), as applicable, prior to the date of delivery of irrevocable notice with respect thereto;
(viii) there shall exist so long as no Event of Default hereunder then exists or shall would result therefrom;, additional Restricted Debt Payments up to an amount equal to the greater of $5,000,000 and 5.0% of Consolidated Adjusted EBITDA at the date of delivery of irrevocable notice with respect thereto less the aggregate amount previously or concurrently used to make an Investment pursuant to Section 6.06(q)(iii) plus, if the Borrowers so elect, amounts in lieu of any amounts permitted to be made as Restricted Payments under Section 6.04(a)(xiv) at such time; and
(xivix) the Parent Borrower may mandatory prepayments of any Second Lien Facility made with Declined Proceeds (it being understood that any Declined Proceeds applied to make additional Restricted Debt Payments in an amount reliance on this Section 6.04(b) shall not to exceed increase the amount available under clause (a)(viii) of proceeds received by the Parent Borrower and/or any Restricted Subsidiary under definition of “Available Amount” to the Representation and Warranty Insurance Policy during the term of this Agreement;
(xv) (A) for any taxable period for which the Parent Borrower and/or any of its Subsidiaries are members of a consolidated, combined or similar income tax group for U.S. federal and/or applicable state or local income tax extent so applied). For purposes of which a direct or indirect parent of the Parent Borrower is the common parent (a “Tax Group”), or for which the Parent Borrower is a disregarded entity for U.S. federal income tax purposes wholly-owned by a corporate parent (a “Corporate Parent”)determining compliance at any time with this Section 6.04, the Parent Borrower and each of its Subsidiaries Borrowers, in their sole discretion, from time to time, may make Restricted Payments the proceeds of which shall be used by classify or reclassify such common parent to pay the portion of any consolidated, combined transaction or similar U.S. federal, state or local income Taxes of such Tax Group, or by the Corporate Parent to pay the portion of the U.S. federal, state or local income Taxes of such Corporate Parent, or any franchise taxes imposed in lieu thereof, for such taxable period that are attributable to the income of the Parent Borrower and/or its Subsidiaries, provided that such amount shall not be greater than the amount of such U.S. federal, state or local income taxes that would be paid (for such taxable period) by the Parent Borrower and its Subsidiaries if the Parent Borrower and/or such Subsidiaries had been a stand-alone corporate taxpayer item (or stand-alone group of corporate taxpayers filing on a consolidated, combined or similar basisportion thereof) for all taxable years ending after the Closing Date (taking into account any net operating loss carryforwards attributable to the Parent Borrower and its Subsidiaries, as the case may be) and (B) without duplication of Restricted Payments made under Section 6.04(a)(xv)(A), for any taxable period for which the Parent Borrower is treated as a partnership for U.S. federal and/or applicable state or local income tax purposes, the Parent Borrower may make Restricted Payments to its equity owners at the times and in the amounaccordance with Section 1.03.
Appears in 1 contract
Sources: First Lien Credit Agreement (Allscripts Healthcare Solutions, Inc.)
Restricted Payments; Certain Payments of Indebtedness. (a) The Parent Borrower shall not pay or make, directly or indirectly, any Restricted Payment, except that:
(i) the Parent Borrower may make Restricted Payments to the extent necessary to permit any Parent Company:
(A) to pay general operating and compliance administrative costs and expenses (including corporate overhead, legal or similar expenses and customary wages, salary, bonus and other benefits payable to directors, officers, employees, members of management, managers consultants and/or consultants independent contractors of any Parent Company), franchise fees, franchise Taxes and similar fees, Taxes and expenses required to maintain the organizational existence of such Parent Company, in each case, which are reasonable and customary and incurred in the ordinary course of business, plus any reasonable and customary indemnification claims made by current or former directors, officers, members of management, managers, employees or consultants of any Parent Company, in each case, to the extent attributable to the ownership or operations of any Parent Company (but excluding, for the avoidance of doubt, the portion of any such amount, if any, that is attributable to the ownership or operations operation of any subsidiary of any Parent Company other than the Parent Borrower Holdings and/or its subsidiaries); provided that Restricted Payments under this clause (a)(i)(A) that are attributable to any Unrestricted Subsidiary shall be permitted only to the extent that either (x) such Unrestricted Subsidiary has made one or more Cash distributions, advances or loans to Holdings or any of its Subsidiaries for such purpose in an amount up to the Parent amount of such Unrestricted Subsidiary’s proportionate share of such costs, expenses, franchise fees and Taxes and similar fees, Taxes and expenses or (y) the amount of such Restricted Payments made by the Borrower and/or its subsidiarieson behalf of such Unrestricted Subsidiary is treated as an Investment subject to Section 6.06 hereof;
(B) to pay franchisethe extent applicable, excise and similar Taxesto make Tax Distributions provided that Restricted Payments under this clause (a)(i)(B) that are attributable to any Unrestricted Subsidiary shall be permitted only to the extent that either (x) such Unrestricted Subsidiary has made one or more Cash distributions, and other fees, Taxes and expenses, required advances or loans to maintain Holdings or any of its Subsidiaries for such purpose in an amount up to the organizational existence amount of such Parent CompanyUnrestricted Subsidiary’s proportionate share of such Tax Distributions or (y) the amount of such Restricted Payments made by the Borrower on behalf of such Unrestricted Subsidiary is treated as an Investment subject to Section 6.06 hereof;
(C) to pay customary salary, bonus, long-term incentive, severance and other benefits (including payment to certain service providers of the Parent Borrower or its Subsidiaries pursuant to any equity plan (whether in the form of options, cash settled options or otherwise)) payable to Permitted Payees, as well as applicable employment, social security or similar taxes in connection therewith, to the extent such salary, bonuses, severance and other benefits are attributable and reasonably allocated to the operations of the Parent Borrower and/or its subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose;
(D) to pay audit and other accounting and reporting expenses of at such Parent Company to the extent attributable relating to the ownership or operations of any Parent Company (but excluding, for the avoidance of doubt, the portion of any such expenses, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower Holdings and/or its subsidiaries), Holdings, the Parent Borrower and and/or its subsidiaries; provided that Restricted Payments under this clause (a)(i)(C) that are attributable to any Unrestricted Subsidiary shall be permitted only to the extent that either (x) such Unrestricted Subsidiary has made one or more Cash distributions, advances or loans to Holdings or any of its Subsidiaries for such purpose in an amount up to the amount of such Unrestricted Subsidiary’s proportionate share of such accounting and reporting expenses or (y) the amount of such Restricted Payments made by Holdings on behalf of such Unrestricted Subsidiary is treated as an Investment subject to Section 6.06 hereof;
(ED) for the payment of insurance premiums to the extent attributable relating to the ownership or operations of any Parent Company (but excluding, for the avoidance of doubt, the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower Holdings and/or its subsidiaries), Holdings, the Parent Borrower and and/or its subsidiaries; provided that Restricted Payments under this clause (a)(i)(D) that are attributable to any Unrestricted Subsidiary shall be permitted only to the extent that either (x) such Unrestricted Subsidiary has made one or more Cash distributions advances or loans to Holdings or any of its Subsidiaries for such purpose in an amount up to the amount of such Unrestricted Subsidiary’s proportionate share of such insurance premiums or (y) the amount of such Restricted Payments made by Holdings on behalf of such Unrestricted Subsidiary is treated as an Investment subject to Section 6.06 hereof;
(FE) to pay (x) fees and expenses related to any debt and/or or equity offerings (including refinancings)offerings, investments and/or or acquisitions permitted or not restricted by this Agreement (whether or not consummated, and including advisory, refinancing, subsequent transaction and exit fees of any Parent Company of the Parent Borrower) and expenses and indemnities of any trustee, agent, arranger, underwriter or similar role and (y) Public Company Costs; and);
(GF) to pay the consideration to finance any Investment permitted under Section 6.06 as if such Parent Company were subject to Section Section 6.06 (provided that (x) any such Restricted Payment Payments under this clause (a)(i)(G(a)(i)(F) 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 (y) the relevant such Parent Company shall, promptly following the closing 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 therewiththereof, cause (I) all such property acquired to be contributed to the Parent Borrower or one or more of its Restricted Subsidiaries Subsidiaries, or (II) the merger, consolidation or amalgamation of the Person formed or acquired into the Parent Borrower or one or more of its Restricted Subsidiaries, in order to consummate such Investment in compliance a manner that causes such Investment to comply with the applicable requirements of Section Section 6.06 as if undertaken as a direct Investment by the Parent Borrower or the relevant Restricted such Subsidiary); and
(G) to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, employees or consultants (or any Immediate Family Member thereof) of any Parent Company plus any reasonable and customary indemnification claims made by current or former directors, officers, members of management, managers, employees or consultants of any Parent Company, to the extent such salary, bonuses, severance and other benefits or claims in respect of any of the foregoing) are directly attributable and reasonably allocated to the ownership or operations of any Parent Company (but excluding, for the avoidance of doubt, the portion of any amount, if any, that is attributable to the ownership or operation of any subsidiary of any Parent Company other than Holdings and/or its subsidiaries), Holdings, the Borrower and/or its subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose; provided that Restricted Payments under this clause (a)(i)(G) that are attributable to any Unrestricted Subsidiary shall be permitted only to the extent that either (x) such Unrestricted Subsidiary has made one or more Cash distributions, advances or loans to Holdings or any of its Subsidiaries for such purpose in an amount up to the amount of such Unrestricted Subsidiary’s proportionate share of such salary, bonus, severance and other benefits or (y) the amount of such Restricted Payments made by Holdings on behalf of such Unrestricted Subsidiary is treated as an Investment subject to Section 6.06 hereof;
(ii) the Parent Borrower may pay (or make Restricted Payments to allow any Parent Company to pay) for the repurchase, redemption, retirement or other acquisition or retirement for value of Capital Stock of any Parent Company Company, the Borrower or any subsidiary held by any Permitted Payeefuture, present or former employee, director, member of management, officer, manager or consultant (or any Immediate Family Member thereof) of any Parent Company, the Borrower or any subsidiary:
(A) in accordance with the terms of promissory notes issued pursuant to Section 6.01(oSection 6.01(n), so long as the aggregate amount of all Cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments made pursuant to sub-clause (D(D) of this clause (ii) below(ii), (1) does not exceed the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period 15,000,000 in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to the next subsequent Fiscal Years (until so applied)) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under clause (D) below; plusYear;
(B) with the proceeds of any sale or issuance of, or of any capital contribution in respect of, the Capital Stock of the Parent Borrower or any Parent Company (to the extent such proceeds are contributed to the Parent Borrower or any Restricted Subsidiary in respect of Qualified Capital Stock issued by the Parent Borrower or such Restricted Subsidiary) (other than amounts constituting a Cure Amount or an Available Excluded Contribution Amount); plusCompany;
(C) with the net proceeds of any key-man life insurance policiespolicies received during such Fiscal Year; plusor
(D) with Cash and Cash Equivalents in an amount not to exceed, together with the aggregate amount of all cash Cash payments made pursuant to sub-clause (A) of this clause (ii) in respect of promissory notes issued pursuant to Section 6.01(oSection 6.01(n), (1) the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period 15,000,000 in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to the next subsequent Fiscal Years (until so applied) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under the immediately preceding clause (1); plus
(E) with the amount of any Cash bonuses otherwise payable to any Permitted Payee that are foregone in exchange for the receipt of Capital Stock of the Parent Borrower or any Parent Company pursuant to any compensation arrangement, including any deferred compensation planYear;
(iii) the Parent Borrower may make additional Restricted Payments in an amount not to exceed (A) the portion, if any, of the Available Amount on such date that the Parent Borrower elects to apply to this clause (iii)(A(iii)(A); provided that the portion of the Available Amount attributed to clause (a)(i) plus or (ii) of the definition thereof shall not be available for any Restricted Payment pursuant to this clause (iii)(A) for so long as, on the date of the declaration thereof, an Event of Default described in Section 7.01(a), (f) or (g) shall have occurred and be continuing or would result therefrom or the Interest Coverage Ratio as determined on a Pro Forma Basis as of the last day of the most recently ended Test Period for which financial statements have been delivered pursuant to Section 5.01(a) or (b), as applicable, would be less than 2.00:1.00 and (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Parent Borrower elects to apply to this clause (iii)(B) (plus, without duplication of amounts 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 with Available Excluded Contribution Amounts up to the amount of such Available Excluded Contribution Amount, less any application thereof under Sections 6.04(b)(vi) or 6.06(r)iii)(B);
(iv) the Parent Borrower may make Restricted Payments (i) to any Parent Company to enable such Parent Company to (A) to make Cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of such Parent Company, dividends, share splits, reverse share splits (or any combination thereof) and, mergers, consolidations, amalgamations or other business combinations, and acquisitions and other Investments permitted hereunder and/or (B) honor to make Cash payments of interest due with respect to the Holdco Notes or Holdco Refinancing Indebtedness or (C) to redeem, repurchase, redeem, defease or otherwise acquire or retire all or a portion of the Holdco Notes or any conversion request by a holder of Convertible Indebtedness by payment of cash and/or delivery of Capital Stock, make any cash payments in lieu of fractional shares in connection with any conversion of Convertible Indebtedness and otherwise make payments on Convertible Holdco Refinancing Indebtedness in accordance with its the terms of the Holdco Notes Indenture or the documentation governing the Holdco Refinancing Indebtedness, as the case may be; provided that, with respect to clause (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments upon redemption thereofC), or, in on the case date of each of sub-clauses such Restricted Payment the Interest Coverage Ratio is not less than 2.00:1.00 calculated on a Pro Forma Basis for the most recently ended Test Period for which financial statements have been delivered pursuant to Section 5.01(a) or (A) and (B) above, make Restricted Payments to any Parent Company to enable such Parent Company to make the payments and/or deliveries described in such sub-clauses (A) and (Bb), and as applicable, prior to the date of the Restricted Payment or (ii) consisting of (A) payments made or expected to be made in respect of withholding or similar Taxes payable by any Permitted Payee future, present or former officers, directors, employees, members of management, managers or consultants of the Borrower, any subsidiary or Parent Company or any of their respective Immediate Family Members and/or (B) repurchases of Capital Stock in consideration of the payments described in sub clause (A) above(A), including demand repurchases in connection with the exercise of stock options and the issuance of restricted stock units or similar stock based awardsoptions;
(v) the Parent Borrower may repurchase, redeem, acquire or retire Capital Stock upon repurchase (or make provisions for withholdings in connection with), or make Restricted Payments to any Parent Company to enable it to repurchase, redeem, acquire or retire ) Capital Stock upon (or make provisions for withholdings in connection with), the exercise of warrants, options or warrants or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represents all or a portion of the exercise price of, of such options or tax withholdings with respect to, such warrants, options warrants or other securities convertible into or exchangeable for Capital Stock as part of a “cashless” exercise;
(vi) the Parent Borrower may make Restricted Payments the proceeds of which are applied (iA) on the Closing Date, solely to effect the consummation of the Transactions and on or about the Amendment No. 1 Effective Date, solely to effect the consummation of the Amendment No. 1 Transactions, (iiB) on and after the Closing Date, to satisfy any payment obligations owing, or as otherwise required, under the Acquisition Agreement (including payment of working capital and/or purchase price adjustments) and to pay any Transaction Costs, in each case, with respect to the Transactions, (iii) to satisfy obligations to direct or indirect holders of Capital Stock of the Parent Borrower (immediately prior to giving effect to the Transactions) in connection with, or as a result of, any working capital and/or purchase price adjustments, in each case, with respect to the Transactions and (iv) to satisfy any settlement of claims or actions in connection with the Transactions or to satisfy indemnity or other similar obligations in connection with the Transactions;
(vii) so long as no Event of Default shall have occurred and be continuing at the Parent time of the declaration thereof, following the consummation of a Qualifying IPO, the Borrower may (or may make Restricted Payments to any Parent Company to enable it to) make Restricted Payments with respect to any Capital Stock in an amount not of up to exceed (A) the greater of (x) an amount equal to 7.006.0% per annum of the net Cash proceeds received by or contributed to the Parent Borrower in connection with the merger of Isos Acquisition Corporation and Bowlero Corp. on December 15, 2021 and the other transactions consummated in connection therewith and (y) an amount equal to 7.00% per annum of the Market Capitalization of the Parent Borrower (or its direct or indirect Parent Company, as applicable) and its subsidiaries minus (B) from any utilization of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A)such Qualifying IPO;
(viii) the Parent Borrower may make Restricted Payments to (i) redeem, repurchase, defease, discharge, retire or otherwise acquire any (A) Capital Stock (“Treasury Capital Stock”) of the Parent Borrower and/or or any Restricted Subsidiary or (B) Capital Stock of any Parent Company, in the case of each of subclauses (A(A) and (B(B), in exchange for, or out of the proceeds of the substantially concurrent sale (other than to the Parent Borrower and/or any Restricted or a Subsidiary) of, Qualified Capital Stock of the Parent Borrower or any Parent Company to the extent any such proceeds are contributed to the capital of the Parent Borrower and/or or any Restricted Subsidiary in respect of Qualified Capital Stock (“Refunding Capital Stock”) and (ii) declare and pay dividends on any the Treasury Capital Stock out of the proceeds of the substantially concurrent sale or issuance (other than to the Parent Borrower or a Restricted Subsidiary) of any the Refunding Capital Stock;
(ix) to the extent constituting a Restricted Payment, the Parent Borrower may consummate any transaction permitted by Section 5.19 (other than Section 5.19(d)), Section Section 6.06 (other than Sections 6.06(j6.06(j) and (t(t)) and Section ), Section 6.07 (other than Section Section 6.07(g)) and Section 6.09 (other than Section 6.09(d));
(x) so long as no Event of Default under Sections 7.01(a), 7.01(f) or 7.01(g) shall have occurred and be continuing at the Parent time of the declaration thereof, the Borrower may make additional Restricted Payments in an aggregate amount not to exceed (A) the greater of $85,000,000 75,000,000 and 257.5% of Consolidated Adjusted EBITDA Total Assets of the Borrower as of the last day of the most recently ended Test Period for which financial statements have been delivered pursuant to Section 5.01(a) or (b), as applicable, minus (B) the amount of (1) any utilization of the Available RP Capacity Amount Restricted Debt Payments or other distributions made pursuant to Section 6.04(b)(vii) and (2) any Investments made in reliance on unused capacity under immediately preceding clause (ASection 6.06(aa);
(xi) [Reserved];
(xii) the Parent Borrower may make additional Restricted Payments if on the date of the distribution thereof, (i) an Event of Default described in Section 7.01(a), (f) or (g) shall not have occurred and be continuing or would result therefrom and (ii) the Total Leverage Ratio as determined on a Pro Forma Basis as of the last day of the most recently ended Test Period for which financial statements have been delivered pursuant to Section 5.01(a) or (b), as applicable, would not exceed 4.00:1.00; and
(xiii) the Borrower may pay any dividend or other distribution or consummate any redemption within 60 days after the date of 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 dividend or redemption notice would have complied with the provisions hereof.
(b) The Borrower shall not, nor shall it permit any Subsidiary to, make any payment in Cash, securities or other property on or in respect of this Section 6.04(aprincipal of or interest on any Junior Indebtedness (such Indebtedness, the “Restricted Debt”), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Restricted Debt (collectively, “Restricted Debt Payments”), except:
(i) the purchase, defeasance, redemption, repurchase, repayment or other acquisition or retirement of any Restricted Debt made by exchange for, or out of the proceeds of the substantially concurrent incurrence of, Refinancing Indebtedness permitted by Section 6.01;
(ii) payments as part of an “applicable high yield discount obligation” catch-up payment;
(iii) payments of regularly scheduled interest and payments of fees, expenses and indemnification obligations as and when due in respect of any Restricted Debt (other than payments with respect to Subordinated Indebtedness prohibited by the subordination provisions thereof);
(xiiiv) payments with respect to intercompany Indebtedness permitted under Section 6.01, subject to the Parent Borrower may make any Restricted Payment constituting the distribution or payment of Receivables Feessubordination provisions applicable thereto;
(xiiiA) the Parent Borrower may make additional Restricted 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 Event of Default hereunder or shall result therefrom;
(xiv) the Parent Borrower may make additional Restricted Debt Payments in an amount not to exceed exchange for, or with proceeds of any issuance of Capital Stock of any Parent Company or Qualified Capital Stock of the amount of proceeds received by the Parent Borrower or any Subsidiary, and/or any Restricted Subsidiary under the Representation and Warranty Insurance Policy during the term capital contribution in respect of this Agreement;
(xv) (A) for any taxable period for which the Parent Borrower and/or any of its Subsidiaries are members of a consolidated, combined or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which a direct or indirect parent Qualified Capital Stock of the Parent Borrower is the common parent (a “Tax Group”), or for which the Parent Borrower is a disregarded entity for U.S. federal income tax purposes wholly-owned by a corporate parent (a “Corporate Parent”), the Parent Borrower and each of its Subsidiaries may make Restricted Payments the proceeds of which shall be used by such common parent to pay the portion of any consolidated, combined or similar U.S. federal, state or local income Taxes of such Tax Group, or by the Corporate Parent to pay the portion of the U.S. federal, state or local income Taxes of such Corporate Parent, or any franchise taxes imposed in lieu thereofSubsidiary, for such taxable period that are attributable to the income of the Parent Borrower and/or its Subsidiaries, provided that such amount shall not be greater than the amount of such U.S. federal, state or local income taxes that would be paid (for such taxable period) by the Parent Borrower and its Subsidiaries if the Parent Borrower and/or such Subsidiaries had been a stand-alone corporate taxpayer (or stand-alone group of corporate taxpayers filing on a consolidated, combined or similar basis) for all taxable years ending after the Closing Date (taking into account any net operating loss carryforwards attributable to the Parent Borrower and its Subsidiaries, as the case may be) and (B) without duplication Restricted Debt Payments as a result of the conversion of all or any portion of Restricted Payments made under Section 6.04(a)(xv)(A), for Debt into Qualified Capital Stock of any taxable period for which the Parent Borrower is treated as a partnership for U.S. federal and/or applicable state or local income tax purposesCompany, the Parent Borrower may make Restricted Payments to its equity owners at the times and in the amounor any
Appears in 1 contract
Sources: First Lien Term Loan Agreement (Interline Brands, Inc./De)
Restricted Payments; Certain Payments of Indebtedness. (a) The Parent Borrower shall not pay or make, directly or indirectly, any Restricted Payment, except that:
(i) the Parent Borrower may make Restricted Payments to the extent necessary to permit any Parent Company:
(A) to pay general operating and compliance administrative costs and expenses (including corporate overhead, legal or similar expenses, expenses to prepare any Tax returns or defend any Tax claims, and customary salary, bonus and other benefits payable to directors, officers, employees, members of management, managers and/or consultants of any Parent Company)) and franchise fees and Taxes and similar fees, Taxes and expenses required to enable such Parent Company to maintain its organizational existence or qualification to do business, in each case, which are reasonable and customary and incurred in the ordinary course of business, plus any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of any Parent Company, in each case, to the extent attributable to the ownership or operations of any Parent Company and its subsidiaries (but excluding, for the avoidance of doubt, excluding the portion of any such amount, if any, amount that is attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or and its subsidiaries), the Parent Borrower and/or its subsidiaries;
(B) to pay franchise, excise scheduled and similar Taxes, overdue interest and other fees, Taxes and expenses, required to maintain the organizational existence payments as part of such Parent Company;
(C) to pay customary salary, bonus, longan AHYDO catch-term incentive, severance and other benefits (including payment to certain service providers of the Parent Borrower or its Subsidiaries pursuant to any equity plan (whether in the form of options, cash settled options or otherwise)) payable to Permitted Payees, as well as applicable employment, social security or similar taxes in connection therewith, to the extent such salary, bonuses, severance and other benefits are attributable and reasonably allocated to the operations of the Parent Borrower and/or its subsidiariesup payment, in each case, so long as such in respect of any Indebtedness of any Parent Company applies to the amount of any such Restricted Payment for such purposeextent the Net Proceeds thereof were contributed to the Borrower;
(DC) to pay audit and other accounting and reporting expenses of such Parent Company to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such expenses, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries;; 129590608_2#96809902v9
(ED) for the payment of insurance premiums to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries;
(FE) to pay (x) fees and expenses related to any debt and/or or equity offerings (including refinancings)by any Parent Company, investments and/or or acquisitions permitted or not restricted by this Agreement (whether or not consummated, and including advisory, refinancing, subsequent transaction and exit fees of any Parent Company of the Parent Borrower) and expenses and indemnities of any trustee, agent, arranger, underwriter or similar role and (y) Public Company Costs; and;
(GF) to finance any Investment permitted under Section 6.06 as if such Parent Company were subject to Section Section 6.06 (provided that (x) any Restricted Payment under this clause (a)(i)(G(a)(i)(F) 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 (y) the relevant Parent Company shall, promptly following the closing 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 therewiththereof, cause (I) all property acquired to be contributed to the Parent Borrower or one or more of its Restricted Subsidiaries Subsidiaries, or (II) the merger, consolidation or amalgamation of the Person formed or acquired into the Parent Borrower or one or more of its Restricted Subsidiaries, in order to consummate such Investment in compliance with the applicable requirements of Section Section 6.06 as if undertaken as a direct Investment by the Parent Borrower or the relevant Restricted Subsidiary); and
(G) to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, employees or consultants of any Parent Company (or any Immediate Family Member of any of the foregoing) to the extent such salary, bonuses and other benefits are attributable and reasonably allocated to the operations of the Borrower and/or its subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose;
(ii) the Parent Borrower may pay (or make Restricted Payments to allow any Parent Company to pay) for the repurchase, redemption, retirement or other acquisition or retirement for value of Capital Stock of any Parent Company or any subsidiary held by any Permitted Payeefuture, present or former employee, director, member of management, officer, manager or consultant (or any Affiliate or Immediate Family Member thereof) of any Parent Company, the Borrower or any subsidiary:
(A) in accordance with the terms of promissory notes issued pursuant to Section Section 6.01(o), so long as the aggregate amount of all Cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments made pursuant to sub-clause (D(D) of this clause (ii(ii) below, (1) does not exceed in any Fiscal Year the greater of $68,000,000 40,000,000 and 2012.0% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period in any Fiscal YearEBITDA, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied)) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under clause (D) below; plusYears;
(B) with the proceeds of any sale or issuance of, or of any capital contribution in respect of, the Capital Stock of the Parent Borrower or any Parent Company (to the extent such proceeds are contributed to the Parent Borrower or any Restricted Subsidiary in respect of Qualified Capital Stock issued by to the Parent Borrower or such any Restricted Subsidiary) (other than amounts constituting a Cure Amount or an Available Excluded Contribution Amount); plus;
(C) with the net proceeds of any key-man life insurance policies; plusor
(D) with Cash and Cash Equivalents in an amount not to exceedexceed in any Fiscal Year, together with the aggregate amount of all cash payments made pursuant to sub-clause (A(A) of this clause (ii(ii) in respect of promissory notes issued pursuant to Section Section 6.01(o), (1) the greater of $68,000,000 40,000,000 and 2012.0% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period in any Fiscal YearEBITDA, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under the immediately preceding clause (1)Years; plus
(E) with the amount of any Cash bonuses otherwise payable to any Permitted Payee that are foregone in exchange for the receipt of Capital Stock of the Parent Borrower or any Parent Company pursuant to any compensation arrangement, including any deferred compensation plan;129590608_2#96809902v9
(iii) the Parent Borrower may make additional Restricted Payments in an amount not to exceed (A) the portion, if any, of the Available Amount on such date that the Parent Borrower elects to apply to this clause (iii)(A) plus (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Parent Borrower elects to apply to this clause (iii)(B) (plus, without duplication of amounts 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 with Available Excluded Contribution Amounts up to the amount of such Available Excluded Contribution Amount, less any application thereof under Sections 6.04(b)(vi) or 6.06(r)iii);
(iv) the Parent Borrower may make Restricted Payments (i) to any Parent Company to enable such Parent Company to (A) make Cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of such Parent Company, dividends, share splits, reverse share splits (or any combination thereof) and, mergers, consolidations, amalgamations or other business combinations, and acquisitions and other Investments permitted hereunder and/or (B) honor any conversion request by a holder of Convertible Indebtedness by payment of cash and/or delivery of Capital Stock, make any cash payments in lieu of fractional shares in connection with any conversion of Convertible Indebtedness and otherwise make payments on Convertible Indebtedness in accordance with its terms (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments upon redemption thereof), or, in the case of each of sub-clauses (A) and (B) above, make Restricted Payments to any Parent Company to enable such Parent Company to make the payments and/or deliveries described in such sub-clauses (A) and (B), and (ii) consisting of (A) payments made or expected to be made in respect of withholding or similar Taxes payable by any Permitted Payee future, present or former officers, directors, employees, members of management, managers or consultants of the Borrower, any Restricted Subsidiary or any Parent Company or any of their respective Immediate Family Members and/or (B) repurchases of Capital Stock in consideration of the payments described in sub sub-clause (A(A) above, including demand repurchases in connection with the exercise of stock options and the issuance of restricted stock units or similar stock based awardsoptions;
(v) the Parent Borrower may repurchase, redeem, acquire or retire Capital Stock upon repurchase (or make provisions for withholdings in connection with), or make Restricted Payments to any Parent Company to enable it to repurchase, redeem, acquire or retire ) Capital Stock upon (or make provisions for withholdings in connection with), the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represents all or a portion of the exercise price of, or tax Tax withholdings with respect to, such warrants, options or other securities convertible into or exchangeable for Capital Stock as part of a “cashless” exercise;
(vi) for any taxable period (or portion thereof) that a Parent Company is treated as a corporation for U.S. federal income tax purposes and for which Borrower and/or any of its subsidiaries are members (or are pass-through entities of such members) of a consolidated, combined, unitary or similar income Tax group for U.S. federal, state, local or foreign income Tax purposes for which such Parent Company is the Parent common parent, the Borrower may make Restricted Payments to such Parent Company to pay the proceeds portion of which any U.S. federal, state, local or foreign income Taxes (as applicable) of such Parent Company for such taxable period that are applied (i) on attributable to the Closing Date, solely to effect the consummation income of the Transactions and on or about Borrower and/or its applicable subsidiaries; provided that the Amendment No. 1 Effective Dateaggregate amount of such distributions shall not exceed the aggregate Taxes the Borrower and/or its subsidiaries, solely to effect the consummation of the Amendment No. 1 Transactionsas applicable, (ii) on and after the Closing Date, to satisfy any payment obligations owing, or as otherwise required, under the Acquisition Agreement (including payment of working capital and/or purchase price adjustments) and would be required to pay Transaction Costsin respect of such U.S. federal, in each casestate, local and foreign Taxes on a stand-alone basis for such taxable period; provided further that the amount of such distributions with respect to the Transactions, (iii) to satisfy obligations to direct or indirect holders of Capital Stock of the Parent Borrower (immediately prior to giving effect any Unrestricted Subsidiary for any taxable period shall be limited to the Transactions) in connection with, or as a result of, any working capital and/or purchase price adjustments, in each case, with respect to the Transactions and (iv) to satisfy any settlement of claims or actions in connection with the Transactions or to satisfy indemnity or other similar obligations in connection with the Transactionsamount actually paid by such Unrestricted Subsidiary for such purpose;
(vii) the Parent Borrower may make Restricted Payments (A) to consummate, to the extent constituting Restricted Payments, the Transactions and (B) to pay Transaction Costs;
(viii) so long as no Event of Default exists at the time of declaration of such Restricted Payment the Borrower may (or may make Restricted Payments to any Parent Company to enable it to) make Restricted Payments with respect to any Capital Stock in an amount not to exceed an aggregate amount per annum equal to the sum of (A) the greater of (x) an amount equal to 7.006% per annum of the net Cash proceeds received by or contributed to the Parent Borrower in connection with the merger of Isos Acquisition Corporation and Bowlero Corp. on December 15, 2021 and the other transactions consummated in connection therewith from an initial public offering and (yB) an amount equal to 7.007% per annum of the Market Capitalization of the Parent Borrower (or its direct or indirect Parent Company, as applicable) and its subsidiaries minus (B) any utilization of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A)Capitalization;
(viiiix) the Parent Borrower may make Restricted Payments to (i) redeem, repurchase, defease, discharge, retire or otherwise acquire any (A) Capital Stock (“Treasury Capital Stock”) of the Parent Borrower and/or any Restricted Subsidiary or (B) Capital Stock of any Parent Company, in the case of each of subclauses (A(A) and (B(B), in exchange for, or out of the proceeds of the substantially concurrent sale (other than to the Parent Borrower and/or any Restricted Subsidiary) of, Qualified Capital Stock of the Parent Borrower or any Parent Company to the extent any such proceeds are contributed to the capital of the Parent Borrower and/or any Restricted Subsidiary 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 the Parent Borrower or a Restricted Subsidiary) of any Refunding Capital Stock;; 129590608_2#96809902v9
(ixx) to the extent constituting a Restricted Payment, the Parent Borrower may consummate any transaction permitted by Section 5.19 (other than Section 5.19(d)), Section Section 6.06 (other than Sections 6.06(j6.06(j) and (t(t)) and Section ), Section 6.07 (other than Section Section 6.07(g)) and Section 6.09 (other than Section 6.09(d));
(xxi) the Parent Borrower may make additional Restricted Payments in an aggregate amount not to exceed (A) the greater of $85,000,000 120,000,000 and 2535.0% of Consolidated Adjusted EBITDA as minus the sum of the last day of the most recently ended Test Period minus (A) any amounts under this Section 6.04(a)(xi) reallocated to make Restricted Debt Payments pursuant to Section 6.04(b)(iv), (B) any utilization of the Available RP Capacity Amount in reliance on unused capacity amounts under immediately preceding clause (Athis Section 6.04(a)(xi) reallocated to make Investments pursuant to Section 6.06(q), and (C) any amounts under this Section 6.04(a)(xi) reallocated to incur Indebtedness pursuant to Section 6.01(u) (which may be further reallocated as provided therein);
(xixii) the Parent Borrower may pay any dividend or other distribution or consummate any redemption within 60 sixty (60) days after the date of 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 dividend or redemption notice would have complied with the provisions of this Section 6.04(a);
(xii) the Parent Borrower may make any Restricted Payment constituting the distribution or payment of Receivables Feeshereof;
(xiii) the Parent Borrower may make additional Restricted Payments so long as, as measured at the time provided for in Section 1.04(e), (iA) no Event of Default exists or would result therefrom and (B) the Total Leverage Ratio would not exceed 4.00:1.00Ratio, calculated on a Pro Forma Basis and (ii) there shall exist no Event at the time of Default hereunder or shall result therefromdeclaration thereof, would not exceed 3.75:1.00;
(xiv) the Parent Borrower may make additional Restricted Payments to enable any Parent Company to make Restricted Payments solely in the Qualified Capital Stock of such Parent Company;
(xv) the Borrower may make Restricted Payments (A) to pay amounts permitted under Section 6.09(f), (g), (h), (i), (k) and (m) and (B) otherwise in an amount not to exceed $500,000 per calendar year; and
(xvi) the Borrower may make Restricted Payments in the form of Capital Stock 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 Cash Equivalents (except to the extent constituting proceeds from the Disposition of all or substantially all of the assets of such Unrestricted Subsidiary) and/or intellectual property material (as determined by the Borrower in good faith) to the business of the Borrower and its Restricted Subsidiaries, taken as a whole).
(b) The Borrower shall not, nor shall it permit any Restricted Subsidiary to, make any payment (whether in Cash, securities or other property) on or in respect of principal of (x) any Junior Lien Indebtedness or (y) any Subordinated Indebtedness, in each cases of clauses (x) and (y), with an individual outstanding principal amount in excess of the Threshold Amount (such Indebtedness under clauses (x) and (y), in each case, with an individual outstanding principal amount in excess of the Threshold Amount, the “Restricted Debt”), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Restricted Debt prior to its scheduled maturity (collectively, “Restricted Debt Payments”), except:
(i) any 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 (except to the extent subject to clause (iv)(C) of the proviso to Section 6.01(p));
(ii) payments as part of an AHYDO catch-up payment;
(iii) payments of regularly scheduled interest as and when due in respect of any Restricted Debt, except for any payments with respect to any such Subordinated Indebtedness that are prohibited by the subordination provisions thereof; 129590608_2#96809902v9
(iv) so long as, at the time of delivery of irrevocable notice with respect thereto, no Event of Default exists or would result therefrom, Restricted Debt Payments in an aggregate amount not to exceed (i) the sum of (A) the greater of $120,000,000 and 35.0% of Consolidated Adjusted EBITDA and (B) any amounts reallocated to this Section 6.04(b)(iv) from Section 6.04(a)(xi) and Section 6.06(q), minus (ii) any amounts reallocated from this Section 6.04(b)(iv) to make Investments pursuant to Section 6.06(q);
(A) Restricted Debt Payments in exchange for, or with proceeds of any issuance of, Qualified Capital Stock of the Borrower and/or any Restricted Subsidiary and/or any capital contribution in respect of Qualified Capital Stock of the Borrower or any Restricted Subsidiary, (B) Restricted Debt Payments as a result of the conversion of all or any portion of any Restricted Debt into Qualified Capital Stock of the Borrower 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 amount not to exceed the amount of proceeds received by the Parent Borrower and/or any Restricted Subsidiary under the Representation and Warranty Insurance Policy during the term of this Agreement;
(xv) (A) for any taxable period for which the Parent Borrower and/or any of its Subsidiaries are members of a consolidatedportion, combined or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which a direct or indirect parent if any, of the Parent Available Amount on such date that the Borrower is the common parent elects to apply to this clause (a “Tax Group”vi), or for which the Parent Borrower is a disregarded entity for U.S. federal income tax purposes wholly-owned by a corporate parent (a “Corporate Parent”), the Parent Borrower and each of its Subsidiaries may make Restricted Payments the proceeds of which shall be used by such common parent to pay the portion of any consolidated, combined or similar U.S. federal, state or local income Taxes of such Tax Group, or by the Corporate Parent to pay the portion of the U.S. federal, state or local income Taxes of such Corporate Parent, or any franchise taxes imposed in lieu thereof, for such taxable period that are attributable to the income of the Parent Borrower and/or its Subsidiaries, provided that such amount shall not be greater than the amount of such U.S. federal, state or local income taxes that would be paid (for such taxable period) by the Parent Borrower and its Subsidiaries if the Parent Borrower and/or such Subsidiaries had been a stand-alone corporate taxpayer (or stand-alone group of corporate taxpayers filing on a consolidated, combined or similar basis) for all taxable years ending after the Closing Date (taking into account any net operating loss carryforwards attributable to the Parent Borrower and its Subsidiaries, as the case may be) and (B) without duplication of Restricted Payments made under Section 6.04(a)(xv)(A), for any taxable period for which the Parent Borrower is treated as a partnership for U.S. federal and/or applicable state or local income tax purposes, the Parent Borrower may make Restricted Payments to its equity owners at the times and in the amoun;
Appears in 1 contract
Sources: First Lien Credit Agreement (Hayward Holdings, Inc.)
Restricted Payments; Certain Payments of Indebtedness. (a) The Parent Borrower Loan Parties shall not pay or make, directly or indirectly, any Restricted Payment, except that:
(i) the Parent Borrower Loan Parties may make Restricted Payments to the extent necessary to permit any Parent Company:
(A) to pay general operating and compliance administrative costs and expenses (including corporate overhead, legal or similar expenses and customary wages, salary, bonus and other benefits payable to directors, officers, employees, members of management, managers consultants and/or consultants independent contractors of any Parent Company), franchise fees, franchise Taxes and similar fees, Taxes and expenses required in connection with maintaining the organizational existence of such Parent Company, in each case, which are reasonable and customary and incurred in the ordinary course of business, plus any reasonable and customary indemnification claims made by current or former directors, officers, members of management, managers, employees or consultants of any Parent Company, in each case, to the extent attributable to the ownership or operations of any Parent Company (but excluding, for the avoidance of doubt, the portion of any such amount, if any, that is attributable to the ownership or operations operation of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries); provided that Restricted Payments under this Section 7.04(a)(i)(A) that are attributable to any Unrestricted Subsidiary shall be permitted only to the extent that either (x) such Unrestricted Subsidiary has made one or more Cash distributions, advances or loans to Parent or any of its Subsidiaries for such purpose in an amount up to the Parent amount of such Unrestricted Subsidiary’s proportionate share of such costs, expenses, franchise fees and Taxes and similar fees, Taxes and expenses or (y) the amount of such Restricted Payments made by a Borrower and/or its subsidiarieson behalf of such Unrestricted Subsidiary is treated as an Investment subject to Section 7.06 hereof;
(B) to pay franchise, excise and similar Taxes, and other fees, Taxes and expenses, required to maintain the organizational existence of such Parent Company;
(C) to pay customary salary, bonus, long-term incentive, severance and other benefits (including payment to certain service providers of the Parent Borrower or its Subsidiaries pursuant to any equity plan (whether in the form of options, cash settled options or otherwise)) payable to Permitted Payees, as well as applicable employment, social security or similar taxes in connection therewith, to the extent such salary, bonuses, severance and other benefits are attributable and reasonably allocated to the operations of the Parent Borrower and/or its subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose;
(D) to pay audit and other accounting and reporting expenses of at such Parent Company to the extent attributable relating to the ownership or operations of any Parent Company (but excluding, for the avoidance of doubt, the portion of any such expenses, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Parent, any Borrower and/or its subsidiaries), the Parent Parent, any Borrower and and/or its subsidiaries; provided that Restricted Payments under this Section 7.04(a)(i)(B) that are attributable to any Unrestricted Subsidiary shall be permitted only to the extent that either (x) such Unrestricted Subsidiary has made one or more Cash distributions, advances or loans to Parent or any of its Subsidiaries for such purpose in an amount up to the amount of such Unrestricted Subsidiary’s proportionate share of such accounting and reporting expenses or (y) the amount of such Restricted Payments made by Parent on behalf of such Unrestricted Subsidiary is treated as an Investment subject to Section 7.06 hereof;
(EC) for the payment of insurance premiums to the extent attributable relating to the ownership or operations of any Parent Company (but excluding, for the avoidance of doubt, the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Parent, any Borrower and/or its subsidiaries), the Parent Parent, any Borrower and and/or its subsidiaries; provided that Restricted Payments under this Section 7.04(a)(i)(C) that are attributable to any Unrestricted Subsidiary shall be permitted only to the extent that either (x) such Unrestricted Subsidiary has made one or more Cash distributions advances or loans to Parent or any of its Subsidiaries for such purpose in an amount up to the amount of such Unrestricted Subsidiary’s proportionate share of such insurance premiums or (y) the amount of such Restricted Payments made by Parent on behalf of such Unrestricted Subsidiary is treated as an Investment subject to Section 7.06 hereof;
(FD) to pay (x) fees and expenses related to any debt and/or or equity offerings (including refinancings)offerings, investments and/or or acquisitions permitted or not restricted by this Agreement (whether or not consummated, and including advisory, refinancing, subsequent transaction and exit fees of any Parent Company of the Parent Borrower) and expenses and indemnities of any trustee, agent, arranger, underwriter or similar role and (y) Public Company Costs; and);
(GE) to pay the consideration to finance any Investment permitted under Section 6.06 as if such Parent Company were subject to Section 6.06 Section 7.06 (provided that (x) any such Restricted Payment Payments under this clause (a)(i)(GSection 7.04(a)(i)(E) 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 (y) the relevant such Parent Company shall, promptly following the closing 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 therewiththereof, cause (I) all such property acquired to be contributed to the Parent any Borrower or one or more of its Restricted Subsidiaries Subsidiaries, or (II) the merger, consolidation or amalgamation of the Person formed or acquired into the Parent any Borrower or one or more of its Restricted Subsidiaries, in order to consummate such Investment in compliance a manner that causes such Investment to comply with the applicable requirements of Section 6.06 Section 7.06 as if undertaken as a direct Investment by the Parent such Borrower or the relevant Restricted such Subsidiary);; and
(F) to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, employees or consultants (or any Immediate Family Member thereof) of any Parent Company plus any reasonable and customary indemnification claims made by current or former directors, officers, members of management, managers, employees or consultants of any Parent Company, to the extent such salary, bonuses, severance and other benefits or claims in respect of any of the foregoing are directly attributable and reasonably allocated to the ownership or operations of any Parent Company (but excluding, for the avoidance of doubt, the portion of any amount, if any, that is attributable to the ownership or operation of any subsidiary of any Parent Company other than Parent, any Borrower and/or its subsidiaries), Parent, any Borrower and/or its subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose; provided that Restricted Payments under this Section 7.04(a)(i)(F) that are attributable to any Unrestricted Subsidiary shall be permitted only to the extent that either (x) such Unrestricted Subsidiary has made one or more Cash distributions, advances or loans to Parent or any of its Subsidiaries for such purpose in an amount up to the amount of such Unrestricted Subsidiary’s proportionate share of such salary, bonus, severance and other benefits or (y) the amount of such Restricted Payments made by Parent on behalf of such Unrestricted Subsidiary is treated as an Investment subject to Section 7.06 hereof.
(ii) the Parent Borrower Loan Parties may pay (or make Restricted Payments to allow any Parent Company to pay) for the repurchase, redemption, retirement or other acquisition or retirement for value of Capital Stock of any Parent Company Company, any Borrower or any subsidiary held by any Permitted Payeefuture, present or former employee, director, member of management, officer, manager or consultant (or any Immediate Family Member thereof) of any Parent Company, any Borrower or any subsidiary:
(A) in accordance with the terms of promissory notes issued pursuant to Section 6.01(oSection 7.01(n), so long as the aggregate amount of all Cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments made pursuant to sub-clause (D) of this clause (ii) belowSection 7.04(a)(ii)(D), (1) does not exceed the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period €10,000,000 in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to the next subsequent Fiscal Years Year, so long as the aggregate amount of all Restricted Payments made pursuant to Section 7.04(a)(ii) in any Fiscal Year (until so applied)after giving effect to such carry forward) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under clause (D) below; plusshall not exceed €20,000,000;
(B) with the proceeds of any sale or issuance of, or of any capital contribution in respect of, the Capital Stock of the Parent Borrower or any Parent Company (to the extent such proceeds are contributed to the Parent Borrower or any Restricted Subsidiary in respect of Qualified Capital Stock issued by the Parent Borrower or such Restricted Subsidiary) (other than amounts constituting a Cure Amount or an Available Excluded Contribution Amount); plusCompany;
(C) with the net proceeds of any key-man life insurance policiespolicies received by Parent and the Subsidiaries during such Fiscal Year; plusor
(D) with Cash and Cash Equivalents in an amount not to exceed, together with the aggregate amount of all cash Cash payments made pursuant to sub-clause (A) of this clause (ii) in respect of promissory notes issued pursuant to Section 6.01(oSection 7.01(n), (1) the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period €10,000,000 in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward solely to the next subsequent Fiscal Years (until Year, so applied) minus (2) any utilization of long as the Available RP Capacity Amount in reliance on unused capacity under the immediately preceding clause (1); plus
(E) with the aggregate amount of any Cash bonuses otherwise payable to any Permitted Payee that are foregone in exchange for the receipt of Capital Stock of the Parent Borrower or any Parent Company all Restricted Payments made pursuant to Section 7.04(a)(ii) in any compensation arrangement, including any deferred compensation planFiscal Year (after giving effect to such carry forward) shall not exceed €20,000,000;
(iii) the Parent Borrower Loan Parties may make additional Restricted Payments in an amount not to exceed (A) the portion, if any, of the Available Amount on such date that the Parent such Borrower elects to apply to this clause (iii)(A(iii); provided that (i) plus (B) no Event of Default shall have occurred and be continuing at the portion, if any, time of the declaration thereof, and (ii) with respect to amounts utilized pursuant to clauses (a)(i) and (ii) of the definition of “Available Excluded Contribution Amount Amount”, after giving Pro Forma Effect thereto, the Total Net Leverage Ratio (calculated on such date that a Pro Forma Basis) is not greater than 5.00:1.00 as of the Parent Borrower elects last day of the most recently ended Test Period for which financial statements have been delivered pursuant to apply to this clause (iii)(BSection 6.01(b) or (plus, without duplication of amounts referred to in this clause (Bc), in an amount equal as applicable, on or prior to the Net Proceeds from a Disposition of property or assets acquired after the Closing Date, if the acquisition making of such property or assets was financed with Available Excluded Contribution Amounts up to the amount of such Available Excluded Contribution Amount, less any application thereof under Sections 6.04(b)(vi) or 6.06(r))Restricted Payment;
(iv) the Parent Borrower Loan Parties may make Restricted Payments (i) to any Parent Company to enable such Parent Company to (A) make Cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of such Parent Company, dividends, share splits, reverse share splits (Company or any combination thereof) and, mergers, consolidations, amalgamations or other business combinations, and acquisitions and other Investments permitted hereunder and/or (B) honor any conversion request by a holder of Convertible Indebtedness by payment of cash and/or delivery of Capital Stock, make any cash payments in lieu of fractional shares in connection with any conversion of Convertible Indebtedness and otherwise make payments on Convertible Indebtedness in accordance with its terms (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments upon redemption thereof), or, in the case of each of sub-clauses (A) and (B) above, make Restricted Payments to any Parent Company to enable such Parent Company to make the payments and/or deliveries described in such sub-clauses (A) and (B), and (ii) consisting of (A) payments made or expected to be made in respect of required withholding or similar Taxes payable by any Permitted Payee future, present or former officers, directors, employees, members of management, managers or consultants of the Borrowers, any subsidiary or Parent Company or any of their respective Immediate Family Members and/or (B) repurchases of Capital Stock in consideration of the payments described in sub clause (A(A) above, including demand repurchases in connection with the exercise of stock options and the issuance of restricted stock units or similar stock based awardsoptions;
(v) the Parent Borrower Loan Parties may repurchase, redeem, acquire or retire Capital Stock upon repurchase (or make provisions for withholdings in connection with), or make Restricted Payments to any Parent Company to enable it to repurchase, redeem, acquire or retire ) Capital Stock upon (or make provisions for withholdings in connection with), the exercise of warrants, options or warrants or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represents all or a portion of the exercise price of, of such options or tax withholdings with respect to, such warrants, options warrants or other securities convertible into or exchangeable for Capital Stock as part of a “cashless” exercise;
(vi) the Parent Borrower Loan Parties may make Restricted Payments the proceeds of which are applied (i) on the Closing Date, solely to effect the consummation of the Transactions and on or about the Amendment No. 1 Effective Date, solely to effect the consummation of the Amendment No. 1 Transactions, (ii) on and after the Closing Date, to satisfy any payment obligations owing, or as otherwise required, under the Acquisition Agreement (including payment of working capital and/or purchase price adjustments) and to pay any Transaction Costs, in each case, with respect to the Transactions, (iii) to satisfy obligations to direct or indirect holders of Capital Stock of the Parent Borrower (immediately prior to giving effect to the Transactions) in connection with, or as a result of, any working capital and/or purchase price adjustments, in each case, with respect to the Transactions and (iv) to satisfy any settlement of claims or actions in connection with the Transactions or to satisfy indemnity or other similar obligations in connection with the Transactions;
(vii) After the Parent Borrower consummation of an IPO, so long as no Event of Default shall have occurred and be continuing at the time of the declaration thereof, the Loan Parties may (or may make Restricted Payments to any Parent Company to enable it to) make Restricted Payments with respect to any Capital Stock in an amount not to exceed (A) the greater of (x) an amount equal to 7.006.0% per annum of the net Cash proceeds received by or contributed to the Parent any Borrower in connection with the merger of Isos Acquisition Corporation and Bowlero Corp. on December 15, 2021 and the other transactions consummated in connection therewith and (y) from an amount equal to 7.00% per annum of the Market Capitalization of the Parent Borrower (or its direct or indirect Parent Company, as applicable) and its subsidiaries minus (B) any utilization of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A)IPO;
(viii) the Parent Borrower Loan Parties may make Restricted Payments to (i) redeem, repurchase, defease, discharge, retire or otherwise acquire any (A) Capital Stock (“Treasury Capital Stock”) of the Parent Borrower and/or such Loan Party or any Restricted of such Loan Party’s Subsidiary or (B) Capital Stock of any Parent Company, in the case of each of subclauses (Aclauses (A) and (B)(B) above, in exchange for, or out of the proceeds of the substantially concurrent sale (other than to the Parent such Borrower and/or any Restricted or such Subsidiary) of, Qualified Capital Stock of the Parent Borrower such Loan Party or any Parent Company to the extent any such proceeds are contributed to the capital of the Parent Borrower and/or such Loan Parties or any Restricted Subsidiary of such Loan Parties in respect of Qualified Capital Stock (“Refunding Capital Stock”) and (ii) declare and pay dividends on any the Treasury Capital Stock out of the proceeds of the substantially concurrent sale or issuance (other than to the Parent Borrower such Loan Party or a Restricted SubsidiarySubsidiary of such Loan Party) of any the Refunding Capital Stock;
(ix) to the extent constituting a Restricted Payment, the Parent Borrower Loan Parties may consummate any transaction permitted by Section 5.19 (other than Section 5.19(d)), Section 6.06 Section 7.06 (other than Sections 6.06(j7.06(j) and (t7.06(t)), Section 7.07 (other than Section 7.07(g)) and Section 6.07 Section 7.09 (other than Section 6.07(gSection 7.09(d));
(x) the Parent Borrower may make additional Restricted Payments in an aggregate amount not to exceed (A) the greater of $85,000,000 and 25% of Consolidated Adjusted EBITDA 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)[reserved];
(xi) the Parent Borrower Loan Parties may pay any dividend or other distribution or consummate any redemption within 60 days after the date of 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 dividend or redemption notice would have complied with the provisions of this Section 6.04(a)hereof;
(xii) the Parent Borrower Loan Parties or any Subsidiary may make any additional Restricted Payments; provided that after giving Pro Forma Effect thereto, (A) the Total Net Leverage Ratio (calculated on a Pro Forma Basis) is not greater than 3.50:1.00 as of the last day of the most recently ended Test Period for which financial statements have been delivered pursuant to Section 6.01(b) or (c), as applicable, on or prior to the making of such Restricted Payment constituting and (B) no Event of Default shall have occurred and be continuing at the distribution or payment time of Receivables Fees;the declaration thereof; and
(xiii) the Parent Borrower may make additional Restricted 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 Event of Default hereunder Loan Parties or shall result therefrom;
(xiv) the Parent Borrower any Subsidiary may make additional Restricted Payments in an aggregate amount not to exceed €20,000,000 per annum; provided that no Event of Default shall have occurred and be continuing at the time of the declaration thereof.
(b) No Loan Party shall, nor shall they permit any Subsidiary to, make any payment in Cash, securities or other property on or in respect of principal of or interest on any Junior Indebtedness (such Indebtedness, the “Restricted Debt”), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Restricted Debt (collectively, “Restricted Debt Payments”), except:
(i) the purchase, defeasance, redemption, repurchase, repayment or other acquisition or retirement of any Restricted Debt made by exchange for, or out of the proceeds of the substantially concurrent incurrence of, Refinancing Indebtedness permitted by Section 7.01(o);
(ii) payments as part of an “applicable high yield discount obligation” catch-up payment;
(iii) payments of regularly scheduled interest and payments of fees, expenses and indemnification obligations as and when due in respect of any Restricted Debt (other than payments with respect to Subordinated Indebtedness prohibited by the subordination provisions thereof);
(iv) payments with respect to intercompany Indebtedness permitted under Section 7.01, subject to the subordination provisions applicable thereto;
(A) Restricted Debt Payments in exchange for, or with proceeds of any issuance of Capital Stock of any Parent Company or Qualified Capital Stock of any Borrower or any Subsidiary, and/or any capital contribution in respect of Qualified Capital Stock of any Loan Party or any Subsidiary, (B) Restricted Debt Payments as a result of the conversion of all or any portion of Restricted Debt into Qualified Capital Stock of any Parent Company, any Borrower or any 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 7.01;
(vi) Restricted Debt Payments in an aggregate amount not to exceed the amount portion, if any, of proceeds received by the Parent Available Amount on such date that any Borrower and/or any elects to apply to this clause (vi); provided that (x) no Default or Event of Default shall have occurred and be continuing either before or after giving effect to such Restricted Subsidiary under Debt Payment and (y) with respect to amounts utilized pursuant to clauses (a)(i) and (ii) of the Representation and Warranty Insurance Policy during definition of “Available Amount”, after giving Pro Forma Effect thereto, the term Total Net Leverage Ratio (calculated on a Pro Forma Basis) is not greater than 5.00:1.00 as of this Agreementthe last day of the most recently ended Test Period for which financial statements have been delivered pursuant to Section 6.01(b) or (c), as applicable, on or prior to the making of such Restricted Debt Payment;
(xvvii) [reserved]; and
(Aviii) for any taxable period for which the Parent Borrower and/or any of its Subsidiaries are members of a consolidated, combined or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which a direct or indirect parent of the Parent Borrower is the common parent (a “Tax Group”), or for which the Parent Borrower is a disregarded entity for U.S. federal income tax purposes wholly-owned by a corporate parent (a “Corporate Parent”), the Parent Borrower and each of its Subsidiaries may make additional Restricted Payments the proceeds of which shall be used by such common parent to pay the portion of any consolidated, combined or similar U.S. federal, state or local income Taxes of such Tax Group, or by the Corporate Parent to pay the portion of the U.S. federal, state or local income Taxes of such Corporate Parent, or any franchise taxes imposed in lieu thereof, for such taxable period that are attributable to the income of the Parent Borrower and/or its Subsidiaries, provided that such amount shall not be greater than the amount of such U.S. federal, state or local income taxes that would be paid (for such taxable period) by the Parent Borrower and its Subsidiaries if the Parent Borrower and/or such Subsidiaries had been a stand-alone corporate taxpayer (or stand-alone group of corporate taxpayers filing on a consolidated, combined or similar basis) for all taxable years ending after the Closing Date (taking into account any net operating loss carryforwards attributable to the Parent Borrower and its Subsidiaries, as the case may be) and (B) without duplication of Restricted Payments made under Section 6.04(a)(xv)(A), for any taxable period for which the Parent Borrower is treated as a partnership for U.S. federal and/or applicable state or local income tax purposes, the Parent Borrower may make Restricted Debt Payments to its equity owners at the times and repay Junior Indebtedness or Subordinated Indebtedness in the amounan aggregate amount not to exceed €20,000,000 per annum.
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) The Parent Borrower Agent shall not pay or make, directly or indirectly, any Restricted Payment, except that:
(i) the Parent Borrower Agent may make Restricted Payments to the extent necessary to permit any Parent Company:;
(A) to pay (x) general operating and compliance administrative costs and expenses (including corporate overhead, legal or similar expenses) and franchise fees and taxes and similar fees, taxes and expenses and customary salary, bonus and other benefits payable required to directors, officers, employees, members maintain the organizational existence of management, managers and/or consultants of any such Parent Company), in each case, which are reasonable and customary and incurred in the ordinary course of business, plus any reasonable and customary indemnification claims made by directors, officers, members of management, managers, management or employees or consultants of any Parent Company, in each case, to the extent attributable to the ownership or operations of any Parent Company (but excluding, for the avoidance of doubtHoldings, the portion Borrowers and their Subsidiaries, and (y) without duplication of preceding clause (x), any Public Company Costs;
(B) for any taxable period in which the Borrower Agent and/or any of its Subsidiaries is a member of a consolidated, combined or similar income tax group of which a direct or indirect parent of the Borrowers is the common parent (a “Tax Group”), to discharge the consolidated tax liabilities of such amountTax Group when and as due, if any, that is to the extent such liabilities are attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or Agent and its subsidiaries), Subsidiaries; provided that the Parent amount paid by the Borrower and/or its subsidiaries;
Agent pursuant to this paragraph (B) to pay franchise, excise shall not exceed the tax liabilities that would be due if the Borrower Agent and each Subsidiary were separate corporations filing income and similar Taxes, and other fees, Taxes and expenses, required to maintain tax returns on a consolidated or combined basis with the organizational existence Borrower Agent as the common parent of such Parent Companyaffiliated group (calculated at the highest combined applicable federal, state, local and foreign tax rate); provided further that the permitted payment pursuant to this paragraph (B) with respect to any taxes of any Unrestricted Subsidiary for any taxable period shall be limited to the amount actually paid with respect to such period by such Unrestricted Subsidiary to the Borrower Agent and its Subsidiaries for the purposes of paying such consolidated, combined or similar taxes;
(C) to pay audit and other accounting and reporting expenses at such Parent Company to the extent relating to the ownership or operations of the Borrowers and their Subsidiaries;
(D) for the payment of insurance premiums to the extent relating to the ownership or operations of the Borrowers and their Subsidiaries;
(E) pay fees and expenses related to debt or equity offerings, investments or acquisitions permitted by this Agreement (whether or not consummated);
(F) to pay the consideration to finance any Investment permitted under Section 6.07 (provided that (x) such Restricted Payments under this clause (a)(i)(F) shall be made substantially concurrently with the closing of such Investment and (y) such Parent Company shall, promptly following the closing thereof, cause all such property acquired to be contributed to the Borrowers or one of their Subsidiaries, or the merger or amalgamation of the Person formed or acquired into the Borrowers or one of their Subsidiaries, in order to consummate such Investment in a manner that causes such Investment to comply with the applicable requirements of Section 6.07 as if undertaken as a direct Investment by such Borrower or such Subsidiary); and
(G) without duplication of clause (A)(y) above, to pay customary salary, bonus, long-term incentive, severance bonus and other benefits (including payment to certain service providers of the Parent Borrower or its Subsidiaries pursuant to any equity plan (whether in the form of options, cash settled options or otherwise)) payable to Permitted Payeesdirectors, as well as applicable employmentofficers, social security members of management or similar taxes in connection therewith, employees of any Parent Company to the extent such salary, bonuses, severance bonuses and other benefits are directly attributable and reasonably allocated to the operations of the Parent Borrower and/or its subsidiariesBorrowers and their Subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose;
(D) to pay audit and other accounting and reporting expenses of such Parent Company to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such expenses, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries;
(E) for the payment of insurance premiums to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries;
(F) to pay (x) fees and expenses related to any debt and/or equity offerings (including refinancings), investments and/or acquisitions permitted or not restricted by this Agreement (whether or not consummated, and including advisory, refinancing, subsequent transaction and exit fees of any Parent Company of the Parent Borrower) and expenses and indemnities of any trustee, agent, arranger, underwriter or similar role and (y) Public Company Costs; and
(G) to finance any Investment permitted under Section 6.06 as if such Parent Company were subject to Section 6.06 (provided that (x) any Restricted Payment under this clause (a)(i)(G) 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 (y) the relevant Parent Company shall, promptly following the closing 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 (I) all property acquired to be contributed to the Parent Borrower or one or more of its Restricted Subsidiaries or (II) the merger, consolidation or amalgamation of the Person formed or acquired into the Parent Borrower or one or more of its Restricted Subsidiaries, in order to consummate such Investment in compliance with the applicable requirements of Section 6.06 as if undertaken as a direct Investment by the Parent Borrower or the relevant Restricted Subsidiary);
(ii) the Parent Borrower Agent may pay (or make Restricted Payments to allow any Parent Company to pay) for the repurchase, redemption, retirement or other acquisition or retirement for value of Capital Stock of any Parent Company or any subsidiary held by any Permitted Payee:future, present or former employee, director, member of management, officer, manager or consultant (or any Affiliate or Immediate Family Member thereof) of any Parent Company, the Borrowers or any Subsidiary;
(A) in accordance with the terms of promissory exchange for notes issued pursuant to Section Section 6.01(o), so long as the aggregate amount of all Cash cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments made (x) pursuant to sub-clause (D(D) of this clause (ii(ii) belowbelow and (y) pursuant to Section 6.05(a)(iv), (1) does not exceed the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period 25,000,000 in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to the next subsequent Fiscal Years (until so applied)) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under clause (D) below; plusYear;
(B) with the proceeds of any sale or issuance of, or of any capital contribution in respect of, the exchange for Capital Stock of the Parent Borrower or any Parent Company (to the extent such proceeds are contributed to the Parent Borrower or any Restricted Subsidiary in respect of Qualified Capital Stock issued by the Parent Borrower or such Restricted Subsidiary) (other than amounts constituting a Cure Amount or an Available Excluded Contribution Amount); plusCompany;
(C) with the in exchange for net proceeds of any key-man life insurance policiespolicies received during such fiscal year; plusor
(D) with in exchange for Cash and Cash Equivalents in an amount not to exceed, together with (x) the aggregate amount of all cash payments made pursuant to sub-clause (A) of this clause (ii) in respect of promissory notes issued pursuant to Section Section 6.01(o) and (y) the aggregate amount of Restricted Payments made pursuant to Section 6.05(a)(iv), (1) the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period 25,000,000 in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to the next subsequent Fiscal Years (until so applied) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under the immediately preceding clause (1); plus
(E) with the amount of any Cash bonuses otherwise payable to any Permitted Payee that are foregone in exchange for the receipt of Capital Stock of the Parent Borrower or any Parent Company pursuant to any compensation arrangement, including any deferred compensation planYear;
(iii) so long as no Default or Event of Default then exists or would result therefrom, the Parent Borrower Agent may make additional Restricted Payments in an amount not to exceed (A) the portion, if any, of the Available Amount on such date that the Parent Borrower Agent elects to apply to this clause (iii)(A(iii)(A) plus and (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Parent Borrower Agent elects to apply to this clause (iii)(B) (plus, without duplication of amounts 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 with Available Excluded Contribution Amounts up to the amount of such Available Excluded Contribution Amount, less any application thereof under Sections 6.04(b)(vi) or 6.06(r)iii)(B);
(iv) the Parent Borrower Agent may make Restricted Payments (i) to any Parent Company to enable such Parent Company to (A) make Cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of such Parent CompanyCompany in an amount not to exceed, dividends, share splits, reverse share splits together with (or any combination thereofx) and, mergers, consolidations, amalgamations or other business combinations, and acquisitions and other Investments permitted hereunder and/or (B) honor any conversion request by a holder the aggregate amount of Convertible Indebtedness by payment of cash and/or delivery of Capital Stock, make any all cash payments in lieu of fractional shares in connection with any conversion of Convertible Indebtedness and otherwise make payments on Convertible Indebtedness in accordance with its terms (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments upon redemption thereof), or, in the case of each of sub-clauses (A) and (B) above, make Restricted Payments to any Parent Company to enable such Parent Company to make the payments and/or deliveries described in such sub-clauses (A) and (B), and (ii) consisting of (A) payments made or expected to be made in respect of withholding or similar Taxes payable by notes issued pursuant to Section 6.01(o) and (y) the aggregate amount of all Restricted Payments made pursuant to Section 6.05(a)(ii)(D), $25,000,000 in any Permitted Payee and/or (B) repurchases of Capital Stock Fiscal Year, which, if not used in consideration of any Fiscal Year, may be carried forward to the payments described in sub clause (A) above, including demand repurchases in connection with the exercise of stock options and the issuance of restricted stock units or similar stock based awardsnext subsequent Fiscal Year;
(v) the Parent Borrower Agent may repurchase, redeem, acquire or retire repurchase Capital Stock upon (or make provisions for withholdings in connection with), or make Restricted Payments to any Parent Company to enable it to repurchase, redeem, acquire or retire Capital Stock upon (or make provisions for withholdings in connection with), the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock warrants if such Capital Stock represents all or a portion of the exercise price of, or tax withholdings with respect to, of such warrants, options or other securities convertible into or exchangeable for Capital Stock warrants as part of a “cashless” exercise;
(vi) the Parent Borrower Agent may make Restricted Payments the proceeds of which are applied (i) on the Closing Date, solely to effect the consummation of the Transactions and on or about the Amendment No. 1 Effective Date, solely to effect the consummation of the Amendment No. 1 Transactions, (ii) on and after the Closing Date, to satisfy any payment obligations owing, or as otherwise required, under the Acquisition Agreement (including payment of working capital and/or purchase price adjustments) and to pay Transaction Costs, in each case, with respect to the Transactions, (iii) to satisfy obligations to direct or indirect holders of Capital Stock of the Parent Borrower (immediately prior to giving effect to the Transactions) in connection with, or as a result of, any working capital and/or purchase price adjustments, in each case, with respect to the Transactions and (iv) to satisfy any settlement of claims or actions in connection with the Transactions or to satisfy indemnity or other similar obligations in connection with the Transactions;
(vii) so long as no Event of Default under Sections 7.01(a), 7.01(f) or 7.01(g) shall have occurred and be continuing, the Parent Borrower Agent may (or may make Restricted Payments to any Parent Company to enable it to) make Restricted Payments with respect to any Capital Stock in an amount not to exceed (A) the greater of (xA) an amount equal to 7.006.00% per annum of the net Cash proceeds Net Proceeds received by or contributed to the Parent Borrower Agent (being $6,255,000) in connection with the merger initial public offering of Isos Acquisition Corporation shares of common stock of Party City Holdco Inc. on April 16, 2015 and Bowlero Corp. on December 15, 2021 and the other transactions consummated in connection therewith and (y) an amount equal to 7.00% per annum of the Market Capitalization of the Parent Borrower (or its direct or indirect Parent Company, as applicable) and its subsidiaries minus (B) any utilization 6.00% of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A)then Market Capitalization;
(viii) the Parent Borrower Agent may make Restricted Payments to (i) redeem, repurchase, defease, discharge, retire or otherwise acquire any (A) Capital Stock (“Treasury Capital Stock”) of the Parent Borrower and/or Agent or any Restricted Subsidiary or (B) Capital Stock of any Parent Company, in the case of each of subclauses (A(A) and (B(B), in exchange for, or out of the proceeds of the substantially concurrent sale (other than to the Parent Borrower and/or any Restricted Agent or a Subsidiary) of, Qualified Capital Stock of the Parent Borrower Agent or any Parent Company to the extent any such proceeds are contributed as a common equity contribution to the capital of the Parent Borrower and/or Agent or any Restricted Subsidiary (in respect of Qualified each case, other than Disqualified Capital Stock Stock) (“Refunding Capital Stock”) and (ii) declare and pay dividends on any the Treasury Capital Stock out of the proceeds of the substantially concurrent sale or issuance (other than to the Parent Borrower Agent or a Restricted Subsidiary) of any the Refunding Capital Stock;
(ix) to the extent constituting a Restricted Payment, the Parent Borrower Agent may consummate any transaction permitted by Section 5.19 (other than Section 5.19(d)), Section 6.06 Sections 6.07 (other than Sections 6.06(j6.07(j) and (t(t)), Section 6.08 (other than Section 6.08(g)) and Section 6.07 (other than Section 6.07(g)Sections 6.11(h);
(x) the Parent Borrower Agent may make Restricted Payments in an aggregate amount not to exceed the greater of $50,000,000 and 1.50% of the Consolidated Total Assets as of the last day of the last Test Period for which financial statements have been delivered pursuant to Section 5.01 at any time outstanding, so long as no Default or Event of Default shall have occurred and be continuing; and
(xi) the Borrowers and the Subsidiary Guarantors may make Restricted Payments so long as, after giving pro forma effect to the payment of each such Restricted Payment, the Total Leverage Ratio shall not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing at the time of declaration of such Restricted Payment.
(b) The Borrowers and the Subsidiary Guarantors shall not, nor shall they permit any Subsidiary to, make, directly or indirectly, any payment or other distribution (whether in Cash, securities or other property) on or in respect of principal of or interest on any Junior 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 Indebtedness (collectively, “Restricted Debt Payments”), except:
(i) the defeasance, redemption, repurchase or other acquisition or retirement of Junior Indebtedness made by exchange for, or out of the proceeds of the substantially concurrent incurrence of, Refinancing Indebtedness permitted by Section 6.01;
(ii) payments as part of an “applicable high yield discount obligation” catch-up payment, so long as no Event of Default shall have occurred and be continuing;
(iii) payments of regularly scheduled interest and fees, expenses and indemnification obligations as and when due in respect of any Indebtedness (other than payments with respect to Subordinated Indebtedness prohibited by the subordination provisions thereof);
(iv) payments with respect to intercompany Indebtedness permitted under Section 6.01, subject to the subordination provisions applicable thereto;
(v) payments in connection with the Existing Debt Refinancing;
(vi) (A) payments of any Junior Indebtedness in exchange for, or with proceeds of any substantially contemporaneous issuance of Qualified Capital Stock of any Parent Company or the Borrower Agent, and any substantially contemporaneous capital contribution in respect of Qualified Capital Stock of the Borrower Agent, (B) payments of Indebtedness by the conversion of all or any portion thereof into Qualified Capital Stock of any Parent Company or the Borrower Agent and (C) payments of interest in respect of Indebtedness in the form of payment-in-kind interest with respect to such Indebtedness permitted under Section 6.01;
(vii) so long as no Default under Sections 7.01(a), 7.01(f) or 7.01(g) and no Event of Default then exists or would result therefrom, additional Restricted Debt Payments in an aggregate amount not to exceed (A) the portion, if any, of the Available Amount on such date that the Borrower Agent elects to apply to this clause (vii)(A) and (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Borrower Agent elects to apply to this clause (vii)(B); and
(viii) Restricted Debt Payments in an aggregate principal amount not to exceed the greater of $85,000,000 50,000,000 and 251.50% of Consolidated Adjusted EBITDA Total Assets as of the last day of the most recently ended last Test Period minus (B) for which financial statements have been delivered pursuant to Section 5.01 at any utilization of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A);
(xi) the Parent Borrower may pay any dividend or other distribution or consummate any redemption within 60 days after the date of the declaration thereof or the provision of a redemption notice with respect theretotime outstanding, 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);
(xii) the Parent Borrower may make any Restricted Payment constituting the distribution or payment of Receivables Fees;
(xiii) the Parent Borrower may make additional Restricted 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 Event of Default hereunder or shall result therefrom;
(xiv) the Parent Borrower may make additional Restricted Payments in an amount not to exceed the amount of proceeds received by the Parent Borrower and/or any Restricted Subsidiary under the Representation and Warranty Insurance Policy during the term of this Agreement;
(xv) (A) for any taxable period for which the Parent Borrower and/or any of its Subsidiaries are members of a consolidated, combined or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which a direct or indirect parent of the Parent Borrower is the common parent (a “Tax Group”Sections 7.01(a), 7.01(f) or for which the Parent Borrower is a disregarded entity for U.S. federal income tax purposes wholly-owned by a corporate parent (a “Corporate Parent”), the Parent Borrower 7.01(g) shall have occurred and each of its Subsidiaries may make Restricted Payments the proceeds of which shall be used by such common parent to pay the portion of any consolidated, combined or similar U.S. federal, state or local income Taxes of such Tax Group, or by the Corporate Parent to pay the portion of the U.S. federal, state or local income Taxes of such Corporate Parent, or any franchise taxes imposed in lieu thereof, for such taxable period that are attributable to the income of the Parent Borrower and/or its Subsidiaries, provided that such amount shall not be greater than the amount of such U.S. federal, state or local income taxes that would be paid (for such taxable period) by the Parent Borrower and its Subsidiaries if the Parent Borrower and/or such Subsidiaries had been a stand-alone corporate taxpayer (or stand-alone group of corporate taxpayers filing on a consolidated, combined or similar basis) for all taxable years ending after the Closing Date (taking into account any net operating loss carryforwards attributable to the Parent Borrower and its Subsidiaries, as the case may be) and (B) without duplication of Restricted Payments made under Section 6.04(a)(xv)(A), for any taxable period for which the Parent Borrower is treated as a partnership for U.S. federal and/or applicable state or local income tax purposes, the Parent Borrower may make Restricted Payments to its equity owners at the times and in the amouncontinuing.
Appears in 1 contract
Sources: Term Loan Credit Agreement (Party City Holdco Inc.)
Restricted Payments; Certain Payments of Indebtedness. (a) The Parent Lead Borrower shall not pay or make, directly or indirectly, any Restricted Payment, except that:
(i) the Parent Lead Borrower may make Restricted Payments to the extent necessary to permit any Parent Company:
(A) to pay general operating and compliance administrative costs and expenses (including corporate overhead, legal or similar expenses and customary salary, fees, bonus and other benefits payable to directors, officers, employees, members of management, managers and/or consultants of any Parent Company)) and franchise fees and Taxes and similar fees, Taxes and expenses required to enable such Parent Company to maintain its organizational existence or qualification to do business, in each case, which are reasonable and customary and incurred in the ordinary course of business, plus any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of any Parent Company, in each case, to the extent attributable to the ownership or operations of any Parent Company and its subsidiaries (but excluding, for the avoidance of doubt, excluding the portion of any such amount, if any, amount that is attributable to the ownership or operations of any subsidiary of any Parent Company other than the Borrowers and their subsidiaries);
(B) to discharge the consolidated, combined, unitary or similar Tax liabilities of such Parent Company and its subsidiaries when and as due, to the extent such liabilities are attributable to the operations of any Parent Company (but excluding, for the avoidance of doubt, the portion of any such Tax liabilities, if any, that is attributable to the operations of any subsidiary of any Parent Company other than the Lead Borrower and/or its subsidiaries), the Parent Lead Borrower and/or and its subsidiaries;
subsidiaries; provided that the amount paid by the Lead Borrower pursuant to this paragraph (B) to pay franchise, excise shall not exceed the amount of Tax liabilities that would be due if the Lead Borrower and each Restricted Subsidiary were separate corporations filing income and similar TaxesTax returns on a consolidated, and other feescombined, Taxes and expenses, required to maintain unitary or similar basis with the organizational existence Lead Borrower as the common parent of such Parent Company;
affiliated group (Ccalculated at the highest combined applicable federal, state, local and foreign Tax rate); provided further that Restricted Payments under this Section 6.04(a)(i)(B) to pay customary salary, bonus, long-term incentive, severance and other benefits (including payment to certain service providers of the Parent Borrower or its Subsidiaries pursuant that are attributable to any equity plan (whether in the form of options, cash settled options Unrestricted Subsidiary or otherwise)) payable to Permitted Payees, as well as applicable employment, social security or similar taxes in connection therewith, any joint venture shall be permitted only to the extent that either (x) such salaryUnrestricted Subsidiary has made one or more Cash distributions, bonuses, severance and other benefits are attributable and reasonably allocated advances or loans to the operations Lead Borrower or any of its Restricted Subsidiaries for such purpose in an amount up to the Parent Borrower and/or its subsidiariesamount of such Unrestricted Subsidiary’s or joint venture’s, in each caseas applicable, so long as proportionate share of such Parent Company applies Tax liabilities or (y) the amount of any such Restricted Payment for made by the Lead Borrower on behalf of such purpose;Unrestricted Subsidiary or joint venture is treated as an Investment subject to Section 6.06 hereof;
(DC) to pay audit and other accounting and reporting expenses of such Parent Company to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such expenses, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower Borrowers and/or its their subsidiaries), the Parent Borrower Borrowers and its subsidiaries;their subsidiaries;
(ED) for the payment of insurance premiums and deductibles to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower Borrowers and/or its their subsidiaries), the Parent Borrower Borrowers and its subsidiaries;their subsidiaries;
(FE) to pay (x) fees and expenses related to any debt and/or or equity offerings (including refinancings)offerings, investments and/or or acquisitions permitted or not restricted by this Agreement (whether or not consummated, ) relating to the Borrowers and including advisory, refinancing, subsequent transaction and exit fees of any Parent Company of the Parent Borrower) and expenses and indemnities of any trustee, agent, arranger, underwriter or similar role their Restricted Subsidiaries and (y) Public Company Costs; andCosts;
(GF) to finance any Investment permitted under Section 6.06 as if such Parent Company were subject to Section Section 6.06 (provided that (x) any Restricted Payment under this clause (a)(i)(G(a)(i)(F) 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 (y) the relevant Parent Company shall, promptly following the closing 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 therewiththereof, cause (I) all property acquired to be contributed to the Parent Borrower Borrowers or one or more of its their Restricted Subsidiaries Subsidiaries, or (II) the merger, consolidation or amalgamation of the Person formed or acquired into the Parent Borrower Borrowers or one or more of its their Restricted Subsidiaries, in order to consummate such Investment in compliance with the applicable requirements of Section Section 6.06 as if undertaken as a direct Investment by the Parent Borrower Borrowers or the relevant Restricted Subsidiary); and
(G) to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, employees or consultants of any Parent Company (or any Immediate Family Member of any of the foregoing) to the extent such salary, bonuses and other benefits are attributable and reasonably allocated to the operations of the Borrowers and/or their subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose; provided that with respect to Restricted Payments under clauses (A), (B), (C), (D) and (G) above, such Restricted Payments that are attributable to any Unrestricted Subsidiary shall be permitted only to the extent that either (x) such Unrestricted Subsidiary has made one or more Cash distributions, advances or loans to the Borrowers or any of their Restricted Subsidiaries for such purpose in an amount up to the amount of such Unrestricted Subsidiary);’s proportionate share of such Restricted Payment or (y) the amount of any such Restricted Payment made by the applicable Borrower on behalf of such Unrestricted Subsidiary is treated as an Investment subject to Section 6.06 hereof;
(ii) the Parent Lead Borrower may pay (or make Restricted Payments to allow any Parent Company to pay) for the repurchase, redemption, retirement or other acquisition or retirement for value of Capital Stock of any Parent Company Company, any subsidiary or any subsidiary of their respective Affiliates held by any Permitted Payeefuture, present or former employee, director, member of management, officer, manager, advisor or consultant (or any Affiliate or Immediate Family Member thereof) of any Parent Company, the Borrowers, any subsidiary or any of their respective Affiliates:
(A) in accordance with the terms of promissory notes issued pursuant to Section Section 6.01(o), so long as the aggregate amount of all Cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments made pursuant to sub-clause (D(D) of this clause (ii(ii) below, (1) does not exceed the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period 5,000,000 in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to the next subsequent Fiscal Years Year (until so applied)) minus (2) provided that no more than $10 million may be carried forward in any utilization of the Available RP Capacity Amount in reliance on unused capacity under clause (D) below; plusFiscal Year);
(B) with the proceeds of any sale or issuance of, or of any capital contribution in respect of, the Capital Stock of the Parent Borrower Borrowers or any Parent Company (to the extent such proceeds are contributed to the Parent Borrower or any Restricted Subsidiary in respect of Qualified Capital Stock issued by to the Parent Borrower Borrowers or such any Restricted Subsidiary) (other than amounts constituting a Cure Amount or an Available Excluded Contribution Amount); plusSubsidiary);
(C) with the net proceeds of any key-man life insurance policies; pluspolicies; or
(D) with Cash and Cash Equivalents in an amount not to exceed, together with the aggregate amount of all cash Cash payments made pursuant to sub-clause (A(A) of this clause (ii(ii) in respect of promissory notes issued pursuant to Section Section 6.01(o), (1) the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period 5,000,000 in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to the next subsequent Fiscal Years Year (until so applied) minus (2) provided that no more than $10 million may be carried forward in any utilization of the Available RP Capacity Amount in reliance on unused capacity under the immediately preceding clause (1); plus
(E) with the amount of any Cash bonuses otherwise payable to any Permitted Payee that are foregone in exchange for the receipt of Capital Stock of the Parent Borrower or any Parent Company pursuant to any compensation arrangement, including any deferred compensation plan;Fiscal Year);
(iii) the Parent Lead Borrower may make additional Restricted Payments in an amount not to exceed (A) the portion, if any, of the Available Amount on such date that the Parent Lead Borrower elects to apply to this clause (iii)(A(iii)(A); provided that (A) no Default or Event of Default has occurred and is continuing or would result therefrom and (B) the Fixed Charge Coverage Ratio, calculated on a Pro Forma Basis, would not be less than 2.00:1.00 as of the last day of the Test Period most recently ended prior to such Restricted Payment for which the financial statements required by Section 5.01(a) or 5.01(b), as the case may be, have been delivered plus (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Parent Lead Borrower elects to apply to this clause (iii)(B) (plus, without duplication of amounts 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 with Available Excluded Contribution Amounts up to the amount of such Available Excluded Contribution Amount, less any application thereof under Sections 6.04(b)(vi) or 6.06(r));iii)(B);
(iv) the Parent Lead Borrower may make Restricted Payments (i) to any Parent Company to enable such Parent Company to (A) make Cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of such Parent Company, dividends, share splits, reverse share splits (or any combination thereof) and, mergers, consolidations, amalgamations or other business combinations, and acquisitions and other Investments permitted hereunder and/or (B) honor any conversion request by a holder of Convertible Indebtedness by payment of cash and/or delivery of Capital Stock, make any cash payments in lieu of fractional shares in connection with any conversion of Convertible Indebtedness and otherwise make payments on Convertible Indebtedness in accordance with its terms (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments upon redemption thereof), or, in the case of each of sub-clauses (A) and (B) above, make Restricted Payments to any Parent Company to enable such Parent Company to make the payments and/or deliveries described in such sub-clauses (A) and (B), and (ii) consisting of (A) payments made or expected to be made in respect of withholding or similar Taxes payable by any Permitted Payee future, present or former officers, directors, employees, members of management, managers or consultants of the Borrowers, any Restricted Subsidiary or any Parent Company or any of their respective Immediate Family Members and/or (B) repurchases of Capital Stock in consideration of the payments described in sub sub-clause (A(A) above, including demand repurchases in connection with the exercise of stock options and the issuance of restricted stock units or similar stock based awards;options;
(v) the Parent Lead Borrower may repurchase, redeem, acquire or retire Capital Stock upon repurchase (or make provisions for withholdings in connection with), or make Restricted Payments to any Parent Company to enable it to repurchase, redeem, acquire or retire ) Capital Stock upon (or make provisions for withholdings in connection with), the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represents all or a portion of the exercise price of, or tax withholdings with respect to, of such warrants, options or other securities convertible into or exchangeable for Capital Stock as part of a “cashless” exercise;exercise;
(vi) the Parent Lead Borrower may make Restricted Payments Payments, the proceeds of which are applied (i) on the Closing Date, solely to effect the consummation of the Transactions and on or about the Amendment No. 1 Effective Date, solely to effect the consummation of the Amendment No. 1 Transactions, (ii) on and after the Closing Date, to satisfy any payment obligations owing, or as otherwise required, under the Acquisition Agreement (including payment of working capital and/or purchase price adjustments) and to pay Transaction Costs, in each case, with respect to the Transactions, (iii) to satisfy obligations to direct or indirect holders of Capital Stock of the Parent Borrower (immediately prior to giving effect to the Transactions) in connection with, or as a result of, any working capital and/or purchase price adjustments, in each case, with respect to the Transactions and (iv) to satisfy any settlement of claims or actions in connection with the Transactions or to satisfy indemnity or other similar obligations in connection with the Transactions;Transactions;
(vii) the Parent Lead Borrower may (or may make Restricted Payments to any Parent Company to enable it to) Holdings (and Holdings may in turn make such Restricted Payments with respect to any Capital Stock Super Holdco) from time to time in an amount not sufficient to exceed enable Super Holdco to fund each scheduled payment of the Regular Cash Dividend; provided that (A) the greater no Default or Event of (x) an amount equal to 7.00% per annum of the net Cash proceeds received by Default exists or contributed to the Parent Borrower in connection with the merger of Isos Acquisition Corporation would result therefrom and Bowlero Corp. on December 15, 2021 and the other transactions consummated in connection therewith and (y) an amount equal to 7.00% per annum of the Market Capitalization of the Parent Borrower (or its direct or indirect Parent Company, as applicable) and its subsidiaries minus (B) any utilization the Fixed Charge Coverage Ratio, calculated on a Pro Forma Basis, would not be less than 2.00:1.00 as of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (Alast day of the Test Period most recently ended prior to such Restricted Payment for which the financial statements required by Section 5.01(a) or 5.01(b);, as the case may be, have been delivered;
(viii) the Parent Lead Borrower may make Restricted Payments to (i) redeem, repurchase, defease, discharge, retire or otherwise acquire any (A) Capital Stock (“Treasury Capital Stock”) of the Parent Borrower Borrowers and/or any Restricted Subsidiary or Subsidiary, (B) Capital Stock of any Parent Company, in the case of each of subclauses (A(A) and (B(B), in exchange for, or out of the proceeds of the substantially concurrent sale (other than to the Parent Lead Borrower and/or any Restricted Subsidiary) of, Qualified Capital Stock of the Parent Borrower Borrowers or any Parent Company to the extent any such proceeds are contributed to the capital of the Parent Borrower Borrowers and/or any Restricted Subsidiary in respect of Qualified Capital Stock (“Refunding Capital Stock”), and/or (C) Capital Stock of any Parent Company owned by any present or former employees, directors, members of management, officers, managers or consultants or independent contractors (or their respective Immediate Family Members) of any Parent Company in an amount equal to any tax liability paid on behalf of such employee, director, member of management, officer, manager or consultant or independent contractor (or their respective Immediate Family Members) arising from the vesting of such 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 the Parent applicable Lead Borrower or a Restricted Subsidiary) of any Refunding Capital Stock;Stock;
(ix) to the extent constituting a Restricted Payment, the Parent Lead Borrower may consummate any transaction permitted by Section 5.19 (other than Section 5.19(d)), Section Section 6.06 (other than Sections 6.06(j6.06(j) and (t(t)) and Section ), Section 6.07 (other than Section Section 6.07(g));) and Section 6.09 (other than Section 6.09(d));
(x) the Parent Lead Borrower may make additional Restricted Payments in an aggregate amount not to exceed (A) the greater of $85,000,000 100,000,000 and 2511% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period minus (BA) the amount of Restricted Debt Payments made by the Borrowers or any utilization of the Available RP Capacity Amount Restricted Subsidiary in reliance on unused capacity under immediately preceding clause (ASection 6.04(b)(iv);, minus (B) the outstanding amount of Investments made by a Borrower or any Restricted Subsidiary in reliance on Section 6.06(q)(ii);
(xi) the Parent Lead Borrower may pay any dividend or other distribution or consummate any redemption within 60 days after the date of 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 dividend or redemption notice would have complied with the provisions of this Section 6.04(a);hereof;
(xii) the Parent Lead Borrower may make any Restricted Payment constituting purchase, redeem or otherwise acquire its common Capital Stock with the distribution or payment proceeds received from the substantially concurrent issuance of Receivables Fees;new common Capital Stock of the Borrowers; and
(xiii) the Parent Lead Borrower may make additional Restricted Payments so long as, as measured at the time provided for in Section 1.04(e), (iA) no Default or Event of Default exists or would result therefrom and (B) the Total Leverage Ratio would not exceed 4.00:1.003.00:1.00. calculated on a Pro Forma Basis as of the last day of the most recently ended Test Period.
(b) The Borrowers shall not, nor shall they permit any Restricted Subsidiary to, make any payment (whether in Cash, securities or other property) on or in respect of principal of or interest on (x) any Indebtedness permitted under Section 6.01(c), (y) any Junior Lien Indebtedness or (z) any Junior Indebtedness (such Indebtedness under clauses (x), (y) and (z), the “Restricted Debt”), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Restricted Debt prior to its scheduled maturity (collectively, “Restricted Debt Payments”), except:
(i) any 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 an “applicable high yield discount obligation” catch-up payment;
(iii) payments of regularly scheduled interest as and when due in respect of any Restricted Debt, except for any payments with respect to any Subordinated Indebtedness that are prohibited by the subordination provisions thereof;
(iv) so long as, at the time of delivery of irrevocable notice with respect thereto, no Event of Default exists or would result therefrom, additional Restricted Debt Payments in an aggregate amount not to exceed the greater of $100,000,000 and 11% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period, minus (A) the outstanding amount of Investments made in reliance on Section 6.06(q)(ii), minus (B) the amount of Restricted Payments made in reliance on Section 6.04(a)(x);
(A) Restricted Debt Payments in exchange for, or with proceeds of any issuance of, Qualified Capital Stock of the Borrowers and/or any Restricted Subsidiary and/or any capital contribution in respect of Qualified Capital Stock of the Borrowers or any Restricted Subsidiary, (B) Restricted Debt Payments as a result of the conversion of all or any portion of any Restricted Debt into Qualified Capital Stock of the Borrowers 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 exceed (A) the portion, if any, of the Available Amount on such date that the Borrowers elect to apply to this clause (vi)(A); provided, that (A) no Default or Event of Default has occurred and is continuing or would result therefrom and (B) the Fixed Charge Coverage Ratio, calculated on a Pro Forma Basis and (ii) there shall exist no Event of Default hereunder or shall result therefrom;
(xiv) the Parent Borrower may make additional Restricted Payments in an amount Basis, would not to exceed the amount of proceeds received by the Parent Borrower and/or any Restricted Subsidiary under the Representation and Warranty Insurance Policy during the term of this Agreement;
(xv) (A) for any taxable period for which the Parent Borrower and/or any of its Subsidiaries are members of a consolidated, combined or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which a direct or indirect parent be less than 2.00:1.00 as of the Parent Borrower is the common parent (a “Tax Group”), or for which the Parent Borrower is a disregarded entity for U.S. federal income tax purposes wholly-owned by a corporate parent (a “Corporate Parent”), the Parent Borrower and each of its Subsidiaries may make Restricted Payments the proceeds of which shall be used by such common parent to pay the portion of any consolidated, combined or similar U.S. federal, state or local income Taxes of such Tax Group, or by the Corporate Parent to pay the portion of the U.S. federal, state or local income Taxes of such Corporate Parent, or any franchise taxes imposed in lieu thereof, for such taxable period that are attributable to the income of the Parent Borrower and/or its Subsidiaries, provided that such amount shall not be greater than the amount of such U.S. federal, state or local income taxes that would be paid (for such taxable period) by the Parent Borrower and its Subsidiaries if the Parent Borrower and/or such Subsidiaries had been a stand-alone corporate taxpayer (or stand-alone group of corporate taxpayers filing on a consolidated, combined or similar basis) for all taxable years ending after the Closing Date (taking into account any net operating loss carryforwards attributable to the Parent Borrower and its Subsidiaries, as the case may be) and (B) without duplication of Restricted Payments made under Section 6.04(a)(xv)(A), for any taxable period for which the Parent Borrower is treated as a partnership for U.S. federal and/or applicable state or local income tax purposes, the Parent Borrower may make Restricted Payments to its equity owners at the times and in the amounlast da
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) The Parent No Borrower shall not pay or make, directly or indirectly, any Restricted Payment, except that:
(i) the Parent Borrower Borrowers may make Restricted Payments to the extent necessary to permit any Parent Company (and so long as such amounts are promptly applied by such Parent Company:):
(A) to pay general operating and compliance administrative costs and expenses (including corporate overhead, legal or similar expenses and customary salary, bonus and other benefits payable to directors, officers, employees, members of management, managers and/or consultants of any Parent Company)) and franchise fees and Taxes and similar fees, Taxes and expenses required to enable such Parent Company to maintain its organizational existence or qualification to do business, in each case, which are reasonable and customary and incurred in the ordinary course of business, plus any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of any Parent Company, in each case, to the extent attributable to the ownership or operations of any Parent Company and its subsidiaries (but excluding, for the avoidance of doubt, excluding the portion of any such amount, if any, amount that is attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its Borrowers and their subsidiaries), the Parent Borrower and/or its subsidiaries;
(B) to pay franchisedischarge the consolidated combined, excise and unitary or similar Taxes, and other fees, Taxes and expenses, required to maintain the organizational existence Tax liabilities of such Parent Company and its subsidiaries when and as due determined without taking into account adjustments pursuant to Section 743 of the Code and using an assumed uniform tax rate, and to the extent such liabilities are attributable to the Parent Company’s direct or indirect ownership of the Borrowers and their subsidiaries;
(C) to pay customary salary, bonus, long-term incentive, severance and other benefits (including payment to certain service providers of the Parent Borrower or its Subsidiaries pursuant to any equity plan (whether in the form of options, cash settled options or otherwise)) payable to Permitted Payees, as well as applicable employment, social security or similar taxes in connection therewith, to the extent such salary, bonuses, severance and other benefits are attributable and reasonably allocated to the operations of the Parent Borrower and/or its subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose;
(D) to pay audit and other accounting and reporting expenses of such Parent Company to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such expenses, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower Borrowers and/or its their subsidiaries), the Parent Borrower Borrowers and its their subsidiaries;
(ED) for the payment of insurance premiums to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower Representative and/or its subsidiaries), the Parent Borrower any Borrowers and its subsidiaries;
(FE) to pay (x) fees and expenses related to any debt and/or or equity offerings (including refinancings)offerings, investments and/or or acquisitions permitted or not restricted by this Agreement (whether or not consummated, ) relating to any Borrower and including advisory, refinancing, subsequent transaction and exit fees of any Parent Company of the Parent Borrower) and expenses and indemnities of any trustee, agent, arranger, underwriter or similar role its Restricted Subsidiaries and (y) Public Company Costs; and;
(GF) to finance any Investment permitted under Section 6.06 as if such Parent Company were subject to Section Section 6.06 (provided that (x) any Restricted Payment under this clause (a)(i)(G(a)(i)(F) 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 (y) the relevant Parent Company shall, promptly following the closing 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 therewiththereof, cause (I) all property acquired to be contributed to the Parent a Borrower or one or more of its Restricted Subsidiaries Subsidiaries, or (II) the merger, consolidation or amalgamation of the Person formed or acquired into the Parent a Borrower or one or more of its Restricted Subsidiaries, in order to consummate such Investment in compliance with the applicable requirements of Section Section 6.06 as if undertaken as a direct Investment by the Parent such Borrower or the relevant Restricted Subsidiary); and
(G) to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, employees or consultants of any Parent Company (or any Immediate Family Member of any of the foregoing) to the extent such salary, bonuses and other benefits are attributable and reasonably allocated to the operations of the Borrowers and/or their subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose; provided, that with respect to Restricted Payments under clauses (A), (B), (C), (D) and (G) above, such Restricted Payments that are attributable to any Unrestricted Subsidiary shall be permitted only to the extent that either (x) such Unrestricted Subsidiary has made one or more cash distributions, advances or loans to a Borrower or any of its Restricted Subsidiaries for such purpose in an amount up to the amount of such Unrestricted Subsidiary’s proportionate share of such Restricted Payment or (y) the amount of any such Restricted Payment made by a Borrower on behalf of such Unrestricted Subsidiary is treated as an Investment subject to Section 6.06 hereof;
(ii) the Parent Borrower Borrowers may pay (or make Restricted Payments to allow any Parent Company to pay) for the repurchase, redemption, retirement or other acquisition or retirement for value of Capital Stock of any Parent Company or any subsidiary held by any Permitted Payeefuture, present or former employee, director, member of management, officer, manager or consultant (or any Affiliate or Immediate Family Member thereof) of any Parent Company, any Borrower or any subsidiary:
(A) in accordance with the terms of exchange for promissory notes issued pursuant to Section Section 6.01(o), so long as the aggregate amount of all Cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments made pursuant to sub-clause (D(D) of this clause (ii(ii) below, (1) does not exceed the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period 10,000,000 in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to the next subsequent Fiscal Years (until so applied)) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under clause (D) below; plusYear;
(B) with the proceeds of any sale or issuance of, or of any capital contribution in respect of, the Capital Stock of the Parent any Borrower or any Parent Company (to the extent such proceeds are contributed to the Parent Borrower or any Restricted Subsidiary in respect of Qualified Capital Stock issued by the Parent to any Borrower or such any Restricted Subsidiary) (other than amounts constituting a Cure Amount or an Available Excluded Contribution Amount); plus;
(C) with the net proceeds of any key-man life insurance policies; plusor
(D) with Cash and Cash Equivalents in an amount not to exceed, together with the aggregate amount of all cash payments made pursuant to sub-clause (A(A) of this clause (ii(ii) in respect of promissory notes issued pursuant to Section Section 6.01(o), (1) the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period 10,000,000 in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to the next subsequent Fiscal Years (until so applied) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under the immediately preceding clause (1); plus
(E) with the amount of any Cash bonuses otherwise payable to any Permitted Payee that are foregone in exchange for the receipt of Capital Stock of the Parent Borrower or any Parent Company pursuant to any compensation arrangement, including any deferred compensation planYear;
(iii) so long as no Event of Default then exists or would result therefrom, the Parent Borrower Borrowers may make additional Restricted Payments in an amount not to exceed (A) the portion, if any, of the Available Amount on such date that the Parent thesuch Borrower elects to apply to this clause (iii)(A(iii)(A) plus (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Parent such Borrower elects to apply to this clause (iii)(B) (plus, without duplication of amounts referred to in this clause (Biii)(B); provided that, in an amount equal to the Net Proceeds from case of clause (A) above, the Total Leverage Ratio, calculated on a Disposition of property or assets acquired after the Closing DatePro Forma Basis, if the acquisition of such property or assets was financed with Available Excluded Contribution Amounts up to the amount of such Available Excluded Contribution Amount, less any application thereof under Sections 6.04(b)(vi) or 6.06(r))would not exceed 4.50:1.00;
(iv) the Parent Borrower Borrowers may make Restricted Payments (i) to any Parent Company to enable such Parent Company to (A) make Cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of such Parent Company, dividends, share splits, reverse share splits (or any combination thereof) and, mergers, consolidations, amalgamations or other business combinations, and acquisitions and other Investments permitted hereunder and/or (B) honor any conversion request by a holder of Convertible Indebtedness by payment of cash and/or delivery of Capital Stock, make any cash payments in lieu of fractional shares in connection with any conversion of Convertible Indebtedness and otherwise make payments on Convertible Indebtedness in accordance with its terms (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments upon redemption thereof), or, in the case of each of sub-clauses (A) and (B) above, make Restricted Payments to any Parent Company to enable such Parent Company to make the payments and/or deliveries described in such sub-clauses (A) and (B), and (ii) consisting of (A) payments made or expected to be made in respect of withholding or similar Taxes payable by any Permitted Payee future, present or former officers, directors, employees, members of management, managers or consultants of any Borrower, any Restricted Subsidiary or any Parent Company or any of their respective Immediate Family Members and/or (B) repurchases of Capital Stock in consideration of the payments described in sub sub-clause (A(A) above, including demand repurchases in connection with the exercise of stock options and the issuance of restricted stock units or similar stock based awardsoptions;
(v) the Parent Borrower Borrowers may repurchase, redeem, acquire or retire Capital Stock upon repurchase (or make provisions for withholdings in connection with), or make Restricted Payments to any Parent Company to enable it to repurchase, redeem, acquire or retire ) Capital Stock upon (or make provisions for withholdings in connection with), the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represents all or a portion of the exercise price of, or tax withholdings with respect to, of such warrants, options or other securities convertible into or exchangeable for Capital Stock as part of a “cashless” exercise;
(vi) the Parent Borrower Borrowers may make Restricted Payments Payments, the proceeds of which are applied (i) on the Closing Date, solely to effect the consummation of the Transactions and on or about the Amendment No. 1 Effective Date, solely to effect the consummation of the Amendment No. 1 Transactions, (ii) on and after the Closing Date, to satisfy any payment obligations owing, or as otherwise required, under the Acquisition Agreement (including payment of working capital and/or purchase price adjustments) and to pay the Transaction Costs, in each case, with respect to the Transactions, (iii) to satisfy obligations to direct or indirect holders of Capital Stock of the Parent Borrower (immediately prior to giving effect to the Transactions) in connection with, or as a result of, any working capital and/or purchase price adjustments, in each case, with respect to the Transactions and (iv) to satisfy any settlement of claims or actions in connection with the Transactions or to satisfy indemnity or other similar obligations in connection with the TransactionsDividend);
(vii) the Parent any Borrower may (or may make Restricted Payments to any Parent Company to enable it to) make Restricted Payments with respect to any Capital Stock in an amount not to exceed (A) the greater of (x) an amount equal to 7.00% per annum of the net Cash proceeds received by or contributed to the Parent Borrower in connection with the merger of Isos Acquisition Corporation and Bowlero Corp. on December 15, 2021 and the other transactions consummated in connection therewith and (y) an amount equal to 7.00% per annum of the Market Capitalization of the Parent Borrower (or its direct or indirect Parent Company, as applicable) and its subsidiaries minus (B) any utilization of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A)Borrower;
(viii) the Parent Borrower Borrowers may make Restricted Payments to (i) redeem, repurchase, defease, discharge, retire or otherwise acquire any (A) Capital Stock (“Treasury Capital Stock”) of the Parent any Borrower and/or any Restricted Subsidiary or (B) Capital Stock of any Parent Company, in the case of each of subclauses (A(A) and (B(B), in exchange for, or out of the proceeds of the substantially concurrent sale (other than to the Parent a Borrower and/or any Restricted Subsidiary) of, Qualified Capital Stock of the Parent any Borrower or any Parent Company to the extent any such proceeds are contributed to the capital of the Parent any Borrower and/or any Restricted Subsidiary 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 the Parent a Borrower or a Restricted Subsidiary) of any Refunding Capital Stock;
(ix) to the extent constituting a Restricted Payment, the Parent any Borrower may consummate any transaction permitted by Section 5.19 (other than Section 5.19(d)), Section Section 6.06 (other than Sections 6.06(j6.06(j) and (t(t)) and Section Section 6.07 (other than Section Section 6.07(g));
(x) the Parent Borrower may make additional Restricted Payments in an aggregate amount not to exceed (A) the greater of $85,000,000 and 25% of Consolidated Adjusted EBITDA 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);[Reserved]; and
(xi) the Parent Borrower Borrowers may pay any dividend or other distribution or consummate any redemption within 60 days after the date of 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 dividend or redemption notice would have complied with the provisions hereof.
(b) Neither Holdings nor any Borrower shall, nor shall they permit any Restricted Subsidiary to, make any payment (whether in Cash, securities or other property) on or in respect of this Section 6.04(aprincipal of or interest on (x) any Junior Lien Indebtedness or (y) any unsecured Indebtedness or Junior Indebtedness (such Indebtedness under clauses (x), (y) and (z), the “Restricted Debt”), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Restricted Debt prior to its scheduled maturity (collectively, “Restricted Debt Payments”), except:
(i) any purchase, defeasance, redemption, repurchase, repayment or other acquisition or retirement of any Restricted Debt made by exchange for, or out of the proceeds of, the substantially concurrent incurrence of Refinancing Indebtedness permitted by Section 6.01(p);
(xiiii) the Parent Borrower may make catch-up payment; payments as part of an “applicable high yield discount obligation”
(iii) payments of regularly scheduled interest as and when due in respect of any Restricted Payment constituting Debt, except for any payments with respect to any Subordinated Indebtedness that are prohibited by the distribution or payment of Receivables Feessubordination provisions thereof;
(xiiiiv) [Reserved];
(A) Restricted Debt Payments in exchange for, or with proceeds of any issuance of, Qualified Capital Stock of any Borrower and/or any Restricted Subsidiary and/or any capital contribution in respect of Qualified Capital Stock of any Borrower or any Restricted Subsidiary, (B) Restricted Debt Payments as a result of the conversion of all or any portion of any Restricted Debt into Qualified Capital Stock of any Borrower 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 to the extent that the incurrence of such additional Restricted Debt is permitted under Section 6.01; and
(vi) so long as no Event of Default exists or would result therefrom, Restricted Debt Payments in an aggregate amount not to exceed (A) the Parent portion, if any, of the Available Amount on such date that any Borrower may make additional Restricted Payments so long aselects to apply to this clause (vi)(A) plus (B) the portion, as measured at if any, of the time Available Excluded Contribution Amount on such date that any Borrower elects to apply to this clause (vi)(B); provided for that, in Section 1.04(e)the case of clause (A) above, (i) the Total Leverage Ratio would not exceed 4.00:1.00Ratio, calculated on a Pro Forma Basis and (ii) there shall exist no Event of Default hereunder or shall result therefrom;
(xiv) the Parent Borrower may make additional Restricted Payments in an amount Basis, would not to exceed the amount of proceeds received by the Parent Borrower and/or any Restricted Subsidiary under the Representation and Warranty Insurance Policy during the term of this Agreement;
(xv) (A) for any taxable period for which the Parent Borrower and/or any of its Subsidiaries are members of a consolidated, combined or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which a direct or indirect parent of the Parent Borrower is the common parent (a “Tax Group”), or for which the Parent Borrower is a disregarded entity for U.S. federal income tax purposes wholly-owned by a corporate parent (a “Corporate Parent”), the Parent Borrower and each of its Subsidiaries may make Restricted Payments the proceeds of which shall be used by such common parent to pay the portion of any consolidated, combined or similar U.S. federal, state or local income Taxes of such Tax Group, or by the Corporate Parent to pay the portion of the U.S. federal, state or local income Taxes of such Corporate Parent, or any franchise taxes imposed in lieu thereof, for such taxable period that are attributable to the income of the Parent Borrower and/or its Subsidiaries, provided that such amount shall not be greater than the amount of such U.S. federal, state or local income taxes that would be paid (for such taxable period) by the Parent Borrower and its Subsidiaries if the Parent Borrower and/or such Subsidiaries had been a stand-alone corporate taxpayer (or stand-alone group of corporate taxpayers filing on a consolidated, combined or similar basis) for all taxable years ending after the Closing Date (taking into account any net operating loss carryforwards attributable to the Parent Borrower and its Subsidiaries, as the case may be) and (B) without duplication of Restricted Payments made under Section 6.04(a)(xv)(A), for any taxable period for which the Parent Borrower is treated as a partnership for U.S. federal and/or applicable state or local income tax purposes, the Parent Borrower may make Restricted Payments to its equity owners at the times and in the amoun4.50:1.00.
Appears in 1 contract
Sources: Credit Agreement (Indivior PLC)
Restricted Payments; Certain Payments of Indebtedness. (a) The Parent Lead Borrower shall not pay or make, directly or indirectly, any Restricted Payment, except that:
(i) the Parent Lead Borrower may make Restricted Payments to the extent necessary to permit any Parent Company:
(A) to pay general operating and compliance administrative costs and expenses (including corporate overhead, legal or similar expenses and customary salary, fees, bonus and other benefits payable to directors, officers, employees, members of management, managers and/or consultants of any Parent Company)) and franchise fees and Taxes and similar fees, Taxes and expenses required to enable such Parent Company to maintain its organizational existence or qualification to do business, in each case, which are reasonable and customary and incurred in the ordinary course of business, plus any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of any Parent Company, in each case, to the extent attributable to the ownership or operations of any Parent Company and its subsidiaries (but excluding, for the avoidance of doubt, excluding the portion of any such amount, if any, amount that is attributable to the ownership or operations of any subsidiary of any Parent Company other than the Borrowers and their subsidiaries);
(B) to discharge the consolidated, combined, unitary or similar Tax liabilities of such Parent Company and its subsidiaries when and as due, to the extent such liabilities are attributable to the operations of any Parent Company (but excluding, for the avoidance of doubt, the portion of any such Tax liabilities, if any, that is attributable to the operations of any subsidiary of any Parent Company other than the Lead Borrower and/or its subsidiaries), the Parent Lead Borrower and/or and its subsidiaries;
subsidiaries; provided that the amount paid by the Lead Borrower pursuant to this paragraph (B) to pay franchise, excise shall not exceed the amount of Tax liabilities that would be due if the Lead Borrower and each Restricted Subsidiary were separate corporations filing income and similar TaxesTax returns on a consolidated, and other feescombined, Taxes and expenses, required to maintain unitary or similar basis with the organizational existence Lead Borrower as the common parent of such Parent Company;
affiliated group (Ccalculated at the highest combined applicable federal, state, local and foreign Tax rate); provided further that Restricted Payments under this Section 6.04(a)(i)(B) to pay customary salary, bonus, long-term incentive, severance and other benefits (including payment to certain service providers of the Parent Borrower or its Subsidiaries pursuant that are attributable to any equity plan (whether in the form of options, cash settled options Unrestricted Subsidiary or otherwise)) payable to Permitted Payees, as well as applicable employment, social security or similar taxes in connection therewith, any joint venture shall be permitted only to the extent that either (x) such salaryUnrestricted Subsidiary has made one or more Cash distributions, bonuses, severance and other benefits are attributable and reasonably allocated advances or loans to the operations Lead Borrower or any of its Restricted Subsidiaries for such purpose in an amount up to the Parent Borrower and/or its subsidiariesamount of such Unrestricted Subsidiary’s or joint venture’s, in each caseas applicable, so long as proportionate share of such Parent Company applies Tax liabilities or (y) the amount of any such Restricted Payment for made by the Lead Borrower on behalf of such purpose;Unrestricted Subsidiary or joint venture is treated as an Investment subject to Section 6.06 hereof;
(DC) to pay audit and other accounting and reporting expenses of such Parent Company to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such expenses, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower Borrowers and/or its their subsidiaries), the Parent Borrower Borrowers and its subsidiaries;their subsidiaries;
(ED) for the payment of insurance premiums and deductibles to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower Borrowers and/or its their subsidiaries), the Parent Borrower Borrowers and its subsidiaries;their subsidiaries;
(FE) to pay (x) fees and expenses related to any debt and/or or equity offerings (including refinancings)offerings, investments and/or or acquisitions permitted or not restricted by this Agreement (whether or not consummated, ) relating to the Borrowers and including advisory, refinancing, subsequent transaction and exit fees of any Parent Company of the Parent Borrower) and expenses and indemnities of any trustee, agent, arranger, underwriter or similar role their Restricted Subsidiaries and (y) Public Company Costs; andCosts;
(GF) to finance any Investment permitted under Section 6.06 as if such Parent Company were subject to Section Section 6.06 (provided that (x) any Restricted Payment under this clause (a)(i)(G(a)(i)(F) 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 (y) the relevant Parent Company shall, promptly following the closing 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 therewiththereof, cause (I) all property acquired to be contributed to the Parent Borrower Borrowers or one or more of its their Restricted Subsidiaries Subsidiaries, or (II) the merger, consolidation or amalgamation of the Person formed or acquired into the Parent Borrower Borrowers or one or more of its their Restricted Subsidiaries, in order to consummate such Investment in compliance with the applicable requirements of Section Section 6.06 as if undertaken as a direct Investment by the Parent Borrower Borrowers or the relevant Restricted Subsidiary); and
(G) to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, employees or consultants of any Parent Company (or any Immediate Family Member of any of the foregoing) to the extent such salary, bonuses and other benefits are attributable and reasonably allocated to the operations of the Borrowers and/or their subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose; provided that with respect to Restricted Payments under clauses (A), (B), (C), (D) and (G) above, such Restricted Payments that are attributable to any Unrestricted Subsidiary shall be permitted only to the extent that either (x) such Unrestricted Subsidiary has made one or more Cash distributions, advances or loans to the Borrowers or any of their Restricted Subsidiaries for such purpose in an amount up to the amount of such Unrestricted Subsidiary);’s proportionate share of such Restricted Payment or (y) the amount of any such Restricted Payment made by the applicable Borrower on behalf of such Unrestricted Subsidiary is treated as an Investment subject to Section 6.06 hereof;
(ii) the Parent Lead Borrower may pay (or make Restricted Payments to allow any Parent Company to pay) for the repurchase, redemption, retirement or other acquisition or retirement for value of Capital Stock of any Parent Company Company, any subsidiary or any subsidiary of their respective Affiliates held by any Permitted Payeefuture, present or former employee, director, member of management, officer, manager, advisor or consultant (or any Affiliate or Immediate Family Member thereof) of any Parent Company, the Borrowers, any subsidiary or any of their respective Affiliates:
(A) in accordance with the terms of promissory notes issued pursuant to Section Section 6.01(o), so long as the aggregate amount of all Cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments made pursuant to sub-clause (D(D) of this clause (ii(ii) below, (1) does not exceed the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period 5,000,000 in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to the next subsequent Fiscal Years Year (until so applied)) minus (2) provided that no more than $10 million may be carried forward in any utilization of the Available RP Capacity Amount in reliance on unused capacity under clause (D) below; plusFiscal Year);
(B) with the proceeds of any sale or issuance of, or of any capital contribution in respect of, the Capital Stock of the Parent Borrower Borrowers or any Parent Company (to the extent such proceeds are contributed to the Parent Borrower or any Restricted Subsidiary in respect of Qualified Capital Stock issued by to the Parent Borrower Borrowers or such any Restricted Subsidiary) (other than amounts constituting a Cure Amount or an Available Excluded Contribution Amount); plusSubsidiary);
(C) with the net proceeds of any key-man life insurance policies; pluspolicies; or
(D) with Cash and Cash Equivalents in an amount not to exceed, together with the aggregate amount of all cash Cash payments made pursuant to sub-clause (A(A) of this clause (ii(ii) in respect of promissory notes issued pursuant to Section Section 6.01(o), (1) the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period 5,000,000 in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to the next subsequent Fiscal Years Year (until so applied) minus (2) provided that no more than $10 million may be carried forward in any utilization of the Available RP Capacity Amount in reliance on unused capacity under the immediately preceding clause (1); plus
(E) with the amount of any Cash bonuses otherwise payable to any Permitted Payee that are foregone in exchange for the receipt of Capital Stock of the Parent Borrower or any Parent Company pursuant to any compensation arrangement, including any deferred compensation plan;Fiscal Year);
(iii) the Parent Lead Borrower may make additional Restricted Payments in an amount not to exceed (A) the portion, if any, of the Available Amount on such date that the Parent Lead Borrower elects to apply to this clause (iii)(A(iii)(A); provided that (A) no Default or Event of Default has occurred and is continuing or would result therefrom and (B) the Fixed Charge Coverage Ratio, calculated on a Pro Forma Basis, would not be less than 2.00:1.00 as of the last day of the Test Period most recently ended prior to such Restricted Payment for which the financial statements required by Section 5.01(a) or 5.01(b), as the case may be, have been delivered plus (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Parent Lead Borrower elects to apply to this clause (iii)(B) (plus, without duplication of amounts 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 with Available Excluded Contribution Amounts up to the amount of such Available Excluded Contribution Amount, less any application thereof under Sections 6.04(b)(vi) or 6.06(r));iii)(B);
(iv) the Parent Lead Borrower may make Restricted Payments (i) to any Parent Company to enable such Parent Company to (A) make Cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of such Parent Company, dividends, share splits, reverse share splits (or any combination thereof) and, mergers, consolidations, amalgamations or other business combinations, and acquisitions and other Investments permitted hereunder and/or (B) honor any conversion request by a holder of Convertible Indebtedness by payment of cash and/or delivery of Capital Stock, make any cash payments in lieu of fractional shares in connection with any conversion of Convertible Indebtedness and otherwise make payments on Convertible Indebtedness in accordance with its terms (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments upon redemption thereof), or, in the case of each of sub-clauses (A) and (B) above, make Restricted Payments to any Parent Company to enable such Parent Company to make the payments and/or deliveries described in such sub-clauses (A) and (B), and (ii) consisting of (A) payments made or expected to be made in respect of withholding or similar Taxes payable by any Permitted Payee future, present or former officers, directors, employees, members of management, managers or consultants of the Borrowers, any Restricted Subsidiary or any Parent Company or any of their respective Immediate Family Members and/or (B) repurchases of Capital Stock in consideration of the payments described in sub sub-clause (A(A) above, including demand repurchases in connection with the exercise of stock options and the issuance of restricted stock units or similar stock based awards;options;
(v) the Parent Lead Borrower may repurchase, redeem, acquire or retire Capital Stock upon repurchase (or make provisions for withholdings in connection with), or make Restricted Payments to any Parent Company to enable it to repurchase, redeem, acquire or retire ) Capital Stock upon (or make provisions for withholdings in connection with), the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represents all or a portion of the exercise price of, or tax withholdings with respect to, of such warrants, options or other securities convertible into or exchangeable for Capital Stock as part of a “cashless” exercise;exercise;
(vi) the Parent Lead Borrower may make Restricted Payments Payments, the proceeds of which are applied (i) on the Closing Date, solely to effect the consummation of the Transactions and on or about the Amendment No. 1 Effective Date, solely to effect the consummation of the Amendment No. 1 Transactions, (ii) on and after the Closing Date, to satisfy any payment obligations owing, or as otherwise required, under the Acquisition Agreement (including payment of working capital and/or purchase price adjustments) and to pay Transaction Costs, in each case, with respect to the Transactions, (iii) to satisfy obligations to direct or indirect holders of Capital Stock of the Parent Borrower (immediately prior to giving effect to the Transactions) in connection with, or as a result of, any working capital and/or purchase price adjustments, in each case, with respect to the Transactions and (iv) to satisfy any settlement of claims or actions in connection with the Transactions or to satisfy indemnity or other similar obligations in connection with the Transactions;Transactions;
(vii) the Parent Lead Borrower may (or may make Restricted Payments to any Parent Company to enable it to) Holdings (and Holdings may in turn make such Restricted Payments with respect to any Capital Stock Super Holdco) from time to time in an amount not sufficient to exceed enable Super Holdco to fund each scheduled payment of the Regular Cash Dividend; provided that (A) the greater no Default or Event of (x) an amount equal to 7.00% per annum of the net Cash proceeds received by Default exists or contributed to the Parent Borrower in connection with the merger of Isos Acquisition Corporation would result therefrom and Bowlero Corp. on December 15, 2021 and the other transactions consummated in connection therewith and (y) an amount equal to 7.00% per annum of the Market Capitalization of the Parent Borrower (or its direct or indirect Parent Company, as applicable) and its subsidiaries minus (B) any utilization the Fixed Charge Coverage Ratio, calculated on a Pro Forma Basis, would not be less than 2.00:1.00 as of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (Alast day of the Test Period most recently ended prior to such Restricted Payment for which the financial statements required by Section 5.01(a) or 5.01(b);, as the case may be, have been delivered;
(viii) the Parent Lead Borrower may make Restricted Payments to (i) redeem, repurchase, defease, discharge, retire or otherwise acquire any (A) Capital Stock (“Treasury Capital Stock”) of the Parent Borrower Borrowers and/or any Restricted Subsidiary or Subsidiary, (B) Capital Stock of any Parent Company, in the case of each of subclauses (Asub-clauses (A) and (B(B), in exchange for, or out of the proceeds of the substantially concurrent sale (other than to the Parent Lead Borrower and/or any Restricted Subsidiary) of, Qualified Capital Stock of the Parent Borrower Borrowers or any Parent Company to the extent any such proceeds are contributed to the capital of the Parent Borrower Borrowers and/or any Restricted Subsidiary in respect of Qualified Capital Stock (“Refunding Capital Stock”), and/or (C) Capital Stock of any Parent Company owned by any present or former employees, directors, members of management, officers, managers or consultants or independent contractors (or their respective Immediate Family Members) of any Parent Company in an amount equal to any tax liability paid on behalf of such employee, director, member of management, officer, manager or consultant or independent contractor (or their respective Immediate Family Members) arising from the vesting of such 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 the Parent applicable Lead Borrower or a Restricted Subsidiary) of any Refunding Capital Stock;Stock;
(ix) to the extent constituting a Restricted Payment, the Parent Lead Borrower may consummate any transaction permitted by Section 5.19 (other than Section 5.19(d)), Section Section 6.06 (other than Sections 6.06(j6.06(j) and (t(t)) and Section ), Section 6.07 (other than Section Section 6.07(g));) and Section 6.09 (other than Section 6.09(d));
(x) the Parent Lead Borrower may make additional Restricted Payments in an aggregate amount not to exceed (A) the greater of $85,000,000 75,000,000 and 2510% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period minus (BA) the amount of Restricted Debt Payments made by the Borrowers or any utilization of the Available RP Capacity Amount Restricted Subsidiary in reliance on unused capacity under immediately preceding clause (ASection 6.04(b)(iv);, minus (B) the outstanding amount of Investments made by a Borrower or any Restricted Subsidiary in reliance on Section 6.06(q)(ii);
(xi) the Parent Lead Borrower may pay any dividend or other distribution or consummate any redemption within 60 days after the date of 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 dividend or redemption notice would have complied with the provisions of this Section 6.04(a);hereof;
(xii) the Parent Lead Borrower may make any Restricted Payment constituting purchase, redeem or otherwise acquire its common Capital Stock with the distribution or payment proceeds received from the substantially concurrent issuance of Receivables Fees;new common Capital Stock of the Borrowers; and
(xiii) the Parent Lead Borrower may make additional Restricted Payments so long as, as measured at the time provided for in Section 1.04(e), (iA) no Default or Event of Default exists or would result therefrom and (B) the Total Net Leverage Ratio would not exceed 4.00:1.00. calculated on a Pro Forma Basis as of the last day of the most recently ended Test Period.
(b) The Borrowers shall not, nor shall they permit any Restricted Subsidiary to, make any payment (whether in Cash, securities or other property) on or in respect of principal of or interest on (x) any Junior Lien Indebtedness or (y) any Junior Indebtedness (such Indebtedness under clauses (x) and (y), the “Restricted Debt”), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Restricted Debt prior to its scheduled maturity (collectively, “Restricted Debt Payments”), except:
(i) any 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 an “applicable high yield discount obligation” catchup payment;
(iii) payments of regularly scheduled interest as and when due in respect of any Restricted Debt, except for any payments with respect to any Subordinated Indebtedness that are prohibited by the subordination provisions thereof;
(iv) so long as, at the time of delivery of irrevocable notice with respect thereto, no Event of Default exists or would result therefrom, additional Restricted Debt Payments in an aggregate amount not to exceed the greater of $75,000,000 and 10% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period, minus (A) the outstanding amount of Investments made in reliance on Section 6.06(q)(ii), minus (B) the amount of Restricted Payments made in reliance on Section 6.04(a)(x);
(A) Restricted Debt Payments in exchange for, or with proceeds of any issuance of, Qualified Capital Stock of the Borrowers and/or any Restricted Subsidiary and/or any capital contribution in respect of Qualified Capital Stock of the Borrowers or any Restricted Subsidiary, (B) Restricted Debt Payments as a result of the conversion of all or any portion of any Restricted Debt into Qualified Capital Stock of the Borrowers and/or any Restricted Subsidiary and (C) to the extent constituting a Restricted Debt Payment, paymentinkind interest with respect to any Restricted Debt that is permitted under Section 6.01;
(vi) Restricted Debt Payments in an aggregate amount not to exceed (A) the portion, if any, of the Available Amount on such date that the Borrowers elect to apply to this clause (vi)(A); provided, that (A) no Default or Event of Default has occurred and is continuing or would result therefrom and (B) the Fixed Charge Coverage Ratio, calculated on a Pro Forma Basis and (ii) there shall exist no Event of Default hereunder or shall result therefrom;
(xiv) the Parent Borrower may make additional Restricted Payments in an amount Basis, would not to exceed the amount of proceeds received by the Parent Borrower and/or any Restricted Subsidiary under the Representation and Warranty Insurance Policy during the term of this Agreement;
(xv) (A) for any taxable period for which the Parent Borrower and/or any of its Subsidiaries are members of a consolidated, combined or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which a direct or indirect parent be less than 2.00:1.00 as of the Parent Borrower is the common parent (a “Tax Group”), or for which the Parent Borrower is a disregarded entity for U.S. federal income tax purposes wholly-owned by a corporate parent (a “Corporate Parent”), the Parent Borrower and each of its Subsidiaries may make Restricted Payments the proceeds of which shall be used by such common parent to pay the portion of any consolidated, combined or similar U.S. federal, state or local income Taxes of such Tax Group, or by the Corporate Parent to pay the portion last day of the U.S. federal, state or local income Taxes of Test Period most recently ended prior to such Corporate Parent, or any franchise taxes imposed in lieu thereof, for such taxable period that are attributable to the income of the Parent Borrower and/or its Subsidiaries, provided that such amount shall not be greater than the amount of such U.S. federal, state or local income taxes that would be paid (for such taxable period) by the Parent Borrower and its Subsidiaries if the Parent Borrower and/or such Subsidiaries had been a stand-alone corporate taxpayer (or stand-alone group of corporate taxpayers filing on a consolidated, combined or similar basis) for all taxable years ending after the Closing Date (taking into account any net operating loss carryforwards attributable to the Parent Borrower and its Subsidiaries, as the case may be) and (B) without duplication of Restricted Payments made under Section 6.04(a)(xv)(A), for any taxable period for which the Parent Borrower is treated as a partnership for U.S. federal and/or applicable state or local income tax purposes, the Parent Borrower may make Restricted Payments to its equity owners at the times and in the amounRe
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) The Parent Borrower shall not pay or make, directly or indirectly, any Restricted Payment, except that:
(i) the Parent Borrower may make Restricted Payments to the extent necessary to permit any Parent Company:;
(A) to pay (x) general operating and compliance administrative costs and expenses (including corporate overhead, legal or similar expenses) and franchise fees and taxes and similar fees, taxes and expenses and customary salary, bonus and other benefits payable required to directors, officers, employees, members maintain the organizational existence of management, managers and/or consultants of any such Parent Company), in each case, which are reasonable and customary and incurred in the ordinary course of business, plus any reasonable and customary indemnification claims made by directors, officers, members of management, managers, management or employees or consultants of any Parent Company, in each case, to the extent attributable to the ownership or operations of any of PC Intermediate, any “Borrower” under the ABL Credit Agreement and the Restricted Subsidiaries and (y) without duplication of preceding clause (x), any Public Company Costs;
(B) to discharge, when and as due, tax liabilities of Issuer, or of any person that is a member of any consolidated, combined or similar income tax group of which Issuer is a member;
(C) to pay audit and other accounting and reporting expenses at such Parent Company (but excluding, for to the avoidance of doubt, the portion of any such amount, if any, that is attributable extent relating to the ownership or operations of any subsidiary of any Parent Company other than “Borrower” under the Parent Borrower and/or its subsidiaries), ABL Credit Agreement and the Parent Borrower and/or its subsidiariesRestricted Subsidiaries;
(BD) for the payment of insurance premiums to the extent relating to the ownership or operations of any “Borrower” under the ABL Credit Agreement and the Restricted Subsidiaries;
(E) pay fees and expenses related to debt or equity offerings, investments or acquisitions permitted by this Indenture (whether or not consummated);
(F) to pay franchise, excise and similar Taxes, and other fees, Taxes and expenses, required the consideration to maintain finance any Investment permitted under Section 4.08 (provided that (x) such Restricted Payments under this clause (a)(i)(F) shall be made substantially concurrently with the organizational existence closing of such Investment and (y) such Parent Company;Company shall, promptly following the closing thereof, cause all such property acquired to be contributed to any “Borrower” under the ABL Credit Agreement or one of the Restricted Subsidiaries, or the merger or amalgamation of the Person formed or acquired into any “Borrower” under the ABL Credit Agreement or one of the Restricted Subsidiaries, in order to consummate such Investment in a manner that causes such Investment to comply with the applicable requirements of Section 4.08 as if undertaken as a direct Investment by such Person or such Restricted Subsidiary); and
(CG) without duplication of clause (A)(y) above, to pay customary salary, bonus, long-term incentive, severance bonus and other benefits (including payment to certain service providers of the Parent Borrower or its Subsidiaries pursuant to any equity plan (whether in the form of options, cash settled options or otherwise)) payable to Permitted Payeesdirectors, as well as applicable employmentofficers, social security members of management or similar taxes in connection therewith, employees of any Parent Company to the extent such salary, bonuses, severance bonuses and other benefits are directly attributable and reasonably allocated to the operations of any “Borrower” under the Parent Borrower and/or its subsidiariesABL Credit Agreement and the Restricted Subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose;
(D) to pay audit and other accounting and reporting expenses of such Parent Company to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such expenses, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries;
(E) for the payment of insurance premiums to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries;
(F) to pay (x) fees and expenses related to any debt and/or equity offerings (including refinancings), investments and/or acquisitions permitted or not restricted by this Agreement (whether or not consummated, and including advisory, refinancing, subsequent transaction and exit fees of any Parent Company of the Parent Borrower) and expenses and indemnities of any trustee, agent, arranger, underwriter or similar role and (y) Public Company Costs; and
(G) to finance any Investment permitted under Section 6.06 as if such Parent Company were subject to Section 6.06 (provided that (x) any Restricted Payment under this clause (a)(i)(G) 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 (y) the relevant Parent Company shall, promptly following the closing 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 (I) all property acquired to be contributed to the Parent Borrower or one or more of its Restricted Subsidiaries or (II) the merger, consolidation or amalgamation of the Person formed or acquired into the Parent Borrower or one or more of its Restricted Subsidiaries, in order to consummate such Investment in compliance with the applicable requirements of Section 6.06 as if undertaken as a direct Investment by the Parent Borrower or the relevant Restricted Subsidiary);
(ii) the Parent Borrower may pay (or make Restricted Payments to allow any Parent Company to pay) for the repurchase, redemption, retirement or other acquisition or retirement for value of Capital Stock of any Parent Company or any subsidiary held by any Permitted Payee:future, present or former employee, director, member of management, officer, manager or consultant (or any Affiliate or Immediate Family Member thereof) of any Parent Company, any “Borrower” under the ABL Credit Agreement or any Restricted Subsidiary;
(A) in accordance with the terms of promissory exchange for notes issued pursuant to Section 6.01(oSection 4.03(o), so long as the aggregate amount of all Cash cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments made (x) pursuant to sub-clause (D(D) of this clause (ii) belowbelow and (y) pursuant to Section 4.06(a)(iv), (1) does not exceed the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period 5,750,000 in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to the next subsequent Fiscal Years (until so applied)) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under clause (D) below; plusYear;
(B) with the proceeds of any sale or issuance of, or of any capital contribution in respect of, the Capital Stock of the Parent Borrower or any Parent Company (to the extent such proceeds are contributed to the Parent Borrower or any Restricted Subsidiary in respect of Qualified Capital Stock issued by the Parent Borrower or such Restricted Subsidiary) (other than amounts constituting a Cure Amount or an Available Excluded Contribution Amount); plus[Reserved];
(C) with the in exchange for net proceeds of any key-man life insurance policiespolicies received during such fiscal year; plusor
(D) with in exchange for Cash and Cash Equivalents in an amount not to exceed, together with (x) the aggregate amount of all cash payments made pursuant to sub-clause (A) of this clause (ii) in respect of promissory notes issued pursuant to Section 6.01(o), (1Section 4.03(o) the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under the immediately preceding clause (1); plus
(E) with the amount of any Cash bonuses otherwise payable to any Permitted Payee that are foregone in exchange for the receipt of Capital Stock of the Parent Borrower or any Parent Company pursuant to any compensation arrangement, including any deferred compensation plan;
(iii) the Parent Borrower may make additional Restricted Payments in an amount not to exceed (A) the portion, if any, of the Available Amount on such date that the Parent Borrower elects to apply to this clause (iii)(A) plus (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Parent Borrower elects to apply to this clause (iii)(B) (plus, without duplication of amounts 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 with Available Excluded Contribution Amounts up to the amount of such Available Excluded Contribution Amount, less any application thereof under Sections 6.04(b)(vi) or 6.06(r));
(iv) the Parent Borrower may make Restricted Payments (i) to any Parent Company to enable such Parent Company to (A) make Cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of such Parent Company, dividends, share splits, reverse share splits (or any combination thereof) and, mergers, consolidations, amalgamations or other business combinations, and acquisitions and other Investments permitted hereunder and/or (B) honor any conversion request by a holder of Convertible Indebtedness by payment of cash and/or delivery of Capital Stock, make any cash payments in lieu of fractional shares in connection with any conversion of Convertible Indebtedness and otherwise make payments on Convertible Indebtedness in accordance with its terms (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments upon redemption thereof), or, in the case of each of sub-clauses (A) and (B) above, make Restricted Payments to any Parent Company to enable such Parent Company to make the payments and/or deliveries described in such sub-clauses (A) and (B), and (ii) consisting of (A) payments made or expected to be made in respect of withholding or similar Taxes payable by any Permitted Payee and/or (B) repurchases of Capital Stock in consideration of the payments described in sub clause (A) above, including demand repurchases in connection with the exercise of stock options and the issuance of restricted stock units or similar stock based awards;
(v) the Parent Borrower may repurchase, redeem, acquire or retire Capital Stock upon (or make provisions for withholdings in connection with), or make Restricted Payments to any Parent Company to enable it to repurchase, redeem, acquire or retire Capital Stock upon (or make provisions for withholdings in connection with), the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represents all or a portion of the exercise price of, or tax withholdings with respect to, such warrants, options or other securities convertible into or exchangeable for Capital Stock as part of a “cashless” exercise;
(vi) the Parent Borrower may make Restricted Payments the proceeds of which are applied (i) on the Closing Date, solely to effect the consummation of the Transactions and on or about the Amendment No. 1 Effective Date, solely to effect the consummation of the Amendment No. 1 Transactions, (ii) on and after the Closing Date, to satisfy any payment obligations owing, or as otherwise required, under the Acquisition Agreement (including payment of working capital and/or purchase price adjustments) and to pay Transaction Costs, in each case, with respect to the Transactions, (iii) to satisfy obligations to direct or indirect holders of Capital Stock of the Parent Borrower (immediately prior to giving effect to the Transactions) in connection with, or as a result of, any working capital and/or purchase price adjustments, in each case, with respect to the Transactions and (iv) to satisfy any settlement of claims or actions in connection with the Transactions or to satisfy indemnity or other similar obligations in connection with the Transactions;
(vii) the Parent Borrower may (or may make Restricted Payments to any Parent Company to enable it to) make Restricted Payments with respect to any Capital Stock in an amount not to exceed (A) the greater of (x) an amount equal to 7.00% per annum of the net Cash proceeds received by or contributed to the Parent Borrower in connection with the merger of Isos Acquisition Corporation and Bowlero Corp. on December 15, 2021 and the other transactions consummated in connection therewith and (y) an amount equal to 7.00% per annum of the Market Capitalization of the Parent Borrower (or its direct or indirect Parent Company, as applicable) and its subsidiaries minus (B) any utilization of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A);
(viii) the Parent Borrower may make Restricted Payments to (i) redeem, repurchase, defease, discharge, retire or otherwise acquire any (A) Capital Stock (“Treasury Capital Stock”) of the Parent Borrower and/or any Restricted Subsidiary or (B) Capital Stock of any Parent Company, in the case of each of subclauses (A) and (B), in exchange for, or out of the proceeds of the substantially concurrent sale (other than to the Parent Borrower and/or any Restricted Subsidiary) of, Qualified Capital Stock of the Parent Borrower or any Parent Company to the extent any such proceeds are contributed to the capital of the Parent Borrower and/or any Restricted Subsidiary 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 the Parent Borrower or a Restricted Subsidiary) of any Refunding Capital Stock;
(ix) to the extent constituting a Restricted Payment, the Parent Borrower may consummate any transaction permitted by Section 5.19 (other than Section 5.19(d)), Section 6.06 (other than Sections 6.06(j) and (t)) and Section 6.07 (other than Section 6.07(g));
(x) the Parent Borrower may make additional Restricted Payments in an aggregate amount not to exceed (A) the greater of $85,000,000 and 25% of Consolidated Adjusted EBITDA 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);
(xi) the Parent Borrower may pay any dividend or other distribution or consummate any redemption within 60 days after the date of 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);
(xii) the Parent Borrower may make any Restricted Payment constituting the distribution or payment of Receivables Fees;
(xiii) the Parent Borrower may make additional Restricted 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 Event of Default hereunder or shall result therefrom;
(xiv) the Parent Borrower may make additional Restricted Payments in an amount not to exceed the amount of proceeds received by the Parent Borrower and/or any Restricted Subsidiary under the Representation and Warranty Insurance Policy during the term of this Agreement;
(xv) (A) for any taxable period for which the Parent Borrower and/or any of its Subsidiaries are members of a consolidated, combined or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which a direct or indirect parent of the Parent Borrower is the common parent (a “Tax Group”), or for which the Parent Borrower is a disregarded entity for U.S. federal income tax purposes wholly-owned by a corporate parent (a “Corporate Parent”), the Parent Borrower and each of its Subsidiaries may make Restricted Payments the proceeds of which shall be used by such common parent to pay the portion of any consolidated, combined or similar U.S. federal, state or local income Taxes of such Tax Group, or by the Corporate Parent to pay the portion of the U.S. federal, state or local income Taxes of such Corporate Parent, or any franchise taxes imposed in lieu thereof, for such taxable period that are attributable to the income of the Parent Borrower and/or its Subsidiaries, provided that such amount shall not be greater than the amount of such U.S. federal, state or local income taxes that would be paid (for such taxable period) by the Parent Borrower and its Subsidiaries if the Parent Borrower and/or such Subsidiaries had been a stand-alone corporate taxpayer (or stand-alone group of corporate taxpayers filing on a consolidated, combined or similar basis) for all taxable years ending after the Closing Date (taking into account any net operating loss carryforwards attributable to the Parent Borrower and its Subsidiaries, as the case may be) and (B) without duplication of Restricted Payments made under Section 6.04(a)(xv)(A), for any taxable period for which the Parent Borrower is treated as a partnership for U.S. federal and/or applicable state or local income tax purposes, the Parent Borrower may make Restricted Payments to its equity owners at the times and in the amounpursuant to
Appears in 1 contract
Sources: Indenture (Party City Holdco Inc.)
Restricted Payments; Certain Payments of Indebtedness. (a) The Parent Borrower shall not pay or make, directly or indirectly, any Restricted Payment, except that:
(i) the Parent Borrower may make Restricted Payments to the extent necessary to permit any Parent Company:
(A) to pay general operating and compliance administrative costs and expenses (including corporate overhead, legal or similar expenses, expenses to prepare any Tax returns or defend any Tax claims, and customary salary, bonus and other benefits payable to directors, officers, employees, members of management, managers and/or consultants of any Parent Company)) and franchise fees and Taxes and similar fees, Taxes and expenses required to enable such Parent Company to maintain its organizational existence or qualification to do business, in each case, which are reasonable and customary and incurred in the ordinary course of business, plus any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of any Parent Company, in each case, to the extent attributable to the ownership or operations of any Parent Company and its subsidiaries (but excluding, for the avoidance of doubt, excluding the portion of any such amount, if any, amount that is attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or and its subsidiaries), the Parent Borrower and/or its subsidiaries;
(B) to pay franchise, excise scheduled and similar Taxes, overdue interest and other fees, Taxes and expenses, required to maintain the organizational existence payments as part of such Parent Company;
(C) to pay customary salary, bonus, longan AHYDO catch-term incentive, severance and other benefits (including payment to certain service providers of the Parent Borrower or its Subsidiaries pursuant to any equity plan (whether in the form of options, cash settled options or otherwise)) payable to Permitted Payees, as well as applicable employment, social security or similar taxes in connection therewith, to the extent such salary, bonuses, severance and other benefits are attributable and reasonably allocated to the operations of the Parent Borrower and/or its subsidiariesup payment, in each case, so long as such in respect of any Indebtedness of any Parent Company applies to the amount of any such Restricted Payment for such purposeextent the Net Proceeds thereof were contributed to the Parent Borrower;
(DC) to pay audit and other accounting and reporting expenses of such Parent Company to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such expenses, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries;
(ED) for the payment of insurance premiums to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries;
(FE) to pay (x) fees and expenses related to any debt and/or or equity offerings (including refinancings)by any Parent Company, investments and/or or acquisitions permitted or not restricted by this Agreement (whether or not consummated, and including advisory, refinancing, subsequent transaction and exit fees of any Parent Company of the Parent Borrower) and expenses and indemnities of any trustee, agent, arranger, underwriter or similar role and (y) Public Company Costs; and;
(GF) to finance any Investment permitted under Section 6.06 as if such Parent Company were subject to Section Section 6.06 (provided that (x) any Restricted Payment under this clause (a)(i)(G(a)(i)(F) 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 (y) the relevant Parent Company shall, promptly following the closing 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 therewiththereof, cause (I) all property acquired to be contributed to the Parent Borrower or one or more of its Restricted Subsidiaries Subsidiaries, or (II) the merger, consolidation or amalgamation of the Person formed or acquired into the Parent Borrower or one or more of its Restricted Subsidiaries, in order to consummate such Investment in compliance with the applicable requirements of Section Section 6.06 as if undertaken as a direct Investment by the Parent Borrower or the relevant Restricted Subsidiary); and
(G) to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, employees or consultants of any Parent Company (or any Immediate Family Member of any of the foregoing) to the extent such salary, bonuses and other benefits are attributable and reasonably allocated to the operations of the Parent Borrower and/or its subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose;
(ii) the Parent Borrower may pay (or make Restricted Payments to allow any Parent Company to pay) for the repurchase, redemption, retirement or other acquisition or retirement for value of Capital Stock of any Parent Company or any subsidiary held by any Permitted Payeefuture, present or former employee, director, member of management, officer, manager or consultant (or any Affiliate or Immediate Family Member thereof) of any Parent Company, the Parent Borrower or any subsidiary:
(A) in accordance with the terms of promissory notes issued pursuant to Section Section 6.01(o), so long as the aggregate amount of all Cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments made pursuant to sub-clause (D(D) of this clause (ii(ii) below, (1) does not exceed in any Fiscal Year the greater of $68,000,000 32,000,000 and 2012.0% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period in any Fiscal YearEBITDA, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied)) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under clause (D) below; plusYears;
(B) with the proceeds of any sale or issuance of, or of any capital contribution in respect of, the Capital Stock of the Parent Borrower or any Parent Company (to the extent such proceeds are contributed in respect of Qualified Capital Stock to the Parent Borrower or any Restricted Subsidiary in respect of Qualified Capital Stock issued by the Parent Borrower or such Restricted Subsidiary) (other than amounts constituting a Cure Amount or an Available Excluded Contribution Amount); plus;
(C) with the net proceeds of any key-man life insurance policies; plusor
(D) with Cash and Cash Equivalents in an amount not to exceedexceed in any Fiscal Year, together with the aggregate amount of all cash payments made pursuant to sub-clause (A(A) of this clause (ii(ii) in respect of promissory notes issued pursuant to Section Section 6.01(o), (1) the greater of $68,000,000 32,000,000 and 2012.0% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period in any Fiscal YearEBITDA, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under the immediately preceding clause (1); plus
(E) with the amount of any Cash bonuses otherwise payable to any Permitted Payee that are foregone in exchange for the receipt of Capital Stock of the Parent Borrower or any Parent Company pursuant to any compensation arrangement, including any deferred compensation planYears;
(iii) the Parent Borrower may make additional Restricted Payments in an amount not to exceed (A) the portion, if any, of the Available Amount on such date that the Parent Borrower elects to apply to this clause (iii)(A) plus (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Parent Borrower elects to apply to this clause (iii)(B) (plus, without duplication of amounts 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 with Available Excluded Contribution Amounts up to the amount of such Available Excluded Contribution Amount, less any application thereof under Sections 6.04(b)(vi) or 6.06(r)iii);
(iv) the Parent Borrower may make Restricted Payments (i) to any Parent Company to enable such Parent Company to (A) make Cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of such Parent Company, dividends, share splits, reverse share splits (or any combination thereof) and, mergers, consolidations, amalgamations or other business combinations, and acquisitions and other Investments permitted hereunder and/or (B) honor any conversion request by a holder of Convertible Indebtedness by payment of cash and/or delivery of Capital Stock, make any cash payments in lieu of fractional shares in connection with any conversion of Convertible Indebtedness and otherwise make payments on Convertible Indebtedness in accordance with its terms (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments upon redemption thereof), or, in the case of each of sub-clauses (A) and (B) above, make Restricted Payments to any Parent Company to enable such Parent Company to make the payments and/or deliveries described in such sub-clauses (A) and (B), and (ii) consisting of (A) payments made or expected to be made in respect of withholding or similar Taxes payable by any Permitted Payee future, present or former officers, directors, employees, members of management, managers or consultants of the Parent Borrower, any Restricted Subsidiary or any Parent Company or any of their respective Immediate Family Members and/or (B) repurchases of Capital Stock in consideration of the payments described in sub sub-clause (A(A) above, including demand repurchases in connection with the exercise of stock options and the issuance of restricted stock units or similar stock based awardsoptions;
(v) the Parent Borrower may repurchase, redeem, acquire or retire Capital Stock upon repurchase (or make provisions for withholdings in connection with), or make Restricted Payments to any Parent Company to enable it to repurchase, redeem, acquire or retire ) Capital Stock upon (or make provisions for withholdings in connection with), the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represents all or a portion of the exercise price of, or tax Tax withholdings with respect to, such warrants, options or other securities convertible into or exchangeable for Capital Stock as part of a “cashless” exercise;
(vi) (A) for any taxable period (or portion thereof) that a Parent Company is treated as a corporation for U.S. federal income tax purposes and for which a Borrower and/or any of its subsidiaries are members (or are pass-through entities of such members) of a consolidated, combined, unitary or similar income Tax group for U.S. federal, state, local or foreign income Tax purposes (a “Tax Group”) for which a parent is the common parent, the Parent Borrower may make Restricted Payments the proceeds of which are applied (i) on the Closing Date, solely to effect the consummation of the Transactions and on or about the Amendment No. 1 Effective Date, solely to effect the consummation of the Amendment No. 1 Transactions, (ii) on and after the Closing Date, to satisfy any payment obligations owing, or as otherwise required, under the Acquisition Agreement (including payment of working capital and/or purchase price adjustments) and such parent to pay Transaction Coststhe portion of any U.S. federal, in each casestate, with respect local or foreign income Taxes (as applicable) of such parent for such taxable period that are attributable to the Transactions, (iii) to satisfy obligations to direct or indirect holders of Capital Stock income of the Parent Borrower (immediately prior and/or its applicable subsidiaries; provided that the aggregate amount of such distributions shall not exceed the aggregate Taxes the Parent Borrower and/or its subsidiaries, as applicable, would be required to giving effect to pay in respect of such U.S. federal, state, local and foreign Taxes on a stand-alone consolidated basis for such taxable period; provided further that the Transactions) in connection with, or as a result of, any working capital and/or purchase price adjustments, in each case, amount of such distributions with respect to any Unrestricted Subsidiary for any taxable period shall be limited to the Transactions amount actually paid by such Unrestricted Subsidiary to a Borrower or any of its Restricted Subsidiaries for such purpose and (ivB) without duplication of amounts payable under clause (A), the Parent Borrower may make Restricted Payments to satisfy any settlement pay the Taxes of claims or actions in connection with such Tax Group attributable to the Transactions or to satisfy indemnity or other similar obligations in connection with the TransactionsPerformance Chemicals Sale;
(vii) to the extent constituting Restricted Payments, the Parent Borrower may make Restricted Payments to pay Transaction Costs;
(viii) so long as no Event of Default exists at the time of declaration of such Restricted Payment the Parent Borrower may (or may make Restricted Payments to any Parent Company to enable it to) make Restricted Payments with respect to any Capital Stock in an amount not to exceed an aggregate amount per annum equal to the sum of (A) the greater of $40,000,000 and (xB) an amount equal to 7.007% per annum of the net Cash proceeds received by or contributed to the Parent Borrower in connection with the merger of Isos Acquisition Corporation and Bowlero Corp. on December 15, 2021 and the other transactions consummated in connection therewith and (y) an amount equal to 7.00% per annum of the Market Capitalization of the Parent Borrower (or its direct or indirect Parent Company, as applicable) and its subsidiaries minus (B) any utilization of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A)Capitalization;
(viiiix) the Parent Borrower may make Restricted Payments to (i) redeem, repurchase, defease, discharge, retire or otherwise acquire any (A) Capital Stock (“Treasury Capital Stock”) of the Parent Borrower and/or any Restricted Subsidiary or (B) Capital Stock of any Parent Company, in the case of each of subclauses (A(A) and (B(B), in exchange for, or out of the proceeds of the substantially concurrent sale (other than to the Parent Borrower and/or any Restricted Subsidiary) of, Qualified Capital Stock of the Parent Borrower or any Parent Company to the extent any such proceeds are contributed to the capital of the Parent Borrower and/or any Restricted Subsidiary 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 the Parent Borrower or a Restricted Subsidiary) of any Refunding Capital Stock;
(ixx) to the extent constituting a Restricted Payment, the Parent Borrower may consummate any transaction permitted by Section 5.19 (other than Section 5.19(d)), Section Section 6.06 (other than Sections 6.06(j6.06(j) and (t(t)) and Section ), Section 6.07 (other than Section Section 6.07(g)) and Section 6.09 (other than Section 6.09(d);
(x) the Parent Borrower may make additional Restricted Payments in an aggregate amount not to exceed (A) the greater of $85,000,000 and 25% of Consolidated Adjusted EBITDA 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);
(xi) the Parent Borrower may make Restricted Payments in an aggregate amount not to exceed the greater of $95,000,000 and 35.0% of Consolidated Adjusted EBITDA minus the sum of (A) any amounts under this Section 6.04(a)(xi) reallocated to make Restricted Debt Payments pursuant to Section 6.04(b)(iv) (B) any amounts under this Section 6.04(a)(xi) reallocated to make Investments pursuant to Section 6.06(q), and (C) any amounts under this Section 6.04(a)(xi) reallocated to incur Indebtedness pursuant to Section 6.01(u) (which may be further reallocated as provided therein);
(xii) the Parent Borrower may pay any dividend or other distribution or consummate any redemption within 60 sixty (60) days after the date of 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 dividend or redemption notice would have complied with the provisions of this Section 6.04(a);
(xii) the Parent Borrower may make any Restricted Payment constituting the distribution or payment of Receivables Feeshereof;
(xiii) the Parent Borrower may make additional Restricted Payments so long as, as measured at the time provided for in Section 1.04(e), (iA) no Event of Default exists or would result therefrom and (B) the Total Leverage Ratio would not exceed 4.00:1.00Ratio, calculated on a Pro Forma Basis and (ii) there shall exist no Event at the time of Default hereunder or shall result therefromdeclaration thereof, would not exceed 4.50:1.00;
(xiv) the Parent Borrower may make additional Restricted Payments to enable any Parent Company to make Restricted Payments solely in the Qualified Capital Stock of such Parent Company;
(xv) the Parent Borrower may make Restricted Payments (A) to pay amounts permitted under Section 6.09(f), (g), (h), (i), (k) and (m) and (B) otherwise in an amount not to exceed $500,000 per calendar year;
(xvi) the Parent Borrower may make Restricted Payments in the form of Capital Stock 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 Cash and Cash Equivalents (except to the extent constituting proceeds from the Disposition of all or substantially all of the assets of such Unrestricted Subsidiary) and/or intellectual property material (as determined by the Parent Borrower in good faith) to the business of the Parent Borrower and its Restricted Subsidiaries, taken as a whole); and
(xvii) the Parent Borrower may make Restricted Payments in an aggregate amount not to exceed $450,000,000 (the “Special Dividend”).
(b) The Parent Borrower shall not, nor shall it permit any Restricted Subsidiary to, make any payment (whether in Cash, securities or other property) on or in respect of principal of (x) any Junior Lien Indebtedness or (y) any Subordinated Indebtedness, in each cases of clauses (x) and (y), with an individual outstanding principal amount in excess of the Threshold Amount (such Indebtedness under clauses (x) and (y), in each case, with an individual outstanding principal amount in excess of the Threshold Amount, the “Restricted Debt”), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Restricted Debt prior to its scheduled maturity (collectively, “Restricted Debt Payments”), except:
(i) any 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 (except to the extent subject to clause (iv)(C) of the proviso to Section 6.01(p));
(ii) payments as part of an AHYDO catch-up payment;
(iii) payments of regularly scheduled interest as and when due in respect of any Restricted Debt, except for any payments with respect to any such Subordinated Indebtedness that are prohibited by the subordination provisions thereof;
(iv) so long as, at the time of delivery of irrevocable notice with respect thereto, no Event of Default exists or would result therefrom, Restricted Debt Payments in an aggregate amount not to exceed (i) the sum of (A) the greater of $95,000,000 and 35.0% of Consolidated Adjusted EBITDA and (B) any amounts reallocated to this Section 6.04(b)(iv) from Section 6.04(a)(xi) and Section 6.06(q), minus (ii) any amounts reallocated from this Section 6.04(b)(iv) to make Investments pursuant to Section 6.06(q);
(A) Restricted Debt Payments in exchange for, or with proceeds of any issuance of, Qualified Capital Stock of the Parent Borrower and/or any Restricted Subsidiary and/or any capital contribution in respect of Qualified Capital Stock of the Parent Borrower or any Restricted Subsidiary, (B) Restricted Debt Payments as a result of the conversion of all or any portion of any Restricted Debt into Qualified Capital Stock of the Parent Borrower 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 amount not to exceed the amount portion, if any, of proceeds received by the Available Amount on such date that the Parent Borrower and/or any Restricted Subsidiary under the Representation and Warranty Insurance Policy during the term of elects to apply to this Agreementclause (vi);
(xv) (A) for any taxable period for which the Parent Borrower and/or any of its Subsidiaries are members of a consolidated, combined or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which a direct or indirect parent of the Parent Borrower is the common parent (a “Tax Group”), or for which the Parent Borrower is a disregarded entity for U.S. federal income tax purposes wholly-owned by a corporate parent (a “Corporate Parent”), the Parent Borrower and each of its Subsidiaries may make Restricted Payments the proceeds of which shall be used by such common parent to pay the portion of any consolidated, combined or similar U.S. federal, state or local income Taxes of such Tax Group, or by the Corporate Parent to pay the portion of the U.S. federal, state or local income Taxes of such Corporate Parent, or any franchise taxes imposed in lieu thereof, for such taxable period that are attributable to the income of the Parent Borrower and/or its Subsidiaries, provided that such amount shall not be greater than the amount of such U.S. federal, state or local income taxes that would be paid (for such taxable period) by the Parent Borrower and its Subsidiaries if the Parent Borrower and/or such Subsidiaries had been a stand-alone corporate taxpayer (or stand-alone group of corporate taxpayers filing on a consolidated, combined or similar basis) for all taxable years ending after the Closing Date (taking into account any net operating loss carryforwards attributable to the Parent Borrower and its Subsidiaries, as the case may be) and (B) without duplication of Restricted Payments made under Section 6.04(a)(xv)(A), for any taxable period for which the Parent Borrower is treated as a partnership for U.S. federal and/or applicable state or local income tax purposes, the Parent Borrower may make Restricted Payments to its equity owners at the times and in the amoun
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) The Parent Borrower shall not pay or make, directly or indirectly, any Restricted Payment, except that:
(i) the Parent Borrower may make Restricted Payments to the extent necessary to permit any Parent Company:
(A) to pay general operating and compliance administrative costs and expenses (including corporate overhead, legal or similar expenses and customary salary, bonus and other benefits payable to directors, officers, employees, members of management, managers and/or consultants of any Parent Company)) and franchise fees and Taxes and similar fees, Taxes and expenses required to enable such Parent Company to maintain its organizational existence or qualification to do business, in each case, which are reasonable and customary and incurred in the ordinary course of business, plus any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of any Parent Company, in each case, to the extent attributable to the ownership or operations of any Parent Company and its subsidiaries (but excluding, for the avoidance of doubt, excluding the portion of any such amount, if any, amount that is attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or and its subsidiaries), the Parent Borrower and/or its subsidiaries;
(B) to pay franchise, excise scheduled and similar Taxes, overdue interest and other fees, Taxes and expenses, required to maintain the organizational existence payments as part of such Parent Company;
(C) to pay customary salary, bonus, longan AHYDO catch-term incentive, severance and other benefits (including payment to certain service providers of the Parent Borrower or its Subsidiaries pursuant to any equity plan (whether in the form of options, cash settled options or otherwise)) payable to Permitted Payees, as well as applicable employment, social security or similar taxes in connection therewith, to the extent such salary, bonuses, severance and other benefits are attributable and reasonably allocated to the operations of the Parent Borrower and/or its subsidiariesup payment, in each case, so long as such in respect of any Indebtedness of any Parent Company applies to the amount of any such Restricted Payment for such purposeextent the Net Proceeds thereof were contributed to the Borrower;
(DC) to pay audit and other accounting and reporting expenses of such Parent Company to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such expenses, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries;
(ED) for the payment of insurance premiums to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries;
(FE) to pay (x) fees and expenses related to any debt and/or or equity offerings (including refinancings)by any Parent Company, investments and/or or acquisitions permitted or not restricted by this Agreement (whether or not consummated, and including advisory, refinancing, subsequent transaction and exit fees of any Parent Company of the Parent Borrower) and expenses and indemnities of any trustee, agent, arranger, underwriter or similar role and (y) Public Company Costs; and;
(GF) to finance any Investment permitted under Section 6.06 as if such Parent Company were subject to Section Section 6.06 (provided that (x) any Restricted Payment under this clause (a)(i)(G(a)(i)(F) 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 (y) the relevant Parent Company shall, promptly following the closing 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 therewiththereof, cause (I) all property acquired to be contributed to the Parent Borrower or one or more of its Restricted Subsidiaries Subsidiaries, or (II) the merger, consolidation or amalgamation of the Person formed or acquired into the Parent Borrower or one or more of its Restricted Subsidiaries, in order to consummate such Investment in compliance with the applicable requirements of Section Section 6.06 as if undertaken as a direct Investment by the Parent Borrower or the relevant Restricted Subsidiary); and
(G) to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, employees or consultants of any Parent Company (or any Immediate Family Member of any of the foregoing) to the extent such salary, bonuses and other benefits are attributable and reasonably allocated to the operations of the Borrower and/or its subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose;
(ii) the Parent Borrower may pay (or make Restricted Payments to allow any Parent Company to pay) for the repurchase, redemption, retirement or other acquisition or retirement for value of Capital Stock of any Parent Company or any subsidiary held by any Permitted Payeefuture, present or former employee, director, member of management, officer, manager or consultant (or any Affiliate or Immediate Family Member thereof) of any Parent Company, the Borrower or any subsidiary:
(A) in accordance with the terms of promissory notes issued pursuant to Section Section 6.01(o), so long as the aggregate amount of all Cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments made pursuant to sub-clause (D(D) of this clause (ii(ii) below, (1) does not exceed in any Fiscal Year the greater of $68,000,000 20,000,000 and 2012.0% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period in any Fiscal YearEBITDA, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied)) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under clause (D) below; plusYears;
(B) with the proceeds of any sale or issuance of, or of any capital contribution in respect of, the Capital Stock of the Parent Borrower or any Parent Company (to the extent such proceeds are contributed to the Parent Borrower or any Restricted Subsidiary in respect of Qualified Capital Stock issued by to the Parent Borrower or such any Restricted Subsidiary) (other than amounts constituting a Cure Amount or an Available Excluded Contribution Amount); plus;
(C) with the net proceeds of any key-man life insurance policies; plusor
(D) with Cash and Cash Equivalents in an amount not to exceedexceed in any Fiscal Year, together with the aggregate amount of all cash payments made pursuant to sub-clause (A(A) of this clause (ii(ii) in respect of promissory notes issued pursuant to Section Section 6.01(o), (1) the greater of $68,000,000 20,000,000 and 2012.0% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period in any Fiscal YearEBITDA, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under the immediately preceding clause (1); plus
(E) with the amount of any Cash bonuses otherwise payable to any Permitted Payee that are foregone in exchange for the receipt of Capital Stock of the Parent Borrower or any Parent Company pursuant to any compensation arrangement, including any deferred compensation planYears;
(iii) the Parent Borrower may make additional Restricted Payments in an amount not to exceed (A) the portion, if any, of the Available Amount on such date that the Parent Borrower elects to apply to this clause (iii)(A) plus (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Parent Borrower elects to apply to this clause (iii)(B) (plus, without duplication of amounts 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 with Available Excluded Contribution Amounts up to the amount of such Available Excluded Contribution Amount, less any application thereof under Sections 6.04(b)(vi) or 6.06(r)iii);
(iv) the Parent Borrower may make Restricted Payments (i) to any Parent Company to enable such Parent Company to (A) make Cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of such Parent Company, dividends, share splits, reverse share splits (or any combination thereof) and, mergers, consolidations, amalgamations or other business combinations, and acquisitions and other Investments permitted hereunder and/or (B) honor any conversion request by a holder of Convertible Indebtedness by payment of cash and/or delivery of Capital Stock, make any cash payments in lieu of fractional shares in connection with any conversion of Convertible Indebtedness and otherwise make payments on Convertible Indebtedness in accordance with its terms (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments upon redemption thereof), or, in the case of each of sub-clauses (A) and (B) above, make Restricted Payments to any Parent Company to enable such Parent Company to make the payments and/or deliveries described in such sub-clauses (A) and (B), and (ii) consisting of (A) payments made or expected to be made in respect of withholding or similar Taxes payable by any Permitted Payee future, present or former officers, directors, employees, members of management, managers or consultants of the Borrower, any Restricted Subsidiary or any Parent Company or any of their respective Immediate Family Members and/or (B) repurchases of Capital Stock in consideration of the payments described in sub sub-clause (A(A) above, including demand repurchases in connection with the exercise of stock options and the issuance of restricted stock units or similar stock based awardsoptions;
(v) the Parent Borrower may repurchase, redeem, acquire or retire Capital Stock upon repurchase (or make provisions for withholdings in connection with), or make Restricted Payments to any Parent Company to enable it to repurchase, redeem, acquire or retire ) Capital Stock upon (or make provisions for withholdings in connection with), the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represents all or a portion of the exercise price of, or tax withholdings with respect to, such warrants, options or other securities convertible into or exchangeable for Capital Stock as part of a “cashless” exercise;
(vi) for any taxable period (or portion thereof) that a Parent Company is treated as a corporation for U.S. federal income tax purposes and for which Borrower and/or any of its subsidiaries are members (or are pass-through entities of such members) of a consolidated, combined, unitary or similar income Tax group for U.S. federal, state, local or foreign income Tax purposes for which such Parent Company is the Parent common parent, the Borrower may make Restricted Payments to such Parent Company to pay the proceeds portion of which any U.S. federal, state, local or foreign income Taxes (as applicable) of such Parent Company for such taxable period that are applied (i) on attributable to the Closing Date, solely to effect the consummation income of the Transactions and on or about Borrower and/or its applicable subsidiaries; provided that the Amendment No. 1 Effective Dateaggregate amount of such distributions shall not exceed the aggregate Taxes the Borrower and/or its subsidiaries, solely to effect the consummation of the Amendment No. 1 Transactionsas applicable, (ii) on and after the Closing Date, to satisfy any payment obligations owing, or as otherwise required, under the Acquisition Agreement (including payment of working capital and/or purchase price adjustments) and would be required to pay Transaction Costsin respect of such U.S. federal, in each casestate, local and foreign Taxes on a stand-alone basis for such taxable period; provided further that the amount of such distributions with respect to the Transactions, (iii) to satisfy obligations to direct or indirect holders of Capital Stock of the Parent Borrower (immediately prior to giving effect any Unrestricted Subsidiary for any taxable period shall be limited to the Transactions) in connection with, or as a result of, any working capital and/or purchase price adjustments, in each case, with respect to the Transactions and (iv) to satisfy any settlement of claims or actions in connection with the Transactions or to satisfy indemnity or other similar obligations in connection with the Transactionsamount actually paid by such Unrestricted Subsidiary for such purpose;
(vii) the Parent Borrower may make Restricted Payments to consummate the Transactions on the Closing Date and to the extent not paid on the Closing Date, thereafter to pay working capital and purchase price adjustments and other payment obligations under the Merger Agreement and Transaction Costs;
(viii) so long as no Event of Default exists at the time of declaration of such Restricted Payment, following the consummation of the first Qualifying IPO, the Borrower may (or may make Restricted Payments to any Parent Company to enable it to) make Restricted Payments with respect to any Capital Stock in an amount not to exceed (A) the greater of (x) an amount equal to 7.006% per annum of the net Cash proceeds received by or contributed to the Parent Borrower in connection with the merger of Isos Acquisition Corporation and Bowlero Corp. on December 15, 2021 and the other transactions consummated in connection therewith and (y) an amount equal to 7.00% per annum of the Market Capitalization of the Parent Borrower (or its direct or indirect Parent Company, as applicable) and its subsidiaries minus (B) from any utilization of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A)Qualifying IPO;
(viiiix) the Parent Borrower may make Restricted Payments to (i) redeem, repurchase, defease, discharge, retire or otherwise acquire any (A) Capital Stock (“Treasury Capital Stock”) of the Parent Borrower and/or any Restricted Subsidiary or (B) Capital Stock of any Parent Company, in the case of each of subclauses (A(A) and (B(B), in exchange for, or out of the proceeds of the substantially concurrent sale (other than to the Parent Borrower and/or any Restricted Subsidiary) of, Qualified Capital Stock of the Parent Borrower or any Parent Company to the extent any such proceeds are contributed to the capital of the Parent Borrower and/or any Restricted Subsidiary 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 the Parent Borrower or a Restricted Subsidiary) of any Refunding Capital Stock;
(ixx) to the extent constituting a Restricted Payment, the Parent Borrower may consummate any transaction permitted by Section 5.19 (other than Section 5.19(d)), Section Section 6.06 (other than Sections 6.06(j6.06(j) and (t(t)) and Section ), Section 6.07 (other than Section Section 6.07(g)) and Section 6.09 (other than Section 6.09(d));
(xxi) the Parent Borrower may make additional Restricted Payments in an aggregate amount not to exceed (A) the greater of $85,000,000 40,000,000 and 2525.0% of Consolidated Adjusted EBITDA as minus the sum of the last day of the most recently ended Test Period minus (Bi) any utilization of the Available RP Capacity Amount in reliance on unused capacity amounts under immediately preceding clause (Athis Section 6.04(a)(xi) reallocated to make Restricted Debt Payments pursuant to Section 6.04(b)(iv)(B), (ii) any amounts under this Section 6.04(a)(xi) reallocated to make Investments pursuant to Section 6.06(q), and (iii) any amounts under this Section 6.04(a)(xi) reallocated to incur Indebtedness pursuant to Section 6.01(u);
(xixii) the Parent Borrower may pay any dividend or other distribution or consummate any redemption within 60 days after the date of 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 dividend or redemption notice would have complied with the provisions of this Section 6.04(a);
(xii) the Parent Borrower may make any Restricted Payment constituting the distribution or payment of Receivables Feeshereof;
(xiii) the Parent Borrower may make additional Restricted Payments so long as, as measured at the time provided for in Section 1.04(e), (iA) no Event of Default exists or would result therefrom and (B) the Total Leverage Ratio would not exceed 4.00:1.00Ratio, calculated on a Pro Forma Basis and (ii) there shall exist no Event at the time of Default hereunder or shall result therefromdeclaration thereof, would not exceed 5.25:1.00;
(xiv) the Parent Borrower may make additional Restricted Payments to enable any Parent Company to make Restricted Payments solely in the Qualified Capital Stock of such Parent Company; and
(xv) the Borrower may make Restricted Payments to pay amounts permitted under Section 6.09(f) and (g).
(b) Holdings and the Borrower shall not, nor shall they permit any Restricted Subsidiary to, make any payment (whether in Cash, securities or other property) on or in respect of principal of or interest on (x) any Junior Lien Indebtedness or (y) any Subordinated Indebtedness, in each cases of clauses (x) and (y), with an individual outstanding principal amount in excess of the Threshold Amount (such Indebtedness under clauses (x) and (y), in each case, with an individual outstanding principal amount in excess of the Threshold Amount, the “Restricted Debt”), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Restricted Debt prior to its scheduled maturity (collectively, “Restricted Debt Payments”), except:
(i) any 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 (except to the extent subject to clause (iv)(C) of the proviso to Section 6.01(p);
(ii) payments as part of an AHYDO catch-up payment;
(iii) payments of regularly scheduled interest as and when due in respect of any Restricted Debt, except for any payments with respect to any such Subordinated Indebtedness that are prohibited by the subordination provisions thereof;
(iv) so long as, at the time of delivery of irrevocable notice with respect thereto, no Event of Default exists or would result therefrom, Restricted Debt Payments in an aggregate amount not to exceed (i) the sum of (A) the greater of $40,000,000 and 25.0% of Consolidated Adjusted EBITDA and (B) any amounts reallocated to this Section 6.04(b)(iv) from Section 6.04(a)(xi) and Section 6.06(q), minus (ii) any amounts reallocated from Section 6.04(b)(iv)(A) to make Investments pursuant to Section 6.06(q);
(A) Restricted Debt Payments in exchange for, or with proceeds of any issuance of, Qualified Capital Stock of the Borrower and/or any Restricted Subsidiary and/or any capital contribution in respect of Qualified Capital Stock of the Borrower or any Restricted Subsidiary, (B) Restricted Debt Payments as a result of the conversion of all or any portion of any Restricted Debt into Qualified Capital Stock of the Borrower 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 amount not to exceed the amount of proceeds received by the Parent Borrower and/or any Restricted Subsidiary under the Representation and Warranty Insurance Policy during the term of this Agreement;
(xv) (A) for any taxable period for which the Parent Borrower and/or any of its Subsidiaries are members of a consolidatedportion, combined or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which a direct or indirect parent if any, of the Parent Available Amount on such date that the Borrower is the common parent elects to apply to this clause (a “Tax Group”vi), or for which the Parent Borrower is a disregarded entity for U.S. federal income tax purposes wholly-owned by a corporate parent (a “Corporate Parent”), the Parent Borrower and each of its Subsidiaries may make Restricted Payments the proceeds of which shall be used by such common parent to pay the portion of any consolidated, combined or similar U.S. federal, state or local income Taxes of such Tax Group, or by the Corporate Parent to pay the portion of the U.S. federal, state or local income Taxes of such Corporate Parent, or any franchise taxes imposed in lieu thereof, for such taxable period that are attributable to the income of the Parent Borrower and/or its Subsidiaries, provided that such amount shall not be greater than the amount of such U.S. federal, state or local income taxes that would be paid (for such taxable period) by the Parent Borrower and its Subsidiaries if the Parent Borrower and/or such Subsidiaries had been a stand-alone corporate taxpayer (or stand-alone group of corporate taxpayers filing on a consolidated, combined or similar basis) for all taxable years ending after the Closing Date (taking into account any net operating loss carryforwards attributable to the Parent Borrower and its Subsidiaries, as the case may be) and (B) without duplication of Restricted Payments made under Section 6.04(a)(xv)(A), for any taxable period for which the Parent Borrower is treated as a partnership for U.S. federal and/or applicable state or local income tax purposes, the Parent Borrower may make Restricted Payments to its equity owners at the times and in the amoun;
Appears in 1 contract
Sources: First Lien Credit Agreement (Hayward Holdings, Inc.)
Restricted Payments; Certain Payments of Indebtedness. (a) The Parent Borrower shall will not pay or make, directly or indirectly, any Restricted Payment, except that:
(i) the Parent Borrower may make Restricted Payments to the extent necessary to permit enable any Parent Company:
(A) to pay general operating and compliance administrative costs and expenses (including corporate overhead, director and manager fees and reimbursement of expenses, legal and other professional fees and expenses or similar expenses costs and customary salaryexpenses) and franchise Taxes, bonus and other benefits payable similar fees, Taxes and expenses, required to directors, officers, employees, members maintain the organizational existence of management, managers and/or consultants of any such Parent Company), in each case, which are reasonable and customary and incurred in the ordinary course of business, plus any reasonable indemnification obligations and customary indemnification claims made by directors, officers, members of management, managers, employees expenses (or consultants advances thereof) owed to any Employee Related Person of any Parent Company, in each case, to the extent attributable to the ownership or operations of any Parent Company (but excluding, for the avoidance of doubt, excluding the portion of any such amount, if any, that is attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiariesSubsidiaries), the Parent Borrower and/or its subsidiariesSubsidiaries;
(B) to pay franchise, excise and similar Taxes, and other fees, Taxes and expenses, required to maintain the organizational existence of such Parent Company;
(C) to pay customary salary, bonus, long-term incentive, severance and other benefits (including payment to certain service providers of the Parent Borrower or its Subsidiaries pursuant to any equity plan (whether in the form of options, cash settled options or otherwise)) payable to Permitted Payees, as well as applicable employment, social security or similar taxes in connection therewith, to the extent such salary, bonuses, severance and other benefits are attributable and reasonably allocated to the operations of the Parent Borrower and/or its subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose;
(D) to pay audit and other accounting and reporting expenses of such Parent Company to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, excluding the portion of any such expenses, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiariesSubsidiaries), the Parent Borrower and and/or its subsidiariesSubsidiaries;
(EC) for the payment of to pay insurance premiums to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, excluding the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiariesSubsidiaries), the Parent Borrower and and/or its subsidiariesSubsidiaries;
(FD) to pay (x) fees and expenses related relating to any debt and/or or equity offerings (including refinancings)offerings, investments and/or acquisitions permitted Investments or not restricted by this Agreement Acquisitions (whether or not consummated, and including advisory, refinancing, subsequent transaction and exit fees of any Parent Company of the Parent Borrower) and expenses and indemnities of any advisor, trustee, agent, arranger, underwriter or similar role Person, in each case attributable to any Parent Company (but excluding the portion of any such fees and expenses, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Borrower and/or its Subsidiaries), the Borrower and/or its Subsidiaries, (y) fees and expenses relating to any Qualifying IPO or any Qualifying IPO Transactions and (yz) Public Company Costs; and;
(GE) to finance any Acquisition or other Investment permitted under Section 6.06 as if such Parent Company were subject to Section 6.06 Section 6.04 (provided that (x) any Restricted Payment under this clause (a)(i)(G(a)(i)(E) 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 (y) the relevant Parent Company shall, promptly following the closing 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 (I) all property acquired to be contributed to the Parent Borrower or one or more of its Restricted Subsidiaries or (II) the merger, consolidation or amalgamation of the Person formed or acquired into the Parent Borrower or one or more of its Restricted Subsidiaries, in order to consummate such Investment in compliance with the applicable requirements of Section 6.06 as if undertaken as a direct Investment by the Parent Borrower or the relevant Restricted Subsidiary);
(ii) the Parent Borrower may pay (or make Restricted Payments to allow any Parent Company to pay) for the repurchase, redemption, retirement Acquisition or other acquisition or retirement for value of Capital Stock of any Parent Company or any subsidiary held by any Permitted Payee:
(A) in accordance with the terms of promissory notes issued pursuant to Section 6.01(o), so long as the aggregate amount of all Cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments made pursuant to sub-clause (D) of this clause (ii) below, (1) does not exceed the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied)) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under clause (D) below; plus
(B) with the proceeds of any sale or issuance of, or of any capital contribution in respect of, the Capital Stock of the Parent Borrower or any Parent Company (to the extent such proceeds are contributed to the Parent Borrower or any Restricted Subsidiary in respect of Qualified Capital Stock issued by the Parent Borrower or such Restricted Subsidiary) (other than amounts constituting a Cure Amount or an Available Excluded Contribution Amount); plus
(C) with the net proceeds of any key-man life insurance policies; plus
(D) with Cash and Cash Equivalents in an amount not to exceed, together with the aggregate amount of all cash payments made pursuant to sub-clause (A) of this clause (ii) in respect of promissory notes issued pursuant to Section 6.01(o), (1) the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under the immediately preceding clause (1); plus
(E) with the amount of any Cash bonuses otherwise payable to any Permitted Payee that are foregone in exchange for the receipt of Capital Stock of the Parent Borrower or any Parent Company pursuant to any compensation arrangement, including any deferred compensation plan;
(iii) the Parent Borrower may make additional Restricted Payments in an amount not to exceed (A) the portion, if any, of the Available Amount on such date that the Parent Borrower elects to apply to this clause (iii)(A) plus (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Parent Borrower elects to apply to this clause (iii)(B) (plus, without duplication of amounts 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 with Available Excluded Contribution Amounts up to the amount of such Available Excluded Contribution Amount, less any application thereof under Sections 6.04(b)(vi) or 6.06(r));
(iv) the Parent Borrower may make Restricted Payments (i) to any Parent Company to enable such Parent Company to (A) make Cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of such Parent Company, dividends, share splits, reverse share splits (or any combination thereof) Investment and, mergers, consolidations, amalgamations or other business combinations, and acquisitions and other Investments permitted hereunder and/or (B) honor any conversion request by a holder of Convertible Indebtedness by payment of cash and/or delivery of Capital Stock, make any cash payments in lieu of fractional shares in connection with any conversion of Convertible Indebtedness and otherwise make payments on Convertible Indebtedness in accordance with its terms (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments upon redemption thereof), or, in the case of each of sub-clauses (A) and (B) above, make Restricted Payments to any Parent Company to enable such Parent Company to make the payments and/or deliveries described in such sub-clauses (A) and (B), and (ii) consisting of (A) payments made or expected to be made in respect of withholding or similar Taxes payable by any Permitted Payee and/or (B) repurchases of Capital Stock in consideration of the payments described in sub clause (A) above, including demand repurchases in connection with the exercise of stock options and the issuance of restricted stock units or similar stock based awards;
(v) the Parent Borrower may repurchase, redeem, acquire or retire Capital Stock upon (or make provisions for withholdings in connection with), or make Restricted Payments to any Parent Company to enable it to repurchase, redeem, acquire or retire Capital Stock upon (or make provisions for withholdings in connection with), the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represents all or a portion of the exercise price of, or tax withholdings with respect to, such warrants, options or other securities convertible into or exchangeable for Capital Stock as part of a “cashless” exercise;
(vi) the Parent Borrower may make Restricted Payments the proceeds of which are applied (i) on the Closing Date, solely to effect the consummation of the Transactions and on or about the Amendment No. 1 Effective Date, solely to effect the consummation of the Amendment No. 1 Transactions, (ii) on and after the Closing Date, to satisfy any payment obligations owing, or as otherwise required, under the Acquisition Agreement (including payment of working capital and/or purchase price adjustments) and to pay Transaction Costs, in each case, with respect to the Transactions, (iii) to satisfy obligations to direct or indirect holders of Capital Stock of the Parent Borrower (immediately prior to giving effect to the Transactions) in connection with, or as a result of, any working capital and/or purchase price adjustments, in each case, with respect to the Transactions and (iv) to satisfy any settlement of claims or actions in connection with the Transactions or to satisfy indemnity or other similar obligations in connection with the Transactions;
(vii) the Parent Borrower may (or may make Restricted Payments to any Parent Company to enable it to) make Restricted Payments with respect to any Capital Stock in an amount not to exceed (A) the greater of (x) an amount equal to 7.00% per annum of the net Cash proceeds received by or contributed to the Parent Borrower in connection with the merger of Isos Acquisition Corporation and Bowlero Corp. on December 15, 2021 and the other transactions consummated in connection therewith and (y) an amount equal to 7.00% per annum of the Market Capitalization of the Parent Borrower (or its direct or indirect Parent Company, as applicable) and its subsidiaries minus (B) any utilization of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A);
(viii) the Parent Borrower may make Restricted Payments to (i) redeem, repurchase, defease, discharge, retire or otherwise acquire any (A) Capital Stock (“Treasury Capital Stock”) of the Parent Borrower and/or any Restricted Subsidiary or (B) Capital Stock of any Parent Company, in the case of each of subclauses (A) and (B), in exchange for, or out of the proceeds of the substantially concurrent sale (other than to the Parent Borrower and/or any Restricted Subsidiary) of, Qualified Capital Stock of the Parent Borrower or any Parent Company to the extent any such proceeds are contributed to the capital of the Parent Borrower and/or any Restricted Subsidiary 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 the Parent Borrower or a Restricted Subsidiary) of any Refunding Capital Stock;
(ix) to the extent constituting a Restricted Payment, the Parent Borrower may consummate any transaction permitted by Section 5.19 (other than Section 5.19(d)), Section 6.06 (other than Sections 6.06(j) and (t)) and Section 6.07 (other than Section 6.07(g));
(x) the Parent Borrower may make additional Restricted Payments in an aggregate amount not to exceed (A) the greater of $85,000,000 and 25% of Consolidated Adjusted EBITDA 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);
(xi) the Parent Borrower may pay any dividend or other distribution or consummate any redemption within 60 days after the date of 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);
(xii) the Parent Borrower may make any Restricted Payment constituting the distribution or payment of Receivables Fees;
(xiii) the Parent Borrower may make additional Restricted 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 Event of Default hereunder or shall result therefrom;
(xiv) the Parent Borrower may make additional Restricted Payments in an amount not to exceed the amount of proceeds received by the Parent Borrower and/or any Restricted Subsidiary under the Representation and Warranty Insurance Policy during the term of this Agreement;
(xv) (A) for any taxable period for which the Parent Borrower and/or any of its Subsidiaries are members of a consolidated, combined or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which a direct or indirect parent of the Parent Borrower is the common parent (a “Tax Group”), or for which the Parent Borrower is a disregarded entity for U.S. federal income tax purposes wholly-owned by a corporate parent (a “Corporate Parent”), the Parent Borrower and each of its Subsidiaries may make Restricted Payments the proceeds of which shall be used by such common parent to pay the portion of any consolidated, combined or similar U.S. federal, state or local income Taxes of such Tax Group, or by the Corporate Parent to pay the portion of the U.S. federal, state or local income Taxes of such Corporate Parent, or any franchise taxes imposed in lieu thereof, for such taxable period that are attributable to the income of the Parent Borrower and/or its Subsidiaries, provided that such amount shall not be greater than the amount of such U.S. federal, state or local income taxes that would be paid (for such taxable period) by the Parent Borrower and its Subsidiaries if the Parent Borrower and/or such Subsidiaries had been a stand-alone corporate taxpayer (or stand-alone group of corporate taxpayers filing on a consolidated, combined or similar basis) for all taxable years ending after the Closing Date (taking into account any net operating loss carryforwards attributable to the Parent Borrower and its Subsidiaries, as the case may be) and (B) without duplication of Restricted Payments made under Section 6.04(a)(xv)(A), for any taxable period for which the Parent Borrower is treated as a partnership for U.S. federal and/or applicable state or local income tax purposes, the Parent Borrower may make Restricted Payments to its equity owners at the times and in the amoun
Appears in 1 contract
Sources: Credit Agreement (MediaAlpha, Inc.)
Restricted Payments; Certain Payments of Indebtedness. (a) The Parent Lead Borrower shall not pay or make, directly or indirectly, any Restricted Payment, except that:
(i) the Parent Lead Borrower may make Restricted Payments to the extent necessary to permit any Parent Company:
(A) to pay general operating and compliance administrative costs and expenses (including corporate overhead, legal or similar expenses and customary salary, bonus and other benefits payable to directors, officers, employees, members of management, managers and/or consultants of any Parent Company)) and franchise fees and Taxes and similar fees, Taxes and expenses required to enable such Parent Company to maintain its organizational existence or qualification to do business, in each case, which are reasonable and customary and incurred in the ordinary course of business, plus any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of any Parent Company, in each case, to the extent attributable to the ownership or operations of any Parent Company and its subsidiaries (but excluding, for the avoidance of doubt, excluding the portion of any such amount, if any, amount that is attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or and its subsidiaries), the Parent Borrower and/or its subsidiaries;
(B) to pay franchise, excise and similar Taxes, and other fees, Taxes and expenses, required to maintain the organizational existence of such Parent Company;[Reserved].
(C) to pay customary salary, bonus, long-term incentive, severance and other benefits (including payment to certain service providers of the Parent Borrower or its Subsidiaries pursuant to any equity plan (whether in the form of options, cash settled options or otherwise)) payable to Permitted Payees, as well as applicable employment, social security or similar taxes in connection therewith, to the extent such salary, bonuses, severance and other benefits are attributable and reasonably allocated to the operations of the Parent Borrower and/or its subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose;
(D) to pay audit and other accounting and reporting expenses of such Parent Company to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such expenses, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries;
(ED) for the payment of insurance premiums to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Lead Borrower and/or its subsidiaries), the Parent Lead Borrower and its subsidiaries;
(FE) to pay (x) fees and expenses related to any debt and/or or equity offerings (including refinancings)offerings, investments and/or or acquisitions permitted or not restricted by this Agreement (whether or not consummated, and including advisory, refinancing, subsequent transaction and exit fees of any Parent Company of the Parent Borrower) and expenses and indemnities of any trustee, agent, arranger, underwriter or similar role and (y) Public Company Costs; and;
(GF) to finance any Investment permitted under Section 6.06 as if such Parent Company were subject to Section Section 6.06 (provided that (x) any Restricted Payment under this clause (a)(i)(G(a)(i)(F) 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 (y) the relevant Parent Company shall, promptly following the closing 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 therewiththereof, cause (I) all property acquired to be contributed to the Parent Lead Borrower or one or more of its Restricted Subsidiaries Subsidiaries, or (II) the merger, consolidation or amalgamation of the Person formed or acquired into the Parent Lead Borrower or one or more of its Restricted Subsidiaries, in order to consummate such Investment in compliance with the applicable requirements of Section Section 6.06 as if undertaken as a direct Investment by the Parent Lead Borrower or the relevant Restricted Subsidiary); and
(G) to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, employees or consultants of any Parent Company (or any Immediate Family Member of any of the foregoing) to the extent such salary, bonuses and other benefits are attributable and reasonably allocated to the operations of the Lead Borrower and/or its subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose;
(ii) the Parent Lead Borrower may pay (or make Restricted Payments to allow any Parent Company to pay) for the repurchase, redemption, retirement or other acquisition or retirement for value of Capital Stock of any Parent Company or any subsidiary held by any Permitted Payeefuture, present or former employee, director, member of management, officer, manager or consultant (or any Affiliate or Immediate Family Member thereof) of any Parent Company, the Lead Borrower or any subsidiary:
(A) in accordance with the terms of promissory notes issued pursuant to Section Section 6.01(o), so long as the aggregate amount of all Cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments made pursuant to sub-clause (D(D) of this clause (ii(ii) below, (1) does not exceed the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period 20,000,000 in any Fiscal YearYear (or $30,000,000 in any Fiscal Year following a Qualifying IPO), which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied)) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under clause (D) below; plusYears;
(B) with the proceeds of any sale or issuance of, or of any capital contribution in respect of, the Capital Stock of the Parent Lead Borrower or any Parent Company (to the extent such proceeds are contributed to the Parent Borrower or any Restricted Subsidiary in respect of Qualified Capital Stock issued by to the Parent Lead Borrower or such any Restricted Subsidiary) (other than any amounts constituting a Cure Amount or an any amount that has been added to the Available Excluded Contribution Amount); plus;
(C) with the net proceeds of any key-man life insurance policies; plusor
(D) with Cash and Cash Equivalents in an amount not to exceed, together with the aggregate amount of all cash payments made pursuant to sub-clause (A(A) of this clause (ii(ii) in respect of promissory notes issued pursuant to Section Section 6.01(o), (1) the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period 20,000,000 in any Fiscal YearYear (or $30,000,000 in any Fiscal Year following a Qualifying IPO), which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under the immediately preceding clause (1); plus
(E) with the amount of any Cash bonuses otherwise payable to any Permitted Payee that are foregone in exchange for the receipt of Capital Stock of the Parent Borrower or any Parent Company pursuant to any compensation arrangement, including any deferred compensation planYears;
(iii) the Parent Lead Borrower may make additional Restricted Payments in an amount not to exceed (A) the portion, if any, of the Available Amount on such date that the Parent Borrower elects to apply to this clause (iii)(A) plus (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Parent Lead Borrower elects to apply to this clause (iii)(B) (plus, without duplication of amounts 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 with Available Excluded Contribution Amounts up to the amount of such Available Excluded Contribution Amount, less any application thereof under Sections 6.04(b)(vi) or 6.06(r)iii)(B);
(iv) the Parent Lead Borrower may make Restricted Payments (i) to any Parent Company to enable such Parent Company to (A) make Cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of such Parent Company, dividends, share splits, reverse share splits (or any combination thereof) and, mergers, consolidations, amalgamations or other business combinations, and acquisitions and other Investments permitted hereunder and/or (B) honor any conversion request by a holder of Convertible Indebtedness by payment of cash and/or delivery of Capital Stock, make any cash payments in lieu of fractional shares in connection with any conversion of Convertible Indebtedness and otherwise make payments on Convertible Indebtedness in accordance with its terms (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments upon redemption thereof), or, in the case of each of sub-clauses (A) and (B) above, make Restricted Payments to any Parent Company to enable such Parent Company to make the payments and/or deliveries described in such sub-clauses (A) and (B), and (ii) consisting of (A) payments made or expected to be made in respect of withholding or similar Taxes payable by any Permitted Payee future, present or former officers, directors, employees, members of management, managers or consultants of the Lead Borrower, any Restricted Subsidiary or any Parent Company or any of their respective Immediate Family Members and/or (B) repurchases of Capital Stock in consideration of the payments described in sub sub-clause (A(A) above, including demand repurchases in connection with the exercise of stock options and the issuance of restricted stock units or similar stock based awardsoptions;
(v) the Parent Lead Borrower may repurchase, redeem, acquire or retire Capital Stock upon repurchase (or make provisions for withholdings in connection with), or make Restricted Payments to any Parent Company to enable it to repurchase, redeem, acquire or retire ) Capital Stock upon (or make provisions for withholdings in connection with), the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represents all or a portion of the exercise price of, or tax withholdings with respect to, of such warrants, options or other securities convertible into or exchangeable for Capital Stock as part of a “cashless” exercise;
(viA) for any taxable year (or portion thereof) that the Lead Borrower is a partnership or disregarded entity for U.S. federal income Tax purposes and no Parent Company is treated as a corporation for U.S. federal income tax purposes, the Lead Borrower may make Restricted Payments to fund the income tax liabilities of the direct or indirect equity owners of the Lead Borrower, in an assumed amount equal to the product of (x) the highest combined marginal federal and applicable state and/or local statutory Tax rate applicable to a direct or indirect taxpayer equity owner of the Lead Borrower, and (y) the U.S. federal taxable income of the Lead Borrower for such year (or portion thereof), provided that (i) such calculation shall take into account the character of income or gain, preferential tax rates and the deductibility of state and local income taxes for US federal income tax purposes; (ii) such taxable income shall be reduced by any losses previously allocated to the equity owners to the extent such loss has not previously been used to offset taxable income of the Lead Borrower; (iii) such distributions shall be reduced by any amounts withheld by the Lead Borrower or its Subsidiaries (or otherwise paid directly to any Governmental Authority) with respect to any taxable income or gain of the Lead Borrower and any tax credits the Lead Borrower allocated to its equity owners); or (B) for any taxable period (or portion thereof) that a Parent Company is treated as a corporation for U.S. federal income tax purposes and for which the Lead Borrower and any of its subsidiaries are members (or are pass-through entities of such members) of a consolidated, combined or similar income Tax group for U.S. federal, state or local income Tax purposes for which such Parent Company is the common parent, the Lead Borrower may make Restricted Payments to such Parent Company to pay the portion of any U.S. federal, state or local income Taxes (as applicable) of such Parent Company for such taxable period that are attributable to the income of the Borrower and/or its applicable subsidiaries; provided that the aggregate amount of any such distributions with respect to federal, state or local Taxes, as applicable, shall not exceed the aggregate amount of such Taxes the Lead Borrower and its subsidiaries that are part of such group would be required to pay in respect of such U.S. federal, state or local Taxes on a stand-alone basis for such taxable period; provided, further, that the amount of such distributions with respect to any Unrestricted Subsidiary for any taxable period shall be limited to the amount actually paid by such Unrestricted Subsidiary for such purpose.
(vii) the Lead Borrower may make Restricted Payments, the proceeds of which are applied (i) on the Closing Date, solely to effect the consummation of the Transactions and on or about the Amendment No. 1 Effective Date, solely to effect the consummation of the Amendment No. 1 Transactions, (ii) on and after the Closing Date, to satisfy any payment obligations owing, or as otherwise required, owing under the Acquisition Agreement (including payment of working capital and/or purchase price adjustments) and to pay Transaction Costs, in each case, with respect to the Transactions, (iii) to satisfy obligations to direct or indirect holders of Capital Stock of the Parent Borrower (immediately prior to giving effect to the Transactions) in connection with, or as a result of, any working capital and/or purchase price adjustments, in each case, with respect to the Transactions and (iv) to satisfy any settlement of claims or actions in connection with the Transactions or to satisfy indemnity or other similar obligations in connection with the TransactionsReorganization Agreement;
(viiviii) so long as no Event of Default exists, following the Parent consummation of the first Qualifying IPO, the Lead Borrower may (or may make Restricted Payments to any Parent Company to enable it to) make Restricted Payments with respect to any Capital Stock in an amount not to exceed (A) the greater of (xi) an amount equal to 7.006% per annum of the net Cash proceeds received by or contributed to the Parent Lead Borrower in connection with the merger of Isos Acquisition Corporation and Bowlero Corp. on December 15, 2021 and the other transactions consummated in connection therewith and from any Qualifying IPO or (yb) an amount equal to 7.005% per annum of the Market Capitalization aggregate market capitalization of the Parent Borrower (or its direct or indirect applicable Parent Company, as applicable) and its subsidiaries minus (B) any utilization of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A);
(viiiix) the Parent Lead Borrower may make Restricted Payments to (i) redeem, repurchase, defease, discharge, retire or otherwise acquire any (A) Capital Stock (“Treasury Capital Stock”) of the Parent Lead Borrower and/or any Restricted Subsidiary or (B) Capital Stock of any Parent Company, in the case of each of subclauses (A(A) and (B(B), in exchange for, or out of the proceeds of the substantially concurrent sale (other than to the Parent Lead Borrower and/or any Restricted Subsidiary) of, Qualified Capital Stock of the Parent Lead Borrower or any Parent Company to the extent any such proceeds are contributed to the capital of the Parent Lead Borrower and/or any Restricted Subsidiary 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 the Parent Borrower or a Restricted Subsidiary) of any Refunding Capital Stock;
(ixx) to the extent constituting a Restricted Payment, the Parent Lead Borrower may consummate any transaction permitted by Section 5.19 (other than Section 5.19(d)), Section Section 6.06 (other than Sections 6.06(j6.06(j) and (t(t)) and Section ), Section 6.07 (other than Section Section 6.07(g)) and Section 6.09 (other than Section 6.09(d));
(xxi) the Parent Lead Borrower may make additional Restricted Payments in an aggregate amount not to exceed (A) the greater of $85,000,000 160,000,000 and 254.0% of Consolidated Adjusted EBITDA Total Assets as of the last day of the most recently ended Test Period minus (BA) the amount of Restricted Debt Payments made by the Lead Borrower or any utilization of the Available RP Capacity Amount Restricted Subsidiary in reliance on unused capacity under immediately preceding clause (ASection 6.04(b)(iv)(B), minus (B) the outstanding amount of Investments made by the Lead Borrower or any Restricted Subsidiary in reliance on Section 6.06(q)(ii);
(xixii) the Parent Lead Borrower may pay any dividend or other distribution or consummate any redemption within 60 days after the date of 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 dividend or redemption notice would have complied with the provisions of this Section 6.04(a);
(xii) the Parent Borrower may make any Restricted Payment constituting the distribution or payment of Receivables Fees;hereof; and
(xiii) the Parent Lead Borrower may make additional Restricted Payments so long as, as measured at the time provided for in Section 1.04(e), (i) no Event of Default exists or would result therefrom and (ii) the Total Leverage Ratio would not exceed 4.00:1.00Payment Conditions applicable to Restricted Payments have been satisfied, calculated on a Pro Forma Basis Basis.
(b) The Lead Borrower shall not, nor shall they permit any Restricted Subsidiary to, make any payment (whether in Cash, securities or other property) on or in respect of principal of or interest on (y) any Junior Lien Indebtedness or (z) any Junior Indebtedness (such Indebtedness under clauses (y) and (z), the “Restricted Debt”), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Restricted Debt prior to its scheduled maturity (collectively, “Restricted Debt Payments”), except:
(i) any 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) there shall exist payments as part of an “applicable high yield discount obligation” catch-up payment;
(iii) payments of regularly scheduled interest as and when due in respect of any Restricted Debt, except for any payments with respect to any Subordinated Indebtedness that are prohibited by the subordination provisions thereof;
(iv) so long as, at the time of delivery of irrevocable notice with respect thereto, no Event of Default hereunder exists or shall would result therefrom, additional Restricted Debt Payments in an aggregate amount not to exceed:
(A) the greater of $160,000,000 and 4.0% of Consolidated Total Assets as of the last day of the most recently ended Test Period, minus the amount of Investments made in reliance on Section 6.06(q)(iii); plus
(B) the greater of $160,000,000 and 4.0% of Consolidated Total Assets as of the last day of the most recently ended Test Period, minus (1) the amount of Restricted Payments made by the Borrower or any Restricted Subsidiary in reliance on Section 6.04(a)(x), minus (2) the outstanding amount of Investments made by the Borrower or any Restricted Subsidiary in reliance on Section 6.06(q)(ii);
(xivA) Restricted Debt Payments in exchange for, or with proceeds of any issuance of, Qualified Capital Stock of the Parent Lead Borrower may make additional and/or any Restricted Subsidiary and/or any capital contribution in respect of Qualified Capital Stock of the Borrower or any Restricted Subsidiary, in each case, other than any amounts constituting a Cure Amount or any amount that has been added to the Available Excluded Contribution Amount, (B) Restricted Debt Payments as a result of the conversion of all or any portion of any Restricted Debt into Qualified Capital Stock of the Lead Borrower 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 exceed the amount portion, if any, of proceeds received by the Parent Available Excluded Contribution Amount on such date that the Borrower and/or any Restricted Subsidiary under the Representation and Warranty Insurance Policy during the term of elects to apply to this Agreementclause (vi)(B);
(xvvii) (A) for any taxable period for which the Parent Borrower and/or any of its Subsidiaries are members of a consolidated, combined or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which a direct or indirect parent of the Parent Borrower is the common parent (a “Tax Group”), or for which the Parent Borrower is a disregarded entity for U.S. federal income tax purposes wholly-owned by a corporate parent (a “Corporate Parent”), the Parent Borrower and each of its Subsidiaries may make additional Restricted Payments the proceeds of which shall be used by such common parent to pay the portion of any consolidated, combined or similar U.S. federal, state or local income Taxes of such Tax Group, or by the Corporate Parent to pay the portion of the U.S. federal, state or local income Taxes of such Corporate Parent, or any franchise taxes imposed in lieu thereof, for such taxable period that are attributable to the income of the Parent Borrower and/or its Subsidiaries, Debt Payments; provided that such amount shall not be greater than the amount of such U.S. federal, state or local income taxes that would be paid (for such taxable period) by the Parent Borrower and its Subsidiaries if the Parent Borrower and/or such Subsidiaries had Payment Conditions applicable to Restricted Debt Prepayments have been a stand-alone corporate taxpayer (or stand-alone group of corporate taxpayers filing satisfied on a consolidated, combined or similar basisPro Forma Basis; and
(viii) for all taxable years ending after the Closing Date (taking into account Restricted Debt Payments with respect to any net operating loss carryforwards attributable to the Parent Borrower and its Subsidiaries, as the case may be) and (B) without duplication of Restricted Payments made under Section 6.04(a)(xv)(A), for Indebtedness incurred in connection with any taxable period for which the Parent Borrower is treated as a partnership for U.S. federal and/or applicable state or local income tax purposes, the Parent Borrower may make Restricted Payments to its equity owners at the times and in the amounNMTC Transaction.
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) The Parent Borrower Holdings shall not pay or make, directly or indirectly, any Restricted Payment, except that:
(i) Except with respect to clause (A)(y) below, so long as no Specified Event of Default shall have occurred and be continuing at the Parent Borrower time of the making thereof, Holdings may make Restricted Payments to the extent necessary to permit any Parent CompanyCompany of Holdings:
(A) to pay (x) general operating and compliance administrative costs and expenses (including corporate overhead, audit and other accounting and reporting expenses, administrative, legal or similar expenses and customary wages, salary, bonus and other benefits payable to directors, officers, employees, members of management, managers consultants and/or consultants independent contractors of any Parent Company)) in an aggregate amount not to exceed $2,500,000 per fiscal year, in each caseand (y) franchise fees, which are reasonable and customary and incurred in the ordinary course of business, plus any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of any Parent Company, in each case, to the extent attributable to the ownership or operations of any Parent Company (but excluding, for the avoidance of doubt, the portion of any such amount, if any, that is attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and/or its subsidiaries;
(B) to pay franchise, excise franchise Taxes and similar Taxes, and other fees, Taxes and expenses, expenses required to maintain the organizational existence of such Parent CompanyCompany and any reasonable and customary indemnification claims made by directors or officers of Parent Company attributable to the direct or indirect ownership or operations of Holdings and its Subsidiaries, in each case, incurred in the ordinary course of business;
(B) for any taxable period ending after the Closing Date with respect to which Holdings or any of its subsidiaries is a member of a consolidated, combined or similar income tax group of which any Parent Company is the common parent (a “Tax Group”), or in which Holdings or the Borrower is disregarded from a direct or indirect parent entity that is a C corporation for U.S. federal income tax purposes, to pay the portion of any consolidated, combined or similar income Taxes of such Tax Group that is attributable to the taxable income of Holdings and its subsidiaries; provided that for each taxable period, the amount of such payments made in respect of such period shall not exceed the amount that Holdings and its applicable subsidiaries would have been required to pay as a stand-alone taxpayer or stand-alone Tax Group;
(C) to pay customary salary, bonus, long-term incentive, severance and other benefits (including payment finance any Investment permitted to certain service providers of the Parent Borrower or its Subsidiaries be made pursuant to any equity plan Section 6.05; provided that (x) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (y) Holdings or such Parent Company shall, immediately following the closing thereof, cause all property acquired (whether assets or Capital Stock) to be held by or contributed to Holdings or another Loan Party or, subject to compliance with Section 6.05(b), any Subsidiary; and
(D) in the form of options, cash settled options or otherwise)) payable an amount equal to Permitted Payees, as well as applicable employment, social security withholding or similar taxes payable or expected to be payable by any future, current or former employee, director, manager, consultant or independent contractor (or any of their respective Immediate Family Members) of any Parent Company of Holdings, any Equityholding Vehicle, the Borrower or any Subsidiary of the Borrower in connection therewithwith the exercise or vesting of Capital Stock or other equity awards or any repurchases, redemptions, acquisitions, retirements or withholdings of Capital Stock in connection with any exercise of Capital Stock or other equity options or warrants or the vesting of Capital Stock or other equity awards if such Capital Stock represent all or a portion of the exercise price of, or withholding obligation with respect to, such options or, warrants or other Capital Stock or equity awards; provided that the aggregate amount of Restricted Payments made pursuant to this subclause (D) shall not exceed $2,500,000 in any fiscal year (with any unused amounts permitted to be carried forward to the extent such salary, bonuses, severance and other benefits are attributable and reasonably allocated to the operations of the Parent Borrower and/or its subsidiaries, immediately following fiscal year); in each case, so long as such Parent Company promptly applies the amount of any such Restricted Payment for such purpose;
(D) to pay audit and other accounting and reporting expenses of such Parent Company to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such expenses, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries;
(E) for the payment of insurance premiums to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries;
(F) to pay (x) fees and expenses related to any debt and/or equity offerings (including refinancings), investments and/or acquisitions permitted or not restricted by this Agreement (whether or not consummated, and including advisory, refinancing, subsequent transaction and exit fees of any Parent Company of the Parent Borrower) and expenses and indemnities of any trustee, agent, arranger, underwriter or similar role and (y) Public Company Costs; and
(G) to finance any Investment permitted under Section 6.06 as if such Parent Company were subject to Section 6.06 (provided that (x) any Restricted Payment under this clause (a)(i)(G) 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 (y) the relevant Parent Company shall, promptly following the closing 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 (I) all property acquired to be contributed to the Parent Borrower or one or more of its Restricted Subsidiaries or (II) the merger, consolidation or amalgamation of the Person formed or acquired into the Parent Borrower or one or more of its Restricted Subsidiaries, in order to consummate such Investment in compliance with the applicable requirements of Section 6.06 as if undertaken as a direct Investment by the Parent Borrower or the relevant Restricted Subsidiary);
(ii) the Parent Borrower Holdings may pay (or make Restricted Payments to allow any Parent Company to pay) for the repurchase, redemption, retirement or other acquisition or retirement for value of Capital Stock of any Parent Company or any subsidiary of Holdings held by any Permitted Payee:
future, present or former employee, vendor, director, member of management, officer, manager or consultant (A) in accordance with the terms of promissory notes issued pursuant to Section 6.01(o), so long as the aggregate amount of all Cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments made pursuant to sub-clause (Dor any Affiliate thereof) of this clause (ii) below, (1) does any Parent Company or any subsidiary of Holdings with Cash and Cash Equivalents in an amount not to exceed the greater of $68,000,000 5,000,000 and 205% of Consolidated Adjusted EBITDA as of the last day of for the most recently ended Test Period in any Fiscal Year, which, if not used in ; provided that any Fiscal Year, unused portion of the preceding basket calculated for any calendar year may be carried forward to subsequent Fiscal Years the next succeeding calendar year;
(until iii) so applied)) minus (2) any utilization long as no Event of Default shall have occurred and be continuing at the time of the Available RP Capacity Amount in reliance on unused capacity under clause (D) below; plus
(B) with the proceeds of any sale or issuance ofdeclaration thereof, or of any capital contribution in respect of, the Capital Stock of the Parent Borrower or any Parent Company (to the extent such proceeds are contributed to the Parent Borrower or any Holdings may make Restricted Subsidiary in respect of Qualified Capital Stock issued by the Parent Borrower or such Restricted Subsidiary) (other than amounts constituting a Cure Amount or an Available Excluded Contribution Amount); plus
(C) with the net proceeds of any key-man life insurance policies; plus
(D) with Cash and Cash Equivalents Payments in an aggregate amount not to exceed, together with the aggregate amount of all cash payments made pursuant to sub-clause (A) of this clause (ii) in respect of promissory notes issued pursuant to Section 6.01(o), (1) exceed the greater of $68,000,000 5,000,000 and 205.0% of Consolidated Adjusted EBITDA as of the last day of for the most recently ended Test Period in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under the immediately preceding clause (1); plus
(E) with the amount of any Cash bonuses otherwise payable to any Permitted Payee that are foregone in exchange for the receipt of Capital Stock of the Parent Borrower or any Parent Company pursuant to any compensation arrangement, including any deferred compensation plan;
(iii) the Parent Borrower may make additional Restricted Payments in an amount not to exceed (A) the portion, if any, of the Available Amount on such date that the Parent Borrower elects to apply to this clause (iii)(A) plus (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Parent Borrower elects to apply to this clause (iii)(B) (plus, without duplication of amounts 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 with Available Excluded Contribution Amounts up to the amount of such Available Excluded Contribution Amount, less any application thereof under Sections 6.04(b)(vi) or 6.06(r))Period;[reserved];
(iv) the Parent Borrower Holdings may make Restricted Payments (i) to any Parent Company to enable such Parent Company to (A) make Cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of such Parent Company, dividends, share splits, reverse share splits (or any combination thereof) and, mergers, consolidations, amalgamations or other business combinations, and acquisitions and other Investments permitted hereunder and/or (B) honor any conversion request by a holder of Convertible Indebtedness by payment of cash and/or delivery of Capital Stock, make any cash payments in lieu of fractional shares in connection with any conversion of Convertible Indebtedness and otherwise make payments on Convertible Indebtedness in accordance with its terms the Revenue Share Agreement (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments upon redemption thereof), or, as defined in the case of each of sub-clauses (A) and (B) above, make Restricted Payments to any Parent Company to enable such Parent Company to make the payments and/or deliveries described in such sub-clauses (A) and (BPurchase Agreement), and (ii) consisting of (A) payments made or expected to be made in respect of withholding or similar Taxes payable by any Permitted Payee and/or (B) repurchases of Capital Stock in consideration of the payments described in sub clause (A) above, including demand repurchases in connection with the exercise of stock options and the issuance of restricted stock units or similar stock based awards;
(v) the Parent Borrower may repurchase, redeem, acquire or retire Capital Stock upon (or make provisions for withholdings in connection with), or make Restricted Payments to any Parent Company to enable it to repurchase, redeem, acquire or retire Capital Stock upon (or make provisions for withholdings in connection with), the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represents all or a portion of the exercise price of, or tax withholdings with respect to, such warrants, options or other securities convertible into or exchangeable for Capital Stock as part of a “cashless” exercise;
(vi) the Parent Borrower Holdings may make Restricted Payments the proceeds of which shall be used to pay customary salary, compensation, bonus and other benefits payable to officers, employees, consultants and other service providers of any Parent Company or partner of Holdings to the extent such salaries, compensation, bonuses and other benefits are applied attributable to the ownership or operation of Holdings, the Borrower and its Restricted Subsidiaries; provided that the aggregate amount of Restricted Payments made pursuant to this subclause (iv) on shall not exceed $2,500,000 in any fiscal year (with any unused amounts permitted to be carried forward to the Closing Date, solely to effect the consummation of the Transactions and on immediately following fiscal year);
(vi) Holdings may pay any dividend or about the Amendment No. 1 Effective Date, solely to effect the consummation of the Amendment No. 1 Transactions, (ii) on and distribution within 60 days after the Closing Datedate of declaration thereof, to satisfy any if at the date of declaration such payment obligations owing, or as otherwise required, under would have complied with the Acquisition provisions of this Agreement (including payment it being understood that a distribution pursuant to this Section 6.04(a)(vi) shall be deemed to have utilized capacity under such other provision of working capital and/or purchase price adjustments) and to pay Transaction Costs, in each case, with respect to the Transactions, (iii) to satisfy obligations to direct or indirect holders of Capital Stock of the Parent Borrower (immediately prior to giving effect to the Transactions) in connection with, or as a result of, any working capital and/or purchase price adjustments, in each case, with respect to the Transactions and (iv) to satisfy any settlement of claims or actions in connection with the Transactions or to satisfy indemnity or other similar obligations in connection with the Transactionsthis Agreement);
(vii) the Parent Borrower may (or Holdings may make Restricted Payments to any Parent Company to enable it to) make Restricted Payments with respect to any Capital Stock in an aggregate amount not to exceed (A) the greater of (x) an amount equal to 7.00% per annum of the net Cash proceeds received by or contributed to the Parent Borrower in connection with the merger of Isos Acquisition Corporation and Bowlero Corp. on December 15, 2021 and the other transactions consummated in connection therewith and (y) an amount equal to 7.00% per annum of the Market Capitalization of the Parent Borrower (or its direct or indirect Parent Company, as applicable) and its subsidiaries minus (B) any utilization of the Available RP Capacity Equity Amount in reliance on unused capacity under immediately preceding clause (A)at the time such Restricted Payment is paid[reserved];
(viii) Holdings may pay Restricted Payments payable solely in its Qualified Capital Stock; and
(ix) Holdings may pay cash in lieu of fractional Qualified Capital Stock in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar permitted Investment).
(b) The Borrower shall not, and Holdings shall not permit any Subsidiary to, pay or make, directly or indirectly, any Restricted Payment, except that:
(i) any Subsidiary of the Parent Borrower may make Restricted Payments to its direct equity holders (other than Holdings) on a ratable basis (or greater than ratable basis with respect to equityholders that are the Borrower or a Subsidiary that is a Loan Party); and
(ii) the Borrower may make Restricted Payments to Holdings to the extent necessary to permit Holdings to make Restricted Payments permitted by Section 6.04(a) (or as if such Restricted Payments were to be paid to Holdings instead of a Parent Company); in each case under this clause (ii), so long as Holdings promptly applies the amount of any such Restricted Payment for such purpose.
(c) Holdings shall not, nor shall it permit any Subsidiary to, make any payment in Cash, securities or other property on or in respect of principal or interest on any Junior Debt, including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Debt (collectively, “Restricted Debt Payments”), except:
(i) redeemthe purchase, defeasance, redemption, repurchase, defease, discharge, retire repayment or otherwise acquire any (A) Capital Stock (“Treasury Capital Stock”) of the Parent Borrower and/or any Restricted Subsidiary other acquisition or (B) Capital Stock retirement of any Parent Company, in the case of each of subclauses (A) and (B), in Junior Debt made by exchange for, or out of the proceeds of the substantially concurrent sale incurrence of, Junior Debt permitted by Section 6.01;
(ii) payments of regularly scheduled interest and payments of fees, expenses and indemnification obligations as and when due in respect of any Junior Debt (other than to payments prohibited by the Parent Borrower and/or any Restricted Subsidiary) of, Qualified Capital Stock of the Parent Borrower or any Parent Company to the extent any such proceeds are contributed to the capital of the Parent Borrower and/or any Restricted Subsidiary in respect of Qualified Capital Stock subordination provisions thereof (“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 the Parent Borrower or a Restricted Subsidiary) of any Refunding Capital Stockif any));
(ixiii) to the extent constituting a Restricted PaymentJunior Debt, the Parent Borrower may consummate any transaction payments in respect of earn-outs and purchase price adjustments arising under Investments otherwise expressly permitted by Section 5.19 (other than Section 5.19(d)), Section 6.06 (other than Sections 6.06(j) and (t)) and Section 6.07 (other than Section 6.07(g))under this Agreement;
(xA) payments with respect to intercompany Indebtedness between the Parent Borrower may make and its Subsidiaries permitted under Section 6.01, subject to the payment subordination provisions applicable thereto; and
(B) so long as no Event of Default exists at the time of delivery of notice with respect thereof or would result therefrom, additional Restricted Debt Payments in an aggregate amount not to exceed (A) the greater of $85,000,000 7,500,000 and 257.5% of Consolidated Adjusted EBITDA as of the last day of for 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);Period; and
(xiC) the Parent Borrower may pay any dividend or other distribution or consummate any redemption within 60 days after the date of 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);
(xii) the Parent Borrower may make any Restricted Payment constituting the distribution or payment of Receivables Fees;
(xiii) the Parent Borrower may make additional Restricted 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 Event of Default hereunder or shall result therefrom;
(xiv) the Parent Borrower may make additional Restricted Debt Payments in an aggregate amount not to exceed the amount Available Equity Amount at the time of proceeds received by the Parent Borrower and/or any such Restricted Subsidiary under the Representation and Warranty Insurance Policy during the term of this AgreementDebt Payment;
(xvv) the conversion thereof to Capital Stock (other than Disqualified Capital Stock) of Holdings; and
(vi) the refinancing thereof with the Net Proceeds of any Indebtedness that constitutes Junior Debt of the same type as the Junior Debt being refinanced (to the extent such Indebtedness constitutes Permitted Refinancing Indebtedness). For purposes of determining compliance with this Section 6.04, in the event that a proposed Restricted Payment (or a portion thereof) or Restricted Debt Payment of(or a portion thereof), as applicable meets the criteria of clauses (a)(i) through (ix), (b)(i) or (ii) or (c)(i) through (vi) (Aor any sub-category thereof) for any taxable period for which above, as applicable, the Parent Borrower and/or any will be entitled to classify or later reclassify (based on circumstances existing on the date of its Subsidiaries are members of a consolidated, combined such reclassification) such Restricted Payment (or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which a direct or indirect parent of the Parent Borrower is the common parent portion thereof) among such clauses (a “Tax Group”a)(i) through (ix), (b)(i) or for which the Parent Borrower is (ii) or (c)(i) through (vi) (or any sub-category thereof) in a disregarded entity for U.S. federal income tax purposes wholly-owned by a corporate parent (a “Corporate Parent”)manner that otherwise complies with this Section 6.04; provided that, the Parent Borrower and each of its Subsidiaries may make Restricted Payments the proceeds of which shall be used by such common parent to pay the portion of any consolidated, combined or similar U.S. federal, state or local income Taxes of such Tax Group, or by the Corporate Parent to pay the portion of the U.S. federal, state or local income Taxes of such Corporate Parent, or any franchise taxes imposed in lieu thereof, for such taxable period that are attributable to the income of the Parent Borrower and/or its Subsidiaries, provided that such amount shall not be greater than the amount of such U.S. federal, state entitled to classify or local income taxes that would be paid (for such taxable period) by the Parent Borrower and its Subsidiaries if the Parent Borrower and/or such Subsidiaries had been a stand-alone corporate taxpayer (or stand-alone group of corporate taxpayers filing on a consolidated, combined or similar basis) for all taxable years ending after the Closing Date (taking into account later reclassify any net operating loss carryforwards attributable to the Parent Borrower and its Subsidiaries, as the case may be) and (B) without duplication of Restricted Payments made under Section 6.04(a)(xv)(A), for as Restricted Debt Payments or any taxable period for which the Parent Borrower is treated Restricted Debt Payments as a partnership for U.S. federal and/or applicable state or local income tax purposes, the Parent Borrower may make Restricted Payments to its equity owners at the times and in the amounPayments.
Appears in 1 contract
Sources: Secured Seller Note Agreement (American Water Works Company, Inc.)
Restricted Payments; Certain Payments of Indebtedness. (a) The Parent Borrower Agent shall not pay or make, directly or indirectly, any Restricted Payment, except that:
(i) the Parent Borrower Agent may make Restricted Payments to the extent necessary to permit any Parent Company:;
(A) to pay (x) general operating and compliance administrative costs and expenses (including corporate overhead, legal or similar expenses) and franchise fees and taxes and similar fees, taxes and expenses and customary salary, bonus and other benefits payable required to directors, officers, employees, members maintain the organizational existence of management, managers and/or consultants of any such Parent Company), in each case, which are reasonable and customary and incurred in the ordinary course of business, plus any reasonable and customary indemnification claims made by directors, officers, members of management, managers, management or employees or consultants of any Parent Company, in each case, to the extent attributable to the ownership or operations of any Parent Company (but excluding, for the avoidance of doubtHoldings, the portion Borrowers and the Subsidiaries and (y) without duplication of preceding clause (x), any Public Company Costs;
(B) for any taxable period in which the Borrower Agent and/or any of its subsidiaries is a member of a consolidated, combined or similar income tax group of which a direct or indirect parent of the Borrowers is the common parent (a “Tax Group”), to discharge the consolidated tax liabilities of such amountTax Group when and as due, if any, that is to the extent such liabilities are attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its Agent and the subsidiaries); provided, that the Parent amount paid by the Borrower and/or its subsidiaries;
Agent pursuant to this paragraph (B) to pay franchise, excise shall not exceed the tax liabilities that would be due if the Borrower Agent and each subsidiary were separate corporations filing income and similar Taxes, and other fees, Taxes and expenses, required to maintain tax returns on a consolidated or combined basis with the organizational existence Borrower Agent as the common parent of such Parent Companyaffiliated group (calculated at the highest combined applicable federal, state, local and foreign tax rate); provided further that the permitted payment pursuant to this paragraph (B) with respect to any taxes of any Unrestricted Subsidiary for any taxable period shall be limited to the amount actually paid with respect to such period by such Unrestricted Subsidiary to the Borrower Agent and the Subsidiaries for the purposes of paying such consolidated, combined or similar taxes;
(C) to pay audit and other accounting and reporting expenses at such Parent Company to the extent relating to the ownership or operations of the Borrowers and the Subsidiaries;
(D) for the payment of insurance premiums to the extent relating to the ownership or operations of the Borrowers and the Subsidiaries;
(E) pay fees and expenses related to debt or equity offerings, investments or acquisitions permitted by this Agreement (whether or not consummated);
(F) to pay the consideration to finance any Investment permitted under Section 6.07 (provided that (x) such Restricted Payments under this clause (a)(i)(F) shall be made substantially concurrently with the closing of such Investment and (y) such Parent Company shall, promptly following the closing thereof, cause all such property acquired to be contributed to the Borrowers or one of the Subsidiaries, or the merger or amalgamation of the Person formed or acquired into the Borrowers or one of the Subsidiaries, in order to consummate such Investment in a manner that causes such Investment to comply with the applicable requirements of Section 6.07 as if undertaken as a direct Investment by such Borrower or such Subsidiary); and
(G) without duplication of clause (A)(y) above, to pay customary salary, bonus, long-term incentive, severance bonus and other benefits (including payment to certain service providers of the Parent Borrower or its Subsidiaries pursuant to any equity plan (whether in the form of options, cash settled options or otherwise)) payable to Permitted Payeesdirectors, as well as applicable employmentofficers, social security members of management or similar taxes in connection therewith, employees of any Parent Company to the extent such salary, bonuses, severance bonuses and other benefits are directly attributable and reasonably allocated to the operations of the Parent Borrower and/or its subsidiariesBorrowers and the Subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose;
(D) to pay audit and other accounting and reporting expenses of such Parent Company to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such expenses, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries;
(E) for the payment of insurance premiums to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries;
(F) to pay (x) fees and expenses related to any debt and/or equity offerings (including refinancings), investments and/or acquisitions permitted or not restricted by this Agreement (whether or not consummated, and including advisory, refinancing, subsequent transaction and exit fees of any Parent Company of the Parent Borrower) and expenses and indemnities of any trustee, agent, arranger, underwriter or similar role and (y) Public Company Costs; and
(G) to finance any Investment permitted under Section 6.06 as if such Parent Company were subject to Section 6.06 (provided that (x) any Restricted Payment under this clause (a)(i)(G) 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 (y) the relevant Parent Company shall, promptly following the closing 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 (I) all property acquired to be contributed to the Parent Borrower or one or more of its Restricted Subsidiaries or (II) the merger, consolidation or amalgamation of the Person formed or acquired into the Parent Borrower or one or more of its Restricted Subsidiaries, in order to consummate such Investment in compliance with the applicable requirements of Section 6.06 as if undertaken as a direct Investment by the Parent Borrower or the relevant Restricted Subsidiary);
(ii) the Parent Borrower Agent may pay (or make Restricted Payments to allow any Parent Company to pay) for the repurchase, redemption, retirement or other acquisition or retirement for value of Capital Stock of any Parent Company or any subsidiary held by any Permitted Payee:future, present or former employee, director, member of management, officer, manager or consultant (or any Affiliate or Immediate Family Member thereof) of any Parent Company, the Borrowers or any Subsidiary;
(A) in accordance with the terms of promissory exchange for notes issued pursuant to Section Section 6.01(o), so long as the aggregate amount of all Cash cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments made (x) pursuant to sub-clause (D(D) of this clause (ii(ii) belowbelow and (y) pursuant to Section 6.05(a)(iv), (1) does not exceed the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period 5,000,000 in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied)) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under clause (D) below; plus;
(B) with the proceeds of any sale or issuance of, or of any capital contribution in respect of, the Capital Stock of the Parent Borrower or any Parent Company (to the extent such proceeds are contributed to the Parent Borrower or any Restricted Subsidiary in respect of Qualified Capital Stock issued by the Parent Borrower or such Restricted Subsidiary) (other than amounts constituting a Cure Amount or an Available Excluded Contribution Amount); plus[Reserved];
(C) with the in exchange for net proceeds of any key-man life insurance policiespolicies received during such fiscal year; plusor
(D) with in exchange for Cash and Cash Equivalents in an amount not to exceed, together with (x) the aggregate amount of all cash payments made pursuant to sub-clause (A) of this clause (ii) in respect of promissory notes issued pursuant to Section Section 6.01(o) and (y) the aggregate amount of Restricted Payments made pursuant to Section 6.05(a)(iv), (1) the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period 5,000,000 in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under the immediately preceding clause (1); plus
(E) with the amount of any Cash bonuses otherwise payable to any Permitted Payee that are foregone in exchange for the receipt of Capital Stock of the Parent Borrower or any Parent Company pursuant to any compensation arrangement, including any deferred compensation plan;
(iii) the Parent Borrower Agent may make additional Restricted Payments; provided that at the time they are paid by the Borrower Agent, before and after giving effect to such Restricted Payments in an amount not to exceed (A) the portion, if any, of the Available Amount on such date that the Parent Borrower elects to apply to under this clause (iii)(A) plus (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Parent Borrower elects to apply to this clause (iii)(B) (plus, without duplication of amounts referred to in this clause (Biii), 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 with Available Excluded Contribution Amounts up to the amount of such Available Excluded Contribution Amount, less any application thereof under Sections 6.04(b)(vi) or 6.06(r))Payment Conditions are satisfied;
(iv) the Parent Borrower Agent may make Restricted Payments (i) to any Parent Company to enable such Parent Company to (A) make Cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of such Parent CompanyCompany in an amount not to exceed, dividends, share splits, reverse share splits together with (or any combination thereofx) and, mergers, consolidations, amalgamations or other business combinations, and acquisitions and other Investments permitted hereunder and/or (B) honor any conversion request by a holder the aggregate amount of Convertible Indebtedness by payment of cash and/or delivery of Capital Stock, make any all cash payments in lieu of fractional shares in connection with any conversion of Convertible Indebtedness and otherwise make payments on Convertible Indebtedness in accordance with its terms (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments upon redemption thereof), or, in the case of each of sub-clauses (A) and (B) above, make Restricted Payments to any Parent Company to enable such Parent Company to make the payments and/or deliveries described in such sub-clauses (A) and (B), and (ii) consisting of (A) payments made or expected to be made in respect of withholding or similar Taxes payable by notes issued pursuant to Section 6.01(o) and (y) the aggregate amount of all Restricted Payments made pursuant to Section 6.05(a)(ii)(D), $5,000,000 in any Permitted Payee and/or (B) repurchases of Capital Stock in consideration of the payments described in sub clause (A) above, including demand repurchases in connection with the exercise of stock options and the issuance of restricted stock units or similar stock based awardsFiscal Year;
(v) the Parent Borrower may repurchase, redeem, acquire or retire Capital Stock upon (or make provisions for withholdings in connection with), or make Restricted Payments to any Parent Company to enable it to repurchase, redeem, acquire or retire Capital Stock upon (or make provisions for withholdings in connection with), the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represents all or a portion of the exercise price of, or tax withholdings with respect to, such warrants, options or other securities convertible into or exchangeable for Capital Stock as part of a “cashless” exercise[Reserved];
(vi) the Parent Borrower may make Restricted Payments the proceeds of which are applied (i) on the Closing Date, solely to effect the consummation of the Transactions and on or about the Amendment No. 1 Effective Date, solely to effect the consummation of the Amendment No. 1 Transactions, (ii) on and after the Closing Date, to satisfy any payment obligations owing, or as otherwise required, under the Acquisition Agreement (including payment of working capital and/or purchase price adjustments) and to pay Transaction Costs, in each case, with respect to the Transactions, (iii) to satisfy obligations to direct or indirect holders of Capital Stock of the Parent Borrower (immediately prior to giving effect to the Transactions) in connection with, or as a result of, any working capital and/or purchase price adjustments, in each case, with respect to the Transactions and (iv) to satisfy any settlement of claims or actions in connection with the Transactions or to satisfy indemnity or other similar obligations in connection with the Transactions[Reserved];
(vii) the Parent Borrower may (or Agent may make Restricted Payments to any Ultimate Parent Company to enable it tothe extent necessary to permit Ultimate Parent to pay (and to the extent applied to pay) make Restricted Payments with respect to any Capital Stock in an amount not to exceed interest, fees, principal and expenses on (A1) the greater Second Lien Notes and (2) any other permitted Indebtedness of (x) an amount equal to 7.00% per annum of the net Cash proceeds received by or contributed Ultimate Parent, in each case, to the Parent Borrower in connection with the merger extent such payments of Isos Acquisition Corporation interest, fees, principal and Bowlero Corp. on December 15, 2021 and the other transactions consummated in connection therewith and (y) an amount equal to 7.00% per annum of the Market Capitalization of the Parent Borrower (or its direct or indirect Parent Company, as applicable) and its subsidiaries minus (B) any utilization of the Available RP Capacity Amount in reliance on unused capacity expenses are not prohibited under immediately preceding clause (ASection 6.05(b);; and
(viii) the Parent Borrower Agent may make Restricted Payments to (i) redeem, repurchase, defease, discharge, retire or otherwise acquire any (A) Capital Stock (“Treasury Capital Stock”) of the Parent Borrower and/or Agent or any Restricted Subsidiary or (B) Capital Stock of any Parent Company, in the case of each of subclauses (A(A) and (B(B), in exchange for, or out of the proceeds of the substantially concurrent sale (other than to the Parent Borrower and/or any Restricted Agent or a Subsidiary) of, Qualified Capital Stock of the Parent Borrower Agent or any Parent Company to the extent any such proceeds are contributed as a common equity contribution to the capital of the Parent Borrower and/or Agent or any Restricted Subsidiary (in respect of Qualified each case, other than Disqualified Capital Stock Stock) (“Refunding Capital Stock”) and (ii) declare and pay dividends on any the Treasury Capital Stock out of the proceeds of the substantially concurrent sale or issuance (other than to the Parent Borrower Agent or a Restricted Subsidiary) of any the Refunding Capital Stock. Notwithstanding anything to the contrary herein, in no event shall Ultimate Parent, Holdings or the Borrower Agent pay or make, directly or indirectly, any Restricted Payment in reliance on Sections 6.05(a)(i)(E) or (iii) or unless all FILO Loans have been paid in full.
(b) Notwithstanding anything to the contrary in Section 6.05(a), no Loan Party shall, nor shall they permit any Subsidiary to, make, directly or indirectly, any payment or other distribution (including with respect to principal, interest or fees) and whether in Cash, securities or other property) on or in respect of the Second Lien Notes, Indebtedness permitted under Section 6.01(k) or (w) (or Refinancing Indebtedness in respect of any of the foregoing if permitted hereunder), any Junior Indebtedness or (without duplication) Indebtedness permitted under Section 6.01(r), 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 Second Lien Notes, Indebtedness permitted under Section 6.01(k) or (w) (or Refinancing Indebtedness in respect of either of the foregoing if permitted hereunder) or any Junior Indebtedness prior to scheduled maturity (collectively, “Restricted Debt Payments”), except:
(i) the defeasance, redemption, repurchase or other acquisition or retirement of the Second Lien Notes, Indebtedness permitted under Section 6.01(k) or (w) (or Refinancing Indebtedness in respect of either of the foregoing if permitted hereunder) or Junior Indebtedness made by exchange for, or out of the proceeds of the substantially concurrent incurrence of, Refinancing Indebtedness permitted by Section 6.01;
(ixii) [Reserved;]
(iii) payments of regularly scheduled principal with respect to any (A) Indebtedness incurred under Section 6.01(m), (B) Indebtedness of the type described in Section 6.01(m) to the extent constituting a Restricted Payment, the Parent Borrower may consummate any transaction permitted by Section 5.19 (other than Section 5.19(d)), Section 6.06 (other than Sections 6.06(jincurred under Section 6.01(u) and (t)(C) and Section 6.07 (other than Section 6.07(g)Indebtedness incurred under Section 6.01(gg);
(xiv) the Parent Borrower may make additional Restricted Payments in an aggregate amount not to exceed (A) payments of regularly scheduled interest, as and when due in respect of any Indebtedness (other than the greater of $85,000,000 Second Lien Notes and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period minus Indebtedness permitted under Sections 6.01(k), (n), (q), (r) or (w)) and (B) payments of (1) customary fees paid on the Closing Date and, thereafter, (2) fees customarily paid to an administrative agent or indenture trustee on a regularly scheduled basis for administrative, agency and/or monitoring services to the extent the recipient thereof is not an Affiliate of either a Loan Party or any utilization of Persons holding Capital Stock in the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A);
Ultimate Parent, (xi3) original issuance discount and other customary fees netted from the Parent Borrower may pay any dividend or other distribution or consummate any redemption within 60 days after the date of the declaration thereof or the provision of a redemption notice with respect thereto, as the case may be, if at the date proceeds of such declaration or notice, the dividend, distribution or redemption contemplated by such declaration or redemption notice would have complied Indebtedness concurrently with the provisions of this Section 6.04(a);
(xii) the Parent Borrower may make any Restricted Payment constituting the distribution or payment of Receivables Fees;
(xiii) the Parent Borrower may make additional Restricted Payments so long as, as measured at the time provided for in Section 1.04(e)funding thereof, (i4) the Total Leverage Ratio would not exceed 4.00:1.00, calculated on a Pro Forma Basis and (ii) there shall exist no Event of Default hereunder or shall result therefrom;
(xiv) the Parent Borrower may make additional Restricted Payments other fees in an amount not to exceed $50,000 in any calendar year and (5) expenses (including, if provided for under the amount applicable financing documentation, expenses of proceeds received legal counsel and other advisors) and indemnification obligations, in each case, to the extent customary in nature, as and when due in respect of any Indebtedness (in each case under this Section 6.05(b)(iv), other than payments with respect to Subordinated Indebtedness prohibited by the Parent Borrower and/or any Restricted Subsidiary under the Representation and Warranty Insurance Policy during the term of this Agreementsubordination provisions thereof);
(xvv) payments with respect to intercompany Indebtedness permitted under Section 6.01, subject to the subordination provisions applicable thereto;
(vi) [Reserved];
(vii) (A) for payments of any taxable period for which Indebtedness under the Parent Borrower Second Lien Notes, Indebtedness permitted under Sections 6.01(k) and/or (w) and/or any Junior Indebtedness in exchange for, or with proceeds of its Subsidiaries are members any substantially contemporaneous issuance of a consolidatedQualified Capital Stock of any Parent Company or the Borrower Agent, combined or similar income tax group for U.S. federal and/or applicable state or local income tax purposes and any substantially contemporaneous capital contribution in respect of which a direct or indirect parent Qualified Capital Stock of the Parent Borrower is the common parent (a “Tax Group”)Agent, or for which the Parent Borrower is a disregarded entity for U.S. federal income tax purposes wholly-owned by a corporate parent (a “Corporate Parent”), the Parent Borrower and each of its Subsidiaries may make Restricted Payments the proceeds of which shall be used by such common parent to pay the portion of any consolidated, combined or similar U.S. federal, state or local income Taxes of such Tax Group, or by the Corporate Parent to pay the portion of the U.S. federal, state or local income Taxes of such Corporate Parent, or any franchise taxes imposed in lieu thereof, for such taxable period that are attributable to the income of the Parent Borrower and/or its Subsidiaries, provided that such amount shall not be greater than the amount of such U.S. federal, state or local income taxes that would be paid (for such taxable period) by the Parent Borrower and its Subsidiaries if the Parent Borrower and/or such Subsidiaries had been a stand-alone corporate taxpayer (or stand-alone group of corporate taxpayers filing on a consolidated, combined or similar basis) for all taxable years ending after the Closing Date (taking into account any net operating loss carryforwards attributable to the Parent Borrower and its Subsidiaries, as the case may be) and (B) without duplication payments of Indebtedness by the conversion of all or any portion thereof into Qualified Capital Stock of any Parent Company or the Borrower Agent and (C) payments of interest in respect of Indebtedness in the form of payment-in-kind interest with respect to such Indebtedness permitted under Section 6.01; and
(viii) Restricted Payments made under Section 6.04(a)(xv)(A), for Debt Payments; provided that as of the date of any taxable period for which the Parent Borrower is treated as a partnership for U.S. federal and/or applicable state or local income tax purposessuch payment and after giving effect thereto, the Parent Borrower may make Payment Conditions are satisfied (provided that in the case of an irrevocable notice required under the terms of the applicable agreements or instruments to be given in respect of a Restricted Payments Debt Payment prior to its equity owners the date of the making of such payment, the Payment Conditions with respect to such Restricted Debt Payment shall be satisfied at the times time of the giving of such irrevocable notice and on the date of the making of such payment). Notwithstanding anything to the contrary herein, in the amounno event shall any Restricted Debt Payment be permitted under Sections 6.05(b)(viii) unless all FILO Loans have been paid in full.
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) The Parent Borrower shall not pay or make, directly or indirectly, any Restricted Payment, except that:
(i) the Parent Borrower may make Restricted Payments to the extent necessary to permit any Parent Company:
(A) to pay general operating and compliance costs and expenses (including corporate overhead, legal or similar expenses and customary salary, bonus and other benefits payable to directors, officers, employees, members of management, managers and/or consultants of any Parent Company), in each case, which are reasonable and customary and incurred in the ordinary course of business, plus any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of any Parent Company, in each case, to the extent attributable to the ownership or operations of any Parent Company (but excluding, for the avoidance of doubt, the portion of any such amount, if any, that is attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and/or its subsidiaries;
(B) to pay franchise, excise and similar Taxes, and other fees, Taxes and expenses, required to maintain the organizational existence of such Parent Company;
(C) to pay customary salary, bonus, long-term incentive, severance and other benefits (including payment to certain service providers of the Parent Borrower or its Subsidiaries pursuant to any equity plan (whether in the form of options, cash settled options or otherwise)) payable to Permitted Payees, as well as applicable employment, social security or similar taxes in connection therewith, to the extent such salary, bonuses, severance and other benefits are attributable and reasonably allocated to the operations of the Parent Borrower and/or its subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose;
(D) to pay audit and other accounting and reporting expenses of such Parent Company to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such expenses, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries;
(E) for the payment of insurance premiums to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries;
(F) to pay (x) fees and expenses related to any debt and/or equity offerings (including refinancings), investments and/or acquisitions permitted or not restricted by this Agreement (whether or not consummated, and including advisory, refinancing, subsequent transaction and exit fees of any Parent Company of the Parent Borrower) and expenses and indemnities of any trustee, agent, arranger, underwriter or similar role and (y) after the consummation of an initial public offering or the issuance of debt securities, Public Company Costs; and
(G) to finance any Investment permitted under Section Section 6.06 as if such Parent Company were subject to Section Section 6.06 (provided that (x) any Restricted Payment under this clause (a)(i)(G(a)(i)(G) 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 (y) the relevant Parent Company shall, promptly following the closing 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 (I) all property acquired to be contributed to the Parent Borrower or one or more of its Restricted Subsidiaries or (II) the merger, consolidation or amalgamation of the Person formed or acquired into the Parent Borrower or one or more of its Restricted Subsidiaries, in order to consummate such Investment in compliance with the applicable requirements of Section Section 6.06 as if undertaken as a direct Investment by the Parent Borrower or the relevant Restricted Subsidiary);
(ii) the Parent Borrower may pay (or make Restricted Payments to allow any Parent Company to pay) for the repurchase, redemption, retirement or other acquisition or retirement for value of Capital Stock of any Parent Company or any subsidiary held by any Permitted Payee:
(A) in accordance with the terms of promissory notes issued pursuant to Section Section 6.01(o), so long as the aggregate amount of all Cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments made pursuant to sub-clause (D(D) of this clause (ii(ii) below, (1) does not exceed the greater of $68,000,000 5,500,000 and 204% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period (which amount shall, following a Qualifying IPO, increase to the greater of $7,500,000 and 6% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period) in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied)) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under clause (D(D) below; plus
(B) with the proceeds of any sale or issuance of, or of any capital contribution in respect of, the Capital Stock of the Parent Borrower or any Parent Company (to the extent such proceeds are contributed to the Parent Borrower or any Restricted Subsidiary in respect of Qualified Capital Stock issued by the Parent Borrower or such Restricted Subsidiary) (other than amounts constituting a Cure Amount or an Available Excluded Contribution Amount); plus
(C) with the net proceeds of any key-man life insurance policies; plus
(D) with Cash and Cash Equivalents in an amount not to exceed, together with the aggregate amount of all cash payments made pursuant to sub-clause (A(A) of this clause (ii(ii) in respect of promissory notes issued pursuant to Section Section 6.01(o), (1) the greater of $68,000,000 5,500,000 and 204% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period (which amount shall, following a Qualifying IPO, increase to the greater of $7,500,000 and 6% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period) in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under the immediately preceding clause (1(1); plus
(E) with the amount of any Cash bonuses otherwise payable to any Permitted Payee that are foregone in exchange for the receipt of Capital Stock of the Parent Borrower or any Parent Company pursuant to any compensation arrangement, including any deferred compensation plan;
(iii) the Parent Borrower may make additional Restricted Payments in an amount not to exceed (A) the portion, if any, of the Available Amount on such date that the Parent Borrower elects to apply to this clause (iii)(A(iii)(A) plus (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Parent Borrower elects to apply to this clause (iii)(B(iii)(B) (plus, without duplication of amounts referred to in this clause (B(B), in an amount equal to the Net Proceeds from a Disposition of property or assets acquired after the Pari First Lien Closing Date, if the acquisition of such property or assets was financed with Available Excluded Contribution Amounts up to the amount of such Available Excluded Contribution Amount, less any application thereof under Sections 6.04(b)(vi6.04(b)(vi) or 6.06(r6.06(r));
(iv) the Parent Borrower may make Restricted Payments (i) to any Parent Company to enable such Parent Company to (A) make Cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of such Parent Company, dividends, share splits, reverse share splits (or any combination thereof) and, mergers, consolidations, amalgamations or other business combinations, and acquisitions and other Investments permitted hereunder and/or (B) honor any conversion request by a holder of Convertible Indebtedness by payment of cash and/or delivery of Capital Stockconvertible Indebtedness, make any cash payments in lieu of fractional shares in connection with any conversion of Convertible Indebtedness and otherwise make payments on Convertible convertible Indebtedness in accordance with its terms (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments upon redemption thereof), or, in the case of each of sub-clauses (A) and (B) above, make Restricted Payments to any Parent Company to enable such Parent Company to make the payments and/or deliveries described in such sub-clauses (A) and (B), and (ii) consisting of (A) payments made or expected to be made in respect of withholding or similar Taxes payable by any Permitted Payee and/or (B) repurchases of Capital Stock in consideration of the payments described in sub clause (A(A) above, including demand repurchases in connection with the exercise of stock options and the issuance of restricted stock units or similar stock based awards;
(v) the Parent Borrower may repurchase, redeem, acquire or retire Capital Stock upon (or make provisions for withholdings in connection with), or make Restricted Payments to any Parent Company to enable it to repurchase, redeem, acquire or retire Capital Stock upon (or make provisions for withholdings in connection with), the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represents all or a portion of the exercise price of, or tax withholdings with respect to, such warrants, options or other securities convertible into or exchangeable for Capital Stock as part of a “cashless” exercise;
(vi) the Parent Borrower may make Restricted Payments the proceeds of which are applied (i) on the Closing Date, solely to effect the consummation of the Transactions and on or about the Amendment No. 1 Effective Date, solely to effect the consummation of the Amendment No. 1 Transactions, (ii) on and after the Closing Date, to satisfy any payment obligations owing, or as otherwise required, under the Acquisition Agreement (including payment of working capital and/or purchase price adjustments) and to pay Transaction Costs, in each case, with respect to the Transactions, (iii) to satisfy obligations to direct or indirect holders of Capital Stock of the Parent Borrower (immediately prior to giving effect to the Transactions) in connection with, or as a result of, any working capital and/or purchase price adjustments, in each case, with respect to the Transactions and (ivii) to satisfy any settlement of claims or actions in connection with the Transactions or to satisfy indemnity or other similar obligations in connection with the Transactions;
(vii) following the Parent consummation of the first Qualifying IPO, the Borrower may (or may make Restricted Payments to any Parent Company to enable it to) make Restricted Payments with respect to any Capital Stock in an amount not to exceed (A) the greater of (x) an amount equal to 7.006.00% per annum of the net Cash proceeds received by or contributed to the Parent Borrower in connection with the merger of Isos Acquisition Corporation and Bowlero Corp. on December 15, 2021 and the other transactions consummated in connection therewith from any Qualifying IPO and (y) an amount equal to 7.006.00% per annum of the Market Capitalization of the Parent Borrower (or its direct or indirect Parent Company, as applicable) and its subsidiaries minus (B) any utilization of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A(A);
(viii) the Parent Borrower may make Restricted Payments to (i) redeem, repurchase, defease, discharge, retire or otherwise acquire any (A) Capital Stock (“Treasury Capital Stock”) of the Parent Borrower and/or any Restricted Subsidiary or (B) Capital Stock of any Parent Company, in the case of each of subclauses (A(A) and (B(B), in exchange for, or out of the proceeds of the substantially concurrent sale (other than to the Parent Borrower and/or any Restricted Subsidiary) of, Qualified Capital Stock of the Parent Borrower or any Parent Company to the extent any such proceeds are contributed to the capital of the Parent Borrower and/or any Restricted Subsidiary 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 the Parent Borrower or a Restricted Subsidiary) of any Refunding Capital Stock;
(ix) to the extent constituting a Restricted Payment, the Parent Borrower may consummate any transaction permitted by Section 5.19 (other than Section 5.19(d)), Section Section 6.06 (other than Sections 6.06(j6.06(j) and (t(t)) and Section ), Section 6.07 (other than Section Section 6.07(g)) and Section 6.09 (other than Section 6.09(d));
(x) the Parent Borrower may make additional Restricted Payments in an aggregate amount not to exceed (A) the greater of $85,000,000 20,000,000 and 2515% of Consolidated Adjusted EBITDA 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(A);
(xi) the Parent Borrower may pay any dividend or other distribution or consummate any redemption within 60 days after the date of 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 Section 6.04(a);
(xii) the Parent Borrower may make any Restricted Payment constituting the distribution or payment of Receivables Fees;
(xiii) the Parent Borrower may make additional Restricted Payments so long as, as measured at the time provided for in Section 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 Event of Default hereunder or shall result therefrom;
(xiv) the Parent Borrower may make additional Restricted Payments in an amount not to exceed the amount of proceeds received by the Parent Borrower and/or any Restricted Subsidiary under the Representation and Warranty Insurance Policy during the term of this Agreement;
(xv) (A) for any taxable period for which the Parent Borrower and/or any of its Subsidiaries are members of a consolidated, combined or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which a direct or indirect parent of the Parent Borrower is the common parent (a “Tax Group”), or for which the Parent Borrower is a disregarded entity for U.S. federal income tax purposes wholly-owned by a corporate parent (a “Corporate Parent”), the Parent Borrower and each of its Subsidiaries may make Restricted Payments (including pursuant to any Tax sharing agreement entered into by the Borrower and any of its Subsidiaries and Comcast Corporation, a Pennsylvania corporation or its Affiliates) the proceeds of which shall be used by such common parent to pay the portion of any consolidated, combined or similar U.S. federal, state or local income Taxes of such Tax Group, or by the Corporate Parent to pay the portion of the U.S. federal, state or local income Taxes of such Corporate Parent, or any franchise taxes imposed in lieu thereof, for such taxable period that are attributable to the income of the Parent Borrower and/or its Subsidiaries, provided that such amount shall not be greater than the amount of such U.S. federal, state or local income taxes that would be paid (for such taxable period) by the Parent Borrower and its Subsidiaries if the Parent Borrower and/or such Subsidiaries had been a stand-alone corporate taxpayer (or stand-alone group of corporate taxpayers filing on a consolidated, combined or similar basis) for all taxable years ending after the Closing Date (taking into account any net operating loss carryforwards attributable to the Parent Borrower and its Subsidiaries, as the case may be) and (B) without duplication of Restricted Payments made under Section Section 6.04(a)(xv)(A), for any taxable period for which the Parent Borrower is treated as a partnership for U.S. federal and/or applicable state or local income tax purposes, the Parent Borrower may make Restricted Payments to its equity owners at the times and in the amounamounts necessary to enable such owners (and their direct or indirect owners) to pay their Tax obligations attributable to their direct or indirect ownership interests in the Borrower in an aggregate amount equal to the product of (1) 50% (or such higher tax rate as shall be applicable to a resident of New York City or California that indirectly owns an interest in the Borrower, taking into account the character of the taxable income in question and the deductibility of state and local income taxes for U.S. federal income tax purposes) and (2) the taxable income of the Borrower for such taxable year, less any cumulative taxable losses from prior taxable years to the extent that such losses are of a character (ordinary or capital) that would permit such losses to be deducted by the direct or indirect owners of the Bor
Appears in 1 contract
Sources: First Lien Credit Agreement (Isos Acquisition Corp.)
Restricted Payments; Certain Payments of Indebtedness. (a) The Parent Borrower shall not pay or make, directly or indirectly, any Restricted Payment, except that:
(i) the Parent Borrower may make Restricted Payments to the extent necessary to permit any Parent Company:
(A) to pay general operating and compliance costs and expenses (including corporate overhead, legal or similar expenses and customary salary, bonus and other benefits payable to directors, officers, employees, members of management, managers and/or consultants of any Parent Company), in each case, which are reasonable and customary and incurred in the ordinary course of business, plus any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of any Parent Company, in each case, to the extent attributable to the ownership or operations of any Parent Company (but excluding, for the avoidance of doubt, the portion of any such amount, if any, that is attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and/or its subsidiaries;
(B) to pay franchise, excise and similar Taxes, and other fees, Taxes and expenses, required to maintain the organizational existence of such Parent Company;
(C) to pay customary salary, bonus, long-term incentive, severance and other benefits (including payment to certain service providers of the Parent Borrower or its Subsidiaries pursuant to any equity plan (whether in the form of options, cash settled options or otherwise)) payable to Permitted Payees, as well as applicable employment, social security or similar taxes in connection therewith, to the extent such salary, bonuses, severance and other benefits are attributable and reasonably allocated to the operations of the Parent Borrower and/or its subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose;
(D) to pay audit and other accounting and reporting expenses of such Parent Company to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such expenses, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries;
(E) for the payment of insurance premiums to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries;
(F) to pay (x) fees and expenses related to any debt and/or equity offerings (including refinancings), investments and/or acquisitions permitted or not restricted by this Agreement (whether or not consummated, and including advisory, refinancing, subsequent transaction and exit fees of any Parent Company of the Parent Borrower) and expenses and indemnities of any trustee, agent, arranger, underwriter or similar role and (y) after the consummation of an initial public offering or the issuance of debt securities, Public Company Costs; and
(G) to finance any Investment permitted under Section Section 6.06 as if such Parent Company were subject to Section Section 6.06 (provided that (x) any Restricted Payment under this clause (a)(i)(G(a))(i))(G) 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 (y) the relevant Parent Company shall, promptly following the closing 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 (I) all property acquired to be contributed to the Parent Borrower or one or more of its Restricted Subsidiaries or (II) the merger, consolidation or amalgamation of the Person formed or acquired into the Parent Borrower or one or more of its Restricted Subsidiaries, in order to consummate such Investment in compliance with the applicable requirements of Section Section 6.06 as if undertaken as a direct Investment by the Parent Borrower or the relevant Restricted Subsidiary);
(ii) the Parent Borrower may pay (or make Restricted Payments to allow any Parent Company to pay) for the repurchase, redemption, retirement or other acquisition or retirement for value of Capital Stock of any Parent Company or any subsidiary held by any Permitted Payee:
(A) in accordance with the terms of promissory notes issued pursuant to Section Section 6.01(o), so long as the aggregate amount of all Cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments made pursuant to sub-clause (D(D) of this clause (ii(ii) below, (1) does not exceed the greater of $68,000,000 5,500,00068,000,000 and 20420% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period (which amount shall, following a Qualifying IPO, increase to the greater of $7,500,000 and 6% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period) in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied)) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under clause (D(D) below; plus
(B) with the proceeds of any sale or issuance of, or of any capital contribution in respect of, the Capital Stock of the Parent Borrower or any Parent Company (to the extent such proceeds are contributed to the Parent Borrower or any Restricted Subsidiary in respect of Qualified Capital Stock issued by the Parent Borrower or such Restricted Subsidiary) (other than amounts constituting a Cure Amount or an Available Excluded Contribution Amount); plus
(C) with the net proceeds of any key-man life insurance policies; plus
(D) with Cash and Cash Equivalents in an amount not to exceed, together with the aggregate amount of all cash payments made pursuant to sub-clause (A(A) of this clause (ii(ii) in respect of promissory notes issued pursuant to Section Section 6.01(o), (1) the greater of $68,000,000 5,500,00068,000,000 and 20420% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period (which amount shall, following a Qualifying IPO, increase to the greater of $7,500,000 and 6% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period) in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under the immediately preceding clause (1(1); plus
(E) with the amount of any Cash bonuses otherwise payable to any Permitted Payee that are foregone in exchange for the receipt of Capital Stock of the Parent Borrower or any Parent Company pursuant to any compensation arrangement, including any deferred compensation plan;
(iii) the Parent Borrower may make additional Restricted Payments in an amount not to exceed (A) the portion, if any, of the Available Amount on such date that the Parent Borrower elects to apply to this clause (iii)(A(iii))(A) plus (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Parent Borrower elects to apply to this clause (iii)(B(iii))(B) (plus, without duplication of amounts referred to in this clause (B(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 with Available Excluded Contribution Amounts up to the amount of such Available Excluded Contribution Amount, less any application thereof under Sections 6.04(b)(vi6.04(b)(vi) or 6.06(r6.06(r));
(iv) the Parent Borrower may make Restricted Payments (i) to any Parent Company to enable such Parent Company to (A) make Cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of such Parent Company, dividends, share splits, reverse share splits (or any combination thereof) and, mergers, consolidations, amalgamations or other business combinations, and acquisitions and other Investments permitted hereunder and/or (B) honor any conversion request by a holder of Convertible convertibleConvertible Indebtedness by payment of cash and/or delivery of Capital Stock, make any cash payments in lieu of fractional shares in connection with any conversion of Convertible Indebtedness and otherwise make payments on Convertible convertibleConvertible Indebtedness in accordance with its terms (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments upon redemption thereof), or, in the case of each of sub-clauses (A) and (B) above, make Restricted Payments to any Parent Company to enable such Parent Company to make the payments and/or deliveries described in such sub-clauses (A) and (B), and (ii) consisting of (A) payments made or expected to be made in respect of withholding or similar Taxes payable by any Permitted Payee and/or (B) repurchases of Capital Stock in consideration of the payments described in sub clause (A(A) above, including demand repurchases in connection with the exercise of stock options and the issuance of restricted stock units or similar stock based awards;
(v) the Parent Borrower may repurchase, redeem, acquire or retire Capital Stock upon (or make provisions for withholdings in connection with), or make Restricted Payments to any Parent Company to enable it to repurchase, redeem, acquire or retire Capital Stock upon (or make provisions for withholdings in connection with), the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represents all or a portion of the exercise price of, or tax withholdings with respect to, such warrants, options or other securities convertible into or exchangeable for Capital Stock as part of a “cashless” exercise;
(vi) the Parent Borrower may make Restricted Payments the proceeds of which are applied (i) on the Closing Date, solely to effect the consummation of the Transactions and on or about the Amendment No. 1 Effective Date, solely to effect the consummation of the Amendment No. 1 Transactions, (ii) on and after the Closing Date, to satisfy any payment obligations owing, or as otherwise required, under the Acquisition Agreement (including payment of working capital and/or purchase price adjustments) and to pay Transaction Costs, in each case, with respect to the Transactions, (iii) to satisfy obligations to direct or indirect holders of Capital Stock of the Parent Borrower (immediately prior to giving effect to the Transactions) in connection with, or as a result of, any working capital and/or purchase price adjustments, in each case, with respect to the Transactions and (iv) to satisfy any settlement of claims or actions in connection with the Transactions or to satisfy indemnity or other similar obligations in connection with the Transactions;
(vii) following the consummation of the first Qualifying IPO, thethe Parent Borrower may (or may make Restricted Payments to any Parent Company to enable it to) make Restricted Payments with respect to any Capital Stock in an amount not to exceed (A) the greater of (x) an amount equal to 7.006.007.00% per annum of the net Cash proceeds received by or contributed to the Parent Borrower from any Qualifying IPOParent Borrower in connection with the merger of Isos Acquisition Corporation and Bowlero Corp. on December 15, 2021 and the other transactions consummated in connection therewith and (y) an amount equal to 7.006.007.00% per annum of the Market Capitalization of the Parent Borrower (or its direct or indirect Parent Company, as applicable) and its subsidiaries minus (B) any utilization of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A(A);
(viii) the Parent Borrower may make Restricted Payments to (i) redeem, repurchase, defease, discharge, retire or otherwise acquire any (A) Capital Stock (“Treasury Capital Stock”) of the Parent Borrower and/or any Restricted Subsidiary or (B) Capital Stock of any Parent Company, in the case of each of subclauses (A(A) and (B(B), in exchange for, or out of the proceeds of the substantially concurrent sale (other than to the Parent Borrower and/or any Restricted Subsidiary) of, Qualified Capital Stock of the Parent Borrower or any Parent Company to the extent any such proceeds are contributed to the capital of the Parent Borrower and/or any Restricted Subsidiary 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 the Parent Borrower or a Restricted Subsidiary) of any Refunding Capital Stock;
(ix) to the extent constituting a Restricted Payment, the Parent Borrower may consummate any transaction permitted by Section Section 5.19 (other than Section Section 5.19(d)), Section Section 6.06 (other than Sections 6.06(j6.06(j) and (t(t)) ), and Section Section 6.07 (other than Section Section 6.07(g)) and Section 6.09 (other than Section 6.09(d));
(x) the Parent Borrower may make additional Restricted Payments in an aggregate amount not to exceed (A) the greater of $85,000,000 20,000,00085,000,000 and 251525% of Consolidated Adjusted EBITDA 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(A);
(xi) the Parent Borrower may pay any dividend or other distribution or consummate any redemption within 60 days after the date of 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 Section 6.04(a);
(xii) the Parent Borrower may make any Restricted Payment constituting the distribution or payment of Receivables Fees;
(xiii) the Parent Borrower may make additional Restricted Payments so long as, as measured at the time provided for in Section 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 Event of Default hereunder or shall result therefrom;
(xiv) the Parent Borrower may make additional Restricted Payments in an amount not to exceed the amount of proceeds received by the Parent Borrower and/or any Restricted Subsidiary under the Representation and Warranty Insurance Policy during the term of this Agreement;
(xv) (A) for any taxable period for which the Parent Borrower and/or any of its Subsidiaries are members of a consolidated, combined or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which a direct or indirect parent of the Parent Borrower is the common parent (a “Tax Group”), or for which the Parent Borrower is a disregarded entity for U.S. federal income tax purposes wholly-owned by a corporate parent (a “Corporate Parent”), the Parent Borrower and each of its Subsidiaries may make Restricted Payments (including pursuant to any Tax sharing agreement entered into by the Borrower and any of its Subsidiaries and Comcast Corporation, a Pennsylvania corporation or its Affiliates) thethe proceeds of which shall be used by such common parent to pay the portion of any consolidated, combined or similar U.S. federal, state or local income Taxes of such Tax Group, or by the Corporate Parent to pay the portion of the U.S. federal, state or local income Taxes of such Corporate Parent, or any franchise taxes imposed in lieu thereof, for such taxable period that are attributable to the income of the Parent Borrower and/or its Subsidiaries, provided that such amount shall not be greater than the amount of such U.S. federal, state or local income taxes that would be paid (for such taxable period) by the Parent Borrower and its Subsidiaries if the Parent Borrower and/or such Subsidiaries had been a stand-alone corporate taxpayer (or stand-alone group of corporate taxpayers filing on a consolidated, combined or similar basis) for all taxable years ending after the Closing Date (taking into account any net operating loss carryforwards attributable to the Parent Borrower and its Subsidiaries, as the case may be) and (B) without duplication of Restricted Payments made under Section 6.04(a)(xv)(A), for any taxable period for which the Parent Borrower is treated as a partnership for U.S. federal and/or applicable state or local income tax purposes, the Parent Borrower may make Restricted Payments to its equity owners at the times and in the amount
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) The Parent Borrower shall not pay or make, directly or indirectly, any Restricted Payment, except that:
(i) the Parent Borrower may make Restricted Payments to the extent necessary to permit any Parent Company:
(A) to pay general operating and compliance costs and expenses (including corporate overhead, legal or similar expenses and customary salary, bonus and other benefits payable to directors, officers, employees, members of management, managers and/or consultants of any Parent Company), in each case, which are reasonable and customary and incurred in the ordinary course of business, plus any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of any Parent Company, in each case, to the extent attributable to the ownership or operations of any Parent Company (but excluding, for the avoidance of doubt, the portion of any such amount, if any, that is attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and/or its subsidiaries;
(B) to pay franchise, excise and similar Taxes, and other fees, Taxes and expenses, required to maintain the organizational existence of such Parent Company;
(C) to pay customary salary, bonus, long-term incentive, severance and other benefits (including payment to certain service providers of the Parent Borrower or its Subsidiaries pursuant to any equity plan (whether in the form of options, cash settled options or otherwise)) payable to Permitted Payees, as well as applicable employment, social security or similar taxes in connection therewith, to the extent such salary, bonuses, severance and other benefits are attributable and reasonably allocated to the operations of the Parent Borrower and/or its subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose;
(D) to pay audit and other accounting and reporting expenses of such Parent Company to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such expenses, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries;
(E) for the payment of insurance premiums to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries;
(F) to pay (x) fees and expenses related to any debt and/or equity offerings (including refinancings), investments and/or acquisitions permitted or not restricted by this Agreement (whether or not consummated, and including advisory, refinancing, subsequent transaction and exit fees of any Parent Company of the Parent Borrower) and expenses and indemnities of any trustee, agent, arranger, underwriter or similar role and (y) after the consummation of an initial public offering or the issuance of debt securities, Public Company Costs; and
(G) to finance any Investment permitted under Section Section 6.06 as if such Parent Company were subject to Section Section 6.06 (provided that (x) any Restricted Payment under this clause (a)(i)(G(a)(i)(G) 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 (y) the relevant Parent Company shall, promptly following the closing 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 (I) all property acquired to be contributed to the Parent Borrower or one or more of its Restricted Subsidiaries or (II) the merger, consolidation or amalgamation of the Person formed or acquired into the Parent Borrower or one or more of its Restricted Subsidiaries, in order to consummate such Investment in compliance with the applicable requirements of Section Section 6.06 as if undertaken as a direct Investment by the Parent Borrower or the relevant Restricted Subsidiary);
(ii) the Parent Borrower may pay (or make Restricted Payments to allow any Parent Company to pay) for the repurchase, redemption, retirement or other acquisition or retirement for value of Capital Stock of any Parent Company or any subsidiary held by any Permitted Payee:
(A) in accordance with the terms of promissory notes issued pursuant to Section Section 6.01(o), so long as the aggregate amount of all Cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments made pursuant to sub-clause (D(D) of this clause (ii(ii) below, (1) does not exceed the greater of $68,000,000 5,500,000 and 204% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period (which amount shall, following a Qualifying IPO, increase to the greater of $7,500,000 and 6% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period) in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied)) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under clause (D(D) below; plus
(B) with the proceeds of any sale or issuance of, or of any capital contribution in respect of, the Capital Stock of the Parent Borrower or any Parent Company (to the extent such proceeds are contributed to the Parent Borrower or any Restricted Subsidiary in respect of Qualified Capital Stock issued by the Parent Borrower or such Restricted Subsidiary) (other than amounts constituting a Cure Amount or an Available Excluded Contribution Amount); plus
(C) with the net proceeds of any key-man life insurance policies; plus
(D) with Cash and Cash Equivalents in an amount not to exceed, together with the aggregate amount of all cash payments made pursuant to sub-clause (A(A) of this clause (ii(ii) in respect of promissory notes issued pursuant to Section Section 6.01(o), (1) the greater of $68,000,000 5,500,000 and 204% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period (which amount shall, following a Qualifying IPO, increase to the greater of $7,500,000 and 6% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period) in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under the immediately preceding clause (1(1); plus
(E) with the amount of any Cash bonuses otherwise payable to any Permitted Payee that are foregone in exchange for the receipt of Capital Stock of the Parent Borrower or any Parent Company pursuant to any compensation arrangement, including any deferred compensation plan;
(iii) the Parent Borrower may make additional Restricted Payments in an amount not to exceed (A) the portion, if any, of the Available Amount on such date that the Parent Borrower elects to apply to this clause (iii)(A(iii)(A) plus (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Parent Borrower elects to apply to this clause (iii)(B(iii)(B) (plus, without duplication of amounts referred to in this clause (B(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 with Available Excluded Contribution Amounts up to the amount of such Available Excluded Contribution Amount, less any application thereof under Sections 6.04(b)(vi6.04(b)(vi) or 6.06(r6.06(r));
(iv) the Parent Borrower may make Restricted Payments (i) to any Parent Company to enable such Parent Company to (A) make Cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of such Parent Company, dividends, share splits, reverse share splits (or any combination thereof) and, mergers, consolidations, amalgamations or other business combinations, and acquisitions and other Investments permitted hereunder and/or (B) honor any conversion request by a holder of Convertible Indebtedness by payment of cash and/or delivery of Capital Stockconvertible Indebtedness, make any cash payments in lieu of fractional shares in connection with any conversion of Convertible Indebtedness and otherwise make payments on Convertible convertible Indebtedness in accordance with its terms (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments upon redemption thereof), or, in the case of each of sub-clauses (A) and (B) above, make Restricted Payments to any Parent Company to enable such Parent Company to make the payments and/or deliveries described in such sub-clauses (A) and (B), and (ii) consisting of (A) payments made or expected to be made in respect of withholding or similar Taxes payable by any Permitted Payee and/or (B) repurchases of Capital Stock in consideration of the payments described in sub clause (A(A) above, including demand repurchases in connection with the exercise of stock options and the issuance of restricted stock units or similar stock based awards;
(v) the Parent Borrower may repurchase, redeem, acquire or retire Capital Stock upon (or make provisions for withholdings in connection with), or make Restricted Payments to any Parent Company to enable it to repurchase, redeem, acquire or retire Capital Stock upon (or make provisions for withholdings in connection with), the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represents all or a portion of the exercise price of, or tax withholdings with respect to, such warrants, options or other securities convertible into or exchangeable for Capital Stock as part of a “cashless” exercise;
(vi) the Parent Borrower may make Restricted Payments the proceeds of which are applied (i) on the Closing Date, solely to effect the consummation of the Transactions and on or about the Amendment No. 1 Effective Date, solely to effect the consummation of the Amendment No. 1 Transactions, (ii) on and after the Closing Date, to satisfy any payment obligations owing, or as otherwise required, under the Acquisition Agreement (including payment of working capital and/or purchase price adjustments) and to pay Transaction Costs, in each case, with respect to the Transactions, (iii) to satisfy obligations to direct or indirect holders of Capital Stock of the Parent Borrower (immediately prior to giving effect to the Transactions) in connection with, or as a result of, any working capital and/or purchase price adjustments, in each case, with respect to the Transactions and (iv) to satisfy any settlement of claims or actions in connection with the Transactions or to satisfy indemnity or other similar obligations in connection with the Transactions;
(vii) following the Parent consummation of the first Qualifying IPO, the Borrower may (or may make Restricted Payments to any Parent Company to enable it to) make Restricted Payments with respect to any Capital Stock in an amount not to exceed (A) the greater of (x) an amount equal to 7.006.00% per annum of the net Cash proceeds received by or contributed to the Parent Borrower in connection with the merger of Isos Acquisition Corporation and Bowlero Corp. on December 15, 2021 and the other transactions consummated in connection therewith from any Qualifying IPO and (y) an amount equal to 7.006.00% per annum of the Market Capitalization of the Parent Borrower (or its direct or indirect Parent Company, as applicable) and its subsidiaries minus (B) any utilization of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A(A);
(viii) the Parent Borrower may make Restricted Payments to (i) redeem, repurchase, defease, discharge, retire or otherwise acquire any (A) Capital Stock (“Treasury Capital Stock”) of the Parent Borrower and/or any Restricted Subsidiary or (B) Capital Stock of any Parent Company, in the case of each of subclauses (A(A) and (B(B), in exchange for, or out of the proceeds of the substantially concurrent sale (other than to the Parent Borrower and/or any Restricted Subsidiary) of, Qualified Capital Stock of the Parent Borrower or any Parent Company to the extent any such proceeds are contributed to the capital of the Parent Borrower and/or any Restricted Subsidiary 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 the Parent Borrower or a Restricted Subsidiary) of any Refunding Capital Stock;
(ix) to the extent constituting a Restricted Payment, the Parent Borrower may consummate any transaction permitted by Section 5.19 (other than Section 5.19(d)), Section Section 6.06 (other than Sections 6.06(j6.06(j) and (t(t)) and Section ), Section 6.07 (other than Section Section 6.07(g)) and Section 6.09 (other than Section 6.09(d));
(x) the Parent Borrower may make additional Restricted Payments in an aggregate amount not to exceed (A) the greater of $85,000,000 20,000,000 and 2515% of Consolidated Adjusted EBITDA 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(A);
(xi) the Parent Borrower may pay any dividend or other distribution or consummate any redemption within 60 days after the date of 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 Section 6.04(a);
(xii) the Parent Borrower may make any Restricted Payment constituting the distribution or payment of Receivables Fees;
(xiii) the Parent Borrower may make additional Restricted Payments so long as, as measured at the time provided for in Section 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 Event of Default hereunder or shall result therefrom;
(xiv) the Parent Borrower may make additional Restricted Payments in an amount not to exceed the amount of proceeds received by the Parent Borrower and/or any Restricted Subsidiary under the Representation and Warranty Insurance Policy during the term of this Agreement;
(xv) (A) for any taxable period for which the Parent Borrower and/or any of its Subsidiaries are members of a consolidated, combined or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which a direct or indirect parent of the Parent Borrower is the common parent (a “Tax Group”), or for which the Parent Borrower is a disregarded entity for U.S. federal income tax purposes wholly-owned by a corporate parent (a “Corporate Parent”), the Parent Borrower and each of its Subsidiaries may make Restricted Payments (including pursuant to any Tax sharing agreement entered into by the Borrower and any of its Subsidiaries and Comcast Corporation, a Pennsylvania corporation or its Affiliates) the proceeds of which shall be used by such common parent to pay the portion of any consolidated, combined or similar U.S. federal, state or local income Taxes of such Tax Group, or by the Corporate Parent to pay the portion of the U.S. federal, state or local income Taxes of such Corporate Parent, or any franchise taxes imposed in lieu thereof, for such taxable period that are attributable to the income of the Parent Borrower and/or its Subsidiaries, provided that such amount shall not be greater than the amount of such U.S. federal, state or local income taxes that would be paid (for such taxable period) by the Parent Borrower and its Subsidiaries if the Parent Borrower and/or such Subsidiaries had been a stand-alone corporate taxpayer (or stand-alone group of corporate taxpayers filing on a consolidated, combined or similar basis) for all taxable years ending after the Closing Date (taking into account any net operating loss carryforwards attributable to the Parent Borrower and its Subsidiaries, as the case may be) and (B) without duplication of Restricted Payments made under Section Section 6.04(a)(xv)(A), for any taxable period for which the Parent Borrower is treated as a partnership for U.S. federal and/or applicable state or local income tax purposes, the Parent Borrower may make Restricted Payments to its equity owners at the times and in the amounamounts necessary to enable such owners (and their direct or indirect owners) to pay their Tax obligations attributable to their direct or indirect ownership interests in the Borrower in an aggregate amount equal to the product of (1) 50% (or such higher tax rate as shall be applicable to a resident of New York City or California that indirectly owns an interest in the Borrower, taking into account the character of the taxable income in question and the deductibility
Appears in 1 contract
Sources: First Lien Credit Agreement (Isos Acquisition Corp.)
Restricted Payments; Certain Payments of Indebtedness. (a) The Parent Lead Borrower shall not pay or make, directly or indirectly, any Restricted Payment, except that:
(i) the Parent Lead Borrower may make Restricted Payments to the extent necessary to permit any Parent Company:
(A) to pay general operating and compliance administrative costs and expenses (including corporate overhead, legal or similar expenses and customary salary, fees, bonus and other benefits payable to directors, officers, employees, members of management, managers and/or consultants of any Parent Company)) and franchise fees and Taxes and similar fees, Taxes and expenses required to enable such Parent Company to maintain its organizational existence or qualification to do business, in each case, which are reasonable and customary and incurred in the ordinary course of business, plus any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of any Parent Company, in each case, to the extent attributable to the ownership or operations of any Parent Company and its subsidiaries (but excluding, for the avoidance of doubt, excluding the portion of any such amount, if any, amount that is attributable to the ownership or operations of any subsidiary of any Parent Company other than the Borrowers and their subsidiaries);
(B) to discharge the consolidated, combined, unitary or similar Tax liabilities of such Parent Company and its subsidiaries when and as due, to the extent such liabilities are attributable to the operations of any Parent Company (but excluding, for the avoidance of doubt, the portion of any such Tax liabilities, if any, that is attributable to the operations of any subsidiary of any Parent Company other than the Lead Borrower and/or its subsidiaries), the Parent Lead Borrower and/or and its subsidiaries;
subsidiaries; provided that the amount paid by the Lead Borrower pursuant to this paragraph (B) to pay franchise, excise shall not exceed the amount of Tax liabilities that would be due if the Lead Borrower and each Restricted Subsidiary were separate corporations filing income and similar TaxesTax returns on a consolidated, and other feescombined, Taxes and expenses, required to maintain unitary or similar basis with the organizational existence Lead Borrower as the common parent of such Parent Company;
affiliated group (Ccalculated at the highest combined applicable federal, state, local and foreign Tax rate); provided further that Restricted Payments under this Section 6.04(a)(i)(B) to pay customary salary, bonus, long-term incentive, severance and other benefits (including payment to certain service providers of the Parent Borrower or its Subsidiaries pursuant that are attributable to any equity plan (whether in the form of options, cash settled options Unrestricted Subsidiary or otherwise)) payable to Permitted Payees, as well as applicable employment, social security or similar taxes in connection therewith, any joint venture shall be permitted only to the extent that either (x) such salaryUnrestricted Subsidiary has made one or more Cash distributions, bonuses, severance and other benefits are attributable and reasonably allocated advances or loans to the operations Lead Borrower or any of its Restricted Subsidiaries for such purpose in an amount up to the Parent Borrower and/or its subsidiariesamount of such Unrestricted Subsidiary’s or joint venture’s, in each caseas applicable, so long as proportionate share of such Parent Company applies Tax liabilities or (y) the amount of any such Restricted Payment for made by the Lead Borrower on behalf of such purpose;Unrestricted Subsidiary or joint venture is treated as an Investment subject to Section 6.06 hereof;
(DC) to pay audit and other accounting and reporting expenses of such Parent Company to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such expenses, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower Borrowers and/or its their subsidiaries), the Parent Borrower Borrowers and its subsidiaries;their subsidiaries;
(ED) for the payment of insurance premiums and deductibles to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower Borrowers and/or its their subsidiaries), the Parent Borrower Borrowers and its subsidiaries;their subsidiaries;
(FE) to pay (x) fees and expenses related to any debt and/or or equity offerings (including refinancings)offerings, investments and/or or acquisitions permitted or not restricted by this Agreement (whether or not consummated, ) relating to the Borrowers and including advisory, refinancing, subsequent transaction and exit fees of any Parent Company of the Parent Borrower) and expenses and indemnities of any trustee, agent, arranger, underwriter or similar role their Restricted Subsidiaries and (y) Public Company Costs; andCosts;
(GF) to finance any Investment permitted under Section 6.06 as if such Parent Company were subject to Section Section 6.06 (provided that (x) any Restricted Payment under this clause (a)(i)(G(a)(i)(F) 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 (y) the relevant Parent Company shall, promptly following the closing 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 therewiththereof, cause (I) all property acquired to be contributed to the Parent Borrower Borrowers or one or more of its their Restricted Subsidiaries Subsidiaries, or (II) the merger, consolidation or amalgamation of the Person formed or acquired into the Parent Borrower Borrowers or one or more of its their Restricted Subsidiaries, in order to consummate such Investment in compliance with the applicable requirements of Section Section 6.06 as if undertaken as a direct Investment by the Parent Borrower Borrowers or the relevant Restricted Subsidiary); and
(G) to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, employees or consultants of any Parent Company (or any Immediate Family Member of any of the foregoing) to the extent such salary, bonuses and other benefits are attributable and reasonably allocated to the operations of the Borrowers and/or their subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose; provided that with respect to Restricted Payments under clauses (A), (B), (C), (D) and (G) above, such Restricted Payments that are attributable to any Unrestricted Subsidiary shall be permitted only to the extent that either (x) such Unrestricted Subsidiary has made one or more Cash distributions, advances or loans to the Borrowers or any of their Restricted Subsidiaries for such purpose in an amount up to the amount of such Unrestricted Subsidiary);’s proportionate share of such Restricted Payment or (y) the amount of any such Restricted Payment made by the applicable Borrower on behalf of such Unrestricted Subsidiary is treated as an Investment subject to Section 6.06 hereof;
(ii) the Parent Lead Borrower may pay (or make Restricted Payments to allow any Parent Company to pay) for the repurchase, redemption, retirement or other acquisition or retirement for value of Capital Stock of any Parent Company Company, any subsidiary or any subsidiary of their respective Affiliates held by any Permitted Payeefuture, present or former employee, director, member of management, officer, manager, advisor or consultant (or any Affiliate or Immediate Family Member thereof) of any Parent Company, the Borrowers, any subsidiary or any of their respective Affiliates:
(A) in accordance with the terms of promissory notes issued pursuant to Section Section 6.01(o), so long as the aggregate amount of all Cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments made pursuant to sub-clause (D(D) of this clause (ii(ii) below, (1) does not exceed the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period 5,000,000 in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to the next subsequent Fiscal Years Year (until so applied)) minus (2) provided that no more than $10 million may be carried forward in any utilization of the Available RP Capacity Amount in reliance on unused capacity under clause (D) below; plusFiscal Year);
(B) with the proceeds of any sale or issuance of, or of any capital contribution in respect of, the Capital Stock of the Parent Borrower Borrowers or any Parent Company (to the extent such proceeds are contributed to the Parent Borrower or any Restricted Subsidiary in respect of Qualified Capital Stock issued by to the Parent Borrower Borrowers or such any Restricted Subsidiary) (other than amounts constituting a Cure Amount or an Available Excluded Contribution Amount); plusSubsidiary);
(C) with the net proceeds of any key-man life insurance policies; pluspolicies; or
(D) with Cash and Cash Equivalents in an amount not to exceed, together with the aggregate amount of all cash Cash payments made pursuant to sub-clause (A(A) of this clause (ii(ii) in respect of promissory notes issued pursuant to Section Section 6.01(o), (1) the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period 5,000,000 in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to the next subsequent Fiscal Years Year (until so applied) minus (2) provided that no more than $10 million may be carried forward in any utilization of the Available RP Capacity Amount in reliance on unused capacity under the immediately preceding clause (1); plus
(E) with the amount of any Cash bonuses otherwise payable to any Permitted Payee that are foregone in exchange for the receipt of Capital Stock of the Parent Borrower or any Parent Company pursuant to any compensation arrangement, including any deferred compensation plan;Fiscal Year);
(iii) the Parent Lead Borrower may make additional Restricted Payments in an amount not to exceed (A) the portion, if any, of the Available Amount on such date that the Parent Lead Borrower elects to apply to this clause (iii)(A(iii)(A); provided that (A) no Default or Event of Default has occurred and is continuing or would result therefrom and (B) the Fixed Charge Coverage Ratio, calculated on a Pro Forma Basis, would not be less than 2.00:1.00 as of the last day of the Test Period most recently ended prior to such Restricted Payment for which the financial statements required by Section 5.01(a) or 5.01(b), as the case may be, have been delivered plus (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Parent Lead Borrower elects to apply to this clause (iii)(B) (plus, without duplication of amounts 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 with Available Excluded Contribution Amounts up to the amount of such Available Excluded Contribution Amount, less any application thereof under Sections 6.04(b)(vi) or 6.06(r));iii)(B);
(iv) the Parent Lead Borrower may make Restricted Payments (i) to any Parent Company to enable such Parent Company to (A) make Cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of such Parent Company, dividends, share splits, reverse share splits (or any combination thereof) and, mergers, consolidations, amalgamations or other business combinations, and acquisitions and other Investments permitted hereunder and/or (B) honor any conversion request by a holder of Convertible Indebtedness by payment of cash and/or delivery of Capital Stock, make any cash payments in lieu of fractional shares in connection with any conversion of Convertible Indebtedness and otherwise make payments on Convertible Indebtedness in accordance with its terms (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments upon redemption thereof), or, in the case of each of sub-clauses (A) and (B) above, make Restricted Payments to any Parent Company to enable such Parent Company to make the payments and/or deliveries described in such sub-clauses (A) and (B), and (ii) consisting of (A) payments made or expected to be made in respect of withholding or similar Taxes payable by any Permitted Payee future, present or former officers, directors, employees, members of management, managers or consultants of the Borrowers, any Restricted Subsidiary or any Parent Company or any of their respective Immediate Family Members and/or (B) repurchases of Capital Stock in consideration of the payments described in sub sub-clause (A(A) above, including demand repurchases in connection with the exercise of stock options and the issuance of restricted stock units or similar stock based awards;options;
(v) the Parent Lead Borrower may repurchase, redeem, acquire or retire Capital Stock upon repurchase (or make provisions for withholdings in connection with), or make Restricted Payments to any Parent Company to enable it to repurchase, redeem, acquire or retire ) Capital Stock upon (or make provisions for withholdings in connection with), the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represents all or a portion of the exercise price of, or tax withholdings with respect to, of such warrants, options or other securities convertible into or exchangeable for Capital Stock as part of a “cashless” exercise;exercise;
(vi) the Parent Lead Borrower may make Restricted Payments Payments, the proceeds of which are applied (i) on the Closing Date, solely to effect the consummation of the Transactions and on or about the Amendment No. 1 Effective Date, solely to effect the consummation of the Amendment No. 1 Transactions, (ii) on and after the Closing Date, to satisfy any payment obligations owing, or as otherwise required, under the Acquisition Agreement (including payment of working capital and/or purchase price adjustments) and to pay Transaction Costs, in each case, with respect to the Transactions, (iii) to satisfy obligations to direct or indirect holders of Capital Stock of the Parent Borrower (immediately prior to giving effect to the Transactions) in connection with, or as a result of, any working capital and/or purchase price adjustments, in each case, with respect to the Transactions and (iv) to satisfy any settlement of claims or actions in connection with the Transactions or to satisfy indemnity or other similar obligations in connection with the Transactions;Transactions;
(vii) the Parent Lead Borrower may (or may make Restricted Payments to any Parent Company to enable it to) Holdings (and Holdings may in turn make such Restricted Payments with respect to any Capital Stock Super Holdco) from time to time in an amount not sufficient to exceed enable Super Holdco to fund each scheduled payment of the Regular Cash Dividend; provided that (A) the greater no Default or Event of (x) an amount equal to 7.00% per annum of the net Cash proceeds received by Default exists or contributed to the Parent Borrower in connection with the merger of Isos Acquisition Corporation would result therefrom and Bowlero Corp. on December 15, 2021 and the other transactions consummated in connection therewith and (y) an amount equal to 7.00% per annum of the Market Capitalization of the Parent Borrower (or its direct or indirect Parent Company, as applicable) and its subsidiaries minus (B) any utilization the Fixed Charge Coverage Ratio, calculated on a Pro Forma Basis, would not be less than 2.00:1.00 as of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (Alast day of the Test Period most recently ended prior to such Restricted Payment for which the financial statements required by Section 5.01(a) or 5.01(b);, as the case may be, have been delivered;
(viii) the Parent Lead Borrower may make Restricted Payments to (i) redeem, repurchase, defease, discharge, retire or otherwise acquire any (A) Capital Stock (“Treasury Capital Stock”) of the Parent Borrower Borrowers and/or any Restricted Subsidiary or Subsidiary, (B) Capital Stock of any Parent Company, in the case of each of subclauses (A(A) and (B(B), in exchange for, or out of the proceeds of the substantially concurrent sale (other than to the Parent Lead Borrower and/or any Restricted Subsidiary) of, Qualified Capital Stock of the Parent Borrower Borrowers or any Parent Company to the extent any such proceeds are contributed to the capital of the Parent Borrower Borrowers and/or any Restricted Subsidiary in respect of Qualified Capital Stock (“Refunding Capital Stock”), and/or (C) Capital Stock of any Parent Company owned by any present or former employees, directors, members of management, officers, managers or consultants or independent contractors (or their respective Immediate Family Members) of any Parent Company in an amount equal to any tax liability paid on behalf of such employee, director, member of management, officer, manager or consultant or independent contractor (or their respective Immediate Family Members) arising from the vesting of such 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 the Parent applicable Lead Borrower or a Restricted Subsidiary) of any Refunding Capital Stock;Stock;
(ix) to the extent constituting a Restricted Payment, the Parent Lead Borrower may consummate any transaction permitted by Section 5.19 (other than Section 5.19(d)), Section Section 6.06 (other than Sections 6.06(j6.06(j) and (t(t)) and Section ), Section 6.07 (other than Section Section 6.07(g));) and Section 6.09 (other than Section 6.09(d));
(x) the Parent Lead Borrower may make additional Restricted Payments in an aggregate amount not to exceed (A) the greater of $85,000,000 75,000,000 and 2510% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period minus (BA) the amount of Restricted Debt Payments made by the Borrowers or any utilization of the Available RP Capacity Amount Restricted Subsidiary in reliance on unused capacity under immediately preceding clause (ASection 6.04(b)(iv);, minus (B) the outstanding amount of Investments made by a Borrower or any Restricted Subsidiary in reliance on Section 6.06(q)(ii);
(xi) the Parent Lead Borrower may pay any dividend or other distribution or consummate any redemption within 60 days after the date of 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 dividend or redemption notice would have complied with the provisions of this Section 6.04(a);hereof;
(xii) the Parent Lead Borrower may make any Restricted Payment constituting purchase, redeem or otherwise acquire its common Capital Stock with the distribution or payment proceeds received from the substantially concurrent issuance of Receivables Fees;new common Capital Stock of the Borrowers; and
(xiii) the Parent Lead Borrower may make additional Restricted Payments so long as, as measured at the time provided for in Section 1.04(e), (iA) no Default or Event of Default exists or would result therefrom and (B) the Total Net Leverage Ratio would not exceed 4.00:1.00. calculated on a Pro Forma Basis as of the last day of the most recently ended Test Period.
(b) The Borrowers shall not, nor shall they permit any Restricted Subsidiary to, make any payment (whether in Cash, securities or other property) on or in respect of principal of or interest on (x) any Junior Lien Indebtedness or (y) any Junior Indebtedness (such Indebtedness under clauses (x) and (y), the “Restricted Debt”), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Restricted Debt prior to its scheduled maturity (collectively, “Restricted Debt Payments”), except:
(i) any 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 an “applicable high yield discount obligation” catch-up payment;
(iii) payments of regularly scheduled interest as and when due in respect of any Restricted Debt, except for any payments with respect to any Subordinated Indebtedness that are prohibited by the subordination provisions thereof;
(iv) so long as, at the time of delivery of irrevocable notice with respect thereto, no Event of Default exists or would result therefrom, additional Restricted Debt Payments in an aggregate amount not to exceed the greater of $75,000,000 and 10% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period, minus (A) the outstanding amount of Investments made in reliance on Section 6.06(q)(ii), minus (B) the amount of Restricted Payments made in reliance on Section 6.04(a)(x);
(A) Restricted Debt Payments in exchange for, or with proceeds of any issuance of, Qualified Capital Stock of the Borrowers and/or any Restricted Subsidiary and/or any capital contribution in respect of Qualified Capital Stock of the Borrowers or any Restricted Subsidiary, (B) Restricted Debt Payments as a result of the conversion of all or any portion of any Restricted Debt into Qualified Capital Stock of the Borrowers 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 exceed (A) the portion, if any, of the Available Amount on such date that the Borrowers elect to apply to this clause (vi)(A); provided, that (A) no Default or Event of Default has occurred and is continuing or would result therefrom and (B) the Fixed Charge Coverage Ratio, calculated on a Pro Forma Basis and (ii) there shall exist no Event of Default hereunder or shall result therefrom;
(xiv) the Parent Borrower may make additional Restricted Payments in an amount Basis, would not to exceed the amount of proceeds received by the Parent Borrower and/or any Restricted Subsidiary under the Representation and Warranty Insurance Policy during the term of this Agreement;
(xv) (A) for any taxable period for which the Parent Borrower and/or any of its Subsidiaries are members of a consolidated, combined or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which a direct or indirect parent be less than 2.00:1.00 as of the Parent Borrower is the common parent (a “Tax Group”), or for which the Parent Borrower is a disregarded entity for U.S. federal income tax purposes wholly-owned by a corporate parent (a “Corporate Parent”), the Parent Borrower and each of its Subsidiaries may make Restricted Payments the proceeds of which shall be used by such common parent to pay the portion of any consolidated, combined or similar U.S. federal, state or local income Taxes of such Tax Group, or by the Corporate Parent to pay the portion last day of the U.S. federal, state or local income Taxes of Test Period most recently ended prior to such Corporate Parent, or any franchise taxes imposed in lieu thereof, for such taxable period that are attributable to the income of the Parent Borrower and/or its Subsidiaries, provided that such amount shall not be greater than the amount of such U.S. federal, state or local income taxes that would be paid (for such taxable period) by the Parent Borrower and its Subsidiaries if the Parent Borrower and/or such Subsidiaries had been a stand-alone corporate taxpayer (or stand-alone group of corporate taxpayers filing on a consolidated, combined or similar basis) for all taxable years ending after the Closing Date (taking into account any net operating loss carryforwards attributable to the Parent Borrower and its Subsidiaries, as the case may be) and (B) without duplication of Restricted Payments made under Section 6.04(a)(xv)(A), for any taxable period for which the Parent Borrower is treated as a partnership for U.S. federal and/or applicable state or local income tax purposes, the Parent Borrower may make Restricted Payments to its equity owners at the times and in the amounRe
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) The Parent Borrower shall not pay or make, directly or indirectly, any Restricted Payment, except that:
(i) the Parent Borrower may make Restricted Payments to the extent necessary to permit any Parent Company:
(A) to pay general operating and compliance administrative costs and expenses (including corporate overhead, legal or similar expenses and customary salary, bonus and other benefits payable to directors, officers, employees, members of management, managers and/or consultants of any Parent Company)) and franchise fees and Taxes and similar fees, Taxes and expenses required to enable such Parent Company to maintain its organizational existence or qualification to do business, in each case, which are reasonable and customary and incurred in the ordinary course of business, plus any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of any Parent Company, in each case, to the extent attributable to the ownership or operations of any Parent Company and its subsidiaries (but excluding, for the avoidance of doubt, excluding the portion of any such amount, if any, amount that is attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or and its subsidiaries), the Parent Borrower and/or its subsidiaries;
(B) to pay franchisedischarge the consolidated, excise and combined, unitary or similar Taxes, and other fees, Taxes and expenses, required to maintain the organizational existence Tax liabilities of such Parent Company;
(C) to pay customary salary, bonus, long-term incentive, severance Company and other benefits (including payment to certain service providers of the Parent Borrower or its Subsidiaries pursuant to any equity plan (whether in the form of options, cash settled options or otherwise)) payable to Permitted Payees, subsidiaries when and as well as applicable employment, social security or similar taxes in connection therewithdue, to the extent such salary, bonuses, severance and other benefits liabilities are attributable and reasonably allocated to the operations taxable income of the Borrower and its subsidiaries (but excluding, for the avoidance of doubt, the portion of any such Tax liabilities, if any, that is attributable to the taxable income of any subsidiary of any Parent Company other than the Borrower and/or its subsidiaries, in each case, so long as such Parent Company applies ); provided that the amount permitted to be paid by the Borrower pursuant to this paragraph (B) shall not exceed the amount of Tax liabilities that would be due if the Borrower and each subsidiary were separate corporations filing income and similar Tax returns on a consolidated, combined, unitary or similar basis with the Borrower as the common parent of such affiliated group; provided, further, that the amount permitted to be paid pursuant to this clause (B) with respect to any Taxes of any Unrestricted Subsidiary shall be limited to the amount actually paid by such Unrestricted Subsidiary to the Borrower or its Restricted Payment Subsidiaries for the purpose of paying such purposeconsolidated, combined, unitary or similar Taxes;
(DC) to pay audit and other accounting and reporting expenses of such Parent Company to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such expenses, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries;
(ED) for the payment of insurance premiums to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries;
(FE) to pay (x) fees and expenses related to any debt and/or or equity offerings (including refinancings)offerings, investments and/or or acquisitions permitted or not restricted by this Agreement (whether or not consummated, and including advisory, refinancing, subsequent transaction and exit fees of any Parent Company of the Parent Borrower) and expenses and indemnities of any trustee, agent, arranger, underwriter or similar role and (y) Public Company Costs; and;
(GF) to finance any Investment permitted under Section 6.06 as if such Parent Company were subject to Section Section 6.06 (provided that (x) any Restricted Payment under this clause (a)(i)(G(a)(i)(F) 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 (y) the relevant Parent Company shall, promptly following the closing 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 therewiththereof, cause (I) all property acquired to be contributed to the Parent Borrower or one or more of its Restricted Subsidiaries Subsidiaries, or (II) the merger, consolidation or amalgamation of the Person formed or acquired into the Parent Borrower or one or more of its Restricted Subsidiaries, in order to consummate such Investment in compliance with the applicable requirements of Section Section 6.06 as if undertaken as a direct Investment by the Parent Borrower or the relevant Restricted Subsidiary); and
(G) to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, employees or consultants of any Parent Company (or any Immediate Family Member of any of the foregoing) to the extent such salary, bonuses and other benefits are attributable and reasonably allocated to the operations of the Borrower and/or its subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose;
(ii) the Parent Borrower may pay (or make Restricted Payments to allow any Parent Company to pay) for the repurchase, redemption, retirement or other acquisition or retirement for value of Capital Stock of any Parent Company or any subsidiary held by any Permitted Payeefuture, present or former employee, director, member of management, officer, manager or consultant (or any Affiliate or Immediate Family Member thereof) of any Parent Company, the Borrower or any subsidiary:
(A) in accordance with the terms of promissory notes issued pursuant to Section Section 6.01(o), so long as the aggregate amount of all Cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments made pursuant to sub-clause (D(D) of this clause (ii(ii) below, (1) does not exceed the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period 10,000,000 in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to the next subsequent Fiscal Years (until so applied)) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under clause (D) below; plusYear;
(B) with the proceeds of any sale or issuance of, or of any capital contribution in respect of, the Capital Stock of the Parent Borrower or any Parent Company (to the extent such proceeds are contributed to the Parent Borrower or any Restricted Subsidiary in respect of Qualified Capital Stock issued by to the Parent Borrower or such any Restricted Subsidiary) (other than amounts constituting a Cure Amount or an Available Excluded Contribution Amount); plus;
(C) with the net proceeds of any key-man life insurance policies; plusor
(D) with Cash and Cash Equivalents in an amount not to exceed, together with the aggregate amount of all cash payments made pursuant to sub-clause (A(A) of this clause (ii(ii) in respect of promissory notes issued pursuant to Section Section 6.01(o), (1) the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period 10,000,000 in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to the next subsequent Fiscal Years (until so applied) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under the immediately preceding clause (1); plus
(E) with the amount of any Cash bonuses otherwise payable to any Permitted Payee that are foregone in exchange for the receipt of Capital Stock of the Parent Borrower or any Parent Company pursuant to any compensation arrangement, including any deferred compensation planYear;
(iii) the Parent Borrower may make additional Restricted Payments in an amount not to exceed (A) the portion, if any, of the Available Amount on such date that the Parent Borrower elects to apply to this clause (iii)(A(iii)(A) plus (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Parent Borrower elects to apply to this clause (iii)(B) (plus, without duplication of amounts 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 with Available Excluded Contribution Amounts up to the amount of such Available Excluded Contribution Amount, less any application thereof under Sections 6.04(b)(vi) or 6.06(r)iii)(B);
(iv) the Parent Borrower may make Restricted Payments (i) to any Parent Company to enable such Parent Company to (A) make Cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of such Parent Company, dividends, share splits, reverse share splits (or any combination thereof) and, mergers, consolidations, amalgamations or other business combinations, and acquisitions and other Investments permitted hereunder and/or (B) honor any conversion request by a holder of Convertible Indebtedness by payment of cash and/or delivery of Capital Stock, make any cash payments in lieu of fractional shares in connection with any conversion of Convertible Indebtedness and otherwise make payments on Convertible Indebtedness in accordance with its terms (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments upon redemption thereof), or, in the case of each of sub-clauses (A) and (B) above, make Restricted Payments to any Parent Company to enable such Parent Company to make the payments and/or deliveries described in such sub-clauses (A) and (B), and (ii) consisting of (A) payments made or expected to be made in respect of withholding or similar Taxes payable by any Permitted Payee future, present or former officers, directors, employees, members of management, managers or consultants of the Borrower, any Restricted Subsidiary or any Parent Company or any of their respective Immediate Family Members and/or (B) repurchases of Capital Stock in consideration of the payments described in sub sub-clause (A(A) above, including demand repurchases in connection with the exercise of stock options and the issuance of restricted stock units or similar stock based awardsoptions;
(v) the Parent Borrower may repurchase, redeem, acquire or retire Capital Stock upon repurchase (or make provisions for withholdings in connection with), or make Restricted Payments to any Parent Company to enable it to repurchase, redeem, acquire or retire ) Capital Stock upon (or make provisions for withholdings in connection with), the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represents all or a portion of the exercise price of, or tax withholdings with respect to, of such warrants, options or other securities convertible into or exchangeable for Capital Stock as part of a “cashless” exercise;
(vi) the Parent Borrower may make Restricted Payments Payments, the proceeds of which are applied (i) on the Closing Date, solely to effect the consummation of the Transactions and on or about the Amendment No. 1 Effective Date, solely to effect the consummation of the Amendment No. 1 Transactions, (ii) on and after the Closing Date, to satisfy any payment obligations owing, or as otherwise required, owing under the Acquisition Agreement (including payment of working capital and/or purchase price adjustments) and to pay Transaction Costs, in each case, with respect to the Transactions, (iii) to satisfy obligations to direct or indirect holders of Capital Stock of the Parent Borrower (immediately prior to giving effect to the Transactions) in connection with, or as a result of, any working capital and/or purchase price adjustments, in each case, with respect to the Transactions and (iv) to satisfy any settlement of claims or actions in connection with the Transactions or to satisfy indemnity or other similar obligations in connection with the TransactionsAgreement;
(vii) so long as no Event of Default exists, following the Parent consummation of the first Qualifying IPO, the Borrower may (or may make Restricted Payments to any Parent Company to enable it to) make Restricted Payments with respect to any Capital Stock in an amount not to exceed (A) the greater of (x) an amount equal to 7.006% per annum of the net Cash proceeds received by or contributed to the Parent Borrower in connection with the merger of Isos Acquisition Corporation and Bowlero Corp. on December 15, 2021 and the other transactions consummated in connection therewith and (y) an amount equal to 7.00% per annum of the Market Capitalization of the Parent Borrower (or its direct or indirect Parent Company, as applicable) and its subsidiaries minus (B) from any utilization of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A)Qualifying IPO;
(viii) the Parent Borrower may make Restricted Payments to (i) redeem, repurchase, defease, discharge, retire or otherwise acquire any (A) Capital Stock (“Treasury Capital Stock”) of the Parent Borrower and/or any Restricted Subsidiary or (B) Capital Stock of any Parent Company, in the case of each of subclauses (A(A) and (B(B), in exchange for, or out of the proceeds of the substantially concurrent sale (other than to the Parent Borrower and/or any Restricted Subsidiary) of, Qualified Capital Stock of the Parent Borrower or any Parent Company to the extent any such proceeds are contributed to the capital of the Parent Borrower and/or any Restricted Subsidiary 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 the Parent Borrower or a Restricted Subsidiary) of any Refunding Capital Stock;
(ix) to the extent constituting a Restricted Payment, the Parent Borrower may consummate any transaction permitted by Section 5.19 (other than Section 5.19(d)), Section Section 6.06 (other than Sections 6.06(j6.06(j) and (t(t)) and Section ), Section 6.07 (other than Section Section 6.07(g)) and Section 6.09 (other than Section 6.09(d));
(x) the Parent Borrower may make additional Restricted Payments in an aggregate amount not to exceed (A) the greater of $85,000,000 40,000,000 and 252.5% of Consolidated Adjusted EBITDA Total Assets as of the last day of the most recently ended Test Period minus (BA) the amount of Restricted Debt Payments made by the Borrower or any utilization of the Available RP Capacity Amount Restricted Subsidiary in reliance on unused capacity under immediately preceding clause (ASection 6.04(b)(iv)(B), minus (B) the outstanding amount of Investments made by the Borrower or any Restricted Subsidiary in reliance on Section 6.06(q)(ii);
(xi) the Parent Borrower may pay any dividend or other distribution or consummate any redemption within 60 days after the date of 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 dividend or redemption notice would have complied with the provisions of this Section 6.04(a)hereof;
(xii) the Parent Borrower may make Restricted Payments to permit any Parent Company (A) to make any payments in respect of the Junior Debentures (and corresponding distributions and redemptions in respect of Trust Preferred Securities), so long as the Interest Coverage Ratio, calculated on a Pro Forma Basis, would not be less than 2.00:1.00, and (B) to make any payments in respect of the Junior Debentures (and corresponding distributions and redemptions in respect of the Trust Preferred Securities), from the proceeds of any sale or issuance of the Capital Stock of the Borrower or any Parent Company (to the extent such proceeds are contributed in respect of Qualified Capital Stock to the Borrower or any Restricted Payment constituting the distribution or payment of Receivables Fees;Subsidiary); and
(xiii) the Parent Borrower may make additional Restricted Payments so long as, as measured at the time provided for in Section 1.04(e), (i) the Total Leverage Ratio would not exceed 4.00:1.00Ratio, calculated on a Pro Forma Basis Basis, would not exceed 4.75:1.00.
(b) Holdings and the Borrower shall not, nor shall they permit any Restricted Subsidiary to, make any payment (whether in Cash, securities or other property) on or in respect of principal of or interest on (y) any Junior Lien Indebtedness or (z) any Junior Indebtedness (such Indebtedness under clauses (y) and (z), the “Restricted Debt”), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Restricted Debt prior to its scheduled maturity (collectively, “Restricted Debt Payments”), except:
(i) any 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 and/or any Permitted Refinancing of the Junior Debentures;
(ii) there shall exist payments as part of an “applicable high yield discount obligation” catch-up payment;
(iii) payments of regularly scheduled interest as and when due in respect of any Restricted Debt (other than the Junior Debentures), except for any payments with respect to any Subordinated Indebtedness that are prohibited by the subordination provisions thereof;
(iv) so long as, at the time of delivery of irrevocable notice with respect thereto, no Event of Default hereunder exists or shall would result therefrom, additional Restricted Debt Payments in an aggregate amount not to exceed:
(A) the greater of $50,000,000 and 3.0% of Consolidated Total Assets as of the last day of the most recently ended Test Period, minus the amount of Investments made in reliance on Section 6.06(q)(iii); plus
(B) the greater of: $40,000,000 and 2.5% of Consolidated Total Assets as of the last day of the most recently ended Test Period, minus (1) the amount of Restricted Payments made by the Borrower or any Restricted Subsidiary in reliance on Section 6.04(a)(x), minus (2) the outstanding amount of Investments made by the Borrower or any Restricted Subsidiary in reliance on Section 6.06(q)(ii);
(xivA) the Parent Borrower may make additional Restricted Debt Payments in an amount not to exceed exchange for, or with proceeds of any issuance of, Qualified Capital Stock of the amount of proceeds received by the Parent Borrower and/or any Restricted Subsidiary and/or any capital contribution in respect of Qualified Capital Stock of the Borrower or any Restricted Subsidiary, (B) Restricted Debt Payments as a result of the conversion of all or any portion of any Restricted Debt into Qualified Capital Stock of the Borrower 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 the Representation and Warranty Insurance Policy during the term of this AgreementSection 6.01;
(xvvi) Restricted Debt Payments in an aggregate amount not to exceed (A) the portion, if any, of the Available Amount on such date that the Borrower elects to apply to this clause (vi)(A) plus (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Borrower elects to apply to this clause (vi)(B);
(vii) additional Restricted Debt Payments; provided that the Total Leverage Ratio, calculated on a Pro Forma Basis, would not exceed 4.75:1.00; and
(viii) (A) for any taxable period for which the Parent Borrower and/or any of its Subsidiaries are members of a consolidated, combined or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which a direct or indirect parent payments in respect of the Parent Borrower is the common parent Junior Debentures (a “Tax Group”and corresponding distributions and redemptions in respect of Trust Preferred Securities), or for which so long as the Parent Borrower is Interest Coverage Ratio, calculated on a disregarded entity for U.S. federal income tax purposes wholly-owned by a corporate parent (a “Corporate Parent”)Pro Forma Basis, the Parent Borrower and each of its Subsidiaries may make Restricted Payments the proceeds of which shall be used by such common parent to pay the portion of any consolidated, combined or similar U.S. federal, state or local income Taxes of such Tax Group, or by the Corporate Parent to pay the portion of the U.S. federal, state or local income Taxes of such Corporate Parent, or any franchise taxes imposed in lieu thereof, for such taxable period that are attributable to the income of the Parent Borrower and/or its Subsidiaries, provided that such amount shall would not be greater less than the amount of such U.S. federal2.00:1.00, state or local income taxes that would be paid (for such taxable period) by the Parent Borrower and its Subsidiaries if the Parent Borrower and/or such Subsidiaries had been a stand-alone corporate taxpayer (or stand-alone group of corporate taxpayers filing on a consolidated, combined or similar basis) for all taxable years ending after the Closing Date (taking into account any net operating loss carryforwards attributable to the Parent Borrower and its Subsidiaries, as the case may be) and (B) without duplication any payments in respect of Restricted Payments made under Section 6.04(a)(xv)(Athe Junior Debentures (and corresponding distributions and redemptions in respect of the Trust Preferred Securities), for from the proceeds of any taxable period for which sale or issuance of the Capital Stock of the Borrower or any Parent Company (to the extent such proceeds are contributed in respect of Qualified Capital Stock to the Borrower is treated as a partnership for U.S. federal and/or applicable state or local income tax purposes, the Parent Borrower may make any Restricted Payments to its equity owners at the times and in the amounSubsidiary).
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) The Parent Borrower shall not pay or make, directly or indirectly, any Restricted Payment, except that:
(i) the Parent Borrower may make Restricted Payments to the extent necessary to permit any Parent Company:
(A) to pay general operating and compliance administrative costs and expenses (including corporate overhead, legal or similar expenses and customary salary, bonus and other benefits payable to directors, officers, employees, members of management, managers and/or consultants of any Parent Company)) and franchise fees and Taxes and similar fees, Taxes and expenses required to enable such Parent Company to maintain its organizational existence or qualification to do business, in each case, which are reasonable and customary and incurred in the ordinary course of business, plus any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of any Parent Company, in each case, to the extent attributable to the ownership or operations of any Parent Company and its subsidiaries (but excluding, for the avoidance of doubt, excluding the portion of any such amount, if any, amount that is attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or and its subsidiaries), the Parent Borrower and/or its subsidiaries;
(B) to pay franchise, excise and similar Taxes, and other fees, Taxes and expenses, required to maintain the organizational existence of such Parent Company;[Reserved].
(C) to pay customary salary, bonus, long-term incentive, severance and other benefits (including payment to certain service providers of the Parent Borrower or its Subsidiaries pursuant to any equity plan (whether in the form of options, cash settled options or otherwise)) payable to Permitted Payees, as well as applicable employment, social security or similar taxes in connection therewith, to the extent such salary, bonuses, severance and other benefits are attributable and reasonably allocated to the operations of the Parent Borrower and/or its subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose;
(D) to pay audit and other accounting and reporting expenses of such Parent Company to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such expenses, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries;
(ED) for the payment of insurance premiums to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries;
(FE) to pay (x) fees and expenses related to any debt and/or or equity offerings (including refinancings)offerings, investments and/or or acquisitions permitted or not restricted by this Agreement (whether or not consummated, and including advisory, refinancing, subsequent transaction and exit fees of any Parent Company of the Parent Borrower) and expenses and indemnities of any trustee, agent, arranger, underwriter or similar role and (y) Public Company Costs; and;
(GF) to finance any Investment permitted under Section 6.06 as if such Parent Company were subject to Section Section 6.06 (provided that (x) any Restricted Payment under this clause (a)(i)(G(a)(i)(F) 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 (y) the relevant Parent Company shall, promptly following the closing 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 therewiththereof, cause (I) all property acquired to be contributed to the Parent Borrower or one or more of its Restricted Subsidiaries Subsidiaries, or (II) the merger, consolidation or amalgamation of the Person formed or acquired into the Parent Borrower or one or more of its Restricted Subsidiaries, in order to consummate such Investment in compliance with the applicable requirements of Section Section 6.06 as if undertaken as a direct Investment by the Parent Borrower or the relevant Restricted Subsidiary); and
(G) to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, employees or consultants of any Parent Company (or any Immediate Family Member of any of the foregoing) to the extent such salary, bonuses and other benefits are attributable and reasonably allocated to the operations of the Borrower and/or its subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose;
(ii) the Parent Borrower may pay (or make Restricted Payments to allow any Parent Company to pay) for the repurchase, redemption, retirement or other acquisition or retirement for value of Capital Stock of any Parent Company or any subsidiary held by any Permitted Payeefuture, present or former employee, director, member of management, officer, manager or consultant (or any Affiliate or Immediate Family Member thereof) of any Parent Company, the Borrower or any subsidiary:
(A) in accordance with the terms of promissory notes issued pursuant to Section Section 6.01(o), so long as the aggregate amount of all Cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments made pursuant to sub-clause (D(D) of this clause (ii(ii) below, (1) does not exceed the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period 30,000,000 in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied)) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under clause (D) below; plusYears;
(B) with the proceeds of any sale or issuance of, or of any capital contribution in respect of, the Capital Stock of the Parent Borrower or any Parent Company (to the extent such proceeds are contributed to the Parent Borrower or any Restricted Subsidiary in respect of Qualified Capital Stock issued by to the Parent Borrower or such any Restricted Subsidiary) (other than any amounts constituting a Cure Amount or an any amount that has been added to the Available Excluded Contribution Amount or the Available Amount); plus;
(C) with the net proceeds of any key-man life insurance policies; plusor
(D) with Cash and Cash Equivalents in an amount not to exceed, together with the aggregate amount of all cash payments made pursuant to sub-clause (A(A) of this clause (ii(ii) in respect of promissory notes issued pursuant to Section Section 6.01(o), (1) the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period 30,000,000 in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under the immediately preceding clause (1); plus
(E) with the amount of any Cash bonuses otherwise payable to any Permitted Payee that are foregone in exchange for the receipt of Capital Stock of the Parent Borrower or any Parent Company pursuant to any compensation arrangement, including any deferred compensation planYears;
(iii) the Parent Borrower may make additional Restricted Payments in an amount not to exceed (A) so long as the Fixed Charge Coverage Ratio, calculated on a Pro Forma Basis, would not be less than 2.00:1.00, the portion, if any, of the Available Amount on such date that the Parent Borrower elects to apply to this clause (iii)(A(iii)(A) plus (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Parent Borrower elects to apply to this clause (iii)(B) (plus, without duplication of amounts 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 with Available Excluded Contribution Amounts up to the amount of such Available Excluded Contribution Amount, less any application thereof under Sections 6.04(b)(vi) or 6.06(r)iii)(B);
(iv) the Parent Borrower may make Restricted Payments (i) to any Parent Company to enable such Parent Company to (A) make Cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of such Parent Company, dividends, share splits, reverse share splits (or any combination thereof) and, mergers, consolidations, amalgamations or other business combinations, and acquisitions and other Investments permitted hereunder and/or (B) honor any conversion request by a holder of Convertible Indebtedness by payment of cash and/or delivery of Capital Stock, make any cash payments in lieu of fractional shares in connection with any conversion of Convertible Indebtedness and otherwise make payments on Convertible Indebtedness in accordance with its terms (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments upon redemption thereof), or, in the case of each of sub-clauses (A) and (B) above, make Restricted Payments to any Parent Company to enable such Parent Company to make the payments and/or deliveries described in such sub-clauses (A) and (B), and (ii) consisting of (A) payments made or expected to be made in respect of withholding or similar Taxes payable by any Permitted Payee future, present or former officers, directors, employees, members of management, managers or consultants of the Borrower, any Restricted Subsidiary or any Parent Company or any of their respective Immediate Family Members and/or (B) repurchases of Capital Stock in consideration of the payments described in sub sub-clause (A(A) above, including demand repurchases in connection with the exercise of stock options and the issuance of restricted stock units or similar stock based awardsoptions;
(v) the Parent Borrower may repurchase, redeem, acquire or retire Capital Stock upon repurchase (or make provisions for withholdings in connection with), or make Restricted Payments to any Parent Company to enable it to repurchase, redeem, acquire or retire ) Capital Stock upon (or make provisions for withholdings in connection with), the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represents all or a portion of the exercise price of, or tax withholdings with respect to, of such warrants, options or other securities convertible into or exchangeable for Capital Stock as part of a “cashless” exercise;
(viA) for any taxable year (or portion thereof) that Borrower is a partnership or disregarded entity for U.S. federal income Tax purposes and no Parent Company is treated as a corporation for U.S. federal income tax purposes, the Parent Borrower may make Restricted Payments to fund the income tax liabilities of the direct or indirect equity owners of Borrower, in an assumed amount equal to the product of (x) the highest combined marginal federal and applicable state and/or local statutory Tax rate applicable to a direct or indirect taxpayer equity owner of Borrower, and (y) the U.S. federal taxable income of the Borrower for such year (or portion thereof), provided that (i) such calculation shall take into account the character of income or gain, preferential tax rates and the deductibility of state and local income taxes for US federal income tax purposes; (ii) such taxable income shall be reduced by any losses previously allocated to the equity owners to the extent such loss has not previously been used to offset taxable income of Borrower; (iii) such distributions shall be reduced by any amounts withheld by the Borrower or its Subsidiaries (or otherwise paid directly to any Governmental Authority) with respect to any taxable income or gain of Borrower and any tax credits Borrower allocated to its equity owners); or (B) for any taxable period (or portion thereof) that a Parent Company is treated as a corporation for U.S. federal income tax purposes and for which Borrower and any of its subsidiaries are members (or are pass-through entities of such members) of a consolidated, combined or similar income Tax group for U.S. federal, state or local income Tax purposes for which such Parent Company is the common parent, the Borrower may make Restricted Payments to such Parent Company to pay the portion of any U.S. federal, state or local income Taxes (as applicable) of such Parent Company for such taxable period that are attributable to the income of the Borrower and/or its applicable subsidiaries; provided that the aggregate amount of any such distributions with respect to federal, state or local Taxes, as applicable, shall not exceed the aggregate amount of such Taxes the Borrower and its subsidiaries that are part of such group would be required to pay in respect of such U.S. federal, state or local Taxes on a stand-alone basis for such taxable period; provided, further, that the amount of such distributions with respect to any Unrestricted Subsidiary for any taxable period shall be limited to the amount actually paid by such Unrestricted Subsidiary for such purpose.
(vii) the Borrower may make Restricted Payments, the proceeds of which are applied (i) on the Closing Date, solely to effect the consummation of the Transactions and on or about the Amendment No. 1 Effective Date, solely to effect the consummation of the Amendment No. 1 Transactions, (ii) on and after the Closing Date, to satisfy any payment obligations owing, or as otherwise required, owing under the Acquisition Agreement (including payment of working capital and/or purchase price adjustments) and to pay Transaction Costs, in each case, with respect to the Transactions, (iii) to satisfy obligations to direct or indirect holders of Capital Stock of the Parent Borrower (immediately prior to giving effect to the Transactions) in connection with, or as a result of, any working capital and/or purchase price adjustments, in each case, with respect to the Transactions and (iv) to satisfy any settlement of claims or actions in connection with the Transactions or to satisfy indemnity or other similar obligations in connection with the TransactionsReorganization Agreement;
(viiviii) so long as no Event of Default exists, following the Parent consummation of the first Qualifying IPO, the Borrower may (or may make Restricted Payments to any Parent Company to enable it to) make Restricted Payments with respect to any Capital Stock in an amount not to exceed (A) the greater of (xi) an amount equal to 7.006% per annum of the net Cash proceeds received by or contributed to the Parent Borrower in connection with the merger of Isos Acquisition Corporation and Bowlero Corp. on December 15, 2021 and the other transactions consummated in connection therewith and from any Qualifying IPO or (yb) an amount equal to 7.005% per annum of the Market Capitalization aggregate market capitalization of the Parent Borrower (or its direct or indirect applicable Parent Company, as applicable) and its subsidiaries minus (B) any utilization of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A);
(viiiix) the Parent Borrower may make Restricted Payments to (i) redeem, repurchase, defease, discharge, retire or otherwise acquire any (A) Capital Stock (“Treasury Capital Stock”) of the Parent Borrower and/or any Restricted Subsidiary or (B) Capital Stock of any Parent Company, in the case of each of subclauses (A(A) and (B(B), in exchange for, or out of the proceeds of the substantially concurrent sale (other than to the Parent Borrower and/or any Restricted Subsidiary) of, Qualified Capital Stock of the Parent Borrower or any Parent Company to the extent any such proceeds are contributed to the capital of the Parent Borrower and/or any Restricted Subsidiary 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 the Parent Borrower or a Restricted Subsidiary) of any Refunding Capital Stock;
(ixx) to the extent constituting a Restricted Payment, the Parent Borrower may consummate any transaction permitted by Section 5.19 (other than Section 5.19(d)), Section Section 6.06 (other than Sections 6.06(j6.06(j) and (t(t)) and Section ), Section 6.07 (other than Section Section 6.07(g)) and Section 6.09 (other than Section 6.09(d));
(xxi) the Parent Borrower may make additional Restricted Payments in an aggregate amount not to exceed (A) the greater of $85,000,000 160,000,000 and 254.0% of Consolidated Adjusted EBITDA Total Assets as of the last day of the most recently ended Test Period minus (BA) the amount of Restricted Debt Payments made by the Borrower or any utilization of the Available RP Capacity Amount Restricted Subsidiary in reliance on unused capacity under immediately preceding clause (ASection 6.04(b)(iv)(B), minus (B) the outstanding amount of Investments made by the Borrower or any Restricted Subsidiary in reliance on Section 6.06(q)(ii);
(xixii) the Parent Borrower may pay any dividend or other distribution or consummate any redemption within 60 days after the date of 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 dividend or redemption notice would have complied with the provisions of this Section 6.04(a);
(xii) the Parent Borrower may make any Restricted Payment constituting the distribution or payment of Receivables Fees;hereof; and
(xiii) the Parent Borrower may make additional Restricted Payments so long as, as measured at the time provided for in Section 1.04(e), (i) no Event of Default exists or would result therefrom and (ii) the Total Leverage Ratio would not exceed 4.00:1.00Ratio, calculated on a Pro Forma Basis and (ii) there shall exist no Event of Default hereunder or shall result therefromBasis, would not exceed 4.50:1.00;
(xiv) the Parent Borrower may make additional Restricted Payments in an amount not to exceed the amount of proceeds received by the Parent Borrower and/or any Restricted Subsidiary under the Representation and Warranty Insurance Policy during the term of this Agreement;
(xv) (A) for any taxable period for which the Parent Borrower and/or any of its Subsidiaries are members of a consolidated, combined or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which a direct or indirect parent of the Parent Borrower is the common parent (a “Tax Group”), or for which the Parent Borrower is a disregarded entity for U.S. federal income tax purposes wholly-owned by a corporate parent (a “Corporate Parent”), the Parent Borrower and each of its Subsidiaries may make Restricted Payments the proceeds of which shall be used by such common parent to pay the portion of any consolidated, combined or similar U.S. federal, state or local income Taxes of such Tax Group, or by the Corporate Parent to pay the portion of the U.S. federal, state or local income Taxes of such Corporate Parent, or any franchise taxes imposed in lieu thereof, for such taxable period that are attributable to the income of the Parent Borrower and/or its Subsidiaries, provided that such amount shall not be greater than the amount of such U.S. federal, state or local income taxes that would be paid (for such taxable period) by the Parent Borrower and its Subsidiaries if the Parent Borrower and/or such Subsidiaries had been a stand-alone corporate taxpayer (or stand-alone group of corporate taxpayers filing on a consolidated, combined or similar basis) for all taxable years ending after the Closing Date (taking into account any net operating loss carryforwards attributable to the Parent Borrower and its Subsidiaries, as the case may be) and (B) without duplication of Restricted Payments made under Section 6.04(a)(xv)(A), for any taxable period for which the Parent Borrower is treated as a partnership for U.S. federal and/or applicable state or local income tax purposes, the Parent Borrower may make Restricted Payments to its equity owners at the times and in the amoun
Appears in 1 contract
Sources: Term Loan Credit Agreement (PQ Group Holdings Inc.)
Restricted Payments; Certain Payments of Indebtedness. (a) The Parent Borrower Borrowers shall not pay or make, directly or indirectly, any Restricted Payment, except that:
(i) the Parent Borrower Borrowers may make Restricted Payments to the extent necessary to permit any Parent Company:
(A) to pay general operating and compliance administrative costs and expenses (including corporate overhead, legal or similar expenses and customary wages, salary, bonus and other benefits payable to directors, officers, employees, members of management, managers consultants and/or consultants independent contractors of any Parent Company), franchise fees, franchise Taxes and similar fees, Taxes and expenses required to maintain the organizational existence of such Parent Company, in each case, which are reasonable and customary and incurred in the ordinary course of business, plus any reasonable and customary indemnification claims made by current or former directors, officers, members of management, managers, employees or consultants of any Parent Company, in each case, to the extent attributable to the ownership or operations of any Parent Company (but excluding, for the avoidance of doubt, the portion of any such amount, if any, that is attributable to the ownership or operations operation of any subsidiary of any Parent Company other than the Parent Borrower Holdings and/or its subsidiaries), the Parent Borrower and/or its subsidiaries;
(B) to pay franchise, excise and similar Taxes, and other fees, Taxes and expenses, required to maintain the organizational existence of such Parent Company[Reserved];
(C) to pay customary salary, bonus, long-term incentive, severance and other benefits (including payment to certain service providers of the Parent Borrower or its Subsidiaries pursuant to any equity plan (whether in the form of options, cash settled options or otherwise)) payable to Permitted Payees, as well as applicable employment, social security or similar taxes in connection therewith, to the extent such salary, bonuses, severance and other benefits are attributable and reasonably allocated to the operations of the Parent Borrower and/or its subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose;
(D) to pay audit and other accounting and reporting expenses of at such Parent Company to the extent attributable relating to the ownership or operations of any Parent Company (but excluding, for the avoidance of doubt, the portion of any such expenses, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower Holdings and/or its subsidiaries), Holdings, the Parent Borrower and its subsidiariesBorrowers and/or their respective Subsidiaries;
(ED) for the payment of insurance premiums to the extent attributable relating to the ownership or operations of any Parent Company (but excluding, for the avoidance of doubt, the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower Holdings and/or its subsidiaries), Holdings, the Parent Borrower and its subsidiariesBorrowers and/or their respective Subsidiaries;
(FE) to pay (x) fees and expenses related to any debt and/or or equity offerings (including refinancings)offerings, investments and/or or acquisitions permitted or not restricted by this Agreement (whether or not consummated, and including advisory, refinancing, subsequent transaction and exit fees of any Parent Company of the Parent Borrower) and expenses and indemnities of any trustee, agent, arranger, underwriter or similar role and (y) Public Company Costs; and);
(GF) to pay the consideration to finance any Investment permitted under Section 6.06 as if such Parent Company were subject to Section Section 6.06 (provided that (x) any such Restricted Payment Payments under this clause (a)(i)(G(a)(i)(F) 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 (y) the relevant such Parent Company shall, promptly following the closing 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 therewiththereof, cause (I) all such property acquired to be contributed to the Parent Borrower Borrowers or one of their respective Subsidiaries, or more of its Restricted Subsidiaries or (II) the merger, consolidation or amalgamation of the Person formed or acquired into the Parent Borrower Borrowers or one or more of its Restricted their respective Subsidiaries, in order to consummate such Investment in compliance a manner that causes such Investment to comply with the applicable requirements of Section Section 6.06 as if undertaken as a direct Investment by the Parent such Borrower or such Subsidiary) (it being agreed that such contribution or merger, consolidation or amalgamation shall not increase the relevant Available Amount except to the extent in excess of such Restricted SubsidiaryPayment made in reliance on this clause (a)(i)(F))); and
(G) to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, employees or consultants (or any Immediate Family Member thereof) of any Parent Company plus any reasonable and customary indemnification claims made by current or former directors, officers, members of management, managers, employees or consultants of any Parent Company, to the extent such salary, bonuses, severance and other benefits or claims in respect of any of the foregoing) are directly attributable and reasonably allocated to the ownership or operations of any Parent Company (but excluding, for the avoidance of doubt, the portion of any amount, if any, that is attributable to the ownership or operation of any subsidiary of any Parent Company other than Holdings and/or its subsidiaries), Holdings, the Borrowers and/or their respective Subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose;
(ii) the Parent Borrower Borrowers may pay (or make Restricted Payments to allow any Parent Company to pay) for the repurchase, redemption, retirement or other acquisition or retirement for value of Capital Stock of any Parent Company Company, any Borrower or any subsidiary Subsidiary held by any Permitted Payeefuture, present or former employee, director, member of management, officer, manager or consultant (or any Immediate Family Member thereof) of any Parent Company, any Borrower or any Subsidiary:
(A) in accordance with the terms of promissory notes issued pursuant to Section 6.01(oSection 6.01(n), so long as the aggregate amount of all Cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments made pursuant to sub-clause (D(D) of this clause (ii) below(ii), (1) does not exceed the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period 4,800,000 in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to the next subsequent Fiscal Years (until so applied)) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under clause (D) below; plusYear;
(B) with the proceeds of any sale or issuance of, or of any capital contribution in respect of, the Capital Stock of the Parent Borrower or any Parent Company (to the extent such proceeds that are contributed to the Parent Borrower or any Restricted Subsidiary in respect of Qualified Capital Stock issued by the Parent Borrower or such Restricted Subsidiary) (other than amounts constituting a Cure Amount or an Available Excluded Contribution Amount); plusnot otherwise applied;
(C) with the net proceeds of any key-man life insurance policiespolicies received during such Fiscal Year; plusor
(D) with Cash and Cash Equivalents in an amount not to exceed, together with the aggregate amount of all cash Cash payments made in respect of notes issued pursuant to sub-Section 6.01(n) and clause (A(A) of this clause (ii) in respect of promissory notes issued pursuant to Section 6.01(o(ii), (1) the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period 4,800,000 in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to the next subsequent Fiscal Years (until so applied) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under the immediately preceding clause (1); plus
(E) with the amount of any Cash bonuses otherwise payable to any Permitted Payee that are foregone in exchange for the receipt of Capital Stock of the Parent Borrower or any Parent Company pursuant to any compensation arrangement, including any deferred compensation planYear;
(iii) so long as no Event of Default then exists or would result therefrom and, to the Parent Borrower extent applicable, subject to the conditions set forth in clause (a)(ii) of the definition of Available Amount, the Borrowers may make additional Restricted Payments in an amount not to exceed (A) the portion, if any, of the Available Amount on such date that the Parent Borrower elects Borrowers elect to apply to this clause (iii)(A) plus (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Parent Borrower elects to apply to this clause (iii)(B) (plus, without duplication of amounts 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 with Available Excluded Contribution Amounts up to the amount of such Available Excluded Contribution Amount, less any application thereof under Sections 6.04(b)(vi) or 6.06(r)iii);
(iv) the Parent Borrower Borrowers may make Restricted Payments (i) to any Parent Company to enable such Parent Company to (A) make Cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of such Parent Company, dividends, share splits, reverse share splits (Company or any combination thereof) and, mergers, consolidations, amalgamations or other business combinations, and acquisitions and other Investments permitted hereunder and/or (B) honor any conversion request by a holder of Convertible Indebtedness by payment of cash and/or delivery of Capital Stock, make any cash payments in lieu of fractional shares in connection with any conversion of Convertible Indebtedness and otherwise make payments on Convertible Indebtedness in accordance with its terms (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments upon redemption thereof), or, in the case of each of sub-clauses (A) and (B) above, make Restricted Payments to any Parent Company to enable such Parent Company to make the payments and/or deliveries described in such sub-clauses (A) and (B), and (ii) consisting of (A) payments made or expected to be made in respect of withholding or similar Taxes payable by any Permitted Payee future, present or former officers, directors, employees, members of management, managers or consultants of any Borrower, any Subsidiary or Parent Company or any of their respective Immediate Family Members and/or (B) repurchases of Capital Stock in consideration of the payments described in sub clause (A(A) above, including demand repurchases in connection with the exercise of stock options and the issuance of restricted stock units or similar stock based awardsoptions;
(v) the Parent Borrower Borrowers may repurchase, redeem, acquire or retire Capital Stock upon repurchase (or make provisions for withholdings in connection with), or make Restricted Payments to any Parent Company to enable it to repurchase, redeem, acquire or retire ) Capital Stock upon (or make provisions for withholdings in connection with), the exercise of warrants, options or warrants or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represents all or a portion of the exercise price of, of such options or tax withholdings with respect to, such warrants, options warrants or other securities convertible into or exchangeable for Capital Stock as part of a “cashless” exercise;
(vi) the Parent Borrower Borrowers may make Restricted Payments the proceeds of which are applied (iA) on the Closing Date, solely to effect the consummation of the Transactions and on or about the Amendment No. 1 Effective Date, solely to effect the consummation of the Amendment No. 1 Transactions, (iiB) on and after the Closing Date, to satisfy any payment obligations owing, or as otherwise required, owing under the Acquisition Agreement (including as in effect on the date hereof) and the payment of working capital and/or purchase price adjustments) and to pay any Transaction Costs, in each case, with respect to the Transactions, (iii) to satisfy obligations to direct or indirect holders of Capital Stock of the Parent Borrower (immediately prior to giving effect to the Transactions) in connection with, or as a result of, any working capital and/or purchase price adjustments, in each case, with respect to the Transactions and (iv) to satisfy any settlement of claims or actions in connection with the Transactions or to satisfy indemnity or other similar obligations in connection with the Transactions;
(vii) so long as no Event of Default shall have occurred and be continuing at the Parent Borrower time of the declaration thereof or would result therefrom, following the consummation of an IPO, the Borrowers may (or may make Restricted Payments to any Parent Company to enable it to) make Restricted Payments with respect to any Capital Stock in an amount not of up to exceed (A) the greater of (x) an amount equal to 7.006.0% per annum of the net Cash proceeds received by or contributed to the Parent Borrower in connection with the merger of Isos Acquisition Corporation and Bowlero Corp. on December 15, 2021 and the other transactions consummated in connection therewith and (y) an amount equal to 7.00% per annum of the Market Capitalization of the Parent Borrower (or its direct or indirect Parent Company, as applicable) and its subsidiaries minus (B) Borrowers from any utilization of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A)such IPO;
(viii) the Parent Borrower Borrowers may make Restricted Payments to (i) redeem, repurchase, defease, discharge, retire or otherwise acquire any (A) Capital Stock (“Treasury Capital Stock”) of the Parent any Borrower and/or or any Restricted Subsidiary or (B) Capital Stock of any Parent Company, in the case of each of subclauses (A(A) and (B)(B) above, in exchange for, or out of the proceeds of the substantially concurrent sale (other than to the Parent any Borrower and/or any Restricted or a Subsidiary) of, Qualified Capital Stock of the Parent any Borrower or any Parent Company to the extent any such proceeds are contributed to the capital of the Parent any Borrower and/or or any Restricted Subsidiary in respect of Qualified Capital Stock (“Refunding Capital Stock”) and (ii) declare and pay dividends on any the Treasury Capital Stock out of the proceeds of the substantially concurrent sale or issuance (other than to the Parent any Borrower or a Restricted Subsidiary) of any the Refunding Capital Stock;
(ix) to the extent constituting a Restricted Payment, the Parent Borrower Borrowers may consummate any transaction permitted by Section 5.19 (other than Section 5.19(d)), Section Section 6.06 (other than Sections 6.06(j6.06(j) and (t(t)) and Section ), Section 6.07 (other than Section Section 6.07(g)) and Section 6.09 (other than Section 6.09(d) and (j);); and
(x) the Parent Borrower may make additional Restricted Payments in an aggregate amount not to exceed (A) the greater of $85,000,000 and 25% of Consolidated Adjusted EBITDA 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)[Reserved];
(xi) the Parent Borrower Borrowers may pay any dividend or other distribution or consummate any redemption within 60 days after the date of 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 dividend or redemption notice would have complied with the provisions of this Section 6.04(a)hereof;
(xii) the Parent any Borrower or any Subsidiary may make any additional Restricted Payments; provided that after giving Pro Forma Effect thereto, (i) the Total Net Leverage Ratio (calculated on a Pro Forma Basis) is not greater than 4.75:1.00 as of the last day of the most recently ended Test Period for which financial statements have been delivered pursuant to Section 5.01(b) or (c), as applicable, on or prior to the making of such Restricted Payment constituting the distribution and (ii) no Event of Default shall have occurred and be continuing or payment of Receivables Feeswould result therefrom;
(xiii) the Parent Borrowers may make Restricted Payments to the extent necessary to make Tax Distributions; and
(xiv) so long as no Event of Default then exists or would result therefrom, any Borrower or any Subsidiary may make additional Restricted Payments so long as, as measured up to an amount equal to the greater of $6,000,000 and 6.0% of Consolidated Adjusted EBITDA at the time provided for such payment is made less the aggregate amount previously or concurrently used to make Investments pursuant to Section 6.06(q)(iii) or Restricted Debt Payments pursuant to Section 6.04(b)(viii)(B); and
(b) The Borrowers shall not, nor shall they permit any Subsidiary to, make any payment in Section 1.04(eCash, securities or other property on or in respect of principal of or interest on any Junior Indebtedness (such Indebtedness, the “Restricted Debt”), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Restricted Debt (collectively, “Restricted Debt Payments”), except:
(i) the purchase, defeasance, redemption, repurchase, repayment or other acquisition or retirement of any Restricted Debt made by exchange for, or out of the proceeds of the substantially concurrent incurrence of, Refinancing Indebtedness permitted by Section 6.01;
(ii) payments as part of an “applicable high yield discount obligation” catch-up payment;
(iii) payments of regularly scheduled interest and payments of fees, expenses and indemnification obligations as and when due in respect of any Restricted Debt (other than payments with respect to Subordinated Indebtedness prohibited by the subordination provisions thereof);
(iv) payments with respect to intercompany Indebtedness permitted under Section 6.01, subject to the subordination provisions applicable thereto;
(A) Restricted Debt Payments in exchange for, or with proceeds of any issuance of Capital Stock of any Parent Company or Qualified Capital Stock of any Borrower or any Subsidiary Guarantor (other than issuances to any Borrower or any Subsidiary), and/or any capital contribution in respect of Qualified Capital Stock of any Borrower, (B) Restricted Debt Payments as a result of the conversion of all or any portion of Restricted Debt into Qualified Capital Stock of any Parent Company, any Borrower or any 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) so long as no Event of Default then exists or would result therefrom and, to the extent applicable, subject to the conditions set forth in clause (a)(ii) of the definition of Available Amount, Restricted Debt Payments in an aggregate amount not to exceed the portion, if any, of the Available Amount on such date that the Borrowers elect to apply to this clause (vi);
(vii) so long as no Event of Default then exists or would result therefrom, additional Restricted Debt Payments provided that the Total Net Leverage Ratio would not exceed 4.00:1.00, 4.75:1.00 calculated on a Pro Forma Basis and as of the last day of the most recently ended Test Period for which financial statements have been delivered pursuant to Section 5.01(b) or (iic), as applicable, prior to the date of delivery of irrevocable notice with respect thereto; and
(viii) there shall exist so long as no Event of Default hereunder then exists or shall would result therefrom;
(xiv) the Parent Borrower may make , additional Restricted Debt Payments in up to an amount not equal to exceed the greater of $6,000,000 and 6.0% of Consolidated Adjusted EBITDA at the date of delivery of irrevocable notice with respect thereto less the aggregate amount previously or concurrently used to make an Investment pursuant to Section 6.06(q)(iii) plus, if the Borrowers so elect, amounts in lieu of proceeds received by the Parent Borrower and/or any amounts permitted to be made as Restricted Subsidiary Payments under the Representation and Warranty Insurance Policy during the term of this Agreement;
(xvSection 6.04(a)(xiv) (A) for any taxable period for which the Parent Borrower and/or any of its Subsidiaries are members of a consolidated, combined or similar income tax group for U.S. federal and/or applicable state or local income tax at such time. For purposes of which a direct or indirect parent of the Parent Borrower is the common parent (a “Tax Group”), or for which the Parent Borrower is a disregarded entity for U.S. federal income tax purposes wholly-owned by a corporate parent (a “Corporate Parent”)determining compliance at any time with this Section 6.04, the Parent Borrower and each of its Subsidiaries Borrowers, in their sole discretion, from time to time, may make Restricted Payments the proceeds of which shall be used by classify or reclassify such common parent to pay the portion of any consolidated, combined transaction or similar U.S. federal, state or local income Taxes of such Tax Group, or by the Corporate Parent to pay the portion of the U.S. federal, state or local income Taxes of such Corporate Parent, or any franchise taxes imposed in lieu thereof, for such taxable period that are attributable to the income of the Parent Borrower and/or its Subsidiaries, provided that such amount shall not be greater than the amount of such U.S. federal, state or local income taxes that would be paid (for such taxable period) by the Parent Borrower and its Subsidiaries if the Parent Borrower and/or such Subsidiaries had been a stand-alone corporate taxpayer item (or stand-alone group of corporate taxpayers filing on a consolidated, combined or similar basisportion thereof) for all taxable years ending after the Closing Date (taking into account any net operating loss carryforwards attributable to the Parent Borrower and its Subsidiaries, as the case may be) and (B) without duplication of Restricted Payments made under Section 6.04(a)(xv)(A), for any taxable period for which the Parent Borrower is treated as a partnership for U.S. federal and/or applicable state or local income tax purposes, the Parent Borrower may make Restricted Payments to its equity owners at the times and in the amounaccordance with Section 1.03.
Appears in 1 contract
Sources: Second Lien Term Loan Agreement (Allscripts Healthcare Solutions, Inc.)
Restricted Payments; Certain Payments of Indebtedness. (a) The Parent Lead Borrower shall not pay or make, directly or indirectly, any Restricted Payment, except that:
(i) the Parent Lead Borrower may make Restricted Payments to the extent necessary to permit any Parent Company:
(A) to pay general operating and compliance administrative costs and expenses (including corporate overhead, legal or similar expenses and customary salary, bonus and other benefits payable to directors, officers, employees, members of management, managers and/or consultants of any Parent Company)) and franchise fees and Taxes and similar fees, Taxes and expenses required to enable such Parent Company to maintain its organizational existence or qualification to do business, in each case, which are reasonable and customary and incurred in the ordinary course of business, plus any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of any Parent Company, in each case, to the extent attributable to the ownership or operations of any Parent Company and its subsidiaries (but excluding, for the avoidance of doubt, excluding the portion of any such amount, if any, amount that is attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or and its subsidiaries), the Parent Borrower and/or its subsidiaries;
(B) to pay franchise, excise scheduled and similar Taxes, overdue interest and other fees, Taxes and expenses, required to maintain the organizational existence payments as part of such Parent Company;
(C) to pay customary salary, bonus, longan AHYDO catch-term incentive, severance and other benefits (including payment to certain service providers of the Parent Borrower or its Subsidiaries pursuant to any equity plan (whether in the form of options, cash settled options or otherwise)) payable to Permitted Payees, as well as applicable employment, social security or similar taxes in connection therewith, to the extent such salary, bonuses, severance and other benefits are attributable and reasonably allocated to the operations of the Parent Borrower and/or its subsidiariesup payment, in each case, so long as such in respect of any Indebtedness of any Parent Company applies to the amount of any such Restricted Payment for such purposeextent the Net Proceeds thereof were contributed to the Lead Borrower;
(DC) to pay audit and other accounting and reporting expenses of such Parent Company to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such expenses, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Lead Borrower and/or its subsidiaries), the Parent Lead Borrower and its subsidiaries;
(ED) for the payment of insurance premiums to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Lead Borrower and/or its subsidiaries), the Parent Lead Borrower and its subsidiaries;
(FE) to pay (x) fees and expenses related to any debt and/or or equity offerings (including refinancings)by any Parent Company, investments and/or or acquisitions permitted or not restricted by this Agreement (whether or not consummated, and including advisory, refinancing, subsequent transaction and exit fees of any Parent Company of the Parent Borrower) and expenses and indemnities of any trustee, agent, arranger, underwriter or similar role and (y) Public Company Costs; and;
(GF) to finance any Investment permitted under Section 6.06 as if such Parent Company were subject to Section Section 6.06 (provided that (x) any Restricted Payment under this clause (a)(i)(G(a)(i)(F) 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 (y) the relevant Parent Company shall, promptly following the closing 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 therewiththereof, cause (I) all property acquired to be contributed to the Parent Lead Borrower or one or more of its Restricted Subsidiaries Subsidiaries, or (II) the merger, consolidation or amalgamation of the Person formed or acquired into the Parent Lead Borrower or one or more of its Restricted Subsidiaries, in order to consummate such Investment in compliance with the applicable requirements of Section Section 6.06 as if undertaken as a direct Investment by the Parent Lead Borrower or the relevant Restricted Subsidiary); and
(G) to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, employees or consultants of any Parent Company (or any Immediate Family Member of any of the foregoing) to the extent such salary, bonuses and other benefits are attributable and reasonably allocated to the operations of the Lead Borrower and/or its subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose;
(ii) the Parent Lead Borrower may pay (or make Restricted Payments to allow any Parent Company to pay) for the repurchase, redemption, retirement or other acquisition or retirement for value of Capital Stock of any Parent Company or any subsidiary held by any Permitted Payeefuture, present or former employee, director, member of management, officer, manager or consultant (or any Affiliate or Immediate Family Member thereof) of any Parent Company, the Lead Borrower or any subsidiary:
(A) in accordance with the terms of promissory notes issued pursuant to Section Section 6.01(o), so long as the aggregate amount of all Cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments made pursuant to sub-clause (D(D) of this clause (ii(ii) below, (1) does not exceed in any Fiscal Year the greater of $68,000,000 20,000,000 and 2012.0% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period in any Fiscal YearEBITDA, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied)) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under clause (D) below; plusYears;
(B) with the proceeds of any sale or issuance of, or of any capital contribution in respect of, the Capital Stock of the Parent Lead Borrower or any Parent Company (to the extent such proceeds are contributed to the Parent Borrower or any Restricted Subsidiary in respect of Qualified Capital Stock issued by to the Parent Lead Borrower or such any Restricted Subsidiary) (other than amounts constituting a Cure Amount or an Available Excluded Contribution Amount); plus;
(C) with the net proceeds of any key-man life insurance policies; plusor
(D) with Cash and Cash Equivalents in an amount not to exceedexceed in any Fiscal Year, together with the aggregate amount of all cash payments made pursuant to sub-clause (A(A) of this clause (ii(ii) in respect of promissory notes issued pursuant to Section Section 6.01(o), (1) the greater of $68,000,000 20,000,000 and 2012.0% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period in any Fiscal YearEBITDA, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under the immediately preceding clause (1); plus
(E) with the amount of any Cash bonuses otherwise payable to any Permitted Payee that are foregone in exchange for the receipt of Capital Stock of the Parent Borrower or any Parent Company pursuant to any compensation arrangement, including any deferred compensation planYears;
(iii) the Parent Lead Borrower may make additional Restricted Payments in an amount not to exceed (A) the portion, if any, of the Available Amount on such date that the Parent Borrower elects to apply to this clause (iii)(A) plus (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Parent Lead Borrower elects to apply to this clause (iii)(B) (plus, without duplication of amounts 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 with Available Excluded Contribution Amounts up to the amount of such Available Excluded Contribution Amount, less any application thereof under Sections 6.04(b)(vi) or 6.06(r)iii);
(iv) the Parent Lead Borrower may make Restricted Payments (i) to any Parent Company to enable such Parent Company to (A) make Cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of such Parent Company, dividends, share splits, reverse share splits (or any combination thereof) and, mergers, consolidations, amalgamations or other business combinations, and acquisitions and other Investments permitted hereunder and/or (B) honor any conversion request by a holder of Convertible Indebtedness by payment of cash and/or delivery of Capital Stock, make any cash payments in lieu of fractional shares in connection with any conversion of Convertible Indebtedness and otherwise make payments on Convertible Indebtedness in accordance with its terms (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments upon redemption thereof), or, in the case of each of sub-clauses (A) and (B) above, make Restricted Payments to any Parent Company to enable such Parent Company to make the payments and/or deliveries described in such sub-clauses (A) and (B), and (ii) consisting of (A) payments made or expected to be made in respect of withholding or similar Taxes payable by any Permitted Payee future, present or former officers, directors, employees, members of management, managers or consultants of the Lead Borrower, any Restricted Subsidiary or any Parent Company or any of their respective Immediate Family Members and/or (B) repurchases of Capital Stock in consideration of the payments described in sub sub-clause (A(A) above, including demand repurchases in connection with the exercise of stock options and the issuance of restricted stock units or similar stock based awardsoptions;
(v) the Parent Lead Borrower may repurchase, redeem, acquire or retire Capital Stock upon repurchase (or make provisions for withholdings in connection with), or make Restricted Payments to any Parent Company to enable it to repurchase, redeem, acquire or retire ) Capital Stock upon (or make provisions for withholdings in connection with), the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represents all or a portion of the exercise price of, or tax withholdings with respect to, such warrants, options or other securities convertible into or exchangeable for Capital Stock as part of a “cashless” exercise;
(vi) for any taxable period (or portion thereof) that a Parent Company is treated as a corporation for U.S. federal income tax purposes and for which the Lead Borrower and/or any of its subsidiaries are members (or are pass-through entities of such members) of a consolidated, combined, unitary or similar income Tax group for U.S. federal, state, local or foreign income Tax purposes for which such Parent Company is the common parent, the Borrower may make Restricted Payments to such Parent Company to pay the proceeds portion of which any U.S. federal, state, local or foreign income Taxes (as applicable) of such Parent Company for such taxable period that are applied (i) on attributable to the Closing Date, solely to effect the consummation income of the Transactions and on or about Lead Borrower and/or its applicable subsidiaries; provided that, the Amendment No. 1 Effective Dateaggregate amount of such distributions shall not exceed the aggregate Taxes the Lead Borrower and/or its subsidiaries, solely to effect the consummation of the Amendment No. 1 Transactionsas applicable, (ii) on and after the Closing Date, to satisfy any payment obligations owing, or as otherwise required, under the Acquisition Agreement (including payment of working capital and/or purchase price adjustments) and would be required to pay Transaction Costsin respect of such U.S. federal, in each casestate, local and foreign Taxes on a stand-alone basis for such taxable period; provided further that the amount of such distributions with respect to the Transactions, (iii) to satisfy obligations to direct or indirect holders of Capital Stock of the Parent Borrower (immediately prior to giving effect any Unrestricted Subsidiary for any taxable period shall be limited to the Transactions) in connection with, or as a result of, any working capital and/or purchase price adjustments, in each case, with respect to the Transactions and (iv) to satisfy any settlement of claims or actions in connection with the Transactions or to satisfy indemnity or other similar obligations in connection with the Transactionsamount actually paid by such Unrestricted Subsidiary for such purpose;
(vii) the Parent Lead Borrower may pay Transaction Costs;
(viii) so long as no Event of Default exists at the time of declaration of such Restricted Payment, following the consummation of the first Qualifying IPO, the Lead Borrower may (or may make Restricted Payments to any Parent Company to enable it to) make Restricted Payments with respect to any Capital Stock in an amount not to exceed (A) the greater of (x) an amount equal to 7.006% per annum of the net Cash proceeds received by or contributed to the Parent Lead Borrower in connection with the merger of Isos Acquisition Corporation and Bowlero Corp. on December 15, 2021 and the other transactions consummated in connection therewith and (y) an amount equal to 7.00% per annum of the Market Capitalization of the Parent Borrower (or its direct or indirect Parent Company, as applicable) and its subsidiaries minus (B) from any utilization of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A)Qualifying IPO;
(viiiix) the Parent Lead Borrower may make Restricted Payments to (i) redeem, repurchase, defease, discharge, retire or otherwise acquire any (A) Capital Stock (“Treasury Capital Stock”) of the Parent Lead Borrower and/or any Restricted Subsidiary or (B) Capital Stock of any Parent Company, in the case of each of subclauses (A(A) and (B(B), in exchange for, or out of the proceeds of the substantially concurrent sale (other than to the Parent Lead Borrower and/or any Restricted Subsidiary) of, Qualified Capital Stock of the Parent Lead Borrower or any Parent Company to the extent any such proceeds are contributed to the capital of the Parent Lead Borrower and/or any Restricted Subsidiary 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 the Parent Lead Borrower or a Restricted Subsidiary) of any Refunding Capital Stock;
(ixx) to the extent constituting a Restricted Payment, the Parent Lead Borrower may consummate any transaction permitted by Section 5.19 (other than Section 5.19(d)), Section Section 6.06 (other than Sections 6.06(j6.06(j) and (t(t)) and Section ), Section 6.07 (other than Section Section 6.07(g)) and Section 6.09 (other than Section 6.09(d));
(xxi) the Parent Lead Borrower may make additional Restricted Payments in an aggregate amount not to exceed (A) the greater of $85,000,000 60,000,000 and 2535.0% of Consolidated Adjusted EBITDA as minus the sum of the last day of the most recently ended Test Period minus (Bi) any utilization of the Available RP Capacity Amount in reliance on unused capacity amounts under immediately preceding clause (A);
(xithis Section 6.04(a)(xi) the Parent Borrower may pay any dividend or other distribution or consummate any redemption within 60 days after the date of 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);
(xii) the Parent Borrower may reallocated to make any Restricted Payment constituting the distribution or payment of Receivables Fees;
(xiii) the Parent Borrower may make additional Restricted Debt Payments so long as, as measured at the time provided for in Section 1.04(epursuant to Section 6.04(b)(iv)(B), (i) the Total Leverage Ratio would not exceed 4.00:1.00, calculated on a Pro Forma Basis and (ii) there shall exist no Event of Default hereunder or shall result therefrom;
(xivany amounts under this Section 6.04(a)(xi) the Parent Borrower may reallocated to make additional Restricted Payments in an amount not Investments pursuant to exceed the amount of proceeds received by the Parent Borrower and/or any Restricted Subsidiary under the Representation and Warranty Insurance Policy during the term of this Agreement;
(xv) (A) for any taxable period for which the Parent Borrower and/or any of its Subsidiaries are members of a consolidated, combined or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which a direct or indirect parent of the Parent Borrower is the common parent (a “Tax Group”Section 6.06(q), or for which the Parent Borrower is a disregarded entity for U.S. federal income tax purposes wholly-owned by a corporate parent (a “Corporate Parent”), the Parent Borrower and each of its Subsidiaries may make Restricted Payments the proceeds of which shall be used by such common parent to pay the portion of any consolidated, combined or similar U.S. federal, state or local income Taxes of such Tax Group, or by the Corporate Parent to pay the portion of the U.S. federal, state or local income Taxes of such Corporate Parent, or any franchise taxes imposed in lieu thereof, for such taxable period that are attributable to the income of the Parent Borrower and/or its Subsidiaries, provided that such amount shall not be greater than the amount of such U.S. federal, state or local income taxes that would be paid (for such taxable period) by the Parent Borrower and its Subsidiaries if the Parent Borrower and/or such Subsidiaries had been a stand-alone corporate taxpayer (or stand-alone group of corporate taxpayers filing on a consolidated, combined or similar basis) for all taxable years ending after the Closing Date (taking into account any net operating loss carryforwards attributable to the Parent Borrower and its Subsidiaries, as the case may be) and (B) without duplication of Restricted Payments made under Section 6.04(a)(xv)(A), for any taxable period for which the Parent Borrower is treated as a partnership for U.S. federal and/or applicable state or local income tax purposes, the Parent Borrower may make Restricted Payments to its equity owners at the times and in the amoun-180-
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) The Parent Lead Borrower shall not pay or make, directly or indirectly, any Restricted Payment, except that:
: (i) the Parent Lead Borrower may make Restricted Payments to the extent necessary to permit any Parent Company:
: (A) to pay general operating and compliance administrative costs and expenses (including corporate overhead, legal or similar expenses and customary salary, fees, bonus and other benefits payable to directors, officers, employees, members of management, managers and/or consultants of any Parent Company)) and franchise fees and Taxes and similar fees, Taxes and expenses required to enable such Parent Company to maintain its organizational existence or qualification to do business, in each case, which are reasonable and customary and incurred in the ordinary course of business, plus any reasonable and customary -179- #96942867v160458181 #96942867v1 indemnification claims made by directors, officers, members of management, managers, employees or consultants of any Parent Company, in each case, to the extent attributable to the ownership or operations of any Parent Company and its subsidiaries (but excluding, for the avoidance of doubt, excluding the portion of any such amount, if any, amount that is attributable to the ownership or operations of any subsidiary of any Parent Company other than the Borrowers and their subsidiaries); (B) to discharge the consolidated, combined, unitary or similar Tax liabilities of such Parent Company and its subsidiaries when and as due, to the extent such liabilities are attributable to the operations of any Parent Company (but excluding, for the avoidance of doubt, the portion of any such Tax liabilities, if any, that is attributable to the operations of any subsidiary of any Parent Company other than the Lead Borrower and/or its subsidiaries), the Parent Lead Borrower and/or and its subsidiaries;
; provided that the amount paid by the Lead Borrower pursuant to this paragraph (B) to pay franchise, excise shall not exceed the amount of Tax liabilities that would be due if the Lead Borrower and each Restricted Subsidiary were separate corporations filing income and similar TaxesTax returns on a consolidated, and other feescombined, Taxes and expenses, required to maintain unitary or similar basis with the organizational existence Lead Borrower as the common parent of such Parent Company;
affiliated group (Ccalculated at the highest combined applicable federal, state, local and foreign Tax rate); provided further that Restricted Payments under this Section 6.04(a)(i)(B) to pay customary salary, bonus, long-term incentive, severance and other benefits (including payment to certain service providers of the Parent Borrower or its Subsidiaries pursuant that are attributable to any equity plan (whether in the form of options, cash settled options Unrestricted Subsidiary or otherwise)) payable to Permitted Payees, as well as applicable employment, social security or similar taxes in connection therewith, any joint venture shall be permitted only to the extent that either (x) such salaryUnrestricted Subsidiary has made one or more Cash distributions, bonuses, severance and other benefits are attributable and reasonably allocated advances or loans to the operations Lead Borrower or any of its Restricted Subsidiaries for such purpose in an amount up to the Parent Borrower and/or its subsidiariesamount of such Unrestricted Subsidiary’s or joint venture’s, in each caseas applicable, so long as proportionate share of such Parent Company applies Tax liabilities or (y) the amount of any such Restricted Payment for made by the Lead Borrower on behalf of such purpose;
Unrestricted Subsidiary or joint venture is treated as an Investment subject to Section 6.06 hereof; (DC) to pay audit and other accounting and reporting expenses of such Parent Company to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such expenses, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower Borrowers and/or its their subsidiaries), the Parent Borrower Borrowers and its their subsidiaries;
; (ED) for the payment of insurance premiums and deductibles to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower Borrowers and/or its their subsidiaries), the Parent Borrower Borrowers and its their subsidiaries;
; (FE) to pay (x) fees and expenses related to any debt and/or or equity offerings (including refinancings)offerings, investments and/or or acquisitions permitted or not restricted by this Agreement (whether or not consummated, ) relating to the Borrowers and including advisory, refinancing, subsequent transaction and exit fees of any Parent Company of the Parent Borrower) and expenses and indemnities of any trustee, agent, arranger, underwriter or similar role their Restricted Subsidiaries and (y) Public Company Costs; and
(GF) to finance any Investment permitted under Section 6.06 as if such Parent Company were subject to Section Section 6.06 (provided that (x) any Restricted Payment under this clause (a)(i)(G(a)(i)(F) shall be -180- #96942867v160458181 #96942867v1 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 (y) the relevant Parent Company shall, promptly following the closing 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 therewiththereof, cause (I) all property acquired to be contributed to the Parent Borrower Borrowers or one or more of its their Restricted Subsidiaries Subsidiaries, or (II) the merger, consolidation or amalgamation of the Person formed or acquired into the Parent Borrower Borrowers or one or more of its their Restricted Subsidiaries, in order to consummate such Investment in compliance with the applicable requirements of Section Section 6.06 as if undertaken as a direct Investment by the Parent Borrower Borrowers or the relevant Restricted Subsidiary);
; and (G) to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, employees or consultants of any Parent Company (or any Immediate Family Member of any of the foregoing) to the extent such salary, bonuses and other benefits are attributable and reasonably allocated to the operations of the Borrowers and/or their subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose; provided that with respect to Restricted Payments under clauses (A), (B), (C), (D) and (G) above, such Restricted Payments that are attributable to any Unrestricted Subsidiary shall be permitted only to the extent that either (x) such Unrestricted Subsidiary has made one or more Cash distributions, advances or loans to the Borrowers or any of their Restricted Subsidiaries for such purpose in an amount up to the amount of such Unrestricted Subsidiary’s proportionate share of such Restricted Payment or (y) the amount of any such Restricted Payment made by the applicable Borrower on behalf of such Unrestricted Subsidiary is treated as an Investment subject to Section 6.06 hereof; (ii) the Parent Lead Borrower may pay (or make Restricted Payments to allow any Parent Company to pay) for the repurchase, redemption, retirement or other acquisition or retirement for value of Capital Stock of any Parent Company Company, any subsidiary or any subsidiary of their respective Affiliates held by any Permitted Payee:
future, present or former employee, director, member of management, officer, manager, advisor or consultant (or any Affiliate or Immediate Family Member thereof) of any Parent Company, the Borrowers, any subsidiary or any of their respective Affiliates: (A) in accordance with the terms of promissory notes issued pursuant to Section Section 6.01(o), so long as the aggregate amount of all Cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments made pursuant to sub-clause (D(D) of this clause (ii(ii) below, (1) does not exceed the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period 5,000,000 in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to the next subsequent Fiscal Years Year (until so appliedprovided that no more than $10 million may be carried forward in any Fiscal Year)) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under clause (D) below; plus
(B) with the proceeds of any sale or issuance of, or of any capital contribution in respect of, the Capital Stock of the Parent Borrower Borrowers or any Parent Company (to the extent such proceeds are contributed to the Parent Borrower or any Restricted Subsidiary in respect of Qualified Capital Stock issued by to the Parent Borrower Borrowers or such any Restricted Subsidiary) (other than amounts constituting a Cure Amount or an Available Excluded Contribution Amount); plus
(C) with the net proceeds of any key-man life insurance policies; plus
(D) with Cash and Cash Equivalents in an amount not to exceed, together with the aggregate amount of all cash payments made pursuant to sub-clause (A) of this clause (ii) in respect of promissory notes issued pursuant to Section 6.01(o), (1) the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under the immediately preceding clause (1); plus
(E) with the amount of any Cash bonuses otherwise payable to any Permitted Payee that are foregone in exchange for the receipt of Capital Stock of the Parent Borrower or any Parent Company pursuant to any compensation arrangement, including any deferred compensation plan;
(iii) the Parent Borrower may make additional Restricted Payments in an amount not to exceed (A) the portion, if any, of the Available Amount on such date that the Parent Borrower elects to apply to this clause (iii)(A) plus (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Parent Borrower elects to apply to this clause (iii)(B) (plus, without duplication of amounts 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 with Available Excluded Contribution Amounts up to the amount of such Available Excluded Contribution Amount, less any application thereof under Sections 6.04(b)(vi) or 6.06(r));
(iv) the Parent Borrower may make Restricted Payments (i) to any Parent Company to enable such Parent Company to (A) make Cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of such Parent Company, dividends, share splits, reverse share splits (or any combination thereof) and, mergers, consolidations, amalgamations or other business combinations, and acquisitions and other Investments permitted hereunder and/or (B) honor any conversion request by a holder of Convertible Indebtedness by payment of cash and/or delivery of Capital Stock, make any cash payments in lieu of fractional shares in connection with any conversion of Convertible Indebtedness and otherwise make payments on Convertible Indebtedness in accordance with its terms (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments upon redemption thereof), or, in the case of each of sub-clauses (A) and (B) above, make Restricted Payments to any Parent Company to enable such Parent Company to make the payments and/or deliveries described in such sub-clauses (A) and (B), and (ii) consisting of (A) payments made or expected to be made in respect of withholding or similar Taxes payable by any Permitted Payee and/or (B) repurchases of Capital Stock in consideration of the payments described in sub clause (A) above, including demand repurchases in connection with the exercise of stock options and the issuance of restricted stock units or similar stock based awards;
(v) the Parent Borrower may repurchase, redeem, acquire or retire Capital Stock upon (or make provisions for withholdings in connection with), or make Restricted Payments to any Parent Company to enable it to repurchase, redeem, acquire or retire Capital Stock upon (or make provisions for withholdings in connection with), the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represents all or a portion of the exercise price of, or tax withholdings with respect to, such warrants, options or other securities convertible into or exchangeable for Capital Stock as part of a “cashless” exercise;
(vi) the Parent Borrower may make Restricted Payments the proceeds of which are applied (i) on the Closing Date, solely to effect the consummation of the Transactions and on or about the Amendment No. 1 Effective Date, solely to effect the consummation of the Amendment No. 1 Transactions, (ii) on and after the Closing Date, to satisfy any payment obligations owing, or as otherwise required, under the Acquisition Agreement (including payment of working capital and/or purchase price adjustments) and to pay Transaction Costs, in each case, with respect to the Transactions, (iii) to satisfy obligations to direct or indirect holders of Capital Stock of the Parent Borrower (immediately prior to giving effect to the Transactions) in connection with, or as a result of, any working capital and/or purchase price adjustments, in each case, with respect to the Transactions and (iv) to satisfy any settlement of claims or actions in connection with the Transactions or to satisfy indemnity or other similar obligations in connection with the Transactions;
(vii) the Parent Borrower may (or may make Restricted Payments to any Parent Company to enable it to) make Restricted Payments with respect to any Capital Stock in an amount not to exceed (A) the greater of (x) an amount equal to 7.00% per annum of the net Cash proceeds received by or contributed to the Parent Borrower in connection with the merger of Isos Acquisition Corporation and Bowlero Corp. on December 15, 2021 and the other transactions consummated in connection therewith and (y) an amount equal to 7.00% per annum of the Market Capitalization of the Parent Borrower (or its direct or indirect Parent Company, as applicable) and its subsidiaries minus (B) any utilization of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A);
(viii) the Parent Borrower may make Restricted Payments to (i) redeem, repurchase, defease, discharge, retire or otherwise acquire any (A) Capital Stock (“Treasury Capital Stock”) of the Parent Borrower and/or any Restricted Subsidiary or (B) Capital Stock of any Parent Company, in the case of each of subclauses (A) and (B), in exchange for, or out of the proceeds of the substantially concurrent sale (other than to the Parent Borrower and/or any Restricted Subsidiary) of, Qualified Capital Stock of the Parent Borrower or any Parent Company to the extent any such proceeds are contributed to the capital of the Parent Borrower and/or any Restricted Subsidiary 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 the Parent Borrower or a Restricted Subsidiary) of any Refunding Capital Stock;
(ix) to the extent constituting a Restricted Payment, the Parent Borrower may consummate any transaction permitted by Section 5.19 (other than Section 5.19(d)), Section 6.06 (other than Sections 6.06(j) and (t)) and Section 6.07 (other than Section 6.07(g));
(x) the Parent Borrower may make additional Restricted Payments in an aggregate amount not to exceed (A) the greater of $85,000,000 and 25% of Consolidated Adjusted EBITDA 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);
(xi) the Parent Borrower may pay any dividend or other distribution or consummate any redemption within 60 days after the date of 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);
(xii) the Parent Borrower may make any Restricted Payment constituting the distribution or payment of Receivables Fees;
(xiii) the Parent Borrower may make additional Restricted 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 Event of Default hereunder or shall result therefrom;
(xiv) the Parent Borrower may make additional Restricted Payments in an amount not to exceed the amount of proceeds received by the Parent Borrower and/or any Restricted Subsidiary under the Representation and Warranty Insurance Policy during the term of this Agreement;
(xv) (A) for any taxable period for which the Parent Borrower and/or any of its Subsidiaries are members of a consolidated, combined or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which a direct or indirect parent of the Parent Borrower is the common parent (a “Tax Group”), or for which the Parent Borrower is a disregarded entity for U.S. federal income tax purposes wholly-owned by a corporate parent (a “Corporate Parent”), the Parent Borrower and each of its Subsidiaries may make Restricted Payments the proceeds of which shall be used by such common parent to pay the portion of any consolidated, combined or similar U.S. federal, state or local income Taxes of such Tax Group, or by the Corporate Parent to pay the portion of the U.S. federal, state or local income Taxes of such Corporate Parent, or any franchise taxes imposed in lieu thereof, for such taxable period that are attributable to the income of the Parent Borrower and/or its Subsidiaries, provided that such amount shall not be greater than the amount of such U.S. federal, state or local income taxes that would be paid (for such taxable period) by the Parent Borrower and its Subsidiaries if the Parent Borrower and/or such Subsidiaries had been a stand-alone corporate taxpayer (or stand-alone group of corporate taxpayers filing on a consolidated, combined or similar basis) for all taxable years ending after the Closing Date (taking into account any net operating loss carryforwards attributable to the Parent Borrower and its Subsidiaries, as the case may be) and (B) without duplication of Restricted Payments made under Section 6.04(a)(xv)(A), for any taxable period for which the Parent Borrower is treated as a partnership for U.S. federal and/or applicable state or local income tax purposes, the Parent Borrower may make Restricted Payments to its equity owners at the times and in the amoun-181- #96942867v160458181 #96942867v1
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) The None of Parent, Intermediate Holdings, Holdings nor the Borrower will, nor will Parent Borrower shall not permit any other 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 that:
that (i) the Subsidiaries may declare and pay dividends ratably with respect to their Equity Interests, (ii) Parent may declare and pay dividends with respect to its Equity Interests payable solely in shares of Qualified Equity Interests, (iii) Parent may (and Intermediate Holdings, Holdings and the Borrower may make Restricted Payments so that Parent may), make Restricted Payments, not exceeding $5,000,000 during any fiscal year, pursuant to and in accordance with stock option plans or other benefit plans or compensation arrangements approved by TopCo’s or Parent’s board of directors for management or employees of Parent, the extent Borrower and the Subsidiaries, (iv) Parent may (and Intermediate Holdings, Holdings and the Borrower may make Restricted Payments so that Parent may) make Restricted Payments at such times and in such amounts, (A) not exceeding $2,000,000 during any fiscal year, as shall be necessary to permit any TopCo, Parent Company:
and the Subsidiaries (Aother than the Borrower and its subsidiaries) to pay discharge their general operating corporate and compliance costs and overhead expenses (including corporate overhead, legal or similar expenses franchise taxes and customary salary, bonus directors fees and other benefits payable to directors, officers, employees, members of management, managers and/or consultants of any Parent Company), in each case, which are reasonable director and customary and officer indemnification obligations) incurred in the ordinary course of businesscourse, plus any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of any Parent Company, in each case, to the extent attributable to the ownership or operations of any Parent Company (but excluding, for the avoidance of doubt, the portion of any such amount, if any, that is attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and/or its subsidiaries;
(B) to pay franchise, excise and similar Taxes, and other fees, Taxes and expenses, required its Tax liabilities directly attributable to maintain the organizational existence of such Parent Company;
(Cor arising as a result of) to pay customary salary, bonus, long-term incentive, severance and other benefits (including payment to certain service providers of the Parent Borrower or its Subsidiaries pursuant to any equity plan (whether in the form of options, cash settled options or otherwise)) payable to Permitted Payees, as well as applicable employment, social security or similar taxes in connection therewith, to the extent such salary, bonuses, severance and other benefits are attributable and reasonably allocated to the operations of the Parent Borrower and/or its subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose;
(D) to pay audit and other accounting and reporting expenses of such Parent Company to the extent attributable to any Parent Company (but excluding, for the avoidance of doubtParent, the portion of any such expenses, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries;
(E) for the payment of insurance premiums to the extent attributable to any Parent Company (but excludingSubsidiaries, for the avoidance of doubt, the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries;
(F) to pay (x) fees and expenses related to any debt and/or equity offerings (including refinancings), investments and/or acquisitions permitted or not restricted by this Agreement (whether or not consummated, and including advisory, refinancing, subsequent transaction and exit fees of any Parent Company of the Parent Borrower) and expenses and indemnities of any trustee, agent, arranger, underwriter or similar role and (y) Public Company Costs; and
(G) to finance any Investment permitted under Section 6.06 as if such Parent Company were subject to Section 6.06 (provided that (x1) any Restricted Payment under this clause (a)(i)(G) 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 (y) the relevant Parent Company shall, promptly following the closing 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 (I) all property acquired to be contributed to the Parent Borrower or one or more of its Restricted Subsidiaries or (II) the merger, consolidation or amalgamation of the Person formed or acquired into the Parent Borrower or one or more of its Restricted Subsidiaries, in order to consummate such Investment in compliance with the applicable requirements of Section 6.06 as if undertaken as a direct Investment by the Parent Borrower or the relevant Restricted Subsidiary);
(ii) the Parent Borrower may pay (or make Restricted Payments to allow any Parent Company to pay) for the repurchase, redemption, retirement or other acquisition or retirement for value of Capital Stock of any Parent Company or any subsidiary held by any Permitted Payee:
(A) in accordance with the terms of promissory notes issued pursuant to Section 6.01(o), so long as the aggregate amount of all Cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments made pursuant to sub-clause (D(B) of this clause (ii(iv) below, (1) does shall not exceed the greater amount that Parent, the Borrower or the Subsidiaries, as applicable, would be required to pay in respect of $68,000,000 federal, state and 20% of Consolidated Adjusted EBITDA local taxes were Parent, the Borrower or the Subsidiaries to pay such taxes as of the last day of the most recently ended Test Period in any Fiscal Yearstand-alone taxpayers, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied)) minus (2) any utilization all Restricted Payments made to Parent, the Borrower or the Subsidiaries, pursuant to this clause (iv) shall be used by Parent, the Borrower or the Subsidiaries, as applicable, for the purposes specified herein within three Business Days after their respective receipt thereof and (3) other than in the case of the Available RP Capacity Amount in reliance on unused capacity under clause (D) below; plus
(B) with the proceeds of any sale or issuance of, or of any capital contribution in respect of, the Capital Stock of the Parent Borrower or any Parent Company (to the extent such proceeds are contributed to the Parent Borrower or any Restricted Subsidiary in respect of Qualified Capital Stock issued by the Parent Borrower or such Restricted Subsidiary) (other than amounts constituting a Cure Amount or an Available Excluded Contribution Amount); plus
(C) with the net proceeds of any key-man life insurance policies; plus
(D) with Cash and Cash Equivalents in an amount not to exceed, together with the aggregate amount of all cash payments made pursuant to sub-clause (A) of this clause (ii) in respect of promissory notes issued pursuant to Section 6.01(o(iv), no Event of Default shall have occurred and be continuing or would result therefrom, (1v) Parent may (and the greater of $68,000,000 Borrower and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under the immediately preceding clause (1); plus
(E) with the amount of any Cash bonuses otherwise payable to any Permitted Payee that are foregone in exchange for the receipt of Capital Stock of the Parent Borrower or any Parent Company pursuant to any compensation arrangement, including any deferred compensation plan;
(iii) the Parent Borrower may make additional Restricted Payments in an amount not to exceed (A) the portion, if any, of the Available Amount on such date that the Parent Borrower elects to apply to this clause (iii)(A) plus (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Parent Borrower elects to apply to this clause (iii)(B) (plus, without duplication of amounts 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 with Available Excluded Contribution Amounts up to the amount of such Available Excluded Contribution Amount, less any application thereof under Sections 6.04(b)(vi) or 6.06(r));
(iv) the Parent Borrower Subsidiaries may make Restricted Payments (iso that Parent may) make Restricted Payments, at such times and in such amounts as are necessary to any Parent Company to enable such Parent Company to make payments of or on account of (A) make Cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options monitoring or other securities convertible into management or exchangeable for Capital Stock of such Parent Company, dividends, share splits, reverse share splits (similar fees or any combination thereof) and, mergers, consolidations, amalgamations or other business combinations, and acquisitions and other Investments permitted hereunder and/or (B) honor any conversion request by a holder of Convertible Indebtedness by payment of cash and/or delivery of Capital Stock, make any cash payments in lieu of fractional shares in connection with any conversion of Convertible Indebtedness and otherwise make payments on Convertible Indebtedness in accordance with its terms (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments upon redemption thereof), or, in the case of each of sub-clauses (A) transaction fees and (B) abovereimbursement of out-of pocket costs and expenses incurred in connection with monitoring, make Restricted Payments management or similar services, in each case to the Sponsor or any Parent Company Sponsor Affiliate to enable such Parent Company to make the payments and/or deliveries described in such sub-clauses (A) extent not prohibited by Section 6.09, provided that no Event of Default shall have occurred and (B)be continuing or would result therefrom, and (iivi) consisting of so long as no Default has occurred and is continuing, Parent may (A) payments made or expected to be made in respect of withholding or similar Taxes payable by any Permitted Payee and/or (B) repurchases of Capital Stock in consideration of the payments described in sub clause (A) above, including demand repurchases in connection with the exercise of stock options and the issuance of restricted stock units or similar stock based awards;
(v) Borrower and the Parent Borrower may repurchase, redeem, acquire or retire Capital Stock upon (or make provisions for withholdings in connection with), or make Restricted Payments to any Parent Company to enable it to repurchase, redeem, acquire or retire Capital Stock upon (or make provisions for withholdings in connection with), the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represents all or a portion of the exercise price of, or tax withholdings with respect to, such warrants, options or other securities convertible into or exchangeable for Capital Stock as part of a “cashless” exercise;
(vi) the Parent Borrower Subsidiaries may make Restricted Payments the proceeds of which are applied (i) on the Closing Date, solely to effect the consummation of the Transactions and on or about the Amendment No. 1 Effective Date, solely to effect the consummation of the Amendment No. 1 Transactions, (ii) on and after the Closing Date, to satisfy any payment obligations owing, or as otherwise required, under the Acquisition Agreement (including payment of working capital and/or purchase price adjustments) and to pay Transaction Costs, in each case, with respect to the Transactions, (iii) to satisfy obligations to direct or indirect holders of Capital Stock of the so that Parent Borrower (immediately prior to giving effect to the Transactions) in connection with, or as a result of, any working capital and/or purchase price adjustments, in each case, with respect to the Transactions and (iv) to satisfy any settlement of claims or actions in connection with the Transactions or to satisfy indemnity or other similar obligations in connection with the Transactions;
(vii) the Parent Borrower may (or may make Restricted Payments to any Parent Company to enable it tomay) make Restricted Payments with respect to any Capital Stock in an amount not to exceed (A) the greater of (x) an amount equal to 7.00% per annum of the net Cash proceeds received by or contributed to the Parent Borrower in connection with the merger of Isos Acquisition Corporation and Bowlero Corp. on December 15, 2021 and the other transactions consummated in connection therewith and (y) an amount equal to 7.00% per annum of the Market Capitalization of the Parent Borrower (or its direct or indirect Parent Company, as applicable) and its subsidiaries minus (B) any utilization of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A);
(viii) the Parent Borrower may make Restricted Payments to (i) redeem, repurchase, defease, discharge, retire or otherwise acquire any (A) Capital Stock (“Treasury Capital Stock”) of the Parent Borrower and/or any Restricted Subsidiary or (B) Capital Stock of any Parent Company, in the case of each of subclauses (A) and (B), in exchange for, or out of the proceeds of the substantially concurrent sale (other than to the Parent Borrower and/or any Restricted Subsidiary) of, Qualified Capital Stock of the Parent Borrower or any Parent Company to the extent any such proceeds are contributed to the capital of the Parent Borrower and/or any Restricted Subsidiary 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 the Parent Borrower or a Restricted Subsidiary) of any Refunding Capital Stock;
(ix) to the extent constituting a Restricted Payment, the Parent Borrower may consummate any transaction permitted by Section 5.19 (other than Section 5.19(d)), Section 6.06 (other than Sections 6.06(j) and (t)) and Section 6.07 (other than Section 6.07(g));
(x) the Parent Borrower may make additional Restricted Payments in an aggregate amount not to exceed the sum of (A) the greater aggregate amount of $85,000,000 Net Proceeds of issuances of, or capital contributions in respect of existing, Qualified Equity Interests (other than in connection with the exercise of a Cure Right) that are Not Otherwise Applied and 25% of Consolidated Adjusted EBITDA (B) if the Leverage Ratio as of the date that is 10 Business Days after the last day of the most most-recently ended Test Period minus four fiscal quarter period in respect of which financial statements shall have been delivered under Section 5.01(a) or (Bb) any utilization of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A);
(xi) the Parent Borrower may pay any dividend or other distribution or consummate any redemption within 60 days after the date of the declaration thereof or the provision a related certificate of a redemption notice with respect thereto, as the case may be, if at the date Financial Officer of such declaration or notice, the dividend, distribution or redemption contemplated by such declaration or redemption notice would Parent shall have complied with the provisions of this Section 6.04(a);
(xii) the Parent Borrower may make any Restricted Payment constituting the distribution or payment of Receivables Fees;
(xiii) the Parent Borrower may make additional Restricted Payments so long as, as measured at the time provided for in Section 1.04(ebeen delivered pursuant to Section 5.01(c), (i) the Total Leverage Ratio would not exceed 4.00:1.00, calculated determined on a Pro Forma Basis after giving effect to such Restricted Payments, is less than or equal to 4.00 to 1.00, the amount of Cumulative Excess Cash Flow that is Not Otherwise Applied.
(b) None of Parent, Intermediate Holdings, Holdings or the Borrower will, nor will Parent permit any other Subsidiary to, make or 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 Indebtedness under the Second-Lien Notes (including any extensions, renewals and replacements thereof), any Additional Second-Lien Debt (including any extensions, renewals and replacements thereof), any Subordinated Debt and any other Indebtedness required to be subordinated to the Obligations pursuant hereto, 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, cancelation or termination of any such Indebtedness, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoing in respect of any such Indebtedness, except:
(i) payment of regularly scheduled interest and principal payments (and fees and expenses payable) as, in the form of payment and when due in respect of any such Indebtedness (subject to the subordination provisions, if any, applicable to any such Indebtedness);
(ii) there shall exist no Event refinancings of Default hereunder or shall result therefromsuch Indebtedness to the extent permitted by Section 6.01;
(xiviii) payment of secured amounts of such Indebtedness that becomes due as a result of the Parent Borrower may make additional Restricted Payments voluntary sale or transfer of the property or assets securing such Indebtedness; and
(iv) so long as no Default has occurred and is continuing, payments or other distributions in respect of any such Indebtedness in an aggregate amount not to exceed the sum of (A) if the First-Lien Leverage Ratio as of the date that is 10 Business Days after the last day of the most-recently ended four fiscal quarter period, determined on a Pro Forma Basis after giving effect to such payment or other disposition on the last day of the most-recently ended fiscal quarter of Parent, is less than 2.85 to 1.00, up to an amount not to exceed the amount of proceeds received by the Parent Borrower and/or any Restricted Subsidiary under the Representation and Warranty Insurance Policy during $40,000,000 for the term of this Agreement;
(xv) (A) for any taxable period for which the Parent Borrower and/or any of its Subsidiaries are members of a consolidated, combined or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which a direct or indirect parent of the Parent Borrower is the common parent (a “Tax Group”), or for which the Parent Borrower is a disregarded entity for U.S. federal income tax purposes wholly-owned by a corporate parent (a “Corporate Parent”), the Parent Borrower and each of its Subsidiaries may make Restricted Payments the proceeds of which shall be used by such common parent to pay the portion of any consolidated, combined or similar U.S. federal, state or local income Taxes of such Tax Group, or by the Corporate Parent to pay the portion of the U.S. federal, state or local income Taxes of such Corporate Parent, or any franchise taxes imposed in lieu thereof, for such taxable period that are attributable to the income of the Parent Borrower and/or its Subsidiaries, provided that such amount shall not be greater than the amount of such U.S. federal, state or local income taxes that would be paid (for such taxable period) by the Parent Borrower and its Subsidiaries if the Parent Borrower and/or such Subsidiaries had been a stand-alone corporate taxpayer (or stand-alone group of corporate taxpayers filing on a consolidated, combined or similar basis) for all taxable years ending after the Closing Date (taking into account any net operating loss carryforwards attributable to the Parent Borrower and its Subsidiaries, as the case may be) Agreement and (B) without duplication the aggregate amount of Restricted Payments made under Section 6.04(a)(xv)(A)Net Proceeds of issuances of, for any taxable period for which or capital contributions in respect of existing, Qualified Equity Interests (other than in connection with the Parent Borrower is treated as exercise of a partnership for U.S. federal and/or applicable state or local income tax purposes, the Parent Borrower may make Restricted Payments to its equity owners at the times and in the amounCure Right) that are Not Otherwise Applied.
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) The Parent Borrower shall not pay or make, directly or indirectly, any Restricted Payment, except that:
(i) the Parent Borrower may make Restricted Payments to the extent necessary to permit any Parent Company:
(A) to pay general operating and compliance administrative costs and expenses (including corporate overhead, legal or similar expenses and customary salary, bonus and other benefits payable to directors, officers, employees, members of management, managers and/or consultants of any Parent Company)) and franchise fees and Taxes and similar fees, Taxes and expenses required to enable such Parent Company to maintain its organizational existence or qualification to do business, in each case, which are reasonable and customary and incurred in the ordinary course of business, plus any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of any Parent Company, in each case, to the extent attributable to the ownership or operations of any Parent Company and its subsidiaries (but excluding, for the avoidance of doubt, excluding the portion of any such amount, if any, amount that is attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or and its subsidiaries), the Parent Borrower and/or its subsidiaries;
(B) to pay franchise, excise and similar Taxes, and other fees, Taxes and expenses, required to maintain the organizational existence of such Parent Company;[Reserved].
(C) to pay customary salary, bonus, long-term incentive, severance and other benefits (including payment to certain service providers of the Parent Borrower or its Subsidiaries pursuant to any equity plan (whether in the form of options, cash settled options or otherwise)) payable to Permitted Payees, as well as applicable employment, social security or similar taxes in connection therewith, to the extent such salary, bonuses, severance and other benefits are attributable and reasonably allocated to the operations of the Parent Borrower and/or its subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose;
(D) to pay audit and other accounting and reporting expenses of such Parent Company to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such expenses, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries;
(ED) for the payment of insurance premiums to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries;
(FE) to pay (x) fees and expenses related to any debt and/or or equity offerings (including refinancings)offerings, investments and/or or acquisitions permitted or not restricted by this Agreement (whether or not consummated, and including advisory, refinancing, subsequent transaction and exit fees of any Parent Company of the Parent Borrower) and expenses and indemnities of any trustee, agent, arranger, underwriter or similar role and (y) Public Company Costs; and;
(GF) to finance any Investment permitted under Section 6.06 as if such Parent Company were subject to Section Section 6.06 (provided that (x) any Restricted Payment under this clause (a)(i)(G(a)(i)(F) 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 (y) the relevant Parent Company shall, promptly following the closing 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 therewiththereof, cause (I) all property acquired to be contributed to the Parent Borrower or one or more of its Restricted Subsidiaries Subsidiaries, or (II) the merger, consolidation or amalgamation of the Person formed or acquired into the Parent Borrower or one or more of its Restricted Subsidiaries, in order to consummate such Investment in compliance with the applicable requirements of Section Section 6.06 as if undertaken as a direct Investment by the Parent Borrower or the relevant Restricted Subsidiary); and
(G) to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, employees or consultants of any Parent Company (or any Immediate Family Member of any of the foregoing) to the extent such salary, bonuses and other benefits are attributable and reasonably allocated to the operations of the Parent Borrower and/or its subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose;
(ii) the Parent Borrower may pay (or make Restricted Payments to allow any Parent Company to pay) for the repurchase, redemption, retirement or other acquisition or retirement for value of Capital Stock of any Parent Company or any subsidiary held by any Permitted Payeefuture, present or former employee, director, member of management, officer, manager or consultant (or any Affiliate or Immediate Family Member thereof) of any Parent Company, the Parent Borrower or any subsidiary:
(A) in accordance with the terms of promissory notes issued pursuant to Section Section 6.01(o), so long as the aggregate amount of all Cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments made pursuant to sub-clause (D(D) of this clause (ii(ii) below, (1) does not exceed the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period 30,000,000 in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied)) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under clause (D) below; plusYears;
(B) with the proceeds of any sale or issuance of, or of any capital contribution in respect of, the Capital Stock of the Parent Borrower or any Parent Company (to the extent such proceeds are contributed in respect of Qualified Capital Stock to the Parent Borrower or any Restricted Subsidiary in respect of Qualified Capital Stock issued by the Parent Borrower or such Restricted Subsidiary) (other than any amounts constituting a Cure Amount or an any amount that has been added to the Available Excluded Contribution Amount or the Available Amount); plus;
(C) with the net proceeds of any key-man life insurance policies; plusor
(D) with Cash and Cash Equivalents in an amount not to exceed, together with the aggregate amount of all cash payments made pursuant to sub-clause (A(A) of this clause (ii(ii) in respect of promissory notes issued pursuant to Section Section 6.01(o), (1) the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period 30,000,000 in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under the immediately preceding clause (1); plus
(E) with the amount of any Cash bonuses otherwise payable to any Permitted Payee that are foregone in exchange for the receipt of Capital Stock of the Parent Borrower or any Parent Company pursuant to any compensation arrangement, including any deferred compensation planYears;
(iii) the Parent Borrower may make additional Restricted Payments in an amount not to exceed (A) so long as the Fixed Charge Coverage Ratio, calculated on a Pro Forma Basis, would not be less than 2.00:1.00, the portion, if any, of the Available Amount on such date that the Parent Borrower elects to apply to this clause (iii)(A(iii)(A) plus (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Parent Borrower elects to apply to this clause (iii)(B) (plus, without duplication of amounts 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 with Available Excluded Contribution Amounts up to the amount of such Available Excluded Contribution Amount, less any application thereof under Sections 6.04(b)(vi) or 6.06(r)iii)(B);
(iv) the Parent Borrower may make Restricted Payments (i) to any Parent Company to enable such Parent Company to (A) make Cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of such Parent Company, dividends, share splits, reverse share splits (or any combination thereof) and, mergers, consolidations, amalgamations or other business combinations, and acquisitions and other Investments permitted hereunder and/or (B) honor any conversion request by a holder of Convertible Indebtedness by payment of cash and/or delivery of Capital Stock, make any cash payments in lieu of fractional shares in connection with any conversion of Convertible Indebtedness and otherwise make payments on Convertible Indebtedness in accordance with its terms (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments upon redemption thereof), or, in the case of each of sub-clauses (A) and (B) above, make Restricted Payments to any Parent Company to enable such Parent Company to make the payments and/or deliveries described in such sub-clauses (A) and (B), and (ii) consisting of (A) payments made or expected to be made in respect of withholding or similar Taxes payable by any Permitted Payee future, present or former officers, directors, employees, members of management, managers or consultants of the Borrower, any Restricted Subsidiary or any Parent Company or any of their respective Immediate Family Members and/or (B) repurchases of Capital Stock in consideration of the payments described in sub sub-clause (A(A) above, including demand repurchases in connection with the exercise of stock options and the issuance of restricted stock units or similar stock based awardsoptions;
(v) the Parent Borrower may repurchase, redeem, acquire or retire Capital Stock upon repurchase (or make provisions for withholdings in connection with), or make Restricted Payments to any Parent Company to enable it to repurchase, redeem, acquire or retire ) Capital Stock upon (or make provisions for withholdings in connection with), the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represents all or a portion of the exercise price of, or tax withholdings with respect to, of such warrants, options or other securities convertible into or exchangeable for Capital Stock as part of a “cashless” exercise;
(viA) for any taxable year (or portion thereof) that Borrower is a partnership or disregarded entity for U.S. federal income Tax purposes and no Parent Company is treated as a corporation for U.S. federal income tax purposes, the Parent Borrower may make Restricted Payments to fund the income tax liabilities of the direct or indirect equity owners of Borrower, in an assumed amount equal to the product of (x) the highest combined marginal federal and applicable state and/or local statutory Tax rate applicable to a direct or indirect taxpayer equity owner of Borrower, and (y) the U.S. federal taxable income of the Parent Borrower for such year (or portion thereof), provided that (i) such calculation shall take into account the character of income or gain, preferential tax rates and the deductibility of state and local income taxes for US federal income tax purposes; (ii) such taxable income shall be reduced by any losses previously allocated to the equity owners to the extent such loss has not previously been used to offset taxable income of Borrower; (iii) such distributions shall be reduced by any amounts withheld by the Parent Borrower or its Subsidiaries (or otherwise paid directly to any Governmental Authority) with respect to any taxable income or gain of Borrower and any tax credits Borrower allocated to its equity owners); or (B) for any taxable period (or portion thereof) that a Parent Company is treated as a corporation for U.S. federal income tax purposes and for which Borrower and any of its subsidiaries are members (or are pass-through entities of such members) of a consolidated, combined or similar income Tax group for U.S. federal, state or local income Tax purposes for which such Parent Company is the common parent, the Parent Borrower may make Restricted Payments to such Parent Company to pay the portion of any U.S. federal, state or local income Taxes (as applicable) of such Parent Company for such taxable period that are attributable to the income of the Parent Borrower and/or its applicable subsidiaries; provided that the aggregate amount of any such distributions with respect to federal, state or local Taxes, as applicable, shall not exceed the aggregate amount of such Taxes the Parent Borrower and its subsidiaries that are part of such group would be required to pay in respect of such U.S. federal, state or local Taxes on a stand-alone basis for such taxable period; provided, further, that the amount of such distributions with respect to any Unrestricted Subsidiary for any taxable period shall be limited to the amount actually paid by such Unrestricted Subsidiary for such purpose.
(vii) the Parent Borrower may make Restricted Payments Payments, the proceeds of which are applied (i) on the Closing Date, solely to effect the consummation of the Transactions and on or about the Amendment No. 1 Effective Date, solely to effect the consummation of the Amendment No. 1 Transactions, (ii) on and after the Closing Date, to satisfy any payment obligations owing, or as otherwise required, owing under the Acquisition Agreement (including payment of working capital and/or purchase price adjustments) and to pay Transaction Costs, in each case, with respect to the Transactions, (iii) to satisfy obligations to direct or indirect holders of Capital Stock of the Parent Borrower (immediately prior to giving effect to the Transactions) in connection with, or as a result of, any working capital and/or purchase price adjustments, in each case, with respect to the Transactions and (iv) to satisfy any settlement of claims or actions in connection with the Transactions or to satisfy indemnity or other similar obligations in connection with the TransactionsReorganization Agreement;
(viiviii) so long as no Event of Default exists, following the consummation of the first Qualifying IPO, the Parent Borrower may (or may make Restricted Payments to any Parent Company to enable it to) make Restricted Payments with respect to any Capital Stock in an amount not to exceed (A) the greater of (xi) an amount equal to 7.006% per annum of the net Cash proceeds received by or contributed to the Parent Borrower in connection with the merger of Isos Acquisition Corporation and Bowlero Corp. on December 15, 2021 and the other transactions consummated in connection therewith and from any Qualifying IPO or (yb) an amount equal to 7.005% per annum of the Market Capitalization aggregate market capitalization of the Parent Borrower (or its direct or indirect applicable Parent Company, as applicable) and its subsidiaries minus (B) any utilization of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A);
(viiiix) the Parent Borrower may make Restricted Payments to (i) redeem, repurchase, defease, discharge, retire or otherwise acquire any (A) Capital Stock (“Treasury Capital Stock”) of the Parent Borrower and/or any Restricted Subsidiary or (B) Capital Stock of any Parent Company, in the case of each of subclauses (A(A) and (B(B), in exchange for, or out of the proceeds of the substantially concurrent sale (other than to the Parent Borrower and/or any Restricted Subsidiary) of, Qualified Capital Stock of the Parent Borrower or any Parent Company to the extent any such proceeds are contributed to the capital of the Parent Borrower and/or any Restricted Subsidiary 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 the Parent Borrower or a Restricted Subsidiary) of any Refunding Capital Stock;
(ixx) to the extent constituting a Restricted Payment, the Parent Borrower may consummate any transaction permitted by Section 5.19 (other than Section 5.19(d)), Section Section 6.06 (other than Sections 6.06(j6.06(j) and (t(t)) and Section ), Section 6.07 (other than Section Section 6.07(g)) and Section 6.09 (other than Section 6.09(d));
(xxi) the Parent Borrower may make additional Restricted Payments in an aggregate amount not to exceed (A) the greater of $85,000,000 160,000,000 and 254.0% of Consolidated Adjusted EBITDA Total Assets as of the last day of the most recently ended Test Period minus (BA) the amount of Restricted Debt Payments made by the Parent Borrower or any utilization of the Available RP Capacity Amount Restricted Subsidiary in reliance on unused capacity under immediately preceding clause (ASection 6.04(b)(iv)(B), minus (B) the outstanding amount of Investments made by the Parent Borrower or any Restricted Subsidiary in reliance on Section 6.06(q)(ii);
(xixii) the Parent Borrower may pay any dividend or other distribution or consummate any redemption within 60 days after the date of 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 dividend or redemption notice would have complied with the provisions of this Section 6.04(a);
(xii) the Parent Borrower may make any Restricted Payment constituting the distribution or payment of Receivables Fees;hereof; and
(xiii) the Parent Borrower may make additional Restricted Payments so long as, as measured at the time provided for in Section 1.04(e), (i) no Event of Default exists or would result therefrom and (ii) the Total Leverage Ratio would not exceed 4.00:1.00Ratio, calculated on a Pro Forma Basis Basis, would not exceed 4.50:1.00;
(b) The Parent Borrower shall not, nor shall they permit any Restricted Subsidiary to, make any payment (whether in Cash, securities or other property) on or in respect of principal of or interest on (y) any Junior Lien Indebtedness or (z) any Junior Indebtedness (such Indebtedness under clauses (y) and (z), the “Restricted Debt”), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Restricted Debt prior to its scheduled maturity (collectively, “Restricted Debt Payments”), except:
(i) any 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) there shall exist payments as part of an “applicable high yield discount obligation” catch-up payment;
(iii) payments of regularly scheduled interest as and when due in respect of any Restricted Debt, except for any payments with respect to any Subordinated Indebtedness that are prohibited by the subordination provisions thereof;
(iv) so long as, at the time of delivery of irrevocable notice with respect thereto, no Event of Default hereunder exists or shall would result therefrom, additional Restricted Debt Payments in an aggregate amount not to exceed:
(A) the greater of $160,000,000 and 4.0% of Consolidated Total Assets as of the last day of the most recently ended Test Period, minus the amount of Investments made in reliance on Section 6.06(q)(iii); plus
(B) the greater of $160,000,000 and 4.0% of Consolidated Total Assets as of the last day of the most recently ended Test Period, minus (1) the amount of Restricted Payments made by the Parent Borrower or any Restricted Subsidiary in reliance on Section 6.04(a)(x), minus (2) the outstanding amount of Investments made by the Parent Borrower or any Restricted Subsidiary in reliance on Section 6.06(q)(ii);
(xivA) the Parent Borrower may make additional Restricted Debt Payments in an amount not to exceed the amount exchange for, or with proceeds of proceeds received by any issuance of, Qualified Capital Stock of the Parent Borrower and/or any Restricted Subsidiary under and/or any capital contribution in respect of Qualified Capital Stock of the Representation and Warranty Insurance Policy during Parent Borrower or any Restricted Subsidiary, in each case, other than any amounts constituting a Cure Amount or any amount that has been added to the term Available Excluded Contribution Amount or the Available Amount, (B) Restricted Debt Payments as a result of this Agreement;
(xv) (A) for the conversion of all or any taxable period for which portion of any Restricted Debt into Qualified Capital Stock of the Parent Borrower 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 exceed (A) the portion, if any, of its Subsidiaries are members of a consolidated, combined or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which a direct or indirect parent of the Available Amount on such date that the Parent Borrower is elects to apply to this clause (vi)(A) plus (B) the common parent (a “Tax Group”)portion, or for which if any, of the Available Excluded Contribution Amount on such date that the Parent Borrower is a disregarded entity for U.S. federal income tax purposes wholly-owned by a corporate parent elects to apply to this clause (a “Corporate Parent”vi)(B), the Parent Borrower and each of its Subsidiaries may make ;
(vii) additional Restricted Payments the proceeds of which shall be used by such common parent to pay the portion of any consolidated, combined or similar U.S. federal, state or local income Taxes of such Tax Group, or by the Corporate Parent to pay the portion of the U.S. federal, state or local income Taxes of such Corporate Parent, or any franchise taxes imposed in lieu thereof, for such taxable period that are attributable to the income of the Parent Borrower and/or its Subsidiaries, Debt Payments; provided that such amount shall not be greater than the amount of such U.S. federalTotal Leverage Ratio, state or local income taxes that would be paid (for such taxable period) by the Parent Borrower and its Subsidiaries if the Parent Borrower and/or such Subsidiaries had been a stand-alone corporate taxpayer (or stand-alone group of corporate taxpayers filing calculated on a consolidatedPro Forma Basis, combined or similar basiswould not exceed 4.75:1.00; and
(viii) for all taxable years ending after the Closing Date (taking into account Restricted Debt Payments with respect to any net operating loss carryforwards attributable to the Parent Borrower and its Subsidiaries, as the case may be) and (B) without duplication of Restricted Payments made under Section 6.04(a)(xv)(A), for Indebtedness incurred in connection with any taxable period for which the Parent Borrower is treated as a partnership for U.S. federal and/or applicable state or local income tax purposes, the Parent Borrower may make Restricted Payments to its equity owners at the times and in the amounNMTC Transaction.
Appears in 1 contract
Sources: Term Loan Credit Agreement (PQ Group Holdings Inc.)
Restricted Payments; Certain Payments of Indebtedness. (a) 6.4.1. The Parent Lead Borrower shall not pay or make, directly or indirectly, any Restricted Payment, except that:
(i) 6.4.1.1. the Parent Lead Borrower may make Restricted Payments to the extent necessary to permit any Parent Company:
(A) 6.4.1.1.1. to pay general operating and compliance administrative costs and expenses (including corporate overhead, legal or similar expenses, expenses to prepare any Tax returns or defend any Tax claims, and customary salary, bonus and other benefits payable to directors, officers, employees, members of management, managers and/or consultants of any Parent Company)) and franchise fees and Taxes and similar fees, Taxes and expenses required to enable such Parent Company to maintain its organizational existence or qualification to do business, in each case, which are reasonable and customary and incurred in the ordinary course of business, plus any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of any Parent Company, in each case, to the extent attributable to the ownership or operations of any Parent Company and its subsidiaries (but excluding, for the avoidance of doubt, excluding the portion of any such amount, if any, amount that is attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Lead Borrower and/or and its subsidiaries), the Parent Borrower and/or its subsidiaries;
(B) 6.4.1.1.2. to pay franchise, excise scheduled and similar Taxes, overdue interest and other fees, Taxes and expenses, required to maintain the organizational existence payments as part of such Parent Company;
(C) to pay customary salary, bonus, longan AHYDO catch-term incentive, severance and other benefits (including payment to certain service providers of the Parent Borrower or its Subsidiaries pursuant to any equity plan (whether in the form of options, cash settled options or otherwise)) payable to Permitted Payees, as well as applicable employment, social security or similar taxes in connection therewith, to the extent such salary, bonuses, severance and other benefits are attributable and reasonably allocated to the operations of the Parent Borrower and/or its subsidiariesup payment, in each case, so long as such in respect of any Indebtedness of any Parent Company applies to the amount of any such Restricted Payment for such purposeextent the Net Proceeds thereof were contributed to the Lead Borrower;
(D) 6.4.1. 1.3. to pay audit and other accounting and reporting expenses of such Parent Company to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such expenses, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Lead Borrower and/or its subsidiaries), the Parent Lead Borrower and its subsidiaries;
(E) for the payment of insurance premiums to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries;
(F) to pay (x) fees and expenses related to any debt and/or equity offerings (including refinancings), investments and/or acquisitions permitted or not restricted by this Agreement (whether or not consummated, and including advisory, refinancing, subsequent transaction and exit fees of any Parent Company of the Parent Borrower) and expenses and indemnities of any trustee, agent, arranger, underwriter or similar role and (y) Public Company Costs; and
(G) to finance any Investment permitted under Section 6.06 as if such Parent Company were subject to Section 6.06 (provided that (x) any Restricted Payment under this clause (a)(i)(G) 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 (y) the relevant Parent Company shall, promptly following the closing 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 (I) all property acquired to be contributed to the Parent Borrower or one or more of its Restricted Subsidiaries or (II) the merger, consolidation or amalgamation of the Person formed or acquired into the Parent Borrower or one or more of its Restricted Subsidiaries, in order to consummate such Investment in compliance with the applicable requirements of Section 6.06 as if undertaken as a direct Investment by the Parent Borrower or the relevant Restricted Subsidiary);
(ii) the Parent Borrower may pay (or make Restricted Payments to allow any Parent Company to pay) for the repurchase, redemption, retirement or other acquisition or retirement for value of Capital Stock of any Parent Company or any subsidiary held by any Permitted Payee:
(A) in accordance with the terms of promissory notes issued pursuant to Section 6.01(o), so long as the aggregate amount of all Cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments made pursuant to sub-clause (D) of this clause (ii) below, (1) does not exceed the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied)) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under clause (D) below; plus
(B) with the proceeds of any sale or issuance of, or of any capital contribution in respect of, the Capital Stock of the Parent Borrower or any Parent Company (to the extent such proceeds are contributed to the Parent Borrower or any Restricted Subsidiary in respect of Qualified Capital Stock issued by the Parent Borrower or such Restricted Subsidiary) (other than amounts constituting a Cure Amount or an Available Excluded Contribution Amount); plus
(C) with the net proceeds of any key-man life insurance policies; plus
(D) with Cash and Cash Equivalents in an amount not to exceed, together with the aggregate amount of all cash payments made pursuant to sub-clause (A) of this clause (ii) in respect of promissory notes issued pursuant to Section 6.01(o), (1) the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under the immediately preceding clause (1); plus
(E) with the amount of any Cash bonuses otherwise payable to any Permitted Payee that are foregone in exchange for the receipt of Capital Stock of the Parent Borrower or any Parent Company pursuant to any compensation arrangement, including any deferred compensation plan;
(iii) the Parent Borrower may make additional Restricted Payments in an amount not to exceed (A) the portion, if any, of the Available Amount on such date that the Parent Borrower elects to apply to this clause (iii)(A) plus (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Parent Borrower elects to apply to this clause (iii)(B) (plus, without duplication of amounts 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 with Available Excluded Contribution Amounts up to the amount of such Available Excluded Contribution Amount, less any application thereof under Sections 6.04(b)(vi) or 6.06(r));
(iv) the Parent Borrower may make Restricted Payments (i) to any Parent Company to enable such Parent Company to (A) make Cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of such Parent Company, dividends, share splits, reverse share splits (or any combination thereof) and, mergers, consolidations, amalgamations or other business combinations, and acquisitions and other Investments permitted hereunder and/or (B) honor any conversion request by a holder of Convertible Indebtedness by payment of cash and/or delivery of Capital Stock, make any cash payments in lieu of fractional shares in connection with any conversion of Convertible Indebtedness and otherwise make payments on Convertible Indebtedness in accordance with its terms (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments upon redemption thereof), or, in the case of each of sub-clauses (A) and (B) above, make Restricted Payments to any Parent Company to enable such Parent Company to make the payments and/or deliveries described in such sub-clauses (A) and (B), and (ii) consisting of (A) payments made or expected to be made in respect of withholding or similar Taxes payable by any Permitted Payee and/or (B) repurchases of Capital Stock in consideration of the payments described in sub clause (A) above, including demand repurchases in connection with the exercise of stock options and the issuance of restricted stock units or similar stock based awards;
(v) the Parent Borrower may repurchase, redeem, acquire or retire Capital Stock upon (or make provisions for withholdings in connection with), or make Restricted Payments to any Parent Company to enable it to repurchase, redeem, acquire or retire Capital Stock upon (or make provisions for withholdings in connection with), the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represents all or a portion of the exercise price of, or tax withholdings with respect to, such warrants, options or other securities convertible into or exchangeable for Capital Stock as part of a “cashless” exercise;
(vi) the Parent Borrower may make Restricted Payments the proceeds of which are applied (i) on the Closing Date, solely to effect the consummation of the Transactions and on or about the Amendment No. 1 Effective Date, solely to effect the consummation of the Amendment No. 1 Transactions, (ii) on and after the Closing Date, to satisfy any payment obligations owing, or as otherwise required, under the Acquisition Agreement (including payment of working capital and/or purchase price adjustments) and to pay Transaction Costs, in each case, with respect to the Transactions, (iii) to satisfy obligations to direct or indirect holders of Capital Stock of the Parent Borrower (immediately prior to giving effect to the Transactions) in connection with, or as a result of, any working capital and/or purchase price adjustments, in each case, with respect to the Transactions and (iv) to satisfy any settlement of claims or actions in connection with the Transactions or to satisfy indemnity or other similar obligations in connection with the Transactions;
(vii) the Parent Borrower may (or may make Restricted Payments to any Parent Company to enable it to) make Restricted Payments with respect to any Capital Stock in an amount not to exceed (A) the greater of (x) an amount equal to 7.00% per annum of the net Cash proceeds received by or contributed to the Parent Borrower in connection with the merger of Isos Acquisition Corporation and Bowlero Corp. on December 15, 2021 and the other transactions consummated in connection therewith and (y) an amount equal to 7.00% per annum of the Market Capitalization of the Parent Borrower (or its direct or indirect Parent Company, as applicable) and its subsidiaries minus (B) any utilization of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A);
(viii) the Parent Borrower may make Restricted Payments to (i) redeem, repurchase, defease, discharge, retire or otherwise acquire any (A) Capital Stock (“Treasury Capital Stock”) of the Parent Borrower and/or any Restricted Subsidiary or (B) Capital Stock of any Parent Company, in the case of each of subclauses (A) and (B), in exchange for, or out of the proceeds of the substantially concurrent sale (other than to the Parent Borrower and/or any Restricted Subsidiary) of, Qualified Capital Stock of the Parent Borrower or any Parent Company to the extent any such proceeds are contributed to the capital of the Parent Borrower and/or any Restricted Subsidiary 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 the Parent Borrower or a Restricted Subsidiary) of any Refunding Capital Stock;
(ix) to the extent constituting a Restricted Payment, the Parent Borrower may consummate any transaction permitted by Section 5.19 (other than Section 5.19(d)), Section 6.06 (other than Sections 6.06(j) and (t)) and Section 6.07 (other than Section 6.07(g));
(x) the Parent Borrower may make additional Restricted Payments in an aggregate amount not to exceed (A) the greater of $85,000,000 and 25% of Consolidated Adjusted EBITDA 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);
(xi) the Parent Borrower may pay any dividend or other distribution or consummate any redemption within 60 days after the date of 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);
(xii) the Parent Borrower may make any Restricted Payment constituting the distribution or payment of Receivables Fees;
(xiii) the Parent Borrower may make additional Restricted 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 Event of Default hereunder or shall result therefrom;
(xiv) the Parent Borrower may make additional Restricted Payments in an amount not to exceed the amount of proceeds received by the Parent Borrower and/or any Restricted Subsidiary under the Representation and Warranty Insurance Policy during the term of this Agreement;
(xv) (A) for any taxable period for which the Parent Borrower and/or any of its Subsidiaries are members of a consolidated, combined or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which a direct or indirect parent of the Parent Borrower is the common parent (a “Tax Group”), or for which the Parent Borrower is a disregarded entity for U.S. federal income tax purposes wholly-owned by a corporate parent (a “Corporate Parent”), the Parent Borrower and each of its Subsidiaries may make Restricted Payments the proceeds of which shall be used by such common parent to pay the portion of any consolidated, combined or similar U.S. federal, state or local income Taxes of such Tax Group, or by the Corporate Parent to pay the portion of the U.S. federal, state or local income Taxes of such Corporate Parent, or any franchise taxes imposed in lieu thereof, for such taxable period that are attributable to the income of the Parent Borrower and/or its Subsidiaries, provided that such amount shall not be greater than the amount of such U.S. federal, state or local income taxes that would be paid (for such taxable period) by the Parent Borrower and its Subsidiaries if the Parent Borrower and/or such Subsidiaries had been a stand-alone corporate taxpayer (or stand-alone group of corporate taxpayers filing on a consolidated, combined or similar basis) for all taxable years ending after the Closing Date (taking into account any net operating loss carryforwards attributable to the Parent Borrower and its Subsidiaries, as the case may be) and (B) without duplication of Restricted Payments made under Section 6.04(a)(xv)(A), for any taxable period for which the Parent Borrower is treated as a partnership for U.S. federal and/or applicable state or local income tax purposes, the Parent Borrower may make Restricted Payments to its equity owners at the times and in the amoun
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) The Parent No Borrower shall not pay or make, directly or indirectly, any Restricted Payment, except that:
(i) the Parent Borrower Borrowers may make Restricted Payments to the extent necessary to permit any Parent Company (and so long as such amounts are promptly applied by such Parent Company:):
(A) to pay general operating and compliance administrative costs and expenses (including corporate overhead, legal or similar expenses and customary salary, bonus and other benefits payable to directors, officers, employees, members of management, managers and/or consultants of any Parent Company)) and franchise fees and Taxes and similar fees, Taxes and expenses required to enable such Parent Company to maintain its organizational existence or qualification to do business, in each case, which are reasonable and customary and incurred in the ordinary course of business, plus any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of any Parent Company, in each case, to the extent attributable to the ownership or operations of any Parent Company and its subsidiaries (but excluding, for the avoidance of doubt, excluding the portion of any such amount, if any, amount that is attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its Borrowers and their subsidiaries), the Parent Borrower and/or its subsidiaries;
(B) to pay franchisedischarge the consolidated combined, excise and unitary or similar Taxes, and other fees, Taxes and expenses, required to maintain the organizational existence Tax liabilities of such Parent Company and its subsidiaries when and as due determined without taking into account adjustments pursuant to Section 743 of the Code and using an assumed uniform tax rate, and to the extent such liabilities are attributable to the Parent Company’s direct or indirect ownership of the Borrowers and their subsidiaries;
(C) to pay customary salary, bonus, long-term incentive, severance and other benefits (including payment to certain service providers of the Parent Borrower or its Subsidiaries pursuant to any equity plan (whether in the form of options, cash settled options or otherwise)) payable to Permitted Payees, as well as applicable employment, social security or similar taxes in connection therewith, to the extent such salary, bonuses, severance and other benefits are attributable and reasonably allocated to the operations of the Parent Borrower and/or its subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose;
(D) to pay audit and other accounting and reporting expenses of such Parent Company to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such expenses, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower Borrowers and/or its their subsidiaries), the Parent Borrower Borrowers and its their subsidiaries;
(ED) for the payment of insurance premiums to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower any Borrowers and its subsidiaries;
(FE) to pay (x) fees and expenses related to any debt and/or or equity offerings (including refinancings)offerings, investments and/or or acquisitions permitted or not restricted by this Agreement (whether or not consummated, ) relating to any Borrower and including advisory, refinancing, subsequent transaction and exit fees of any Parent Company of the Parent Borrower) and expenses and indemnities of any trustee, agent, arranger, underwriter or similar role its Restricted Subsidiaries and (y) Public Company Costs; and;
(GF) to finance any Investment permitted under Section 6.06 as if such Parent Company were subject to Section Section 6.06 (provided that (x) any Restricted Payment under this clause (a)(i)(G(a)(i)(F) 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 (y) the relevant Parent Company shall, promptly following the closing 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 therewiththereof, cause (I) all property acquired to be contributed to the Parent a Borrower or one or more of its Restricted Subsidiaries Subsidiaries, or (II) the merger, consolidation or amalgamation of the Person formed or acquired into the Parent a Borrower or one or more of its Restricted Subsidiaries, in order to consummate such Investment in compliance with the applicable requirements of Section Section 6.06 as if undertaken as a direct Investment by the Parent such Borrower or the relevant Restricted Subsidiary); and
(G) to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, employees or consultants of any Parent Company (or any Immediate Family Member of any of the foregoing) to the extent such salary, bonuses and other benefits are attributable and reasonably allocated to the operations of the Borrowers and/or their subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose; provided, that with respect to Restricted Payments under clauses (A), (B), (C), (D) and (G) above, such Restricted Payments that are attributable to any Unrestricted Subsidiary shall be permitted only to the extent that either (x) such Unrestricted Subsidiary has made one or more cash distributions, advances or loans to a Borrower or any of its Restricted Subsidiaries for such purpose in an amount up to the amount of such Unrestricted Subsidiary’s proportionate share of such Restricted Payment or (y) the amount of any such Restricted Payment made by a Borrower on behalf of such Unrestricted Subsidiary is treated as an Investment subject to Section 6.06 hereof;
(ii) the Parent Borrower Borrowers may pay (or make Restricted Payments to allow any Parent Company to pay) for the repurchase, redemption, retirement or other acquisition or retirement for value of Capital Stock of any Parent Company or any subsidiary held by any Permitted Payeefuture, present or former employee, director, member of management, officer, manager or consultant (or any Affiliate or Immediate Family Member thereof) of any Parent Company, any Borrower or any subsidiary:
(A) in accordance with the terms of exchange for promissory notes issued pursuant to Section Section 6.01(o), so long as the aggregate amount of all Cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments made pursuant to sub-clause (D(D) of this clause (ii(ii) below, (1) does not exceed the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period 10,000,000 in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to the next subsequent Fiscal Years (until so applied)) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under clause (D) below; plusYear;
(B) with the proceeds of any sale or issuance of, or of any capital contribution in respect of, the Capital Stock of the Parent any Borrower or any Parent Company (to the extent such proceeds are contributed to the Parent Borrower or any Restricted Subsidiary in respect of Qualified Capital Stock issued by the Parent to any Borrower or such any Restricted Subsidiary) (other than amounts constituting a Cure Amount or an Available Excluded Contribution Amount); plus;
(C) with the net proceeds of any key-man life insurance policies; plusor
(D) with Cash and Cash Equivalents in an amount not to exceed, together with the aggregate amount of all cash payments made pursuant to sub-clause (A(A) of this clause (ii(ii) in respect of promissory notes issued pursuant to Section Section 6.01(o), (1) the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period 10,000,000 in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to the next subsequent Fiscal Years (until so applied) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under the immediately preceding clause (1); plus
(E) with the amount of any Cash bonuses otherwise payable to any Permitted Payee that are foregone in exchange for the receipt of Capital Stock of the Parent Borrower or any Parent Company pursuant to any compensation arrangement, including any deferred compensation planYear;
(iii) so long as no Event of Default then exists or would result therefrom, the Parent Borrower Borrowers may make additional Restricted Payments in an amount not to exceed (A) the portion, if any, of the Available Amount on such date that the Parent Borrower elects to apply to this clause (iii)(A) plus (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Parent Borrower elects to apply to this clause (iii)(B) (plus, without duplication of amounts 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 with Available Excluded Contribution Amounts up to the amount of such Available Excluded Contribution Amount, less any application thereof under Sections 6.04(b)(vi) or 6.06(r));
(iv) the Parent Borrower may make Restricted Payments (i) to any Parent Company to enable such Parent Company to (A) make Cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of such Parent Company, dividends, share splits, reverse share splits (or any combination thereof) and, mergers, consolidations, amalgamations or other business combinations, and acquisitions and other Investments permitted hereunder and/or (B) honor any conversion request by a holder of Convertible Indebtedness by payment of cash and/or delivery of Capital Stock, make any cash payments in lieu of fractional shares in connection with any conversion of Convertible Indebtedness and otherwise make payments on Convertible Indebtedness in accordance with its terms (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments upon redemption thereof), or, in the case of each of sub-clauses (A) and (B) above, make Restricted Payments to any Parent Company to enable such Parent Company to make the payments and/or deliveries described in such sub-clauses (A) and (B), and (ii) consisting of (A) payments made or expected to be made in respect of withholding or similar Taxes payable by any Permitted Payee and/or (B) repurchases of Capital Stock in consideration of the payments described in sub clause (A) above, including demand repurchases in connection with the exercise of stock options and the issuance of restricted stock units or similar stock based awards;
(v) the Parent Borrower may repurchase, redeem, acquire or retire Capital Stock upon (or make provisions for withholdings in connection with), or make Restricted Payments to any Parent Company to enable it to repurchase, redeem, acquire or retire Capital Stock upon (or make provisions for withholdings in connection with), the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represents all or a portion of the exercise price of, or tax withholdings with respect to, such warrants, options or other securities convertible into or exchangeable for Capital Stock as part of a “cashless” exercise;
(vi) the Parent Borrower may make Restricted Payments the proceeds of which are applied (i) on the Closing Date, solely to effect the consummation of the Transactions and on or about the Amendment No. 1 Effective Date, solely to effect the consummation of the Amendment No. 1 Transactions, (ii) on and after the Closing Date, to satisfy any payment obligations owing, or as otherwise required, under the Acquisition Agreement (including payment of working capital and/or purchase price adjustments) and to pay Transaction Costs, in each case, with respect to the Transactions, (iii) to satisfy obligations to direct or indirect holders of Capital Stock of the Parent Borrower (immediately prior to giving effect to the Transactions) in connection with, or as a result of, any working capital and/or purchase price adjustments, in each case, with respect to the Transactions and (iv) to satisfy any settlement of claims or actions in connection with the Transactions or to satisfy indemnity or other similar obligations in connection with the Transactions;
(vii) the Parent Borrower may (or may make Restricted Payments to any Parent Company to enable it to) make Restricted Payments with respect to any Capital Stock in an amount not to exceed (A) the greater of (x) an amount equal to 7.00% per annum of the net Cash proceeds received by or contributed to the Parent Borrower in connection with the merger of Isos Acquisition Corporation and Bowlero Corp. on December 15, 2021 and the other transactions consummated in connection therewith and (y) an amount equal to 7.00% per annum of the Market Capitalization of the Parent Borrower (or its direct or indirect Parent Company, as applicable) and its subsidiaries minus (B) any utilization of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A);
(viii) the Parent Borrower may make Restricted Payments to (i) redeem, repurchase, defease, discharge, retire or otherwise acquire any (A) Capital Stock (“Treasury Capital Stock”) of the Parent Borrower and/or any Restricted Subsidiary or (B) Capital Stock of any Parent Company, in the case of each of subclauses (A) and (B), in exchange for, or out of the proceeds of the substantially concurrent sale (other than to the Parent Borrower and/or any Restricted Subsidiary) of, Qualified Capital Stock of the Parent Borrower or any Parent Company to the extent any such proceeds are contributed to the capital of the Parent Borrower and/or any Restricted Subsidiary 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 the Parent Borrower or a Restricted Subsidiary) of any Refunding Capital Stock;
(ix) to the extent constituting a Restricted Payment, the Parent Borrower may consummate any transaction permitted by Section 5.19 (other than Section 5.19(d)), Section 6.06 (other than Sections 6.06(j) and (t)) and Section 6.07 (other than Section 6.07(g));
(x) the Parent Borrower may make additional Restricted Payments in an aggregate amount not to exceed (A) the greater of $85,000,000 and 25% of Consolidated Adjusted EBITDA 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);
(xi) the Parent Borrower may pay any dividend or other distribution or consummate any redemption within 60 days after the date of 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);
(xii) the Parent Borrower may make any Restricted Payment constituting the distribution or payment of Receivables Fees;
(xiii) the Parent Borrower may make additional Restricted 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 Event of Default hereunder or shall result therefrom;
(xiv) the Parent Borrower may make additional Restricted Payments in an amount not to exceed the amount of proceeds received by the Parent Borrower and/or any Restricted Subsidiary under the Representation and Warranty Insurance Policy during the term of this Agreement;
(xv) (A) for any taxable period for which the Parent Borrower and/or any of its Subsidiaries are members of a consolidated, combined or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which a direct or indirect parent of the Parent Borrower is the common parent (a “Tax Group”), or for which the Parent Borrower is a disregarded entity for U.S. federal income tax purposes wholly-owned by a corporate parent (a “Corporate Parent”), the Parent Borrower and each of its Subsidiaries may make Restricted Payments the proceeds of which shall be used by such common parent to pay the portion of any consolidated, combined or similar U.S. federal, state or local income Taxes of such Tax Group, or by the Corporate Parent to pay the portion of the U.S. federal, state or local income Taxes of such Corporate Parent, or any franchise taxes imposed in lieu thereof, for such taxable period that are attributable to the income of the Parent Borrower and/or its Subsidiaries, provided that such amount shall not be greater than the amount of such U.S. federal, state or local income taxes that would be paid (for such taxable period) by the Parent Borrower and its Subsidiaries if the Parent Borrower and/or such Subsidiaries had been a stand-alone corporate taxpayer (or stand-alone group of corporate taxpayers filing on a consolidated, combined or similar basis) for all taxable years ending after the Closing Date (taking into account any net operating loss carryforwards attributable to the Parent Borrower and its Subsidiaries, as the case may be) and (B) without duplication of Restricted Payments made under Section 6.04(a)(xv)(A), for any taxable period for which the Parent Borrower is treated as a partnership for U.S. federal and/or applicable state or local income tax purposes, the Parent Borrower may make Restricted Payments to its equity owners at the times and in the amounclause
Appears in 1 contract
Sources: Credit Agreement (Indivior PLC)
Restricted Payments; Certain Payments of Indebtedness. (a) The Parent None of the Borrower shall not pay or any Subsidiary will declare or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so (other than dividends and distributions on Equity Interests payable solely by the issuance of additional Equity Interests (other than Disqualified Equity Interests) of the person paying such dividends or distributions), except that, without duplication:
(i) any Subsidiary of the Parent Borrower may declare and pay dividends or make other distributions with respect to its capital stock, partnership or membership interests or other similar Equity Interests, or make other Restricted Payments in respect of its Equity Interests, in each case ratably to the extent holders of such Equity Interests;
(ii) the Borrower or any Subsidiary may declare and pay dividends or make other distributions to Parent at such times and in such amounts as necessary to permit any Parent CompanyParent:
(A) to pay general (or to make a payment to any Controlling Company to enable it to pay) franchise taxes or similar taxes, and other fees and expenses, required to maintain the corporate existence of Parent or any Controlling Company;
(B) to pay (or to make a payment to any Controlling Company to enable it to pay) such entities’ operating expenses incurred in the ordinary course of business and compliance other corporate overhead costs and expenses (including corporate overheadincluding, legal or without limitation, administrative, legal, accounting and similar expenses and customary salary, bonus and other benefits payable to directors, officers, employees, members of management, managers and/or consultants of any Parent Companyprovided by third parties), in each case, which are reasonable and customary and incurred in the ordinary course of business, to the extent such expenses are directly attributable to the ownership or operation of the Borrower and its Subsidiaries plus any reasonable and customary indemnification claims made by directors, officers, members directors or officers of management, managers, employees Parent or consultants of any Parent Company, in each case, to the extent Controlling Company attributable to the ownership or operations of any Parent Company (but excludingParent, for the avoidance of doubt▇▇▇▇▇, the portion of any such amount, if any, that is attributable Borrower and its Subsidiaries; and to the ownership or operations of any subsidiary of any Parent Company discharge its other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and/or its subsidiaries;
(B) to pay franchise, excise and similar Taxes, and other fees, Taxes and expenses, required to maintain the organizational existence of such Parent Companypermitted liabilities when due;
(C) to pay customary salary, bonus, long-term incentive, severance and other benefits finance (including payment or to certain service providers of the Parent Borrower or its Subsidiaries pursuant make a Restricted Payment to any equity plan (whether in the form of options, cash settled options or otherwise)) payable to Permitted Payees, as well as applicable employment, social security or similar taxes in connection therewith, to the extent such salary, bonuses, severance and other benefits are attributable and reasonably allocated to the operations of the Parent Borrower and/or its subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose;
(D) to pay audit and other accounting and reporting expenses of such Parent Controlling Company to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such expenses, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries;
(Efinance) for the payment of insurance premiums to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries;
(F) to pay (x) fees and expenses related to any debt and/or equity offerings (including refinancings), investments and/or acquisitions permitted or not restricted by this Agreement (whether or not consummated, and including advisory, refinancing, subsequent transaction and exit fees of any Parent Company of the Parent Borrower) and expenses and indemnities of any trustee, agent, arranger, underwriter or similar role and (y) Public Company Costs; and
(G) to finance any Investment permitted under Section 6.06 as if such Parent Company were subject to Section 6.06 (be made pursuant to Section 6.04; provided that (x) any such Restricted Payment under this clause (a)(i)(G) 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 (y) Parent or the relevant Parent applicable Controlling Company shall, promptly immediately following the closing 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 therewiththereof, cause (I1) all property acquired (whether assets or Equity Interests) to be contributed to the Parent Borrower or one a Loan Party other than Parent (or more a Person that will become a Loan Party (other than Parent) upon receipt of its Restricted Subsidiaries such contribution) or (II2) the merger, consolidation or amalgamation merger (to the extent permitted in Section 6.04) of the Person formed or acquired into the Parent Borrower or one or more of its Restricted Subsidiaries, a Loan Party (other than Parent) in order to consummate such Investment in compliance with the applicable requirements of Section 6.06 as if undertaken as a direct Investment by the Parent Borrower or the relevant Restricted Subsidiary)Investment;
(iiD) the Parent Borrower may to pay (or to make a payment to any Controlling Company to enable it to pay) fees and expenses (other than to Affiliates) related to any unsuccessful equity or debt offering not prohibited by this Agreement;
(E) the Borrower may make Restricted Payments to allow Parent (or to make a Restricted Payment to a Controlling Company to enable it to fund), not exceeding $10,000,000 in the aggregate during the term of the Agreement, to fund the repurchase or redemption of capital stock of Parent or a Controlling Company, in each case, held pursuant to and in accordance with stock option plans or other benefit plans or agreements for future, present or former directors, officers or employees of Parent, the Borrower and the other Subsidiaries (or any Immediate Family Member thereof); provided that the Borrower may make such Restricted Payments with respect to any such director, officer or employee without regard to such restriction for consideration consisting of the proceeds of key man life insurance held by Parent, any Controlling Company, the Borrower or a Subsidiary regarding such director, officer of employee or pursuant to any right to acquire capital stock of Parent or a Controlling Company at a price not less than, or any right to the appreciation in value of such capital stock exceeding the fair market value of such capital stock;
(F) to make Restricted Payments expressly permitted to be made under this Section;
(G) to pay (or to make a Restricted Payment to any Controlling Company to enable it to pay) for the repurchasecustomary salary, redemption, retirement or bonus and other acquisition or retirement for value benefits payable to officers and employees of Capital Stock of any Parent Company or any subsidiary held by any Permitted Payee:
(A) in accordance with the terms of promissory notes issued pursuant to Section 6.01(o), so long as the aggregate amount of all Cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments made pursuant to sub-clause (D) of this clause (ii) below, (1) does not exceed the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied)) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under clause (D) below; plus
(B) with the proceeds of any sale or issuance of, or of any capital contribution in respect of, the Capital Stock of the Parent Borrower or any Parent Controlling Company (to the extent such proceeds salaries, bonuses and other benefits are contributed directly attributable to the Parent ownership or operations of the Borrower or any Restricted Subsidiary and its Subsidiaries;
(H) to make regularly scheduled interest payments, fees, expenses and indemnification obligations as and when due in respect of Qualified Capital Stock issued by the Parent Borrower or Senior Notes (including downstreaming of such Restricted Subsidiary) (other than amounts constituting a Cure Amount or an Available Excluded Contribution Amountproceeds to ▇▇▇▇▇ to enable ▇▇▇▇▇ to pay such amounts); plusand
(CI) with the net proceeds of to pay (or to make a Restricted Payment to any key-man life insurance policies; plus
(DControlling Company to enable it to pay) with Cash and Cash Equivalents in an amount not to exceed, together with the aggregate amount of all cash payments made pursuant to sub-clause (A) of this clause (ii) in respect of promissory notes issued pursuant to Section 6.01(o), (1) the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as amounts of the last day of type described in Section 6.09(b) to the most recently ended Test Period in any Fiscal Year, which, if not used in any Fiscal Year, may extent such payment would be carried forward to subsequent Fiscal Years (until so applied) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity permitted under the immediately preceding clause (1such Section 6.09(b); plus
(E) with the amount of any Cash bonuses otherwise payable to any Permitted Payee that are foregone in exchange for the receipt of Capital Stock of the Parent Borrower or any Parent Company pursuant to any compensation arrangement, including any deferred compensation plan;
(iii) the Parent Borrower may make additional Restricted Payments in an amount not to exceed (A) non-cash repurchases of its Equity Interests upon the portion, exercise of stock options if any, such Equity Interests represent a portion of the Available Amount on such date that the Parent Borrower elects to apply to this clause (iii)(A) plus (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Parent Borrower elects to apply to this clause (iii)(B) (plus, without duplication of amounts 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 exercise price of such property options or assets was financed with Available Excluded Contribution Amounts up taxes to the amount of such Available Excluded Contribution Amount, less any application thereof under Sections 6.04(b)(vi) or 6.06(r))be paid in connection therewith;
(iv) the Parent Borrower may make Restricted Payments (i) to any Parent Company to enable such Parent Company to (A) make Cash cash payments in lieu of the issuance of fractional shares representing insignificant interests in the Borrower or similar Equity Interests in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of such capital stock in the Borrower, Parent Company, dividends, share splits, reverse share splits (or any combination thereof) Controlling Person, as applicable; and, mergers, consolidations, amalgamations or other business combinations, and acquisitions and other Investments permitted hereunder and/or (B) honor any conversion request by a holder of Convertible Indebtedness by payment of cash and/or delivery of Capital Stock, make any cash payments in lieu of fractional shares in connection with any conversion of Convertible Indebtedness and otherwise make payments on Convertible Indebtedness in accordance with its terms (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments upon redemption thereof), or, in the case of each of sub-clauses (A) and (B) above, make Restricted Payments to any Parent Company to enable such Parent Company to make the payments and/or deliveries described in such sub-clauses (A) and (B), and (ii) consisting of (A) payments made or expected to be made in respect of withholding or similar Taxes payable by any Permitted Payee and/or (B) repurchases of Capital Stock in consideration of the payments described in sub clause (A) above, including demand repurchases in connection with the exercise of stock options and the issuance of restricted stock units or similar stock based awards;
(v) the Parent Borrower may repurchase, redeem, acquire or retire Capital Stock upon (or make provisions for withholdings in connection with), or make Restricted Payments to any Parent Company to enable it to repurchase, redeem, acquire or retire Capital Stock upon (or make provisions for withholdings in connection with), the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represents all or a portion of the exercise price of, or tax withholdings with respect to, such warrants, options or other securities convertible into or exchangeable for Capital Stock as part of a “cashless” exercise;
(vi) the Parent by Borrower may make Restricted Payments the proceeds of which are applied (i) on the Closing Date, solely to effect the consummation of the Transactions and on or about the Amendment No. 1 Effective Date, solely to effect the consummation of the Amendment No. 1 Transactions, (ii) on and after the Closing Date, to satisfy any payment obligations owing, or as otherwise required, under the Acquisition Agreement (including payment of working capital and/or purchase price adjustments) and to pay Transaction Costs, in each case, with respect to the Transactions, (iii) to satisfy obligations to direct or indirect holders of Capital Stock of the Parent Borrower (immediately prior to giving effect to the Transactions) in connection with, or as a result of, any working capital and/or purchase price adjustments, in each case, with respect to the Transactions and (iv) to satisfy any settlement of claims or actions in connection with the Transactions or to satisfy indemnity or other similar obligations in connection with the Transactions;
(vii) the Parent Borrower may (or may make Restricted Payments to any Parent Company to enable it to) make Restricted Payments with respect to any Capital Stock in an amount not to exceed (A) the greater of (x) an amount equal to 7.00% per annum of the net Cash proceeds received by or contributed to the Parent Borrower in connection with the merger of Isos Acquisition Corporation and Bowlero Corp. on December 15, 2021 and the other transactions consummated in connection therewith and (y) an amount equal to 7.00% per annum of the Market Capitalization of the Parent Borrower (or its direct or indirect Parent Company, as applicable) and its subsidiaries minus (B) any utilization of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A)Permitted Distribution Amount;
(viiib) None of the Parent Borrower may or any Subsidiary will make Restricted Payments or agree with the holder thereof to pay or make, directly or indirectly, any cash payment or other distribution in respect of any material Subordinated Indebtedness including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, defeasance, cancellation or termination of any material Subordinated Indebtedness, except for:
(i) redeemregularly scheduled interest payments, repurchasefees, defease, discharge, retire or otherwise acquire any (A) Capital Stock (“Treasury Capital Stock”) of the Parent Borrower and/or any Restricted Subsidiary or (B) Capital Stock expenses and indemnification obligations as and when due in respect of any Parent Company, in the case such Subordinated Indebtedness;
(ii) refinancings or exchanges of each of subclauses (A) and (B), in exchange for, any such Subordinated Indebtedness for like or out of junior debt with the proceeds of the substantially concurrent sale other Indebtedness permitted under Section 6.01;
(other than iii) conversions of any such Subordinated Indebtedness to the Parent Borrower and/or any Restricted Subsidiary) of, Qualified Capital Stock Equity Interests of the Parent Parent, any Controlling Person, the Borrower or any Parent Company to the extent any such proceeds are contributed to the capital of the Parent Borrower and/or any Restricted Subsidiary other Subsidiary;
(iv) additional payments 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 the Parent Borrower or a Restricted Subsidiary) of any Refunding Capital Stock;
(ix) to the extent constituting a Restricted Payment, the Parent Borrower may consummate any transaction permitted by Section 5.19 (other than Section 5.19(d)), Section 6.06 (other than Sections 6.06(j) and (t)) and Section 6.07 (other than Section 6.07(g));
(x) the Parent Borrower may make additional Restricted Payments such Subordinated Indebtedness in an aggregate amount not to exceed (A) the greater of $85,000,000 and 25% of Consolidated Adjusted EBITDA 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);
(xi) the Parent Borrower may pay any dividend or other distribution or consummate any redemption within 60 days after the date of 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);
(xii) the Parent Borrower may make any Restricted Payment constituting the distribution or payment of Receivables Fees;
(xiii) the Parent Borrower may make additional Restricted Payments so long as, as measured at the time Amount; 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 that no Event of Default hereunder shall have occurred and be continuing or shall would result therefrom;
(xivv) the Parent Borrower may make additional Restricted Payments in an amount not to exceed the amount of proceeds received by the Parent Borrower and/or any Restricted Subsidiary under the Representation and Warranty Insurance Policy during the term of this Agreement;
(xv) (A) for any taxable period for which the Parent Borrower and/or any of its Subsidiaries are members of a consolidated, combined or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which a direct or indirect parent of the Parent Borrower is the common parent (a AHYDO “Tax Group”), or for which the Parent Borrower is a disregarded entity for U.S. federal income tax purposes wholly-owned by a corporate parent (a “Corporate Parent”), the Parent Borrower and each of its Subsidiaries may make Restricted Payments the proceeds of which shall be used by such common parent to pay the portion of any consolidated, combined or similar U.S. federal, state or local income Taxes of such Tax Group, or by the Corporate Parent to pay the portion of the U.S. federal, state or local income Taxes of such Corporate Parent, or any franchise taxes imposed in lieu thereof, for such taxable period that are attributable to the income of the Parent Borrower and/or its Subsidiaries, provided that such amount shall not be greater than the amount of such U.S. federal, state or local income taxes that would be paid (for such taxable period) by the Parent Borrower and its Subsidiaries if the Parent Borrower and/or such Subsidiaries had been a stand-alone corporate taxpayer (or stand-alone group of corporate taxpayers filing on a consolidated, combined or similar basis) for all taxable years ending after the Closing Date (taking into account any net operating loss carryforwards attributable to the Parent Borrower and its Subsidiaries, as the case may be) and (B) without duplication of Restricted Payments made under Section 6.04(a)(xv)(A), for any taxable period for which the Parent Borrower is treated as a partnership for U.S. federal and/or applicable state or local income tax purposes, the Parent Borrower may make Restricted Payments to its equity owners at the times and in the amouncatchup” payments.
Appears in 1 contract
Sources: Credit Agreement (PetroLogistics LP)
Restricted Payments; Certain Payments of Indebtedness. (a) The Parent Borrower shall not pay or make, directly or indirectly, any Restricted Payment, except that:
(i) the Parent Borrower may make Restricted Payments to the extent necessary to permit any Parent Company:
(A) to pay general operating and compliance administrative costs and expenses (including corporate overhead, legal or similar expenses, expenses to prepare any Tax returns or defend any Tax claims, and customary salary, bonus and other benefits payable to directors, officers, employees, members of management, managers and/or consultants of any Parent Company)) and franchise fees and Taxes and similar fees, Taxes and expenses required to enable such Parent Company to maintain its organizational existence or qualification to do business, in each case, which are reasonable and customary and incurred in the ordinary course of business, plus any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of any Parent Company, in each case, to the extent attributable to the ownership or operations of any Parent Company and its subsidiaries (but excluding, for the avoidance of doubt, excluding the portion of any such amount, if any, amount that is attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or and its subsidiaries), the Parent Borrower and/or its subsidiaries;
(B) to pay franchise, excise scheduled and similar Taxes, overdue interest and other fees, Taxes and expenses, required to maintain the organizational existence payments as part of such Parent Company;
(C) to pay customary salary, bonus, longan AHYDO catch-term incentive, severance and other benefits (including payment to certain service providers of the Parent Borrower or its Subsidiaries pursuant to any equity plan (whether in the form of options, cash settled options or otherwise)) payable to Permitted Payees, as well as applicable employment, social security or similar taxes in connection therewith, to the extent such salary, bonuses, severance and other benefits are attributable and reasonably allocated to the operations of the Parent Borrower and/or its subsidiariesup payment, in each case, so long as such in respect of any Indebtedness of any Parent Company applies to the amount of any such Restricted Payment for such purposeextent the Net Proceeds thereof were contributed to the Borrower;
(DC) to pay audit and other accounting and reporting expenses of such Parent Company to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such expenses, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries;
(ED) for the payment of insurance premiums to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries;
(FE) to pay (x) fees and expenses related to any debt and/or or equity offerings (including refinancings)by any Parent Company, investments and/or or acquisitions permitted or not restricted by this Agreement (whether or not consummated, and including advisory, refinancing, subsequent transaction and exit fees of any Parent Company of the Parent Borrower) and expenses and indemnities of any trustee, agent, arranger, underwriter or similar role and (y) Public Company Costs; and;
(GF) to finance any Investment permitted under Section 6.06 as if such Parent Company were subject to Section Section 6.06 (provided that (x) any Restricted Payment under this clause (a)(i)(G(a)(i)(F) 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 (y) the relevant Parent Company shall, promptly following the closing 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 therewiththereof, cause (I) all property acquired to be contributed to the Parent Borrower or one or more of its Restricted Subsidiaries Subsidiaries, or (II) the merger, consolidation or amalgamation of the Person formed or acquired into the Parent Borrower or one or more of its Restricted Subsidiaries, in order to consummate such Investment in compliance with the applicable requirements of Section Section 6.06 as if undertaken as a direct Investment by the Parent Borrower or the relevant Restricted Subsidiary); and
(G) to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, employees or consultants of any Parent Company (or any Immediate Family Member of any of the foregoing) to the extent such salary, bonuses and other benefits are attributable and reasonably allocated to the operations of the Borrower and/or its subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose;
(ii) the Parent Borrower may pay (or make Restricted Payments to allow any Parent Company to pay) for the repurchase, redemption, retirement or other acquisition or retirement for value of Capital Stock of any Parent Company or any subsidiary held by any Permitted Payeefuture, present or former employee, director, member of management, officer, manager or consultant (or any Affiliate or Immediate Family Member thereof) of any Parent Company, the Borrower or any subsidiary:
(A) in accordance with the terms of promissory notes issued pursuant to Section Section 6.01(o), so long as the aggregate amount of all Cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments made pursuant to sub-clause (D(D) of this clause (ii(ii) below, (1) does not exceed in any Fiscal Year the greater of $68,000,000 40,000,000 and 2012.0% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period in any Fiscal YearEBITDA, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied)) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under clause (D) below; plusYears;
(B) with the proceeds of any sale or issuance of, or of any capital contribution in respect of, the Capital Stock of the Parent Borrower or any Parent Company (to the extent such proceeds are contributed to the Parent Borrower or any Restricted Subsidiary in respect of Qualified Capital Stock issued by to the Parent Borrower or such any Restricted Subsidiary) (other than amounts constituting a Cure Amount or an Available Excluded Contribution Amount); plus;
(C) with the net proceeds of any key-man life insurance policies; plusor
(D) with Cash and Cash Equivalents in an amount not to exceedexceed in any Fiscal Year, together with the aggregate amount of all cash payments made pursuant to sub-clause (A(A) of this clause (ii(ii) in respect of promissory notes issued pursuant to Section Section 6.01(o), (1) the greater of $68,000,000 40,000,000 and 2012.0% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period in any Fiscal YearEBITDA, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under the immediately preceding clause (1); plus
(E) with the amount of any Cash bonuses otherwise payable to any Permitted Payee that are foregone in exchange for the receipt of Capital Stock of the Parent Borrower or any Parent Company pursuant to any compensation arrangement, including any deferred compensation planYears;
(iii) the Parent Borrower may make additional Restricted Payments in an amount not to exceed (A) the portion, if any, of the Available Amount on such date that the Parent Borrower elects to apply to this clause (iii)(A) plus (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Parent Borrower elects to apply to this clause (iii)(B) (plus, without duplication of amounts 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 with Available Excluded Contribution Amounts up to the amount of such Available Excluded Contribution Amount, less any application thereof under Sections 6.04(b)(vi) or 6.06(r)iii);
(iv) the Parent Borrower may make Restricted Payments (i) to any Parent Company to enable such Parent Company to (A) make Cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of such Parent Company, dividends, share splits, reverse share splits (or any combination thereof) and, mergers, consolidations, amalgamations or other business combinations, and acquisitions and other Investments permitted hereunder and/or (B) honor any conversion request by a holder of Convertible Indebtedness by payment of cash and/or delivery of Capital Stock, make any cash payments in lieu of fractional shares in connection with any conversion of Convertible Indebtedness and otherwise make payments on Convertible Indebtedness in accordance with its terms (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments upon redemption thereof), or, in the case of each of sub-clauses (A) and (B) above, make Restricted Payments to any Parent Company to enable such Parent Company to make the payments and/or deliveries described in such sub-clauses (A) and (B), and (ii) consisting of (A) payments made or expected to be made in respect of withholding or similar Taxes payable by any Permitted Payee future, present or former officers, directors, employees, members of management, managers or consultants of the Borrower, any Restricted Subsidiary or any Parent Company or any of their respective Immediate Family Members and/or (B) repurchases of Capital Stock in consideration of the payments described in sub sub-clause (A(A) above, including demand repurchases in connection with the exercise of stock options and the issuance of restricted stock units or similar stock based awardsoptions;
(v) the Parent Borrower may repurchase, redeem, acquire or retire Capital Stock upon repurchase (or make provisions for withholdings in connection with), or make Restricted Payments to any Parent Company to enable it to repurchase, redeem, acquire or retire ) Capital Stock upon (or make provisions for withholdings in connection with), the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represents all or a portion of the exercise price of, or tax Tax withholdings with respect to, such warrants, options or other securities convertible into or exchangeable for Capital Stock as part of a “cashless” exercise;
(vi) for any taxable period (or portion thereof) that a Parent Company is treated as a corporation for U.S. federal income tax purposes and for which Borrower and/or any of its subsidiaries are members (or are pass-through entities of such members) of a consolidated, combined, unitary or similar income Tax group for U.S. federal, state, local or foreign income Tax purposes for which such Parent Company is the Parent common parent, the Borrower may make Restricted Payments to such Parent Company to pay the proceeds portion of which any U.S. federal, state, local or foreign income Taxes (as applicable) of such Parent Company for such taxable period that are applied (i) on attributable to the Closing Date, solely to effect the consummation income of the Transactions and on or about Borrower and/or its applicable subsidiaries; provided that the Amendment No. 1 Effective Dateaggregate amount of such distributions shall not exceed the aggregate Taxes the Borrower and/or its subsidiaries, solely to effect the consummation of the Amendment No. 1 Transactionsas applicable, (ii) on and after the Closing Date, to satisfy any payment obligations owing, or as otherwise required, under the Acquisition Agreement (including payment of working capital and/or purchase price adjustments) and would be required to pay Transaction Costsin respect of such U.S. federal, in each casestate, local and foreign Taxes on a stand-alone basis for such taxable period; provided further that the amount of such distributions with respect to the Transactions, (iii) to satisfy obligations to direct or indirect holders of Capital Stock of the Parent Borrower (immediately prior to giving effect any Unrestricted Subsidiary for any taxable period shall be limited to the Transactions) in connection with, or as a result of, any working capital and/or purchase price adjustments, in each case, with respect to the Transactions and (iv) to satisfy any settlement of claims or actions in connection with the Transactions or to satisfy indemnity or other similar obligations in connection with the Transactionsamount actually paid by such Unrestricted Subsidiary for such purpose;
(vii) the Parent Borrower may make Restricted Payments (A) to consummate, to the extent constituting Restricted Payments, the Transactions and (B) to pay Transaction Costs;
(viii) so long as no Event of Default exists at the time of declaration of such Restricted Payment the Borrower may (or may make Restricted Payments to any Parent Company to enable it to) make Restricted Payments with respect to any Capital Stock in an amount not to exceed an aggregate amount per annum equal to the sum of (A) the greater of (x) an amount equal to 7.006% per annum of the net Cash proceeds received by or contributed to the Parent Borrower in connection with the merger of Isos Acquisition Corporation and Bowlero Corp. on December 15, 2021 and the other transactions consummated in connection therewith from an initial public offering and (yB) an amount equal to 7.007% per annum of the Market Capitalization of the Parent Borrower (or its direct or indirect Parent Company, as applicable) and its subsidiaries minus (B) any utilization of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A)Capitalization;
(viiiix) the Parent Borrower may make Restricted Payments to (i) redeem, repurchase, defease, discharge, retire or otherwise acquire any (A) Capital Stock (“Treasury Capital Stock”) of the Parent Borrower and/or any Restricted Subsidiary or (B) Capital Stock of any Parent Company, in the case of each of subclauses (A(A) and (B(B), in exchange for, or out of the proceeds of the substantially concurrent sale (other than to the Parent Borrower and/or any Restricted Subsidiary) of, Qualified Capital Stock of the Parent Borrower or any Parent Company to the extent any such proceeds are contributed to the capital of the Parent Borrower and/or any Restricted Subsidiary 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 the Parent Borrower or a Restricted Subsidiary) of any Refunding Capital Stock;
(ixx) to the extent constituting a Restricted Payment, the Parent Borrower may consummate any transaction permitted by Section 5.19 (other than Section 5.19(d)), Section Section 6.06 (other than Sections 6.06(j6.06(j) and (t(t)) and Section ), Section 6.07 (other than Section Section 6.07(g)) and Section 6.09 (other than Section 6.09(d));
(xxi) the Parent Borrower may make additional Restricted Payments in an aggregate amount not to exceed (A) the greater of $85,000,000 120,000,000 and 2535.0% of Consolidated Adjusted EBITDA as minus the sum of the last day of the most recently ended Test Period minus (A) any amounts under this Section 6.04(a)(xi) reallocated to make Restricted Debt Payments pursuant to Section 6.04(b)(iv), (B) any utilization of the Available RP Capacity Amount in reliance on unused capacity amounts under immediately preceding clause (Athis Section 6.04(a)(xi) reallocated to make Investments pursuant to Section 6.06(q), and (C) any amounts under this Section 6.04(a)(xi) reallocated to incur Indebtedness pursuant to Section 6.01(u) (which may be further reallocated as provided therein);
(xixii) the Parent Borrower may pay any dividend or other distribution or consummate any redemption within 60 sixty (60) days after the date of 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 dividend or redemption notice would have complied with the provisions of this Section 6.04(a);
(xii) the Parent Borrower may make any Restricted Payment constituting the distribution or payment of Receivables Feeshereof;
(xiii) the Parent Borrower may make additional Restricted Payments so long as, as measured at the time provided for in Section 1.04(e), (iA) no Event of Default exists or would result therefrom and (B) the Total Leverage Ratio would not exceed 4.00:1.00Ratio, calculated on a Pro Forma Basis and (ii) there shall exist no Event at the time of Default hereunder or shall result therefromdeclaration thereof, would not exceed 3.75:1.00;
(xiv) the Parent Borrower may make additional Restricted Payments to enable any Parent Company to make Restricted Payments solely in the Qualified Capital Stock of such Parent Company;
(xv) the Borrower may make Restricted Payments (A) to pay amounts permitted under Section 6.09(f), (g), (h), (i), (k) and (m) and (B) otherwise in an amount not to exceed $500,000 per calendar year; and
(xvi) the Borrower may make Restricted Payments in the form of Capital Stock 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 Cash Equivalents (except to the extent constituting proceeds from the Disposition of all or substantially all of the assets of such Unrestricted Subsidiary) and/or intellectual property material (as determined by the Borrower in good faith) to the business of the Borrower and its Restricted Subsidiaries, taken as a whole).
(b) The Borrower shall not, nor shall it permit any Restricted Subsidiary to, make any payment (whether in Cash, securities or other property) on or in respect of principal of (x) any Junior Lien Indebtedness or (y) any Subordinated Indebtedness, in each cases of clauses (x) and (y), with an individual outstanding principal amount in excess of the Threshold Amount (such Indebtedness under clauses (x) and (y), in each case, with an individual outstanding principal amount in excess of the Threshold Amount, the “Restricted Debt”), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Restricted Debt prior to its scheduled maturity (collectively, “Restricted Debt Payments”), except:
(i) any 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 (except to the extent subject to clause (iv)(C) of the proviso to Section 6.01(p));
(ii) payments as part of an AHYDO catch-up payment;
(iii) payments of regularly scheduled interest as and when due in respect of any Restricted Debt, except for any payments with respect to any such Subordinated Indebtedness that are prohibited by the subordination provisions thereof;
(iv) so long as, at the time of delivery of irrevocable notice with respect thereto, no Event of Default exists or would result therefrom, Restricted Debt Payments in an aggregate amount not to exceed (i) the sum of (A) the greater of $120,000,000 and 35.0% of Consolidated Adjusted EBITDA and (B) any amounts reallocated to this Section 6.04(b)(iv) from Section 6.04(a)(xi) and Section 6.06(q), minus (ii) any amounts reallocated from this Section 6.04(b)(iv) to make Investments pursuant to Section 6.06(q);
(A) Restricted Debt Payments in exchange for, or with proceeds of any issuance of, Qualified Capital Stock of the Borrower and/or any Restricted Subsidiary and/or any capital contribution in respect of Qualified Capital Stock of the Borrower or any Restricted Subsidiary, (B) Restricted Debt Payments as a result of the conversion of all or any portion of any Restricted Debt into Qualified Capital Stock of the Borrower 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 amount not to exceed the amount of proceeds received by the Parent Borrower and/or any Restricted Subsidiary under the Representation and Warranty Insurance Policy during the term of this Agreement;
(xv) (A) for any taxable period for which the Parent Borrower and/or any of its Subsidiaries are members of a consolidatedportion, combined or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which a direct or indirect parent if any, of the Parent Available Amount on such date that the Borrower is the common parent elects to apply to this clause (a “Tax Group”vi), or for which the Parent Borrower is a disregarded entity for U.S. federal income tax purposes wholly-owned by a corporate parent (a “Corporate Parent”), the Parent Borrower and each of its Subsidiaries may make Restricted Payments the proceeds of which shall be used by such common parent to pay the portion of any consolidated, combined or similar U.S. federal, state or local income Taxes of such Tax Group, or by the Corporate Parent to pay the portion of the U.S. federal, state or local income Taxes of such Corporate Parent, or any franchise taxes imposed in lieu thereof, for such taxable period that are attributable to the income of the Parent Borrower and/or its Subsidiaries, provided that such amount shall not be greater than the amount of such U.S. federal, state or local income taxes that would be paid (for such taxable period) by the Parent Borrower and its Subsidiaries if the Parent Borrower and/or such Subsidiaries had been a stand-alone corporate taxpayer (or stand-alone group of corporate taxpayers filing on a consolidated, combined or similar basis) for all taxable years ending after the Closing Date (taking into account any net operating loss carryforwards attributable to the Parent Borrower and its Subsidiaries, as the case may be) and (B) without duplication of Restricted Payments made under Section 6.04(a)(xv)(A), for any taxable period for which the Parent Borrower is treated as a partnership for U.S. federal and/or applicable state or local income tax purposes, the Parent Borrower may make Restricted Payments to its equity owners at the times and in the amoun;
Appears in 1 contract
Sources: First Lien Credit Agreement (Hayward Holdings, Inc.)
Restricted Payments; Certain Payments of Indebtedness. (a) The Parent Borrower Holdings shall not pay or make, directly or indirectly, any Restricted Payment, except that:
(i) Except with respect to clause (A)(y) below, so long as no Specified Event of Default shall have occurred and be continuing at the Parent Borrower time of the making thereof, Holdings may make Restricted Payments to the extent necessary to permit any Parent CompanyCompany of Holdings:
(A) to pay (x) general operating and compliance administrative costs and expenses (including corporate overhead, audit and other accounting and reporting expenses, administrative, legal or similar expenses and customary wages, salary, bonus and other benefits payable to directors, officers, employees, members of management, managers consultants and/or consultants independent contractors of any Parent Company)) in an aggregate amount not to exceed $2,500,000 per fiscal year, in each caseand (y) franchise fees, which are reasonable and customary and incurred in the ordinary course of business, plus any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of any Parent Company, in each case, to the extent attributable to the ownership or operations of any Parent Company (but excluding, for the avoidance of doubt, the portion of any such amount, if any, that is attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and/or its subsidiaries;
(B) to pay franchise, excise franchise Taxes and similar Taxes, and other fees, Taxes and expenses, expenses required to maintain the organizational existence of such Parent CompanyCompany and any reasonable and customary indemnification claims made by directors or officers of Parent Company attributable to the direct or indirect ownership or operations of Holdings and its Subsidiaries, in each case, incurred in the ordinary course of business;
(B) for any taxable period ending after the Closing Date with respect to which Holdings or any of its subsidiaries is a member of a consolidated, combined or similar income tax group of which any Parent Company is the common parent (a “Tax Group”), or in which Holdings or the Borrower is disregarded from a direct or indirect parent entity that is a C corporation for U.S. federal income tax purposes, to pay the portion of any consolidated, combined or similar income Taxes of such Tax Group that is attributable to the taxable income of Holdings and its subsidiaries; provided that for each taxable period, the amount of such payments made in respect of such period shall not exceed the amount that Holdings and its applicable subsidiaries would have been required to pay as a stand-alone taxpayer or stand-alone Tax Group;
(C) to pay customary salary, bonus, long-term incentive, severance and other benefits (including payment finance any Investment permitted to certain service providers of the Parent Borrower or its Subsidiaries be made pursuant to any equity plan Section 6.05; provided that (x) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (y) Holdings or such Parent Company shall, immediately following the closing thereof, cause all property acquired (whether assets or Capital Stock) to be held by or contributed to Holdings or another Loan Party or, subject to compliance with Section 6.05(b), any Subsidiary; and
(D) in the form of options, cash settled options or otherwise)) payable an amount equal to Permitted Payees, as well as applicable employment, social security withholding or similar taxes payable or expected to be payable by any future, current or former employee, director, manager, consultant or independent contractor (or any of their respective Immediate Family Members) of any Parent Company of Holdings, any Equityholding Vehicle, the Borrower or any Subsidiary of the Borrower in connection therewithwith the exercise or vesting of Capital Stock or other equity awards or any repurchases, redemptions, acquisitions, retirements or withholdings of Capital Stock in connection with any exercise of Capital Stock or other equity options or warrants or the vesting of Capital Stock or other equity awards if such Capital Stock represent all or a portion of the exercise price of, or withholding obligation with respect to, such options or, warrants or other Capital Stock or equity awards; provided that the aggregate amount of Restricted Payments made pursuant to this subclause (D) shall not exceed $2,500,000 in any fiscal year (with any unused amounts permitted to be carried forward to the extent such salary, bonuses, severance and other benefits are attributable and reasonably allocated to the operations of the Parent Borrower and/or its subsidiaries, immediately following fiscal year); in each case, so long as such Parent Company promptly applies the amount of any such Restricted Payment for such purpose;
(D) to pay audit and other accounting and reporting expenses of such Parent Company to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such expenses, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries;
(E) for the payment of insurance premiums to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries;
(F) to pay (x) fees and expenses related to any debt and/or equity offerings (including refinancings), investments and/or acquisitions permitted or not restricted by this Agreement (whether or not consummated, and including advisory, refinancing, subsequent transaction and exit fees of any Parent Company of the Parent Borrower) and expenses and indemnities of any trustee, agent, arranger, underwriter or similar role and (y) Public Company Costs; and
(G) to finance any Investment permitted under Section 6.06 as if such Parent Company were subject to Section 6.06 (provided that (x) any Restricted Payment under this clause (a)(i)(G) 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 (y) the relevant Parent Company shall, promptly following the closing 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 (I) all property acquired to be contributed to the Parent Borrower or one or more of its Restricted Subsidiaries or (II) the merger, consolidation or amalgamation of the Person formed or acquired into the Parent Borrower or one or more of its Restricted Subsidiaries, in order to consummate such Investment in compliance with the applicable requirements of Section 6.06 as if undertaken as a direct Investment by the Parent Borrower or the relevant Restricted Subsidiary);
(ii) the Parent Borrower Holdings may pay (or make Restricted Payments to allow any Parent Company to pay) for the repurchase, redemption, retirement or other acquisition or retirement for value of Capital Stock of any Parent Company or any subsidiary of Holdings held by any Permitted Payee:
future, present or former employee, vendor, director, member of management, officer, manager or consultant (A) in accordance with the terms of promissory notes issued pursuant to Section 6.01(o), so long as the aggregate amount of all Cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments made pursuant to sub-clause (Dor any Affiliate thereof) of this clause (ii) below, (1) does any Parent Company or any subsidiary of Holdings with Cash and Cash Equivalents in an amount not to exceed the greater of $68,000,000 5,000,000 and 205% of Consolidated Adjusted EBITDA as of the last day of for the most recently ended Test Period in any Fiscal Year, which, if not used in ; provided that any Fiscal Year, unused portion of the preceding basket calculated for any calendar year may be carried forward to subsequent Fiscal Years the next succeeding calendar year;
(until iii) so applied)) minus (2) any utilization long as no Event of Default shall have occurred and be continuing at the time of the Available RP Capacity Amount in reliance on unused capacity under clause (D) below; plus
(B) with the proceeds of any sale or issuance ofdeclaration thereof, or of any capital contribution in respect of, the Capital Stock of the Parent Borrower or any Parent Company (to the extent such proceeds are contributed to the Parent Borrower or any Holdings may make Restricted Subsidiary in respect of Qualified Capital Stock issued by the Parent Borrower or such Restricted Subsidiary) (other than amounts constituting a Cure Amount or an Available Excluded Contribution Amount); plus
(C) with the net proceeds of any key-man life insurance policies; plus
(D) with Cash and Cash Equivalents Payments in an aggregate amount not to exceed, together with the aggregate amount of all cash payments made pursuant to sub-clause (A) of this clause (ii) in respect of promissory notes issued pursuant to Section 6.01(o), (1) exceed the greater of $68,000,000 5,000,000 and 205.0% of Consolidated Adjusted EBITDA as of the last day of for the most recently ended Test Period in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under the immediately preceding clause (1); plus
(E) with the amount of any Cash bonuses otherwise payable to any Permitted Payee that are foregone in exchange for the receipt of Capital Stock of the Parent Borrower or any Parent Company pursuant to any compensation arrangement, including any deferred compensation plan;
(iii) the Parent Borrower may make additional Restricted Payments in an amount not to exceed (A) the portion, if any, of the Available Amount on such date that the Parent Borrower elects to apply to this clause (iii)(A) plus (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Parent Borrower elects to apply to this clause (iii)(B) (plus, without duplication of amounts 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 with Available Excluded Contribution Amounts up to the amount of such Available Excluded Contribution Amount, less any application thereof under Sections 6.04(b)(vi) or 6.06(r))Period;
(iv) the Parent Borrower Holdings may make Restricted Payments (i) to any Parent Company to enable such Parent Company to (A) make Cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of such Parent Company, dividends, share splits, reverse share splits (or any combination thereof) and, mergers, consolidations, amalgamations or other business combinations, and acquisitions and other Investments permitted hereunder and/or (B) honor any conversion request by a holder of Convertible Indebtedness by payment of cash and/or delivery of Capital Stock, make any cash payments in lieu of fractional shares in connection with any conversion of Convertible Indebtedness and otherwise make payments on Convertible Indebtedness in accordance with its terms the Revenue Share Agreement (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments upon redemption thereof), or, as defined in the case of each of sub-clauses (A) and (B) above, make Restricted Payments to any Parent Company to enable such Parent Company to make the payments and/or deliveries described in such sub-clauses (A) and (BPurchase Agreement), and (ii) consisting of (A) payments made or expected to be made in respect of withholding or similar Taxes payable by any Permitted Payee and/or (B) repurchases of Capital Stock in consideration of the payments described in sub clause (A) above, including demand repurchases in connection with the exercise of stock options and the issuance of restricted stock units or similar stock based awards;
(v) the Parent Borrower may repurchase, redeem, acquire or retire Capital Stock upon (or make provisions for withholdings in connection with), or make Restricted Payments to any Parent Company to enable it to repurchase, redeem, acquire or retire Capital Stock upon (or make provisions for withholdings in connection with), the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represents all or a portion of the exercise price of, or tax withholdings with respect to, such warrants, options or other securities convertible into or exchangeable for Capital Stock as part of a “cashless” exercise;
(vi) the Parent Borrower Holdings may make Restricted Payments the proceeds of which shall be used to pay customary salary, compensation, bonus and other benefits payable to officers, employees, consultants and other service providers of any Parent Company or partner of Holdings to the extent such salaries, compensation, bonuses and other benefits are applied attributable to the ownership or operation of Holdings, the Borrower and its Restricted Subsidiaries; provided that the aggregate amount of Restricted Payments made pursuant to this subclause (iv) on shall not exceed $2,500,000 in any fiscal year (with any unused amounts permitted to be carried forward to the Closing Date, solely to effect the consummation of the Transactions and on immediately following fiscal year);
(vi) Holdings may pay any dividend or about the Amendment No. 1 Effective Date, solely to effect the consummation of the Amendment No. 1 Transactions, (ii) on and distribution within 60 days after the Closing Datedate of declaration thereof, to satisfy any if at the date of declaration such payment obligations owing, or as otherwise required, under would have complied with the Acquisition provisions of this Agreement (including payment it being understood that a distribution pursuant to this Section 6.04(a)(vi) shall be deemed to have utilized capacity under such other provision of working capital and/or purchase price adjustments) and to pay Transaction Costs, in each case, with respect to the Transactions, (iii) to satisfy obligations to direct or indirect holders of Capital Stock of the Parent Borrower (immediately prior to giving effect to the Transactions) in connection with, or as a result of, any working capital and/or purchase price adjustments, in each case, with respect to the Transactions and (iv) to satisfy any settlement of claims or actions in connection with the Transactions or to satisfy indemnity or other similar obligations in connection with the Transactionsthis Agreement);
(vii) the Parent Borrower may (or Holdings may make Restricted Payments to any Parent Company to enable it to) make Restricted Payments with respect to any Capital Stock in an aggregate amount not to exceed (A) the greater of (x) an amount equal to 7.00% per annum of the net Cash proceeds received by or contributed to the Parent Borrower in connection with the merger of Isos Acquisition Corporation and Bowlero Corp. on December 15, 2021 and the other transactions consummated in connection therewith and (y) an amount equal to 7.00% per annum of the Market Capitalization of the Parent Borrower (or its direct or indirect Parent Company, as applicable) and its subsidiaries minus (B) any utilization of the Available RP Capacity Equity Amount in reliance on unused capacity under immediately preceding clause (A)at the time such Restricted Payment is paid;
(viii) Holdings may pay Restricted Payments payable solely in its Qualified Capital Stock; and
(ix) Holdings may pay cash in lieu of fractional Qualified Capital Stock in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar permitted Investment).
(b) The Borrower shall not, and Holdings shall not permit any Subsidiary to, pay or make, directly or indirectly, any Restricted Payment, except that:
(i) any Subsidiary of the Parent Borrower may make Restricted Payments to its direct equity holders (other than Holdings) on a ratable basis (or greater than ratable basis with respect to equityholders that are the Borrower or a Subsidiary that is a Loan Party); and
(ii) the Borrower may make Restricted Payments to Holdings to the extent necessary to permit Holdings to make Restricted Payments permitted by Section 6.04(a) (or as if such Restricted Payments were to be paid to Holdings instead of a Parent Company); in each case under this clause (ii), so long as Holdings promptly applies the amount of any such Restricted Payment for such purpose.
(c) Holdings shall not, nor shall it permit any Subsidiary to, make any payment in Cash, securities or other property on or in respect of principal or interest on any Junior Debt, including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Debt (collectively, “Restricted Debt Payments”), except:
(i) redeemthe purchase, defeasance, redemption, repurchase, defease, discharge, retire repayment or otherwise acquire any (A) Capital Stock (“Treasury Capital Stock”) of the Parent Borrower and/or any Restricted Subsidiary other acquisition or (B) Capital Stock retirement of any Parent Company, in the case of each of subclauses (A) and (B), in Junior Debt made by exchange for, or out of the proceeds of the substantially concurrent sale incurrence of, Junior Debt permitted by Section 6.01;
(ii) payments of regularly scheduled interest and payments of fees, expenses and indemnification obligations as and when due in respect of any Junior Debt (other than to payments prohibited by the Parent Borrower and/or any Restricted Subsidiary) of, Qualified Capital Stock of the Parent Borrower or any Parent Company to the extent any such proceeds are contributed to the capital of the Parent Borrower and/or any Restricted Subsidiary in respect of Qualified Capital Stock subordination provisions thereof (“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 the Parent Borrower or a Restricted Subsidiary) of any Refunding Capital Stockif any));
(ixiii) to the extent constituting a Restricted PaymentJunior Debt, the Parent Borrower may consummate any transaction payments in respect of earn-outs and purchase price adjustments arising under Investments otherwise expressly permitted by Section 5.19 (other than Section 5.19(d)), Section 6.06 (other than Sections 6.06(j) and (t)) and Section 6.07 (other than Section 6.07(g))under this Agreement;
(xA) payments with respect to intercompany Indebtedness between the Parent Borrower may make and its Subsidiaries permitted under Section 6.01, subject to the payment subordination provisions applicable thereto;
(B) so long as no Event of Default exists at the time of delivery of notice with respect thereof or would result therefrom, additional Restricted Debt Payments in an aggregate amount not to exceed (A) the greater of $85,000,000 7,500,000 and 257.5% of Consolidated Adjusted EBITDA as of the last day of for 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);Period; and
(xiC) the Parent Borrower may pay any dividend or other distribution or consummate any redemption within 60 days after the date of 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);
(xii) the Parent Borrower may make any Restricted Payment constituting the distribution or payment of Receivables Fees;
(xiii) the Parent Borrower may make additional Restricted 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 Event of Default hereunder or shall result therefrom;
(xiv) the Parent Borrower may make additional Restricted Debt Payments in an aggregate amount not to exceed the amount Available Equity Amount at the time of proceeds received by the Parent Borrower and/or any such Restricted Subsidiary under the Representation and Warranty Insurance Policy during the term of this AgreementDebt Payment;
(xvv) the conversion thereof to Capital Stock (other than Disqualified Capital Stock) of Holdings; and
(vi) the refinancing thereof with the Net Proceeds of any Indebtedness that constitutes Junior Debt of the same type as the Junior Debt being refinanced (to the extent such Indebtedness constitutes Permitted Refinancing Indebtedness). For purposes of determining compliance with this Section 6.04, in the event that a proposed Restricted Payment (or a portion thereof) or Restricted Debt Payment of a portion thereof, as applicable meets the criteria of clauses (a)(i) through (ix), (b)(i) or (ii) or (c)(i) through (vi) (Aor any sub-category thereof) for any taxable period for which above, as applicable, the Parent Borrower and/or any will be entitled to classify or later reclassify (based on circumstances existing on the date of its Subsidiaries are members of a consolidated, combined such reclassification) such Restricted Payment (or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which a direct or indirect parent of the Parent Borrower is the common parent portion thereof) among such clauses (a “Tax Group”a)(i) through (ix), (b)(i) or for which the Parent Borrower is a disregarded entity for U.S. federal income tax purposes wholly-owned by a corporate parent (a “Corporate Parent”), the Parent Borrower and each of its Subsidiaries may make Restricted Payments the proceeds of which shall be used by such common parent to pay the portion of any consolidated, combined ii) or similar U.S. federal, state or local income Taxes of such Tax Group, or by the Corporate Parent to pay the portion of the U.S. federal, state or local income Taxes of such Corporate Parent, (c)(i) through (vi) (or any franchise taxes imposed sub-category thereof) in lieu thereof, for such taxable period a manner that are attributable to the income of the Parent Borrower and/or its Subsidiaries, provided that such amount shall not be greater than the amount of such U.S. federal, state or local income taxes that would be paid (for such taxable period) by the Parent Borrower and its Subsidiaries if the Parent Borrower and/or such Subsidiaries had been a stand-alone corporate taxpayer (or stand-alone group of corporate taxpayers filing on a consolidated, combined or similar basis) for all taxable years ending after the Closing Date (taking into account any net operating loss carryforwards attributable to the Parent Borrower and its Subsidiaries, as the case may be) and (B) without duplication of Restricted Payments made under Section 6.04(a)(xv)(A), for any taxable period for which the Parent Borrower is treated as a partnership for U.S. federal and/or applicable state or local income tax purposes, the Parent Borrower may make Restricted Payments to its equity owners at the times and in the amounotherwise complies with this Section 6.04.
Appears in 1 contract
Sources: Secured Seller Note Agreement (American Water Works Company, Inc.)
Restricted Payments; Certain Payments of Indebtedness. (a) The Parent Borrower shall not pay or make, directly or indirectly, any Restricted Payment, except that:
(i) the Parent Borrower may make Restricted Payments to the extent necessary to permit any Parent Company:
(A) to pay general operating and compliance administrative costs and expenses (including corporate overhead, legal or similar expenses and customary salary, bonus and other benefits payable to directors, officers, employees, members of management, managers and/or consultants of any Parent Company)) and franchise fees and Taxes and similar fees, Taxes and expenses required to enable such Parent Company to maintain its organizational existence or qualification to do business, in each case, which are reasonable and customary and incurred in the ordinary course of business, plus any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of any Parent Company, in each case, to the extent attributable to the ownership or operations of any Parent Company and its subsidiaries (but excluding, for the avoidance of doubt, excluding the portion of any such amount, if any, amount that is attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or and its subsidiaries), the Parent Borrower and/or its subsidiaries;
(B) to pay franchise, excise and similar Taxes, and other fees, Taxes and expenses, required to maintain the organizational existence of such Parent Company;[Reserved].
(C) to pay customary salary, bonus, long-term incentive, severance and other benefits (including payment to certain service providers of the Parent Borrower or its Subsidiaries pursuant to any equity plan (whether in the form of options, cash settled options or otherwise)) payable to Permitted Payees, as well as applicable employment, social security or similar taxes in connection therewith, to the extent such salary, bonuses, severance and other benefits are attributable and reasonably allocated to the operations of the Parent Borrower and/or its subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose;
(D) to pay audit and other accounting and reporting expenses of such Parent Company to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such expenses, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries;
(ED) for the payment of insurance premiums to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries;
(FE) to pay (x) fees and expenses related to any debt and/or or equity offerings (including refinancings)offerings, investments and/or or acquisitions permitted or not restricted by this Agreement (whether or not consummated, and including advisory, refinancing, subsequent transaction and exit fees of any Parent Company of the Parent Borrower) and expenses and indemnities of any trustee, agent, arranger, underwriter or similar role and (y) Public Company Costs; and;
(GF) to finance any Investment permitted under Section 6.06 as if such Parent Company were subject to Section Section 6.06 (provided that (x) any Restricted Payment under this clause (a)(i)(G(a)(i)(F) 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 (y) the relevant Parent Company shall, promptly following the closing 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 therewiththereof, cause (I) all property acquired to be contributed to the Parent Borrower or one or more of its Restricted Subsidiaries Subsidiaries, or (II) the merger, consolidation or amalgamation of the Person formed or acquired into the Parent Borrower or one or more of its Restricted Subsidiaries, in order to consummate such Investment in compliance with the applicable requirements of Section Section 6.06 as if undertaken as a direct Investment by the Parent Borrower or the relevant Restricted Subsidiary); and
(G) to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, employees or consultants of any Parent Company (or any Immediate Family Member of any of the foregoing) to the extent such salary, bonuses and other benefits are attributable and reasonably allocated to the operations of the Borrower and/or its subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose;
(ii) the Parent Borrower may pay (or make Restricted Payments to allow any Parent Company to pay) for the repurchase, redemption, retirement or other acquisition or retirement for value of Capital Stock of any Parent Company or any subsidiary held by any Permitted Payeefuture, present or former employee, director, member of management, officer, manager or consultant (or any Affiliate or Immediate Family Member thereof) of any Parent Company, the Borrower or any subsidiary:
(A) in accordance with the terms of promissory notes issued pursuant to Section Section 6.01(o), so long as the aggregate amount of all Cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments made pursuant to sub-clause (D(D) of this clause (ii(ii) below, (1) does not exceed the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period 20,000,000 in any Fiscal YearYear (or $30,000,000 in any Fiscal Year following a Qualifying IPO), which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied)) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under clause (D) below; plusYears;
(B) with the proceeds of any sale or issuance of, or of any capital contribution in respect of, the Capital Stock of the Parent Borrower or any Parent Company (to the extent such proceeds are contributed to the Parent Borrower or any Restricted Subsidiary in respect of Qualified Capital Stock issued by to the Parent Borrower or such any Restricted Subsidiary) (other than any amounts constituting a Cure Amount or an any amount that has been added to the Available Excluded Contribution Amount or the Available Amount); plus;
(C) with the net proceeds of any key-man life insurance policies; plusor
(D) with Cash and Cash Equivalents in an amount not to exceed, together with the aggregate amount of all cash payments made pursuant to sub-clause (A(A) of this clause (ii(ii) in respect of promissory notes issued pursuant to Section Section 6.01(o), (1) the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period 20,000,000 in any Fiscal YearYear (or $30,000,000 in any Fiscal Year following a Qualifying IPO), which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under the immediately preceding clause (1); plus
(E) with the amount of any Cash bonuses otherwise payable to any Permitted Payee that are foregone in exchange for the receipt of Capital Stock of the Parent Borrower or any Parent Company pursuant to any compensation arrangement, including any deferred compensation planYears;
(iii) the Parent Borrower may make additional Restricted Payments in an amount not to exceed (A) so long as the Fixed Charge Coverage Ratio, calculated on a Pro Forma Basis, would not be less than 2.00:1.00, the portion, if any, of the Available Amount on such date that the Parent Borrower elects to apply to this clause (iii)(A(iii)(A) plus (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Parent Borrower elects to apply to this clause (iii)(B) (plus, without duplication of amounts 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 with Available Excluded Contribution Amounts up to the amount of such Available Excluded Contribution Amount, less any application thereof under Sections 6.04(b)(vi) or 6.06(r)iii)(B);
(iv) the Parent Borrower may make Restricted Payments (i) to any Parent Company to enable such Parent Company to (A) make Cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of such Parent Company, dividends, share splits, reverse share splits (or any combination thereof) and, mergers, consolidations, amalgamations or other business combinations, and acquisitions and other Investments permitted hereunder and/or (B) honor any conversion request by a holder of Convertible Indebtedness by payment of cash and/or delivery of Capital Stock, make any cash payments in lieu of fractional shares in connection with any conversion of Convertible Indebtedness and otherwise make payments on Convertible Indebtedness in accordance with its terms (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments upon redemption thereof), or, in the case of each of sub-clauses (A) and (B) above, make Restricted Payments to any Parent Company to enable such Parent Company to make the payments and/or deliveries described in such sub-clauses (A) and (B), and (ii) consisting of (A) payments made or expected to be made in respect of withholding or similar Taxes payable by any Permitted Payee future, present or former officers, directors, employees, members of management, managers or consultants of the Borrower, any Restricted Subsidiary or any Parent Company or any of their respective Immediate Family Members and/or (B) repurchases of Capital Stock in consideration of the payments described in sub sub-clause (A(A) above, including demand repurchases in connection with the exercise of stock options and the issuance of restricted stock units or similar stock based awardsoptions;
(v) the Parent Borrower may repurchase, redeem, acquire or retire Capital Stock upon repurchase (or make provisions for withholdings in connection with), or make Restricted Payments to any Parent Company to enable it to repurchase, redeem, acquire or retire ) Capital Stock upon (or make provisions for withholdings in connection with), the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represents all or a portion of the exercise price of, or tax withholdings with respect to, of such warrants, options or other securities convertible into or exchangeable for Capital Stock as part of a “cashless” exercise;
(viA) for any taxable year (or portion thereof) that Borrower is a partnership or disregarded entity for U.S. federal income Tax purposes and no Parent Company is treated as a corporation for U.S. federal income tax purposes, the Parent Borrower may make Restricted Payments to fund the income tax liabilities of the direct or indirect equity owners of Borrower, in an assumed amount equal to the product of (x) the highest combined marginal federal and applicable state and/or local statutory Tax rate applicable to a direct or indirect taxpayer equity owner of Borrower, and (y) the U.S. federal taxable income of the Borrower for such year (or portion thereof), provided that (i) such calculation shall take into account the character of income or gain, preferential tax rates and the deductibility of state and local income taxes for US federal income tax purposes; (ii) such taxable income shall be reduced by any losses previously allocated to the equity owners to the extent such loss has not previously been used to offset taxable income of Borrower; (iii) such distributions shall be reduced by any amounts withheld by the Borrower or its Subsidiaries (or otherwise paid directly to any Governmental Authority) with respect to any taxable income or gain of Borrower and any tax credits Borrower allocated to its equity owners); or (B) for any taxable period (or portion thereof) that a Parent Company is treated as a corporation for U.S. federal income tax purposes and for which Borrower and any of its subsidiaries are members (or are pass-through entities of such members) of a consolidated, combined or similar income Tax group for U.S. federal, state or local income Tax purposes for which such Parent Company is the common parent, the Borrower may make Restricted Payments to such Parent Company to pay the portion of any U.S. federal, state or local income Taxes (as applicable) of such Parent Company for such taxable period that are attributable to the income of the Borrower and/or its applicable subsidiaries; provided that the aggregate amount of any such distributions with respect to federal, state or local Taxes, as applicable, shall not exceed the aggregate amount of such Taxes the Borrower and its subsidiaries that are part of such group would be required to pay in respect of such U.S. federal, state or local Taxes on a stand-alone basis for such taxable period; provided, further, that the amount of such distributions with respect to any Unrestricted Subsidiary for any taxable period shall be limited to the amount actually paid by such Unrestricted Subsidiary for such purpose.
(vii) the Borrower may make Restricted Payments, the proceeds of which are applied (i) on the Closing Date, solely to effect the consummation of the Transactions and on or about the Amendment No. 1 Effective Date, solely to effect the consummation of the Amendment No. 1 Transactions, (ii) on and after the Closing Date, to satisfy any payment obligations owing, or as otherwise required, owing under the Acquisition Agreement (including payment of working capital and/or purchase price adjustments) and to pay Transaction Costs, in each case, with respect to the Transactions, (iii) to satisfy obligations to direct or indirect holders of Capital Stock of the Parent Borrower (immediately prior to giving effect to the Transactions) in connection with, or as a result of, any working capital and/or purchase price adjustments, in each case, with respect to the Transactions and (iv) to satisfy any settlement of claims or actions in connection with the Transactions or to satisfy indemnity or other similar obligations in connection with the TransactionsReorganization Agreement;
(viiviii) so long as no Event of Default exists, following the Parent consummation of the first Qualifying IPO, the Borrower may (or may make Restricted Payments to any Parent Company to enable it to) make Restricted Payments with respect to any Capital Stock in an amount not to exceed (A) the greater of (xi) an amount equal to 7.006% per annum of the net Cash proceeds received by or contributed to the Parent Borrower in connection with the merger of Isos Acquisition Corporation and Bowlero Corp. on December 15, 2021 and the other transactions consummated in connection therewith and from any Qualifying IPO or (yb) an amount equal to 7.005% per annum of the Market Capitalization aggregate market capitalization of the Parent Borrower (or its direct or indirect applicable Parent Company, as applicable) and its subsidiaries minus (B) any utilization of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A);
(viiiix) the Parent Borrower may make Restricted Payments to (i) redeem, repurchase, defease, discharge, retire or otherwise acquire any (A) Capital Stock (“Treasury Capital Stock”) of the Parent Borrower and/or any Restricted Subsidiary or (B) Capital Stock of any Parent Company, in the case of each of subclauses (A(A) and (B(B), in exchange for, or out of the proceeds of the substantially concurrent sale (other than to the Parent Borrower and/or any Restricted Subsidiary) of, Qualified Capital Stock of the Parent Borrower or any Parent Company to the extent any such proceeds are contributed to the capital of the Parent Borrower and/or any Restricted Subsidiary 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 the Parent Borrower or a Restricted Subsidiary) of any Refunding Capital Stock;
(ixx) to the extent constituting a Restricted Payment, the Parent Borrower may consummate any transaction permitted by Section 5.19 (other than Section 5.19(d)), Section Section 6.06 (other than Sections 6.06(j6.06(j) and (t(t)) and Section ), Section 6.07 (other than Section Section 6.07(g)) and Section 6.09 (other than Section 6.09(d));
(xxi) the Parent Borrower may make additional Restricted Payments in an aggregate amount not to exceed (A) the greater of $85,000,000 160,000,000 and 254.0% of Consolidated Adjusted EBITDA Total Assets as of the last day of the most recently ended Test Period minus (BA) the amount of Restricted Debt Payments made by the Borrower or any utilization of the Available RP Capacity Amount Restricted Subsidiary in reliance on unused capacity under immediately preceding clause (ASection 6.04(b)(iv)(B), minus (B) the outstanding amount of Investments made by the Borrower or any Restricted Subsidiary in reliance on Section 6.06(q)(ii);
(xixii) the Parent Borrower may pay any dividend or other distribution or consummate any redemption within 60 days after the date of 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 dividend or redemption notice would have complied with the provisions of this Section 6.04(a);
(xii) the Parent Borrower may make any Restricted Payment constituting the distribution or payment of Receivables Fees;hereof; and
(xiii) the Parent Borrower may make additional Restricted Payments so long as, as measured at the time provided for in Section 1.04(e), (i) no Event of Default exists or would result therefrom and (ii) the Total Leverage Ratio would not exceed 4.00:1.00Ratio, calculated on a Pro Forma Basis Basis, would not exceed 4.50:1.00;
(b) The Borrower shall not, nor shall they permit any Restricted Subsidiary to, make any payment (whether in Cash, securities or other property) on or in respect of principal of or interest on (y) any Junior Lien Indebtedness or (z) any Junior Indebtedness (such Indebtedness under clauses (y) and (z), the “Restricted Debt”), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Restricted Debt prior to its scheduled maturity (collectively, “Restricted Debt Payments”), except:
(i) any 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) there shall exist payments as part of an “applicable high yield discount obligation” catch-up payment;
(iii) payments of regularly scheduled interest as and when due in respect of any Restricted Debt, except for any payments with respect to any Subordinated Indebtedness that are prohibited by the subordination provisions thereof;
(iv) so long as, at the time of delivery of irrevocable notice with respect thereto, no Event of Default hereunder exists or shall would result therefrom, additional Restricted Debt Payments in an aggregate amount not to exceed:
(A) the greater of $160,000,000 and 4.0% of Consolidated Total Assets as of the last day of the most recently ended Test Period, minus the amount of Investments made in reliance on Section 6.06(q)(iii); plus
(B) the greater of $160,000,000 and 4.0% of Consolidated Total Assets as of the last day of the most recently ended Test Period, minus (1) the amount of Restricted Payments made by the Borrower or any Restricted Subsidiary in reliance on Section 6.04(a)(x), minus (2) the outstanding amount of Investments made by the Borrower or any Restricted Subsidiary in reliance on Section 6.06(q)(ii);
(xivA) the Parent Borrower may make additional Restricted Debt Payments in an amount not to exceed exchange for, or with proceeds of any issuance of, Qualified Capital Stock of the amount of proceeds received by the Parent Borrower and/or any Restricted Subsidiary and/or any capital contribution in respect of Qualified Capital Stock of the Borrower or any Restricted Subsidiary, in each case, other than any amounts constituting a Cure Amount or any amount that has been added to the Available Excluded Contribution Amount or the Available Amount, (B) Restricted Debt Payments as a result of the conversion of all or any portion of any Restricted Debt into Qualified Capital Stock of the Borrower 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 the Representation and Warranty Insurance Policy during the term of this AgreementSection 6.01;
(xvvi) Restricted Debt Payments in an aggregate amount not to exceed (A) for any taxable period for which the Parent Borrower and/or any of its Subsidiaries are members of a consolidatedportion, combined or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which a direct or indirect parent if any, of the Parent Available Amount on such date that the Borrower is the common parent elects to apply to this clause (a “Tax Group”), or for which the Parent Borrower is a disregarded entity for U.S. federal income tax purposes wholly-owned by a corporate parent (a “Corporate Parent”), the Parent Borrower and each of its Subsidiaries may make Restricted Payments the proceeds of which shall be used by such common parent to pay the portion of any consolidated, combined or similar U.S. federal, state or local income Taxes of such Tax Group, or by the Corporate Parent to pay the portion of the U.S. federal, state or local income Taxes of such Corporate Parent, or any franchise taxes imposed in lieu thereof, for such taxable period that are attributable to the income of the Parent Borrower and/or its Subsidiaries, provided that such amount shall not be greater than the amount of such U.S. federal, state or local income taxes that would be paid (for such taxable periodvi)(A) by the Parent Borrower and its Subsidiaries if the Parent Borrower and/or such Subsidiaries had been a stand-alone corporate taxpayer (or stand-alone group of corporate taxpayers filing on a consolidated, combined or similar basis) for all taxable years ending after the Closing Date (taking into account any net operating loss carryforwards attributable to the Parent Borrower and its Subsidiaries, as the case may be) and plus (B) without duplication the portion, if any, of the Available Excluded Contribution Amount on such date that the Borrower elects to apply to this clause (vi)(B);
(vii) additional Restricted Debt Payments; provided that the Total Leverage Ratio, calculated on a Pro Forma Basis, would not exceed 4.75:1.00; and
(viii) Restricted Debt Payments made under Section 6.04(a)(xv)(A), for with respect to any taxable period for which the Parent Borrower is treated as a partnership for U.S. federal and/or applicable state or local income tax purposes, the Parent Borrower may make Restricted Payments to its equity owners at the times and Indebtedness incurred in the amounconnection with any NMTC Transaction.
Appears in 1 contract
Sources: Term Loan Credit Agreement (PQ Group Holdings Inc.)
Restricted Payments; Certain Payments of Indebtedness. (a) The Parent Borrower shall not pay or make, directly or indirectly, any Restricted Payment, except that:
(i) the Parent Borrower may make Restricted Payments to the extent necessary to permit any Parent Company:
(A) to pay general operating and compliance administrative costs and expenses (including corporate overhead, legal or similar expenses and customary wages, salary, bonus and other benefits payable to directors, officers, employees, members of management, managers consultants and/or consultants independent contractors of any Parent Company), franchise fees, franchise Taxes and similar fees, Taxes and expenses required to maintain the organizational existence of such Parent Company, in each case, which are reasonable and customary and incurred in the ordinary course of business, plus any reasonable and customary indemnification claims made by current or former directors, officers, members of management, managers, employees or consultants of any Parent Company, in each case, to the extent attributable to the ownership or operations of any Parent Company Company, plus any costs or expenses associated with complying with the requirements or regulations in connection with becoming or continuing to be a public company (including costs and expenses incurred in connection with compliance with ▇▇▇▇▇▇▇▇-▇▇▇▇▇) (but excluding, for the avoidance of doubt, the portion of any such amount, if any, that is attributable to the ownership or operations operation of any subsidiary of any Parent Company other than Holdings, the Parent Borrower and/or its subsidiaries), the Parent Borrower and/or its subsidiaries;
(B) to pay franchisethe extent applicable, excise and similar Taxes, and other fees, Taxes and expenses, required to maintain the organizational existence of such Parent Companymake Tax Distributions;
(C) to pay customary salary, bonus, long-term incentive, severance and other benefits (including payment to certain service providers of the Parent Borrower or its Subsidiaries pursuant to any equity plan (whether in the form of options, cash settled options or otherwise)) payable to Permitted Payees, as well as applicable employment, social security or similar taxes in connection therewith, to the extent such salary, bonuses, severance and other benefits are attributable and reasonably allocated to the operations of the Parent Borrower and/or its subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose;
(D) to pay audit and other accounting and reporting expenses of at such Parent Company to the extent attributable relating to the ownership or operations of any Parent Company (but excluding, for the avoidance of doubt, the portion of any such expenses, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than Holdings, the Parent Borrower and/or its subsidiaries), Holdings, the Parent Borrower and and/or its subsidiaries;
(ED) for the payment of insurance premiums to the extent attributable relating to the ownership or operations of any Parent Company (but excluding, for the avoidance of doubt, the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than Holdings, the Parent Borrower and/or its subsidiaries), Holdings, the Parent Borrower and and/or its subsidiaries;
(FE) to pay (x) fees and expenses related to any debt and/or or equity offerings (including refinancings)offerings, investments and/or or acquisitions permitted or not restricted by this Agreement (whether or not consummated, and including advisory, refinancing, subsequent transaction and exit fees of any Parent Company of the Parent Borrower) and expenses and indemnities of any trustee, agent, arranger, underwriter or similar role and (y) Public Company Costs; and);
(GF) to finance any Investment permitted under Section 6.06 as if such Parent Company were subject to Section Section 6.06 (provided that (x) any such Restricted Payment Payments under this clause (a)(i)(G(a)(i)(F) 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 (y) the relevant such Parent Company shall, promptly following the closing 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 therewiththereof, cause (I) all such property acquired to be contributed to the Parent Borrower or one or more of its Restricted Subsidiaries Subsidiaries, or (II) the merger, consolidation or amalgamation of the Person formed or acquired into the Parent Borrower or one or more of its Restricted Subsidiaries, in order to consummate such Investment in compliance a manner that causes such Investment to comply with the applicable requirements of Section Section 6.06 as if undertaken as a direct Investment by the Parent Borrower or such Subsidiary (it being agreed that such contribution or merger, consolidation or amalgamation shall not increase the relevant Available Amount or the Available Excluded Contribution Amount except to the extent in excess of such Restricted SubsidiaryPayment made in reliance on this clause (a)(i)(F)));
(G) to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, employees or consultants (or any Immediate Family Member thereof) of any Parent Company plus any reasonable and customary indemnification claims made by current or former directors, officers, members of management, managers, employees or consultants of any Parent Company, to the extent such salary, bonuses, severance and other benefits or claims in respect of any of the foregoing are directly attributable and reasonably allocated to the ownership or operations of any Parent Company (but excluding, for the avoidance of doubt, the portion of any amount, if any, that is attributable to the ownership or operation of any subsidiary of any Parent Company other than Holdings, the Borrower and/or its subsidiaries), Holdings, the Borrower and/or its subsidiaries; and
(H) without duplication of any amounts permitted under clause (a)(i)(B) of this Section 6.04, to pay any United States federal, state or local income tax liabilities of the partners in any Parent Company that are attributable to the receipt by such Parent Company of any Restricted Payment made pursuant to clause (ii) (as well as any amounts with respect to the funding of such tax liabilities) assuming such partners are subject to tax at an effective rate equal to the higher of the combined marginal effective rate of U.S. federal, state and local income tax applicable to a corporation doing business or an individual resident in New York, New York, taking account of any difference in rates applicable to ordinary income, capital gains and “qualified dividends” as such term is defined in Code Section 1(h), any available dividends-received deductions and any allowable deductions in respect of such state and local taxes in computing liability for U.S. federal income taxes; in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose;
(ii) the Parent Borrower may pay (or make Restricted Payments to allow any Parent Company to pay) for the repurchase, redemption, retirement or other acquisition or retirement for value of Capital Stock of any Parent Company or any subsidiary of the Borrower held by any Permitted Payeefuture, present or former employee, director, member of management, officer, manager or consultant (or any Immediate Family Member thereof) of any Parent Company, the Borrower or any subsidiary of the Borrower:
(A) in accordance with the terms of promissory notes issued pursuant to Section 6.01(oSection 6.01(n), so long as the aggregate amount of all Cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments made pursuant to sub-clause (D(D) of this clause (ii) below(ii), (1) does not exceed the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period 10,000,000 in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to the next two subsequent Fiscal Years (until so applied)) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under clause (D) below; plusYears;
(B) with the proceeds of any sale or issuance of, or of any capital contribution in respect of, the Capital Stock of the Parent Borrower or any Parent Company (to the extent such proceeds that are contributed to the Parent Borrower or any Restricted Subsidiary in respect of Qualified Capital Stock issued by the Parent Borrower or such Restricted Subsidiary) (other than amounts constituting a Cure Amount or an Available Excluded Contribution Amount); plusNot Otherwise Applied;
(C) with the net proceeds of any key-man life insurance policiespolicies received during such Fiscal Year; plusor
(D) with Cash and Cash Equivalents in an amount not to exceed, together with the aggregate amount of all cash Cash payments made pursuant to sub-clause (A) of this clause (ii) in respect of promissory notes issued pursuant to Section 6.01(oSection 6.01(n), (1) the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period 10,000,000 in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to the next two subsequent Fiscal Years (until so applied) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under the immediately preceding clause (1); plus
(E) with the amount of any Cash bonuses otherwise payable to any Permitted Payee that are foregone in exchange for the receipt of Capital Stock of the Parent Borrower or any Parent Company pursuant to any compensation arrangement, including any deferred compensation planYears;
(iii) the Parent Borrower may make additional Restricted Payments in an amount not to exceed (A) the portion, if any, of the Available Amount on such date that the Parent Borrower elects to apply to this clause (iii)(A(iii)(A) plus and (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Parent Borrower elects to apply to this clause (iii)(B(iii)(B) (plus, without duplication of amounts 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 with Available Excluded Contribution Amounts up to the amount of such Available Excluded Contribution Amount, less any application thereof under Sections 6.04(b)(vi) or 6.06(r))and that is Not Otherwise Applied;
(iv) the Parent Borrower may make Restricted Payments (i) to any Parent Company to enable such Parent Company to (A) make Cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of such Parent Company, dividends, share splits, reverse share splits (Company or any combination thereof) and, mergers, consolidations, amalgamations or other business combinations, and acquisitions and other Investments permitted hereunder and/or (B) honor any conversion request by a holder of Convertible Indebtedness by payment of cash and/or delivery of Capital Stock, make any cash payments in lieu of fractional shares in connection with any conversion of Convertible Indebtedness and otherwise make payments on Convertible Indebtedness in accordance with its terms (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments upon redemption thereof), or, in the case of each of sub-clauses (A) and (B) above, make Restricted Payments to any Parent Company to enable such Parent Company to make the payments and/or deliveries described in such sub-clauses (A) and (B), and (ii) consisting of (A) payments made or expected to be made in respect of withholding or similar Taxes payable by any Permitted Payee future, present or former officers, directors, employees, members of management, managers or consultants of the Borrower, any subsidiary of the Borrower or Parent Company or any of their respective Immediate Family Members and/or (B) repurchases of Capital Stock in consideration of the payments described in sub clause (A) above(A), including demand repurchases in connection with the exercise of stock options and the issuance of restricted stock units or similar stock based awardsoptions;
(v) the Parent Borrower may repurchase, redeem, acquire or retire Capital Stock upon repurchase (or make provisions for withholdings in connection with), or make Restricted Payments to any Parent Company to enable it to repurchase, redeem, acquire or retire ) Capital Stock upon (or make provisions for withholdings in connection with), the exercise of warrantsoptions, options warrants or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represents all or a portion of the exercise price ofof such options, or tax withholdings with respect to, such warrants, options warrants or other securities convertible into or exchangeable for Capital Stock as part of a “cashless” exercise;
(vi) the Parent Borrower may make Restricted Payments the proceeds of which are applied (iA) on the Closing Date, solely to effect the consummation of the Transactions and on or about the Amendment No. 1 Effective Date, solely to effect the consummation of the Amendment No. 1 Transactions, (iiB) on and after the Closing Date, to satisfy (or to enable any Parent Company to satisfy) any payment obligations owing, or as otherwise required, owing under the Acquisition Agreement (including as in effect on the date hereof) and the payment of working capital and/or purchase price adjustments) and to pay any Transaction Costs, in each case, with respect to the Transactions, (iii) to satisfy obligations to direct or indirect holders of Capital Stock of the Parent Borrower (immediately prior to giving effect to the Transactions) in connection with, or as a result of, any working capital and/or purchase price adjustments, in each case, with respect to the Transactions and (iv) to satisfy any settlement of claims or actions in connection with the Transactions or to satisfy indemnity or other similar obligations in connection with the Transactions;
(vii) so long as no Event of Default shall have occurred and be continuing at the Parent time of the declaration thereof, following the consummation of a Qualifying IPO, the Borrower may (or may make Restricted Payments to any Parent Company to enable it to) make Restricted Payments with respect to any Capital Stock in an amount not of up to exceed (A) the greater of (x) an amount equal to 7.006.0% per annum of the net Cash proceeds received by or contributed to the Parent Borrower in connection with the merger of Isos Acquisition Corporation and Bowlero Corp. on December 15, 2021 and the other transactions consummated in connection therewith and (y) an amount equal to 7.00% per annum of the Market Capitalization of the Parent Borrower (or its direct or indirect Parent Company, as applicable) and its subsidiaries minus (B) from any utilization of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A)such Qualifying IPO;
(viii) the Parent Borrower may make Restricted Payments to (i) redeem, repurchase, defease, discharge, retire or otherwise acquire any (A) Capital Stock (“Treasury Capital Stock”) of the Parent Borrower and/or or any Restricted Subsidiary or (B) Capital Stock of any Parent Company, in the case of each of subclauses (A(A) and (B(B), in exchange for, or out of the proceeds of the substantially concurrent sale (other than to the Parent Borrower and/or any Restricted or a Subsidiary) of, Qualified Capital Stock of the Parent Borrower or any Parent Company to the extent any such proceeds are contributed to the capital of the Parent Borrower and/or or any Restricted Subsidiary in respect of Qualified Capital Stock (“Refunding Capital Stock”) and (ii) declare and pay dividends on any the Treasury Capital Stock out of the proceeds of the substantially concurrent sale or issuance (other than to the Parent Borrower or a Restricted Subsidiary) of any the Refunding Capital Stock;
(ix) to the extent constituting a Restricted Payment, the Parent Borrower may consummate any transaction permitted by Section 5.19 (other than Section 5.19(d)), Section Section 6.06 (other than Sections 6.06(j6.06(j) and (t(t)) and Section ), Section 6.07 (other than Section Section 6.07(g)) and Section 6.09 (other than Sections 6.09(d) and (j));
(x) the Parent Borrower may make additional Restricted Payments in an aggregate amount not to exceed the portion, if any, of the Floating Basket Amount on the relevant date of determination that the Borrower elects to apply pursuant to this clause (x);
(xi) the Borrower may make additional Restricted Payments so long as at the time of the declaration thereof, (A) no Default or Event of Default exists or would result therefrom and (B) the greater of $85,000,000 and 25% of Consolidated Adjusted EBITDA Total Leverage Ratio would not exceed 3.00:1.00 calculated on a Pro Forma Basis as of the last day of the most recently ended Test Period minus for which financial statements have been delivered pursuant to Section 5.01(a) or (B) any utilization of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (Ab);, as applicable; and
(xixii) the Parent Borrower may pay any dividend or other distribution or consummate any redemption within 60 days after the date of 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 dividend or redemption notice would have complied with the provisions hereof.
(b) The Borrower shall not, nor shall it permit any Subsidiary to, make any payment in Cash, securities or other property on or in respect of this Section 6.04(aprincipal of or interest on any Junior Indebtedness (such Indebtedness, the “Restricted Debt”), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Restricted Debt (collectively, “Restricted Debt Payments”), except:
(i) the purchase, defeasance, redemption, repurchase, repayment or other acquisition or retirement of any Restricted Debt made by exchange for, or out of the proceeds of the substantially concurrent incurrence of, Restricted Debt permitted by Section 6.01;
(ii) payments as part of an “applicable high yield discount obligation” catch-up payment;
(iii) payments of regularly scheduled interest and payments of fees, expenses and indemnification obligations as and when due in respect of any Restricted Debt (other than payments with respect to Subordinated Indebtedness prohibited by the subordination provisions thereof);
(xiiiv) payments with respect to intercompany Indebtedness between the Parent Borrower may make any Restricted Payment constituting and its Subsidiaries permitted under Section 6.01, subject to the distribution or payment of Receivables Feessubordination provisions applicable thereto;
(xiiiA) Restricted Debt Payments in exchange for, or with proceeds of any issuance of Capital Stock of any Parent Company or Qualified Capital Stock of the Borrower or any Subsidiary Guarantor (other than issuances to the Borrower or a Subsidiary) and/or any capital contribution in respect of Qualified Capital Stock of the Borrower, in each case, that are Not Otherwise Applied in reliance on the Available Amount, (B) Restricted Debt Payments as a result of the conversion of all or any portion of Restricted Debt into Qualified Capital Stock of any Parent Company, the Borrower or any Subsidiary Guarantor, in each case, that are Not Otherwise Applied in reliance on the Available Amount 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 exceed (A) the Parent portion, if any, of the Available Amount on such date that the Borrower may make elects to apply to this clause (vi)(A), and (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Borrower elects to apply to this clause (vi)(B) and that is Not Otherwise Applied;
(vii) (A) additional Restricted Debt Payments in an aggregate amount not to exceed the portion, if any, of the Floating Basket Amount on the relevant date of determination that the Borrower elects to apply pursuant to this clause (vii)(A), (B) additional Restricted Debt Payments in an aggregate amount not to exceed the greater of $35,000,000 and 4.00% of Consolidated Total Assets as of the last day of the most recently ended Test Period for which financial statements have been delivered pursuant to Section 5.01(a) or (b), as applicable and (C) so long as, as measured Event of Default exists at the time of delivery of notice with respect thereof or would result therefrom, additional Restricted Debt Payments; provided for that in Section 1.04(ethe case of Restricted Debt Payments made pursuant to this clause (C), (i) at the time of delivery of notice with respect thereto, the Total Leverage Ratio would not exceed 4.00:1.00, 3.25:1.00 calculated on a Pro Forma Basis and as of the last day of the most recently ended Test Period for which financial statements have been delivered pursuant to Section 5.01(a) or (ii) there shall exist no Event of Default hereunder or shall result therefrom;b), as applicable, prior to such time; and
(xivviii) the Parent Borrower may mandatory prepayments of any Second Lien Facility made with Declined Proceeds (it being understood that any Declined Proceeds applied to make additional Restricted Debt Payments in an amount reliance on this Section 6.04(b)(viii) shall not to exceed increase the amount of proceeds received by the Parent Borrower and/or any Restricted Subsidiary available under the Representation and Warranty Insurance Policy during the term of this Agreement;
clause (xva)(viii) (A) for any taxable period for which the Parent Borrower and/or any of its Subsidiaries are members of a consolidated, combined or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which a direct or indirect parent of the Parent Borrower is the common parent (a definition of “Tax Group”), or for which the Parent Borrower is a disregarded entity for U.S. federal income tax purposes wholly-owned by a corporate parent (a “Corporate Parent”), the Parent Borrower and each of its Subsidiaries may make Restricted Payments the proceeds of which shall be used by such common parent to pay the portion of any consolidated, combined or similar U.S. federal, state or local income Taxes of such Tax Group, or by the Corporate Parent to pay the portion of the U.S. federal, state or local income Taxes of such Corporate Parent, or any franchise taxes imposed in lieu thereof, for such taxable period that are attributable Available Amount” to the income of the Parent Borrower and/or its Subsidiaries, provided that such amount shall not be greater than the amount of such U.S. federal, state or local income taxes that would be paid (for such taxable period) by the Parent Borrower and its Subsidiaries if the Parent Borrower and/or such Subsidiaries had been a stand-alone corporate taxpayer (or stand-alone group of corporate taxpayers filing on a consolidated, combined or similar basis) for all taxable years ending after the Closing Date (taking into account any net operating loss carryforwards attributable to the Parent Borrower and its Subsidiaries, as the case may be) and (B) without duplication of Restricted Payments made under Section 6.04(a)(xv)(Aextent so applied), for any taxable period for which the Parent Borrower is treated as a partnership for U.S. federal and/or applicable state or local income tax purposes, the Parent Borrower may make Restricted Payments to its equity owners at the times and in the amoun.
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) The Parent Lead Borrower shall not pay or make, directly or indirectly, any Restricted Payment, except that:
(i) the Parent Lead Borrower may make Restricted Payments to the extent necessary to permit any Parent Company:
(A) to pay general operating and compliance administrative costs and expenses (including corporate overhead, legal or similar expenses and customary salary, fees, bonus and other benefits payable to directors, officers, employees, members of management, managers and/or consultants of any Parent Company)) and franchise fees and Taxes and similar fees, Taxes and expenses required to enable such Parent Company to maintain its organizational existence or qualification to do business, in each case, which are reasonable and customary and incurred in the ordinary course of business, plus any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of any Parent Company, in each case, to the extent attributable to the ownership or operations of any Parent Company and its subsidiaries (but excluding, for the avoidance of doubt, excluding the portion of any such amount, if any, amount that is attributable to the ownership or operations of any subsidiary of any Parent Company other than the Borrowers and their subsidiaries);
(B) to discharge the consolidated, combined, unitary or similar Tax liabilities of such Parent Company and its subsidiaries when and as due, to the extent such liabilities are attributable to the operations of any Parent Company (but excluding, for the avoidance of doubt, the portion of any such Tax liabilities, if any, that is attributable to the operations of any subsidiary of any Parent Company other than the Lead Borrower and/or its subsidiaries), the Parent Lead Borrower and/or and its subsidiaries;
; provided that the amount paid by the Lead Borrower pursuant to this paragraph (B) to pay franchise, excise shall not exceed the amount of Tax liabilities that would be due if the Lead Borrower and each Restricted Subsidiary were separate corporations filing income and similar TaxesTax returns on a consolidated, and other feescombined, Taxes and expenses, required to maintain unitary or similar basis with the organizational existence Lead Borrower as the common parent of such Parent Company;
affiliated group (Ccalculated at the highest combined applicable federal, state, local and foreign Tax rate); provided further that Restricted Payments under this Section 6.04(a)(i)(B) to pay customary salary, bonus, long-term incentive, severance and other benefits (including payment to certain service providers of the Parent Borrower or its Subsidiaries pursuant that are attributable to any equity plan (whether in the form of options, cash settled options Unrestricted Subsidiary or otherwise)) payable to Permitted Payees, as well as applicable employment, social security or similar taxes in connection therewith, any joint venture shall be permitted only to the extent that either (x) such salaryUnrestricted Subsidiary has made one or more Cash distributions, bonuses, severance and other benefits are attributable and reasonably allocated advances or loans to the operations Lead Borrower or any of its Restricted Subsidiaries for such purpose in an amount up to the Parent Borrower and/or its subsidiariesamount of such Unrestricted Subsidiary’s or joint venture’s, in each caseas applicable, so long as proportionate share of such Parent Company applies Tax liabilities or (y) the amount of any such Restricted Payment for made by the Lead Borrower on behalf of such purposeUnrestricted Subsidiary or joint venture is treated as an Investment subject to Section 6.06 hereof;
(DC) to pay audit and other accounting and reporting expenses of such Parent Company to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such expenses, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower Borrowers and/or its their subsidiaries), the Parent Borrower Borrowers and its their subsidiaries;
(ED) for the payment of insurance premiums and deductibles to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower Borrowers and/or its their subsidiaries), the Parent Borrower Borrowers and its their subsidiaries;
(FE) to pay (x) fees and expenses related to any debt and/or or equity offerings (including refinancings)offerings, investments and/or or acquisitions permitted or not restricted by this Agreement (whether or not consummated, ) relating to the Borrowers and including advisory, refinancing, subsequent transaction and exit fees of any Parent Company of the Parent Borrower) and expenses and indemnities of any trustee, agent, arranger, underwriter or similar role their Restricted Subsidiaries and (y) Public Company Costs; and;
(GF) to finance any Investment permitted under Section 6.06 as if such Parent Company were subject to Section Section 6.06 (provided that (x) any Restricted Payment under this clause (a)(i)(G(a)(i)(F) 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 (y) the relevant Parent Company shall, promptly following the closing 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 therewiththereof, cause (I) all property acquired to be contributed to the Parent Borrower Borrowers or one or more of its their Restricted Subsidiaries Subsidiaries, or (II) the merger, consolidation or amalgamation of the Person formed or acquired into the Parent Borrower Borrowers or one or more of its their Restricted Subsidiaries, in order to consummate such Investment in compliance with the applicable requirements of Section Section 6.06 as if undertaken as a direct Investment by the Parent Borrower Borrowers or the relevant Restricted Subsidiary); and
(G) to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, employees or consultants of any Parent Company (or any Immediate Family Member of any of the foregoing) to the extent such salary, bonuses and other benefits are attributable and reasonably allocated to the operations of the Borrowers and/or their subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose; provided that with respect to Restricted Payments under clauses (A), (B), (C), (D) and (G) above, such Restricted Payments that are attributable to any Unrestricted Subsidiary shall be permitted only to the extent that either (x) such Unrestricted Subsidiary has made one or more Cash distributions, advances or loans to the Borrowers or any of their Restricted Subsidiaries for such purpose in an amount up to the amount of such Unrestricted Subsidiary’s proportionate share of such Restricted Payment or (y) the amount of any such Restricted Payment made by the applicable Borrower on behalf of such Unrestricted Subsidiary is treated as an Investment subject to Section 6.06 hereof;
(ii) the Parent Lead Borrower may pay (or make Restricted Payments to allow any Parent Company to pay) for the repurchase, redemption, retirement or other acquisition or retirement for value of Capital Stock of any Parent Company Company, any subsidiary or any subsidiary of their respective Affiliates held by any Permitted Payeefuture, present or former employee, director, member of management, officer, manager, advisor or consultant (or any Affiliate or Immediate Family Member thereof) of any Parent Company, the Borrowers , any subsidiary or any of their respective Affiliates:
(A) in accordance with the terms of promissory notes issued pursuant to Section Section 6.01(o), so long as the aggregate amount of all Cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments made pursuant to sub-clause (D(D) of this clause (ii(ii) below, (1) does not exceed the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period 5,000,000 in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to the next subsequent Fiscal Years Year (until so appliedprovided that no more than $10 million may be carried forward in any Fiscal Year)) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under clause (D) below; plus;
(B) with the proceeds of any sale or issuance of, or of any capital contribution in respect of, the Capital Stock of the Parent Borrower Borrowers or any Parent Company (to the extent such proceeds are contributed to the Parent Borrower or any Restricted Subsidiary in respect of Qualified Capital Stock issued by to the Parent Borrower Borrowers or such any Restricted Subsidiary) (other than amounts constituting a Cure Amount or an Available Excluded Contribution Amount); plus;
(C) with the net proceeds of any key-man life insurance policies; plusor
(D) with Cash and Cash Equivalents in an amount not to exceed, together with the aggregate amount of all cash Cash payments made pursuant to sub-clause (A(A) of this clause (ii(ii) in respect of promissory notes issued pursuant to Section Section 6.01(o), (1) the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period 5,000,000 in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to the next subsequent Fiscal Years Year (until so applied) minus (2) provided that no more than $10 million may be carried forward in any utilization of the Available RP Capacity Amount in reliance on unused capacity under the immediately preceding clause (1Fiscal Year); plus
(E) with the amount of any Cash bonuses otherwise payable to any Permitted Payee that are foregone in exchange for the receipt of Capital Stock of the Parent Borrower or any Parent Company pursuant to any compensation arrangement, including any deferred compensation plan;
(iii) the Parent Lead Borrower may make additional Restricted Payments in an amount not to exceed (A) the portion, if any, of the Available Amount on such date that the Parent Lead Borrower elects to apply to this clause (iii)(A(iii)(A); provided that (A) no Default or Event of Default has occurred and is continuing or would result therefrom and (B) the Fixed Charge Coverage Ratio, calculated on a Pro Forma Basis, would not be less than 2.00:1.00 as of the last day of the Test Period most recently ended prior to such Restricted Payment for which the financial statements required by Section 5.01(a) or 5.01(b), as the case may be, have been delivered plus (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Parent Lead Borrower elects to apply to this clause (iii)(B) (plus, without duplication of amounts 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 with Available Excluded Contribution Amounts up to the amount of such Available Excluded Contribution Amount, less any application thereof under Sections 6.04(b)(vi) or 6.06(r)iii)(B);
(iv) the Parent Lead Borrower may make Restricted Payments (i) to any Parent Company to enable such Parent Company to (A) make Cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of such Parent Company, dividends, share splits, reverse share splits (or any combination thereof) and, mergers, consolidations, amalgamations or other business combinations, and acquisitions and other Investments permitted hereunder and/or (B) honor any conversion request by a holder of Convertible Indebtedness by payment of cash and/or delivery of Capital Stock, make any cash payments in lieu of fractional shares in connection with any conversion of Convertible Indebtedness and otherwise make payments on Convertible Indebtedness in accordance with its terms (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments upon redemption thereof), or, in the case of each of sub-clauses (A) and (B) above, make Restricted Payments to any Parent Company to enable such Parent Company to make the payments and/or deliveries described in such sub-clauses (A) and (B), and (ii) consisting of (A) payments made or expected to be made in respect of withholding or similar Taxes payable by any Permitted Payee future, present or former officers, directors, employees, members of management, managers or consultants of the Borrowers, any Restricted Subsidiary or any Parent Company or any of their respective Immediate Family Members and/or (B) repurchases of Capital Stock in consideration of the payments described in sub sub-clause (A(A) above, including demand repurchases in connection with the exercise of stock options and the issuance of restricted stock units or similar stock based awardsoptions;
(v) the Parent Lead Borrower may repurchase, redeem, acquire or retire Capital Stock upon repurchase (or make provisions for withholdings in connection with), or make Restricted Payments to any Parent Company to enable it to repurchase, redeem, acquire or retire ) Capital Stock upon (or make provisions for withholdings in connection with), the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represents all or a portion of the exercise price of, or tax withholdings with respect to, of such warrants, options or other securities convertible into or exchangeable for Capital Stock as part of a “cashless” exercise;
(vi) the Parent Lead Borrower may make Restricted Payments Payments, the proceeds of which are applied (i) on the Closing Date, solely to effect the consummation of the Transactions and on or about the Amendment No. 1 Effective Date, solely to effect the consummation of the Amendment No. 1 Transactions, (ii) on and after the Closing Date, to satisfy any payment obligations owing, or as otherwise required, under the Acquisition Agreement (including payment of working capital and/or purchase price adjustments) and to pay Transaction Costs, in each case, with respect to the Transactions, (iii) to satisfy obligations to direct or indirect holders of Capital Stock of the Parent Borrower (immediately prior to giving effect to the Transactions) in connection with, or as a result of, any working capital and/or purchase price adjustments, in each case, with respect to the Transactions and (iv) to satisfy any settlement of claims or actions in connection with the Transactions or to satisfy indemnity or other similar obligations in connection with the Transactions;
(vii) the Parent Lead Borrower may (or may make Restricted Payments to any Parent Company to enable it to) Holdings (and Holdings may in turn make such Restricted Payments with respect to any Capital Stock Super Holdco) from time to time in an amount not sufficient to exceed enable Super Holdco to fund each scheduled payment of the Regular Cash Dividend; provided that (A) the greater no Default or Event of (x) an amount equal to 7.00% per annum of the net Cash proceeds received by Default exists or contributed to the Parent Borrower in connection with the merger of Isos Acquisition Corporation would result therefrom and Bowlero Corp. on December 15, 2021 and the other transactions consummated in connection therewith and (y) an amount equal to 7.00% per annum of the Market Capitalization of the Parent Borrower (or its direct or indirect Parent Company, as applicable) and its subsidiaries minus (B) any utilization the Fixed Charge Coverage Ratio, calculated on a Pro Forma Basis, would not be less than 2.00:1.00 as of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (Alast day of the Test Period most recently ended prior to such Restricted Payment for which the financial statements required by Section 5.01(a) or 5.01(b), as the case may be, have been delivered;
(viii) the Parent Lead Borrower may make Restricted Payments to (i) redeem, repurchase, defease, discharge, retire or otherwise acquire any (A) Capital Stock (“Treasury Capital Stock”) of the Parent Borrower Borrowers and/or any Restricted Subsidiary or Subsidiary, (B) Capital Stock of any Parent Company, in the case of each of subclauses (A(A) and (B(B), in exchange for, or out of the proceeds of the substantially concurrent sale (other than to the Parent Lead Borrower and/or any Restricted Subsidiary) of, Qualified Capital Stock of the Parent Borrower Borrowers or any Parent Company to the extent any such proceeds are contributed to the capital of the Parent Borrower Borrowers and/or any Restricted Subsidiary in respect of Qualified Capital Stock (“Refunding Capital Stock”), and/or (C) Capital Stock of any Parent Company owned by any present or former employees, directors, members of management, officers, managers or consultants or independent contractors (or their respective Immediate Family Members) of any Parent Company in an amount equal to any tax liability paid on behalf of such employee, director, member of management, officer, manager or consultant or independent contractor (or their respective Immediate Family Members) arising from the vesting of such 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 the Parent applicable Lead Borrower or a Restricted Subsidiary) of any Refunding Capital Stock;
(ix) to the extent constituting a Restricted Payment, the Parent Lead Borrower may consummate any transaction permitted by Section 5.19 (other than Section 5.19(d)), Section Section 6.06 (other than Sections 6.06(j6.06(j) and (t(t)) and Section ), Section 6.07 (other than Section Section 6.07(g)) and Section 6.09 (other than Section 6.09(d));
(x) the Parent Lead Borrower may make additional Restricted Payments in an aggregate amount not to exceed (A) the greater of $85,000,000 100,000,000 and 2511% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period minus (BA) the amount of Restricted Debt Payments made by the Borrowers or any utilization of the Available RP Capacity Amount Restricted Subsidiary in reliance on unused capacity under immediately preceding clause (ASection 6.04(b)(iv), minus (B) the outstanding amount of Investments made by a Borrower or any Restricted Subsidiary in reliance on Section 6.06(q)(ii);
(xi) the Parent Lead Borrower may pay any dividend or other distribution or consummate any redemption within 60 days after the date of 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 dividend or redemption notice would have complied with the provisions of this Section 6.04(a)hereof;
(xii) the Parent Lead Borrower may make any Restricted Payment constituting purchase, redeem or otherwise acquire its common Capital Stock with the distribution or payment proceeds received from the substantially concurrent issuance of Receivables Fees;new common Capital Stock of the Borrowers; and
(xiii) the Parent Lead Borrower may make additional Restricted Payments so long as, as measured at the time provided for in Section 1.04(e), (iA) no Default or Event of Default exists or would result therefrom and (B) the Total Leverage Ratio would not exceed 4.00:1.003.00:1.00. calculated on a Pro Forma Basis as of the last day of the most recently ended Test Period.
(b) The Borrowers shall not, nor shall they permit any Restricted Subsidiary to, make any payment (whether in Cash, securities or other property) on or in respect of principal of or interest on (x) any Indebtedness permitted under Section 6.01(c), (y) any Junior Lien Indebtedness or (z) any Junior Indebtedness (such Indebtedness under clauses (x), (y) and (z), the “Restricted Debt”), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Restricted Debt prior to its scheduled maturity (collectively, “Restricted Debt Payments”), except:
(i) any 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 an “applicable high yield discount obligation” catch-up payment;
(iii) payments of regularly scheduled interest as and when due in respect of any Restricted Debt, except for any payments with respect to any Subordinated Indebtedness that are prohibited by the subordination provisions thereof;
(iv) so long as, at the time of delivery of irrevocable notice with respect thereto, no Event of Default exists or would result therefrom, additional Restricted Debt Payments in an aggregate amount not to exceed the greater of $100,000,000 and 11% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period, minus (A) the outstanding amount of Investments made in reliance on Section 6.06(q)(ii), minus (B) the amount of Restricted Payments made in reliance on Section 6.04(a)(x);
(A) Restricted Debt Payments in exchange for, or with proceeds of any issuance of, Qualified Capital Stock of the Borrowers and/or any Restricted Subsidiary and/or any capital contribution in respect of Qualified Capital Stock of the Borrowers or any Restricted Subsidiary, (B) Restricted Debt Payments as a result of the conversion of all or any portion of any Restricted Debt into Qualified Capital Stock of the Borrowers 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 exceed (A) the portion, if any, of the Available Amount on such date that the Borrowers elect to apply to this clause (vi)(A); provided, that (A) no Default or Event of Default has occurred and is continuing or would result therefrom and (B) the Fixed Charge Coverage Ratio, calculated on a Pro Forma Basis and (ii) there shall exist no Event of Default hereunder or shall result therefrom;
(xiv) the Parent Borrower may make additional Restricted Payments in an amount Basis, would not to exceed the amount of proceeds received by the Parent Borrower and/or any Restricted Subsidiary under the Representation and Warranty Insurance Policy during the term of this Agreement;
(xv) (A) for any taxable period for which the Parent Borrower and/or any of its Subsidiaries are members of a consolidated, combined or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which a direct or indirect parent be less than 2.00:1.00 as of the Parent Borrower is the common parent (a “Tax Group”), or for which the Parent Borrower is a disregarded entity for U.S. federal income tax purposes wholly-owned by a corporate parent (a “Corporate Parent”), the Parent Borrower and each of its Subsidiaries may make Restricted Payments the proceeds of which shall be used by such common parent to pay the portion of any consolidated, combined or similar U.S. federal, state or local income Taxes of such Tax Group, or by the Corporate Parent to pay the portion of the U.S. federal, state or local income Taxes of such Corporate Parent, or any franchise taxes imposed in lieu thereof, for such taxable period that are attributable to the income of the Parent Borrower and/or its Subsidiaries, provided that such amount shall not be greater than the amount of such U.S. federal, state or local income taxes that would be paid (for such taxable period) by the Parent Borrower and its Subsidiaries if the Parent Borrower and/or such Subsidiaries had been a stand-alone corporate taxpayer (or stand-alone group of corporate taxpayers filing on a consolidated, combined or similar basis) for all taxable years ending after the Closing Date (taking into account any net operating loss carryforwards attributable to the Parent Borrower and its Subsidiaries, as the case may be) and (B) without duplication of Restricted Payments made under Section 6.04(a)(xv)(A), for any taxable period for which the Parent Borrower is treated as a partnership for U.S. federal and/or applicable state or local income tax purposes, the Parent Borrower may make Restricted Payments to its equity owners at the times and in the amounlast d
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) The Parent Borrower Agent shall not pay or make, directly or indirectly, any Restricted Payment, except that:
(i) the Parent Borrower Agent may make Restricted Payments to the extent necessary to permit any Parent Company:;
(A) to pay (x) general operating and compliance administrative costs and expenses (including corporate overhead, legal or similar expenses) and franchise fees and taxes and similar fees, taxes and expenses and customary salary, bonus and other benefits payable required to directors, officers, employees, members maintain the organizational existence of management, managers and/or consultants of any such Parent Company), in each case, which are reasonable and customary and incurred in the ordinary course of business, plus any reasonable and customary indemnification claims made by directors, officers, members of management, managers, management or employees or consultants of any Parent Company, in each case, to the extent attributable to the ownership or operations of any Parent Company (but excluding, for the avoidance of doubtHoldings, the portion Borrowers and their Subsidiaries and (y) without duplication of preceding clause (x), any Public Company Costs;
(B) for any taxable period in which the Borrower Agent and/or any of its Subsidiaries is a member of a consolidated, combined or similar income tax group of which a direct or indirect parent of the Borrowers is the common parent (a “Tax Group”), to discharge the consolidated tax liabilities of such amountTax Group when and as due, if any, that is to the extent such liabilities are attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or Agent and its subsidiaries)Subsidiaries; provided, that the Parent amount paid by the Borrower and/or its subsidiaries;
Agent pursuant to this paragraph (B) to pay franchise, excise shall not exceed the tax liabilities that would be due if the Borrower Agent and each Subsidiary were separate corporations filing income and similar Taxes, and other fees, Taxes and expenses, required to maintain tax returns on a consolidated or combined basis with the organizational existence Borrower Agent as the common parent of such Parent Companyaffiliated group (calculated at the highest combined applicable federal, state, local and foreign tax rate); provided further that the permitted payment pursuant to this paragraph (B) with respect to any taxes of any Unrestricted Subsidiary for any taxable period shall be limited to the amount actually paid with respect to such period by such Unrestricted Subsidiary to the Borrower Agent and its Subsidiaries for the purposes of paying such consolidated, combined or similar taxes;
(C) to pay audit and other accounting and reporting expenses at such Parent Company to the extent relating to the ownership or operations of the Borrowers and their Subsidiaries;
(D) for the payment of insurance premiums to the extent relating to the ownership or operations of the Borrowers and their Subsidiaries;
(E) pay fees and expenses related to debt or equity offerings, investments or acquisitions permitted by this Agreement (whether or not consummated);
(F) to pay the consideration to finance any Investment permitted under Section 6.07 (provided that (x) such Restricted Payments under this clause (a)(i)(F) shall be made substantially concurrently with the closing of such Investment and (y) such Parent Company shall, promptly following the closing thereof, cause all such property acquired to be contributed to the Borrowers or one of their Subsidiaries, or the merger or amalgamation of the Person formed or acquired into the Borrowers or one of their Subsidiaries, in order to consummate such Investment in a manner that causes such Investment to comply with the applicable requirements of Section 6.07 as if undertaken as a direct Investment by such Borrower or such Subsidiary); and
(G) without duplication of clause (A)(y) above, to pay customary salary, bonus, long-term incentive, severance bonus and other benefits (including payment to certain service providers of the Parent Borrower or its Subsidiaries pursuant to any equity plan (whether in the form of options, cash settled options or otherwise)) payable to Permitted Payeesdirectors, as well as applicable employmentofficers, social security members of management or similar taxes in connection therewith, employees of any Parent Company to the extent such salary, bonuses, severance bonuses and other benefits are directly attributable and reasonably allocated to the operations of the Parent Borrower and/or its subsidiariesBorrowers and their Subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose;
(D) to pay audit and other accounting and reporting expenses of such Parent Company to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such expenses, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries;
(E) for the payment of insurance premiums to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries;
(F) to pay (x) fees and expenses related to any debt and/or equity offerings (including refinancings), investments and/or acquisitions permitted or not restricted by this Agreement (whether or not consummated, and including advisory, refinancing, subsequent transaction and exit fees of any Parent Company of the Parent Borrower) and expenses and indemnities of any trustee, agent, arranger, underwriter or similar role and (y) Public Company Costs; and
(G) to finance any Investment permitted under Section 6.06 as if such Parent Company were subject to Section 6.06 (provided that (x) any Restricted Payment under this clause (a)(i)(G) 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 (y) the relevant Parent Company shall, promptly following the closing 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 (I) all property acquired to be contributed to the Parent Borrower or one or more of its Restricted Subsidiaries or (II) the merger, consolidation or amalgamation of the Person formed or acquired into the Parent Borrower or one or more of its Restricted Subsidiaries, in order to consummate such Investment in compliance with the applicable requirements of Section 6.06 as if undertaken as a direct Investment by the Parent Borrower or the relevant Restricted Subsidiary);
(ii) the Parent Borrower Agent may pay (or make Restricted Payments to allow any Parent Company to pay) for the repurchase, redemption, retirement or other acquisition or retirement for value of Capital Stock of any Parent Company or any subsidiary held by any Permitted Payee:future, present or former employee, director, member of management, officer, manager or consultant (or any Affiliate or Immediate Family Member thereof) of any Parent Company, the Borrowers or any Subsidiary;
(A) in accordance with the terms of promissory exchange for notes issued pursuant to Section Section 6.01(o), so long as the aggregate amount of all Cash cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments made (x) pursuant to sub-clause (D(D) of this clause (ii(ii) belowbelow and (y) pursuant to Section 6.05(a)(iv), (1) does not exceed the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period 25,000,000 in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to the next subsequent Fiscal Years (until so applied)) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under clause (D) below; plusYear;
(B) with the proceeds of any sale or issuance of, or of any capital contribution in respect of, the exchange for Capital Stock of the Parent Borrower or any Parent Company (to the extent such proceeds are contributed to the Parent Borrower or any Restricted Subsidiary in respect of Qualified Capital Stock issued by the Parent Borrower or such Restricted Subsidiary) (other than amounts constituting a Cure Amount or an Available Excluded Contribution Amount); plusCompany;
(C) with the in exchange for net proceeds of any key-man life insurance policiespolicies received during such fiscal year; plusor
(D) with in exchange for Cash and Cash Equivalents in an amount not to exceed, together with (x) the aggregate amount of all cash payments made pursuant to sub-clause (A) of this clause (ii) in respect of promissory notes issued pursuant to Section Section 6.01(o) and (y) the aggregate amount of Restricted Payments made pursuant to Section 6.05(a)(iv), (1) the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period 25,000,000 in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to the next subsequent Fiscal Years (until so applied) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under the immediately preceding clause (1); plus
(E) with the amount of any Cash bonuses otherwise payable to any Permitted Payee that are foregone in exchange for the receipt of Capital Stock of the Parent Borrower or any Parent Company pursuant to any compensation arrangement, including any deferred compensation planYear;
(iii) the Parent Borrower Agent may make additional Restricted Payments; provided that at the time they are paid by the Borrower Agent, before and after giving effect to such Restricted Payments in an amount not to exceed (A) the portion, if any, of the Available Amount on such date that the Parent Borrower elects to apply to under this clause (iii)(A) plus (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Parent Borrower elects to apply to this clause (iii)(B) (plus, without duplication of amounts referred to in this clause (Biii), 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 with Available Excluded Contribution Amounts up to the amount of such Available Excluded Contribution Amount, less any application thereof under Sections 6.04(b)(vi) or 6.06(r))Payment Conditions are satisfied;
(iv) the Parent Borrower Agent may make Restricted Payments (i) to any Parent Company to enable such Parent Company to (A) make Cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of such Parent CompanyCompany in an amount not to exceed, dividends, share splits, reverse share splits together with (or any combination thereofx) and, mergers, consolidations, amalgamations or other business combinations, and acquisitions and other Investments permitted hereunder and/or (B) honor any conversion request by a holder the aggregate amount of Convertible Indebtedness by payment of cash and/or delivery of Capital Stock, make any all cash payments in lieu of fractional shares in connection with any conversion of Convertible Indebtedness and otherwise make payments on Convertible Indebtedness in accordance with its terms (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments upon redemption thereof), or, in the case of each of sub-clauses (A) and (B) above, make Restricted Payments to any Parent Company to enable such Parent Company to make the payments and/or deliveries described in such sub-clauses (A) and (B), and (ii) consisting of (A) payments made or expected to be made in respect of withholding or similar Taxes payable by notes issued pursuant to Section 6.01(o) and (y) the aggregate amount of all Restricted Payments made pursuant to Section 6.05(a)(ii)(D), $25,000,000 in any Permitted Payee and/or (B) repurchases of Capital Stock Fiscal Year, which, if not used in consideration of any Fiscal Year, may be carried forward to the payments described in sub clause (A) above, including demand repurchases in connection with the exercise of stock options and the issuance of restricted stock units or similar stock based awardsnext subsequent Fiscal Year;
(v) the Parent Borrower Agent may repurchase, redeem, acquire or retire repurchase Capital Stock upon (or make provisions for withholdings in connection with), or make Restricted Payments to any Parent Company to enable it to repurchase, redeem, acquire or retire Capital Stock upon (or make provisions for withholdings in connection with), the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock warrants if such Capital Stock represents all or a portion of the exercise price of, or tax withholdings with respect to, of such warrants, options or other securities convertible into or exchangeable for Capital Stock warrants as part of a “cashless” exercise;
(vi) the Parent Borrower Agent may make Restricted Payments the proceeds of which are applied (i) on the Closing Date, solely to effect the consummation of the Transactions and on or about the Amendment No. 1 Effective Date, solely to effect the consummation of the Amendment No. 1 Transactions, (ii) on and after the Closing Date, to satisfy any payment obligations owing, or as otherwise required, under the Acquisition Agreement (including payment of working capital and/or purchase price adjustments) and to pay Transaction Costs, in each case, with respect to the Transactions, (iii) to satisfy obligations to direct or indirect holders of Capital Stock of the Parent Borrower (immediately prior to giving effect to the Transactions) in connection with, or as a result of, any working capital and/or purchase price adjustments, in each case, with respect to the Transactions and (iv) to satisfy any settlement of claims or actions in connection with the Transactions or to satisfy indemnity or other similar obligations in connection with the Transactions;
(vii) so long as no Event of Default shall have occurred and be continuing, the Parent Borrower Agent may (or may make Restricted Payments to any Parent Company to enable it to) make Restricted Payments with respect to any Capital Stock in an amount not to exceed (A) the greater of (x) an amount equal to 7.006.00% per annum of the net Cash proceeds received by or contributed to the Parent Borrower Agent in connection with the merger initial public offering of Isos Acquisition Corporation and Bowlero Corp. shares of common stock of Party City Holdco Inc. on December 15April 16, 2021 and the other transactions consummated in connection therewith and (y) an amount equal to 7.00% per annum of the Market Capitalization of the Parent Borrower (or its direct or indirect Parent Company, as applicable) and its subsidiaries minus (B) any utilization of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A)2015;
(viii) the Parent Borrower Agent may make Restricted Payments to (i) redeem, repurchase, defease, discharge, retire or otherwise acquire any (A) Capital Stock (“Treasury Capital Stock”) of the Parent Borrower and/or Agent or any Restricted Subsidiary or (B) Capital Stock of any Parent Company, in the case of each of subclauses (A(A) and (B(B), in exchange for, or out of the proceeds of the substantially concurrent sale (other than to the Parent Borrower and/or any Restricted Agent or a Subsidiary) of, Qualified Capital Stock of the Parent Borrower Agent or any Parent Company to the extent any such proceeds are contributed as a common equity contribution to the capital of the Parent Borrower and/or Agent or any Restricted Subsidiary (in respect of Qualified each case, other than Disqualified Capital Stock Stock) (“Refunding Capital Stock”) and (ii) declare and pay dividends on any the Treasury Capital Stock out of the proceeds of the substantially concurrent sale or issuance (other than to the Parent Borrower Agent or a Restricted Subsidiary) of any the Refunding Capital Stock;
(ix) to the extent constituting a Restricted Payment, the Parent Borrower Agent may consummate any transaction permitted by Section 5.19 (other than Section 5.19(d)), Section 6.06 Sections 6.07 (other than Sections 6.06(j6.07(j) and (t(t)), Section 6.08 (other than Section 6.08(g)) and Section 6.07 (other than Section 6.07(gSections 6.11(h));; and
(x) the Parent Borrower Agent may make additional Restricted Payments in an aggregate amount not to exceed exceed, together with the aggregate amount of any Restricted Debt Payments made pursuant to Section 6.05(b)(viii), $50,000,000 at any time outstanding, so long as no Default or Event of Default shall have occurred and be continuing.
(Ab) The Borrowers and the Subsidiary Guarantors shall not, nor shall they permit any Subsidiary to, make, directly or indirectly, any payment or other distribution (whether in Cash, securities or other property) on or in respect of principal of or interest on the Senior Notes (or Refinancing Indebtedness in respect thereof) or any Junior 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 the Senior Notes (or any Refinancing Indebtedness in respect thereof) or any Junior Indebtedness (collectively, “Restricted Debt Payments”), except:
(i) the greater of $85,000,000 and 25% of Consolidated Adjusted EBITDA as defeasance, redemption, repurchase or other acquisition or retirement of the last day Senior Notes (or Refinancing Indebtedness in respect thereof) or Junior Indebtedness made by exchange for, or out of the most recently ended Test Period minus (B) any utilization proceeds of the Available RP Capacity Amount substantially concurrent incurrence of, Refinancing Indebtedness permitted by Section 6.01;
(ii) payments as part of an “applicable high yield discount obligation” catch-up payment, so long as no Event of Default shall have occurred and be continuing;
(iii) payments of regularly scheduled interest and fees, expenses and indemnification obligations as and when due in reliance on unused capacity under immediately preceding clause (Arespect of any Indebtedness (other than payments with respect to Subordinated Indebtedness prohibited by the subordination provisions thereof);
(xiiv) the Parent Borrower may pay any dividend or other distribution or consummate any redemption within 60 days after the date of the declaration thereof or the provision of a redemption notice payments with respect to intercompany Indebtedness permitted under Section 6.01, subject to the subordination provisions applicable 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);
(xiiv) payments in connection with the Parent Borrower may make any Restricted Payment constituting the distribution or payment of Receivables FeesExisting Debt Refinancing;
(xiii) the Parent Borrower may make additional Restricted 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 Event of Default hereunder or shall result therefrom;
(xiv) the Parent Borrower may make additional Restricted Payments in an amount not to exceed the amount of proceeds received by the Parent Borrower and/or any Restricted Subsidiary under the Representation and Warranty Insurance Policy during the term of this Agreement;
(xvvi) (A) for payments of any taxable period for which the Parent Borrower Senior Notes and/or any Junior Indebtedness in exchange for, or with proceeds of its Subsidiaries are members any substantially contemporaneous issuance of a consolidatedQualified Capital Stock of any Parent Company or the Borrower Agent, combined or similar income tax group for U.S. federal and/or applicable state or local income tax purposes and any substantially contemporaneous capital contribution in respect of which a direct or indirect parent Qualified Capital Stock of the Parent Borrower is the common parent (a “Tax Group”)Agent, or for which the Parent Borrower is a disregarded entity for U.S. federal income tax purposes wholly-owned by a corporate parent (a “Corporate Parent”), the Parent Borrower and each of its Subsidiaries may make Restricted Payments the proceeds of which shall be used by such common parent to pay the portion of any consolidated, combined or similar U.S. federal, state or local income Taxes of such Tax Group, or by the Corporate Parent to pay the portion of the U.S. federal, state or local income Taxes of such Corporate Parent, or any franchise taxes imposed in lieu thereof, for such taxable period that are attributable to the income of the Parent Borrower and/or its Subsidiaries, provided that such amount shall not be greater than the amount of such U.S. federal, state or local income taxes that would be paid (for such taxable period) by the Parent Borrower and its Subsidiaries if the Parent Borrower and/or such Subsidiaries had been a stand-alone corporate taxpayer (or stand-alone group of corporate taxpayers filing on a consolidated, combined or similar basis) for all taxable years ending after the Closing Date (taking into account any net operating loss carryforwards attributable to the Parent Borrower and its Subsidiaries, as the case may be) and (B) without duplication payments of Restricted Payments made under Section 6.04(a)(xv)(A), for Indebtedness by the conversion of all or any taxable period for which portion thereof into Qualified Capital Stock of any Parent Company or the Parent Borrower is treated as a partnership for U.S. federal and/or applicable state or local income tax purposes, the Parent Borrower may make Restricted Payments to its equity owners at the times Agent and (C) payments of interest in respect of Indebtedness in the amounform of payment-in-kind interest with respect to such Indebtedness permitted under Section 6.01;
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) The Parent Borrower Agent shall not pay or make, directly or indirectly, any Restricted Payment, except that:
(i) the Parent Borrower Agent may make Restricted Payments to the extent necessary to permit any Parent Company:;
(A) to pay general operating and compliance administrative costs and expenses (including corporate overhead, legal or similar expenses) and franchise fees and taxes and similar fees, taxes and expenses and customary salary, bonus and other benefits payable required to directors, officers, employees, members maintain the organizational existence of management, managers and/or consultants of any such Parent Company), in each case, which are reasonable and customary and incurred in the ordinary course of business, plus any reasonable and customary indemnification claims made by directors, officers, members of management, managers, management or employees or consultants of any Parent Company, in each case, to the extent attributable to the ownership or operations of any Parent Company (but excluding, for the avoidance of doubtHoldings, the portion Borrowers and their Subsidiaries;
(B) to discharge its consolidated tax liabilities of any Holdings and its Subsidiaries when and as due, to the extent such amount, if any, that is liabilities are attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or Agent and its subsidiaries), Subsidiaries; provided that the Parent amount paid by the Borrower and/or its subsidiaries;
Agent pursuant to this paragraph (B) to pay franchise, excise shall not exceed the tax liabilities that would be due if the Borrower Agent and each Subsidiary were separate corporations filing income and similar Taxes, and other fees, Taxes and expenses, required to maintain tax returns on a consolidated or combined basis with the organizational existence Borrower Agent as the common parent of such Parent Companyaffiliated group (calculated at the highest combined applicable federal, state, local and foreign tax rate);
(C) to pay audit and other accounting and reporting expenses at such Parent Company to the extent relating to the ownership or operations of the Borrowers and their Subsidiaries;
(D) for the payment of insurance premiums to the extent relating to the ownership or operations of the Borrowers and their Subsidiaries;
(E) pay fees and expenses related to debt or equity offerings, investments or acquisitions permitted by this Agreement (whether or not consummated);
(F) to pay the consideration to finance any Investment permitted under Section 6.07 (provided that (x) such Restricted Payments under this clause (a)(i)(F) shall be made substantially concurrently with the closing of such Investment and (y) such Parent Company shall, promptly following the closing thereof, cause all such property acquired to be contributed to the Borrowers or one of their Subsidiaries, or the merger or amalgamation of the Person formed or acquired into the Borrowers or one of their Subsidiaries, in order to consummate such Investment in a manner that causes such Investment to comply with the applicable requirements of Section 6.07 as if undertaken as a direct Investment by such Borrower or such Subsidiary); and
(G) to pay customary salary, bonus, long-term incentive, severance bonus and other benefits (including payment to certain service providers of the Parent Borrower or its Subsidiaries pursuant to any equity plan (whether in the form of options, cash settled options or otherwise)) payable to Permitted Payeesdirectors, as well as applicable employmentofficers, social security members of management or similar taxes in connection therewith, employees of any Parent Company to the extent such salary, bonuses, severance bonuses and other benefits are directly attributable and reasonably allocated to the operations of the Parent Borrower and/or its subsidiariesBorrowers and their Subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose;
(D) to pay audit and other accounting and reporting expenses of such Parent Company to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such expenses, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries;
(E) for the payment of insurance premiums to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries;
(F) to pay (x) fees and expenses related to any debt and/or equity offerings (including refinancings), investments and/or acquisitions permitted or not restricted by this Agreement (whether or not consummated, and including advisory, refinancing, subsequent transaction and exit fees of any Parent Company of the Parent Borrower) and expenses and indemnities of any trustee, agent, arranger, underwriter or similar role and (y) Public Company Costs; and
(G) to finance any Investment permitted under Section 6.06 as if such Parent Company were subject to Section 6.06 (provided that (x) any Restricted Payment under this clause (a)(i)(G) 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 (y) the relevant Parent Company shall, promptly following the closing 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 (I) all property acquired to be contributed to the Parent Borrower or one or more of its Restricted Subsidiaries or (II) the merger, consolidation or amalgamation of the Person formed or acquired into the Parent Borrower or one or more of its Restricted Subsidiaries, in order to consummate such Investment in compliance with the applicable requirements of Section 6.06 as if undertaken as a direct Investment by the Parent Borrower or the relevant Restricted Subsidiary);
(ii) the Parent Borrower Agent may pay (or make Restricted Payments to allow any Parent Company to pay) for the repurchase, redemption, retirement or other acquisition or retirement for value of Capital Stock of any Parent Company or any subsidiary held by any Permitted Payee:future, present or former employee, director, member of management, officer, manager or consultant (or any Affiliate or Immediate Family Member thereof) of any Parent Company, the Borrowers or any Subsidiary;
(A) in accordance with the terms of promissory exchange for notes issued pursuant to Section Section 6.01(o), so long as the aggregate amount of all Cash cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments made (x) pursuant to sub-clause (D(D) of this clause (ii(ii) belowbelow and (y) pursuant to Section 6.05(a)(iv), (1) does not exceed the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period 15,000,000 in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to the next subsequent Fiscal Years (until so applied)) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under clause (D) below; plusYear;
(B) with the proceeds of any sale or issuance of, or of any capital contribution in respect of, the exchange for Capital Stock of the Parent Borrower or any Parent Company (to the extent such proceeds are contributed to the Parent Borrower or any Restricted Subsidiary in respect of Qualified Capital Stock issued by the Parent Borrower or such Restricted Subsidiary) (other than amounts constituting a Cure Amount or an Available Excluded Contribution Amount); plusCompany;
(C) with the in exchange for net proceeds of any key-man life insurance policiespolicies received during such fiscal year; plusor
(D) with in exchange for Cash and Cash Equivalents in an amount not to exceed, together with (x) the aggregate amount of all cash payments made pursuant to sub-clause (A) of this clause (ii) in respect of promissory notes issued pursuant to Section Section 6.01(o) and (y) the aggregate amount of Restricted Payments made pursuant to Section 6.05(a)(iv), (1) the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period 15,000,000 in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to the next subsequent Fiscal Years (until so applied) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under the immediately preceding clause (1); plus
(E) with the amount of any Cash bonuses otherwise payable to any Permitted Payee that are foregone in exchange for the receipt of Capital Stock of the Parent Borrower or any Parent Company pursuant to any compensation arrangement, including any deferred compensation planYear;
(iii) so long as no Default or Event of Default then exists or would result therefrom, the Parent Borrower Agent may make additional Restricted Payments in an amount not to exceed (A) the portion, if any, of the Available Amount on such date that the Parent Borrower Agent elects to apply to this clause (iii)(A(iii)(A) plus and (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Parent Borrower Agent elects to apply to this clause (iii)(B) (plus, without duplication of amounts 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 with Available Excluded Contribution Amounts up to the amount of such Available Excluded Contribution Amount, less any application thereof under Sections 6.04(b)(vi) or 6.06(r)iii)(B);
(iv) the Parent Borrower Agent may make Restricted Payments (i) to any Parent Company to enable such Parent Company to (A) make Cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of such Parent CompanyCompany in an amount not to exceed, dividends, share splits, reverse share splits together with (or any combination thereofx) and, mergers, consolidations, amalgamations or other business combinations, and acquisitions and other Investments permitted hereunder and/or (B) honor any conversion request by a holder the aggregate amount of Convertible Indebtedness by payment of cash and/or delivery of Capital Stock, make any all cash payments in lieu of fractional shares in connection with any conversion of Convertible Indebtedness and otherwise make payments on Convertible Indebtedness in accordance with its terms (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments upon redemption thereof), or, in the case of each of sub-clauses (A) and (B) above, make Restricted Payments to any Parent Company to enable such Parent Company to make the payments and/or deliveries described in such sub-clauses (A) and (B), and (ii) consisting of (A) payments made or expected to be made in respect of withholding or similar Taxes payable by notes issued pursuant to Section 6.01(o) and (y) the aggregate amount of all Restricted Payments made pursuant to Section 6.05(a)(ii)(D), $15,000,000 in any Permitted Payee and/or (B) repurchases of Capital Stock Fiscal Year, which, if not used in consideration of any Fiscal Year, may be carried forward to the payments described in sub clause (A) above, including demand repurchases in connection with the exercise of stock options and the issuance of restricted stock units or similar stock based awardsnext subsequent Fiscal Year;
(v) the Parent Borrower Agent may repurchase, redeem, acquire or retire repurchase Capital Stock upon (or make provisions for withholdings in connection with), or make Restricted Payments to any Parent Company to enable it to repurchase, redeem, acquire or retire Capital Stock upon (or make provisions for withholdings in connection with), the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock warrants if such Capital Stock represents all or a portion of the exercise price of, or tax withholdings with respect to, of such warrants, options or other securities convertible into or exchangeable for Capital Stock warrants as part of a “cashless” exercise;
(vi) the Parent Borrower Agent may make Restricted Payments the proceeds of which are applied (iA) on the Closing Date, solely to effect the consummation of the Transactions and on or about the Amendment No. 1 Effective Date, solely to effect the consummation of the Amendment No. 1 Transactions, (iiB) on and after the Closing Date, to satisfy any payment obligations owing, or as otherwise required, owing under the Acquisition Merger Agreement (including payment of working capital and/or purchase price adjustments) and to pay Transaction Costs, as in each case, with respect to effect on the Transactions, (iii) to satisfy obligations to direct or indirect holders of Capital Stock of the Parent Borrower (immediately prior to giving effect to the Transactions) in connection with, or as a result of, any working capital and/or purchase price adjustments, in each case, with respect to the Transactions and (iv) to satisfy any settlement of claims or actions in connection with the Transactions or to satisfy indemnity or other similar obligations in connection with the Transactionsdate hereof);
(vii) so long as no Event of Default shall have occurred and be continuing, following the Parent consummation of the first Qualifying IPO, the Borrower Agent may (or may make Restricted Payments to any Parent Company to enable it to) make Restricted Payments with respect to any Capital Stock in an amount not of up to exceed (A) the greater of (x) an amount equal to 7.006.0% per annum of the net Cash proceeds received by or contributed to the Parent Borrower in connection with the merger of Isos Acquisition Corporation and Bowlero Corp. on December 15, 2021 and the other transactions consummated in connection therewith and (y) an amount equal to 7.00% per annum of the Market Capitalization of the Parent Borrower (or its direct or indirect Parent Company, as applicable) and its subsidiaries minus (B) Agent from any utilization of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A)such Qualifying IPO;
(viii) the Parent Borrower Agent may make Restricted Payments to (i) redeem, repurchase, defease, discharge, retire or otherwise acquire any (A) Capital Stock (“Treasury Capital Stock”) of the Parent Borrower and/or Agent or any Restricted Subsidiary or (B) Capital Stock of any Parent Company, in the case of each of subclauses (A(A) and (B(B), in exchange for, or out of the proceeds of the substantially concurrent sale (other than to the Parent Borrower and/or any Restricted Agent or a Subsidiary) of, Qualified Capital Stock of the Parent Borrower Agent or any Parent Company to the extent any such proceeds are contributed as a common equity contribution to the capital of the Parent Borrower and/or Agent or any Restricted Subsidiary (in respect of Qualified Capital Stock each case, other than Disqualified Stock) (“Refunding Capital Stock”) and (ii) declare and pay dividends on any the Treasury Capital Stock out of the proceeds of the substantially concurrent sale or issuance (other than to the Parent Borrower Agent or a Restricted Subsidiary) of any the Refunding Capital Stock;
(ix) to the extent constituting a Restricted Payment, the Parent Borrower Agent may consummate any transaction permitted by Section 5.19 (other than Section 5.19(d)), Section 6.06 Sections 6.07 (other than Sections 6.06(j6.07(j) and (t(t)), Section 6.08 (other than Section 6.08(g)) and Section 6.07 Sections 6.11(f) and (other than Section 6.07(gh));; and
(x) the Parent Borrower Agent may make additional Restricted Payments in an aggregate amount not to exceed (A) the greater of $85,000,000 30,000,000 and 251.00% of the Consolidated Adjusted EBITDA Total Assets as of the last day of the most recently ended last Test Period minus (B) for which financial statements have been delivered pursuant to Section 5.01 at any utilization time outstanding, so long as no Default or Event of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A);Default shall have occurred and be continuing.
(xib) The Borrowers and the Parent Borrower may pay Subsidiary Guarantors shall not, nor shall they permit any dividend Subsidiary to, make, directly or indirectly, any payment or other distribution (whether in Cash, securities or consummate other property) on or in respect of principal of or interest on the Senior Notes (or Refinancing Indebtedness in respect thereof) or any redemption within 60 days after the date Junior 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 declaration thereof purchase, redemption, retirement, acquisition, cancellation or termination of the provision of a redemption notice with Senior Notes (or any Refinancing Indebtedness in respect theretothereof) or any Junior Indebtedness (collectively, 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);
(xii) the Parent Borrower may make any “Restricted Payment constituting the distribution or payment of Receivables Fees;
(xiii) the Parent Borrower may make additional Restricted Payments so long as, as measured at the time provided for in Section 1.04(eDebt Payments”), except:
(i) the Total Leverage Ratio would not exceed 4.00:1.00defeasance, calculated on a Pro Forma Basis and redemption, repurchase or other acquisition or retirement of the Senior Notes (or Refinancing Indebtedness in respect thereof) or Junior Indebtedness made by exchange for, or out of the proceeds of the substantially concurrent incurrence of, Refinancing Indebtedness permitted by Section 6.01;
(ii) there shall exist payments as part of an “applicable high yield discount obligation” catch-up payment, so long as no Event of Default hereunder or shall result therefromhave occurred and be continuing;
(xiviii) the Parent Borrower may make additional Restricted Payments payments of regularly scheduled interest and fees, expenses and indemnification obligations as and when due in an amount not respect of any Indebtedness (other than payments with respect to exceed the amount of proceeds received Subordinated Indebtedness prohibited by the Parent Borrower and/or any Restricted Subsidiary subordination provisions thereof); (iv) payments with respect to intercompany Indebtedness permitted under the Representation and Warranty Insurance Policy during the term of this Agreement;
(xv) (A) for any taxable period for which the Parent Borrower and/or any of its Subsidiaries are members of a consolidatedSection 6.01, combined or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which a direct or indirect parent of the Parent Borrower is the common parent (a “Tax Group”), or for which the Parent Borrower is a disregarded entity for U.S. federal income tax purposes wholly-owned by a corporate parent (a “Corporate Parent”), the Parent Borrower and each of its Subsidiaries may make Restricted Payments the proceeds of which shall be used by such common parent to pay the portion of any consolidated, combined or similar U.S. federal, state or local income Taxes of such Tax Group, or by the Corporate Parent to pay the portion of the U.S. federal, state or local income Taxes of such Corporate Parent, or any franchise taxes imposed in lieu thereof, for such taxable period that are attributable subject to the income of the Parent Borrower and/or its Subsidiaries, provided that such amount shall not be greater than the amount of such U.S. federal, state or local income taxes that would be paid (for such taxable period) by the Parent Borrower and its Subsidiaries if the Parent Borrower and/or such Subsidiaries had been a stand-alone corporate taxpayer (or stand-alone group of corporate taxpayers filing on a consolidated, combined or similar basis) for all taxable years ending after the Closing Date (taking into account any net operating loss carryforwards attributable to the Parent Borrower and its Subsidiaries, as the case may be) and (B) without duplication of Restricted Payments made under Section 6.04(a)(xv)(A), for any taxable period for which the Parent Borrower is treated as a partnership for U.S. federal and/or subordination provisions applicable state or local income tax purposes, the Parent Borrower may make Restricted Payments to its equity owners at the times and in the amounthereto;
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) The Parent Borrower shall not pay or make, directly or indirectly, any Restricted Payment, except that:
(i) the Parent Borrower may make Restricted Payments to the extent necessary to permit any Parent Company:
(A) to pay general operating and compliance administrative costs and expenses (including corporate overhead, legal or similar expenses and customary salary, bonus and other benefits payable to directors, officers, employees, members of management, managers and/or consultants of any Parent Company)) and franchise fees and Taxes and similar fees, Taxes and expenses required to maintain the organizational existence of such Parent Company, in each case, which are reasonable and customary and incurred in the ordinary course of business, plus any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of any Parent Company, in each case, to the extent attributable to the ownership or operations of any Parent Company (but excluding, for the avoidance of doubt, the portion of any such amount, if any, that is attributable to the ownership or operations of any subsidiary of any Parent Company other than the Borrower and/or its subsidiaries), and/or its subsidiaries (and/or Joint Ventures); provided that Restricted Payments under this Section 6.04(a)(i)(A) that are attributable to any Unrestricted Subsidiary or any Specified Joint Venture shall be permitted only to the extent that either (x) such Unrestricted Subsidiary or Specified Joint Venture has made one or more cash distributions, advances or loans to the Borrower or any of its Restricted Subsidiaries for such purpose in an amount up to the amount of such Unrestricted Subsidiary’s or Specified Joint Venture’s proportionate share of such costs, expenses, franchise fees and Taxes and similar fees, Taxes and expenses or (y) the amount of such Restricted Payments made by the Borrower on behalf of such Unrestricted Subsidiary or Specified Joint Venture is treated as an Investment subject to Section 6.06 hereof;
(B) to discharge the consolidated, combined, unitary or similar Tax liabilities of such Parent Company and its subsidiaries when and as due, to the extent such liabilities are attributable to the ownership or operations of any Parent Company (but excluding, for the avoidance of doubt, the portion of any such Tax liabilities, if any, that is attributable to the ownership or operations of any subsidiary of any Parent Company other than the Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries (and/or its subsidiaries;
any Joint Venture); provided that the amount paid by the Borrower pursuant to this paragraph (B) to pay franchise, excise shall not exceed the amount of Tax liabilities that would be due if the Borrower and each subsidiary were separate corporations filing income and similar TaxesTax returns on a consolidated, and other feescombined, Taxes and expenses, required to maintain unitary or similar basis with the organizational existence Borrower as the common parent of such Parent Company;
affiliated group (Ccalculated at the highest combined applicable federal, state, local and foreign Tax rate); provided further that Restricted Payments under this Section 6.04(a)(i)(B) to pay customary salary, bonus, long-term incentive, severance and other benefits (including payment to certain service providers of the Parent Borrower or its Subsidiaries pursuant that are attributable to any equity plan (whether in the form of options, cash settled options Unrestricted Subsidiary or otherwise)) payable to Permitted Payees, as well as applicable employment, social security or similar taxes in connection therewith, any Specified Joint Venture shall be permitted only to the extent that either (x) such salaryUnrestricted Subsidiary has made one or more cash distributions, bonuses, severance and other benefits are attributable and reasonably allocated advances or loans to the operations Borrower or any of its Restricted Subsidiaries for such purpose in an amount up to the Parent Borrower and/or its subsidiariesamount of such Unrestricted Subsidiary’s or Specified Joint Venture’s, in each caseas applicable, so long as proportionate share of such Parent Company applies Tax liabilities or (y) the amount of any such Restricted Payment for made by the Borrower on behalf of such purposeUnrestricted Subsidiary or Specified Joint Venture is treated as an Investment subject to Section 6.06 hereof;
(DC) to pay audit and other accounting and reporting expenses of such Parent Company to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such expenses, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiariessubsidiaries (and/or any Joint Ventures); provided that Restricted Payments under this Section 6.04(a)(i)(C) that are attributable to any Unrestricted Subsidiary or any Specified Joint Venture shall be permitted only to the extent that either (x) such Unrestricted Subsidiary has made one or more cash distributions, advances or loans to the Borrower or any of its Restricted Subsidiaries for such purpose in an amount up to the amount of such Unrestricted Subsidiary’s or Specified Joint Venture’s, as applicable, proportionate share of such accounting and reporting expenses or (y) the amount of any such Restricted Payment made by the Borrower on behalf of such Unrestricted Subsidiary or Specified Joint Venture is treated as an Investment subject to Section 6.06 hereof;
(ED) for the payment of insurance premiums to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiariessubsidiaries (and/or Joint Ventures); provided that Restricted Payments under this Section 6.04(a)(i)(D) that are attributable to any Unrestricted Subsidiary or any Specified Joint Venture shall be permitted only to the extent that either (x) such Unrestricted Subsidiary has made one or more cash distributions, advances or loans to the Borrower or any of its Restricted Subsidiaries for such purpose in an amount up to the amount of such Unrestricted Subsidiary’s or Specified Joint Venture’s, as applicable, proportionate share of such insurance premiums or (y) the amount of any such Restricted Payment made by the Borrower on behalf of such Unrestricted Subsidiary or Specified Joint Venture is treated as an Investment subject to Section 6.06 hereof;
(FE) to pay (x) fees and expenses related to any debt and/or or equity offerings (including refinancings)offerings, investments and/or or acquisitions permitted or not restricted by this Agreement (whether or not consummated); provided that Restricted Payments under this Section 6.04(a)(i)(E) that are attributable to any Unrestricted Subsidiary or Specified Joint Venture shall be permitted only to the extent that either (x) such Unrestricted Subsidiary or Specified Joint Venture has made one or more cash distributions, and including advisory, refinancing, subsequent transaction and exit advances or loans to the Borrower or any of its Restricted Subsidiaries for such purpose in an amount up to the amount of such Unrestricted Subsidiary’s or Specified Joint Venture’s proportionate share of such fees of any Parent Company of the Parent Borrower) and expenses and indemnities of any trustee, agent, arranger, underwriter or similar role and (y) Public Company Costs; andthe amount of such Restricted Payment made by the Borrower on behalf of such Unrestricted Subsidiary or Specified Joint Venture is treated as an Investment subject to Section 6.06 hereof;
(GF) to finance any Investment permitted under Section 6.06 as if such Parent Company were subject to Section Section 6.06 (provided that (x) any Restricted Payment under this clause (a)(i)(G(a)(i)(F) 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 (y) the relevant Parent Company shall, promptly following the closing 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 therewiththereof, cause (I) all property acquired to be contributed to the Parent Borrower or one or more of its Restricted Subsidiaries Subsidiaries, or (II) the merger, consolidation or amalgamation of the Person formed or acquired into the Parent Borrower or one or more of its Restricted Subsidiaries, in order to consummate such Investment in compliance with the applicable requirements of Section Section 6.06 as if undertaken as a direct Investment by the Parent Borrower or the relevant Restricted Subsidiary); and
(G) to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, employees or consultants of any Parent Company (or any Immediate Family Member of any of the foregoing) to the extent such salary, bonuses and other benefits are attributable and reasonably allocated to the operations of the Borrower and/or its subsidiaries (and/or Joint Ventures), in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose; provided that Restricted Payments under this Section 6.04(a)(i)(G) that are attributable to any Unrestricted Subsidiary or any Specified Joint Venture shall be permitted only to the extent that either (x) such Unrestricted Subsidiary has made one or more cash distributions, advances or loans to the Borrower or any of its Restricted Subsidiaries for such purpose in an amount up to the amount of such Unrestricted Subsidiary’s or Specified Joint Venture’s, as applicable, proportionate share of such salary, bonus, severance and other benefits or (y) the amount of such Restricted Payments made by the Borrower on behalf of such Unrestricted Subsidiary or Specified Joint Venture is treated as an Investment subject to Section 6.06 hereof;
(ii) the Parent Borrower may pay (or make Restricted Payments to allow any Parent Company to pay) for the repurchase, redemption, retirement or other acquisition or retirement for value of Capital Stock of any Parent Company or any subsidiary held by any Permitted Payeefuture, present or former employee, director, member of management, officer, manager or consultant (or any Affiliate or Immediate Family Member thereof) of any Parent Company, the Borrower or any subsidiary:
(A) in accordance with the terms of promissory notes issued pursuant to Section Section 6.01(o), so long as the aggregate amount of all Cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments made pursuant to sub-clause (D(D) of this clause (ii(ii) below, (1) does not exceed the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period 3,000,000 in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to the next subsequent Fiscal Years (until so applied)) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under clause (D) below; plusYear;
(B) with the proceeds of any sale or issuance of, or of any capital contribution in respect of, the Capital Stock of the Parent Borrower or any Parent Company (to the extent such proceeds are contributed to the Parent Borrower or any Restricted Subsidiary in respect of Qualified Capital Stock issued by to the Parent Borrower or such any Restricted Subsidiary) (other than amounts constituting a Cure Amount or an Available Excluded Contribution Amount); plus;
(C) with the net proceeds of any key-man life insurance policies; plusor
(D) with Cash and Cash Equivalents in an amount not to exceed, together with the aggregate amount of all cash payments made pursuant to sub-clause (A(A) of this clause (ii(ii) in respect of promissory notes issued pursuant to Section Section 6.01(o), (1) the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period 3,000,000 in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to the next subsequent Fiscal Years (until so applied) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under the immediately preceding clause (1); plus
(E) with the amount of any Cash bonuses otherwise payable to any Permitted Payee that are foregone in exchange for the receipt of Capital Stock of the Parent Borrower or any Parent Company pursuant to any compensation arrangement, including any deferred compensation planYear;
(iii) the Parent Borrower may make additional Restricted Payments in an amount not to exceed (A) the portion, if any, of the Available Amount on such date that the Parent Borrower elects to apply to this clause (iii)(A(iii)(A) plus (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Parent Borrower elects to apply to this clause (iii)(B) (plus, without duplication of amounts 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 with Available Excluded Contribution Amounts up to the amount of such Available Excluded Contribution Amount, less any application thereof under Sections 6.04(b)(vi) or 6.06(r)iii)(B);
(iv) the Parent Borrower may make Restricted Payments (i) to any Parent Company to enable such Parent Company to (A) make Cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of such Parent Company, dividends, share splits, reverse share splits (or any combination thereof) and, mergers, consolidations, amalgamations or other business combinations, and acquisitions and other Investments permitted hereunder and/or (B) honor any conversion request by a holder of Convertible Indebtedness by payment of cash and/or delivery of Capital Stock, make any cash payments in lieu of fractional shares in connection with any conversion of Convertible Indebtedness and otherwise make payments on Convertible Indebtedness in accordance with its terms (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments upon redemption thereof), or, in the case of each of sub-clauses (A) and (B) above, make Restricted Payments to any Parent Company to enable such Parent Company to make the payments and/or deliveries described in such sub-clauses (A) and (B), and (ii) consisting of (A) payments made or expected to be made in respect of withholding or similar Taxes payable by any Permitted Payee future, present or former officers, directors, employees, members of management, managers or consultants of the Borrower, any Restricted Subsidiary or any Parent Company or any of their respective Immediate Family Members and/or (B) repurchases of Capital Stock in consideration of the payments described in sub sub-clause (A(A) above, including demand repurchases in connection with the exercise of stock options and the issuance of restricted stock units or similar stock based awardsoptions;
(v) the Parent Borrower may repurchase, redeem, acquire or retire Capital Stock upon repurchase (or make provisions for withholdings in connection with), or make Restricted Payments to any Parent Company to enable it to repurchase, redeem, acquire or retire ) Capital Stock upon (or make provisions for withholdings in connection with), the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represents all or a portion of the exercise price of, or tax withholdings with respect to, of such warrants, options or other securities convertible into or exchangeable for Capital Stock as part of a “cashless” exercise;
(vi) the Parent Borrower may make Restricted Payments Payments, the proceeds of which are applied (i) on the Closing Date, solely to effect pay the consummation of the Transactions Special Dividend and on or about the Amendment No. 1 Effective Date, solely to effect the consummation of the Amendment No. 1 Transactions, (ii) on and after the Closing Date, to satisfy any payment obligations owing, or as otherwise required, under the Acquisition Agreement (including payment of working capital and/or purchase price adjustments) and to pay Transaction Costs, in each case, with respect to the Transactions, (iii) to satisfy obligations to direct or indirect holders of Capital Stock of the Parent Borrower (immediately prior to giving effect to the Transactions) in connection with, or as a result of, any working capital and/or purchase price adjustments, in each case, with respect to the Transactions and (iv) to satisfy any settlement of claims or actions in connection with the Transactions or to satisfy indemnity or other similar obligations in connection with the Transactionsrelated expenses;
(vii) so long as no Event of Default exists at the Parent time of the declaration thereof, following the consummation of the first Qualifying IPO, the Borrower may (or may make Restricted Payments to any Parent Company to enable it to) make Restricted Payments with respect to any Capital Stock in an amount not of up to exceed (A) the greater of (x) an amount equal to 7.006% per annum of the net Cash proceeds received by or contributed to the Parent Borrower in connection with the merger of Isos Acquisition Corporation and Bowlero Corp. on December 15, 2021 and the other transactions consummated in connection therewith and (y) an amount equal to 7.00% per annum of the Market Capitalization of the Parent Borrower (or its direct or indirect Parent Company, as applicable) and its subsidiaries minus (B) from any utilization of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A)Qualifying IPO;
(viii) the Parent Borrower may make Restricted Payments to (i) redeem, repurchase, defease, discharge, retire or otherwise acquire any (A) Capital Stock (“Treasury Capital Stock”) of the Parent Borrower and/or any Restricted Subsidiary or (B) Capital Stock of any Parent Company, in the case of each of subclauses (A(A) and (B(B), in exchange for, or out of the proceeds of the substantially concurrent sale (other than to the Parent Borrower and/or any Restricted Subsidiary) of, Qualified Capital Stock of the Parent Borrower or any Parent Company to the extent any such proceeds are contributed to the capital of the Parent Borrower and/or any Restricted Subsidiary 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 the Parent Borrower or a Restricted Subsidiary) of any Refunding Capital StockStock or Subordinated Shareholder Debt;
(ix) to the extent constituting a Restricted Payment, the Parent Borrower may consummate any transaction permitted by Section 5.19 (other than Section 5.19(d)), Section Section 6.06 (other than Sections 6.06(j6.06(j) and (t(t)) and Section ), Section 6.07 (other than Section Section 6.07(g)) and Section 6.09 (other than Section 6.09(d));
(x) the Parent Borrower may make additional Restricted Payments in an aggregate amount not to exceed (A) the greater of $85,000,000 7,500,000 and 2515% of Consolidated Adjusted EBITDA of the Borrower and its Restricted Subsidiaries as of the last day of the most recently ended Test Period for which financial statements have been delivered pursuant to Sections 5.01(a) or (b), as applicable, minus (A) the amount of Restricted Debt Payments made by the Borrower or any Restricted Subsidiary in reliance on Section 6.04(b)(iv)(B), minus (B) the outstanding amount of Investments made by the Borrower or any utilization of the Available RP Capacity Amount Restricted Subsidiary in reliance on unused capacity under immediately preceding clause (ASection 6.06(q)(ii);
(xi) the Parent Borrower may pay any dividend or other distribution or consummate any redemption within 60 days after the date of 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 dividend or redemption notice would have complied with the provisions of this Section 6.04(a)hereof;
(xii) the Parent Borrower may make any Restricted Payment constituting the distribution or payment of Receivables Fees;[Reserved]; and
(xiii) the Parent Borrower may make additional Restricted Payments so long as, as measured at the time provided for in Section 1.04(e), (i) the Total Leverage Ratio would not exceed 4.00:1.00Ratio, calculated on a Pro Forma Basis at the time of the declaration thereof, would not exceed 4.50:1.00.
(b) the Borrower shall not, nor shall it permit any Restricted Subsidiary to, make any payment (whether in Cash, securities or other property) on or in respect of principal of or interest on (x) any Junior Lien Indebtedness or (y) any Junior Indebtedness (such Indebtedness under clauses (x) and (y), the “Restricted Debt”), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Restricted Debt prior to the scheduled maturity (collectively, “Restricted Debt Payments”), except:
(i) any 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) there shall exist payments as part of an “applicable high yield discount obligation” catch-up payment;
(iii) payments of regularly scheduled interest and payments of fees, expenses and indemnification obligations as and when due in respect of any Restricted Debt (other than payments with respect to Subordinated Indebtedness that are prohibited by the subordination provisions thereof);
(iv) so long as, at the time of delivery of irrevocable notice with respect thereto, no Event of Default hereunder exists or shall would result therefrom;
(xiv) the Parent Borrower may make additional Restricted Payments in an amount not to exceed the amount of proceeds received by the Parent Borrower and/or any Restricted Subsidiary under the Representation and Warranty Insurance Policy during the term of this Agreement;
(xv) (A) for any taxable period for which the Parent Borrower and/or any of its Subsidiaries are members of a consolidated, combined or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which a direct or indirect parent of the Parent Borrower is the common parent (a “Tax Group”), or for which the Parent Borrower is a disregarded entity for U.S. federal income tax purposes wholly-owned by a corporate parent (a “Corporate Parent”), the Parent Borrower and each of its Subsidiaries may make Restricted Payments the proceeds of which shall be used by such common parent to pay the portion of any consolidated, combined or similar U.S. federal, state or local income Taxes of such Tax Group, or by the Corporate Parent to pay the portion of the U.S. federal, state or local income Taxes of such Corporate Parent, or any franchise taxes imposed in lieu thereof, for such taxable period that are attributable to the income of the Parent Borrower and/or its Subsidiaries, provided that such amount shall not be greater than the amount of such U.S. federal, state or local income taxes that would be paid (for such taxable period) by the Parent Borrower and its Subsidiaries if the Parent Borrower and/or such Subsidiaries had been a stand-alone corporate taxpayer (or stand-alone group of corporate taxpayers filing on a consolidated, combined or similar basis) for all taxable years ending after the Closing Date (taking into account any net operating loss carryforwards attributable to the Parent Borrower and its Subsidiaries, as the case may be) and (B) without duplication of Restricted Payments made under Section 6.04(a)(xv)(A), for any taxable period for which the Parent Borrower is treated as a partnership for U.S. federal and/or applicable state or local income tax purposes, the Parent Borrower may make Restricted Payments to its equity owners at the times and in the amoun
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) The Parent Borrower shall not pay or make, directly or indirectly, make any Restricted Payment, except that:
(i) the Parent Borrower may make Restricted Payments to the extent necessary to permit any Parent Company:
(A) to pay general operating and compliance administrative costs and expenses (including corporate overhead, legal or similar expenses and customary wages, salary, bonus and other benefits payable to directors, officers, employees, members of management, managers consultants and/or consultants independent contractors of any Parent Company), franchise fees, franchise Taxes and similar fees, Taxes and expenses required to maintain the organizational existence of such Parent Company, in each case, which are reasonable and customary and incurred in the ordinary course of business, plus any reasonable and customary indemnification claims made by current or former directors, officers, members of management, managers, employees or consultants of any Parent Company, in each case, to the extent attributable to the ownership or operations of any Parent Company (but excluding, for the avoidance of doubt, the portion of any such amount, if any, that is attributable to the ownership or operations operation of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries); provided that Restricted Payments under this clause (a)(i)(A) that are attributable to any Unrestricted Subsidiary shall be permitted only to the extent that either (x) such Unrestricted Subsidiary has made one or more Cash distributions, advances or loans to the Parent Borrower and/or or any of its subsidiariesSubsidiaries for such purpose in an amount up to the amount of such Unrestricted Subsidiary’s proportionate share of such costs, expenses, franchise fees and Taxes and similar fees, Taxes and expenses or (y) the amount of such Restricted Payments made by the Borrower on behalf of such Unrestricted Subsidiary is treated as an Investment subject to Section 6.06 hereof;
(B) to pay franchise, excise and similar Taxes, and other fees, Taxes and expenses, required to maintain the organizational existence of such Parent Company[reserved];
(C) to pay customary salary, bonus, long-term incentive, severance and other benefits (including payment to certain service providers of the Parent Borrower or its Subsidiaries pursuant to any equity plan (whether in the form of options, cash settled options or otherwise)) payable to Permitted Payees, as well as applicable employment, social security or similar taxes in connection therewith, to the extent such salary, bonuses, severance and other benefits are attributable and reasonably allocated to the operations of the Parent Borrower and/or its subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose;
(D) to pay audit and other accounting and reporting expenses of at such Parent Company to the extent attributable relating to the ownership or operations of any Parent Company (but excluding, for the avoidance of doubt, the portion of any such expenses, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and and/or its subsidiaries; provided that Restricted Payments under this clause (a)(i)(C) that are attributable to any Unrestricted Subsidiary shall be permitted only to the extent that either (x) such Unrestricted Subsidiary has made one or more Cash distributions, advances or loans to the Borrower or any of its Subsidiaries for such purpose in an amount up to the amount of such Unrestricted Subsidiary’s proportionate share of such accounting and reporting expenses or (y) the amount of such Restricted Payments made by Borrower on behalf of such Unrestricted Subsidiary is treated as an Investment subject to Section 6.06 hereof;
(ED) for the payment of insurance premiums to the extent attributable relating to the ownership or operations of any Parent Company (but excluding, for the avoidance of doubt, the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and and/or its subsidiaries; provided that Restricted Payments under this clause (a)(i)(D) that are attributable to any Unrestricted Subsidiary shall be permitted only to the extent that either (x) such Unrestricted Subsidiary has made one or more Cash distributions advances or loans to Borrower or any of its Subsidiaries for such purpose in an amount up to the amount of such Unrestricted Subsidiary’s proportionate share of such insurance premiums or (y) the amount of such Restricted Payments made by Borrower on behalf of such Unrestricted Subsidiary is treated as an Investment subject to Section 6.06 hereof;
(FE) to pay (x) fees and expenses related to any debt and/or or equity offerings (including refinancings)offerings, investments and/or or acquisitions permitted or not restricted by this Agreement (whether or not consummated, and including advisory, refinancing, subsequent transaction and exit fees of any Parent Company of the Parent Borrower) and expenses and indemnities of any trustee, agent, arranger, underwriter or similar role and (y) Public Company Costs; and);
(GF) to pay the consideration to finance any Investment permitted under Section 6.06 as if such Parent Company were subject to Section Section 6.06 (provided that (x) any such Restricted Payment Payments under this clause (a)(i)(G(a)(i)(F) 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 (y) the relevant such Parent Company shall, promptly following the closing 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 therewiththereof, cause (I) all such property acquired to be contributed to the Parent Borrower or one or more of its Restricted Subsidiaries Subsidiaries, or (II) the merger, consolidation or amalgamation of the Person formed or acquired into the Parent Borrower or one or more of its Restricted Subsidiaries, in order to consummate such Investment in compliance a manner that causes such Investment to comply with the applicable requirements of Section Section 6.06 as if undertaken as a direct Investment by the Parent Borrower or the relevant Restricted such Subsidiary);; and
(G) to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, employees or consultants (or any Immediate Family Member thereof) of any Parent Company plus any reasonable and customary indemnification claims made by current or former directors, officers, members of management, managers, employees or consultants of any Parent Company, to the extent such salary, bonuses, severance and other benefits or claims in respect of any of the foregoing) are directly attributable and reasonably allocated to the ownership or operations of any Parent Company (but excluding, for the avoidance of doubt, the portion of any amount, if any, that is attributable to the ownership or operation of any subsidiary of any Parent Company other than the Borrower and/or its subsidiaries), the Borrower and/or its subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose; provided that Restricted Payments under this clause (a)(i)(G) that are attributable to any Unrestricted Subsidiary shall be permitted only to the extent that either (x) such Unrestricted Subsidiary has made one or more Cash distributions, advances or loans to Borrower or any of its Subsidiaries for such purpose in an amount up to the amount of such Unrestricted Subsidiary’s proportionate share of such salary, bonus, severance and other benefits or (y) the amount of such Restricted Payments made by Borrower on behalf of such Unrestricted Subsidiary is treated as an Investment subject to Section 6.06 hereof.
(ii) the Parent Borrower may make Tax Distributions;
(iii) the Borrower may pay (or make Restricted Payments to allow any Parent Company to pay) for the repurchase, redemption, retirement or other acquisition or retirement for value of Capital Stock of any Parent Company Company, the Borrower or any subsidiary held by any Permitted Payeefuture, present or former employee, director, member of management, officer, manager or consultant (or any Immediate Family Member thereof) of any Parent Company, the Borrower or any subsidiary:
(A) in accordance with the terms of promissory notes issued pursuant to Section 6.01(oSection 6.01(n), so long as the aggregate amount of all Cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments made pursuant to sub-clause (D(D) of this clause (ii) below(iii), (1) does not exceed the greater of (x) $68,000,000 14,000,000 and 20(y) 12% of Consolidated Adjusted EBITDA of the Borrower as of the last day of the most recently ended Test Period for which financial statements are available, as determined on a Pro Forma Basis in any Fiscal Year (or, after a Qualifying IPO, the greater of (i) $30,000,000 and (ii) 24% of Consolidated Adjusted EBITDA of the Borrower as of the last day of the most recently ended Test Period for which financial statements are available, as determined on a Pro Forma Basis in any Fiscal Year), which, if not used in any Fiscal Year, may be carried forward to the next subsequent Fiscal Years (until so applied)) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under clause (D) below; plusYear;
(B) with the proceeds of any sale or issuance of, or of any capital contribution in respect of, the Capital Stock of the Parent Borrower or any Parent Company (to the extent such proceeds are have been contributed to the Parent Borrower or any Restricted Subsidiary in respect capital of Qualified Capital Stock issued by the Parent Borrower or such Restricted Subsidiary) (other than amounts constituting a Cure Amount or an Available Excluded Contribution Amount); plusBorrower;
(C) with the net proceeds of any key-man life insurance policiespolicies received during such Fiscal Year; plusor
(D) with Cash and Cash Equivalents in an amount not to exceed, together with the aggregate amount of all cash Cash payments made pursuant to sub-clause (A) of this clause (ii) in respect of promissory notes issued pursuant to Section 6.01(oSection 6.01(n), (1) the greater of (i) $68,000,000 14,000,000 and 20(ii) 12% of Consolidated Adjusted EBITDA of the Borrower as of the last day of the most recently ended Test Period for which financial statements are available, as determined on a Pro Forma Basis in any Fiscal Year (or, after a Qualifying IPO, the greater of (x) $30,000,000 and (y) 24% of Consolidated Adjusted EBITDA of the Borrower as of the last day of the most recently ended Test Period for which financial statements are available, as determined on a Pro Forma Basis in any Fiscal Year), which, if not used in any Fiscal Year, may be carried forward to the next subsequent Fiscal Years (until so applied) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under the immediately preceding clause (1); plus
(E) with the amount of any Cash bonuses otherwise payable to any Permitted Payee that are foregone in exchange for the receipt of Capital Stock of the Parent Borrower or any Parent Company pursuant to any compensation arrangement, including any deferred compensation planYear;
(iiiiv) the Parent Borrower may make additional Restricted Payments in an amount not to exceed (A) the portion, if any, of the Available Amount on such date that the Parent Borrower elects to apply to this clause (iii)(A(a)(iv)(A); provided that the portion of the Available Amount attributed to clause (a)(i) plus of the definition thereof shall not be available for any Restricted Payment pursuant to this clause (iv)(A) for so long as, on the date of the declaration thereof, an Event of Default shall have occurred and be continuing; provided further that the portion of the Available Amount attributed to clause (a)(ii) of the definition thereof shall not be available for any Restricted Payment pursuant to this clause (iv)(A) for so long as, on the date of the declaration thereof, an Event of Default described in Section 7.01(a), (f) or (g) shall have occurred and be continuing or would result therefrom or the Interest Coverage Ratio as determined on a Pro Forma Basis as of the last day of the most recently ended Test Period for which financial statements are available, would be less than 1.75:1.00 and (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Parent Borrower elects to apply to this clause (iii)(B(iv)(B) (plus, without duplication of amounts referred to in this clause (B), in an amount equal to the Net Proceeds from a Disposition extent such Restricted Payment is made within 12 months of property or assets acquired after the Closing Date, if the acquisition date of such property or assets was financed with Available Excluded Contribution Amounts up to the amount designation of such Available Excluded Contribution Amount, less any application thereof under Sections 6.04(b)(vi) or 6.06(r));
(ivv) the Parent Borrower may make Restricted Payments (i) and may make Restricted Payments to any Parent Company to enable such Parent Company to make Restricted Payments consisting of (A1) make Cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of such Parent Company, dividends, share splits, reverse share splits Company or (or any combination thereof2) and, mergers, consolidations, amalgamations or other business combinations, and acquisitions and other Investments permitted hereunder and/or (B) honor any conversion request by a holder of Convertible Indebtedness by payment of cash and/or delivery of Capital Stock, make any cash payments in lieu of fractional shares in connection with any conversion of Convertible Indebtedness and otherwise make payments on Convertible Indebtedness in accordance with its terms (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments upon redemption thereof), or, in the case of each of sub-clauses (A) and (B) above, make Restricted Payments to any Parent Company to enable such Parent Company to make the payments and/or deliveries described in such sub-clauses (A) and (B), and (ii) consisting of (A) payments made or expected to be made in respect of withholding or similar Taxes payable by any Permitted Payee future, present or former officers, directors, employees, members of management, managers or consultants of the Borrower, any subsidiary or Parent Company or any of their respective Immediate Family Members and/or (B) repurchases of Capital Stock in consideration of the payments described in sub clause (A) above(A), including demand repurchases in connection with the exercise of stock options and the issuance of restricted stock units or similar stock based awardsoptions;
(vvi) the Parent Borrower may repurchase, redeem, acquire or retire Capital Stock upon repurchase (or make provisions for withholdings in connection with), or make Restricted Payments to any Parent Company to enable it to repurchase, redeem, acquire or retire ) Capital Stock upon (or make provisions for withholdings in connection with), the exercise of warrants, options or warrants or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represents all or a portion of the exercise price of, of such options or tax withholdings with respect to, such warrants, options warrants or other securities convertible into or exchangeable for Capital Stock as part of a “cashless” exercise;
(vivii) the Parent Borrower may make Restricted Payments the proceeds of which are applied (iA) on or after the Closing Date, solely to effect the consummation of the Transactions and on or about the Amendment No. 1 Effective Date, solely to effect the consummation of the Amendment No. 1 Transactions, (iiB) on and after the Closing Date, to satisfy any payment obligations owing, or as otherwise required, owing under the Acquisition Agreement (including as in effect on the date hereof) and the payment of working capital and/or purchase price adjustments) and to pay any Transaction Costs, in each case, with respect to the Transactions, (iii) to satisfy obligations to direct or indirect holders of Capital Stock of the Parent Borrower (immediately prior to giving effect to the Transactions) in connection with, or as a result of, any working capital and/or purchase price adjustments, in each case, with respect to the Transactions and (iv) to satisfy any settlement of claims or actions in connection with the Transactions or to satisfy indemnity or other similar obligations in connection with the Transactions;
(viiviii) so long as no Event of Default shall have occurred and be continuing at the Parent time of the declaration thereof, following the consummation of a Qualifying IPO, the Borrower may (or may make Restricted Payments to any Parent Company to enable it to) make Restricted Payments with respect to any Capital Stock in an amount not of up to exceed (A) the greater of (x) an amount equal to 7.007.20% per annum of the net Cash proceeds received by or contributed to the Parent Borrower in connection with the merger of Isos Acquisition Corporation and Bowlero Corp. on December 15, 2021 and the other transactions consummated in connection therewith and (y) an amount equal to 7.00% per annum of the Market Capitalization of the Parent Borrower (or its direct or indirect Parent Company, as applicable) and its subsidiaries minus (B) from any utilization of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A)such Qualifying IPO;
(viiiix) the Parent Borrower may make Restricted Payments to (i1) redeem, repurchase, defease, discharge, retire or otherwise acquire any (A) Capital Stock (“Treasury Capital Stock”) of the Parent Borrower and/or or any Restricted Subsidiary or (B) Capital Stock of any Parent Company, in the case of each of subclauses (A(A) and (B(B), in exchange for, or out of the proceeds of the substantially concurrent sale (other than to the Parent Borrower and/or any Restricted or a Subsidiary) of, Qualified Capital Stock of the Parent Borrower or any Parent Company to the extent any such proceeds are contributed to the capital of the Parent Borrower and/or or any Restricted Subsidiary in respect of Qualified Capital Stock (“Refunding Capital Stock”) and (ii2) declare and pay dividends on any the Treasury Capital Stock out of the proceeds of the substantially concurrent sale or issuance (other than to the Parent Borrower or a Restricted Subsidiary) of any the Refunding Capital Stock;
(ixx) to the extent constituting a Restricted Payment, the Parent Borrower may consummate any transaction permitted by Section 5.19 (other than Section 5.19(d)), Section Section 6.06 (other than Sections 6.06(j6.06(j) and (t(t)) and Section ), Section 6.07 (other than Section Section 6.07(g)) and Section 6.09 (other than Section 6.09(d));
(xxi) so long as no Event of Default described in Section 7.01(a), (f) or (g) shall have occurred and be continuing or would result therefrom, the Parent Borrower may make additional Restricted Payments in an aggregate amount not to exceed (A) the greater of (i) $85,000,000 70,000,000 and 25(ii) 60% of Consolidated Adjusted EBITDA of the Borrower, as of the last day of the most recently ended Test Period minus (B) any utilization for which financial statements are available, prior to the date of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A)applicable incurrence;
(xixii) the Parent Borrower may make additional Restricted Payments if on the date of the distribution thereof, (1) no Default or Event of Default shall have occurred and be continuing or would result therefrom and (2) the Total Leverage Ratio as determined on a Pro Forma Basis as of the last day of the most recently ended Test Period for which financial statements are available, would not exceed 5.00:1.00;
(xiii) the Borrower may pay any dividend or other distribution or consummate any redemption within 60 days after the date of 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 dividend or redemption notice would have complied with the provisions of this Section 6.04(a);
(xii) the Parent Borrower may make any Restricted Payment constituting the distribution or payment of Receivables Fees;
(xiii) the Parent Borrower may make additional Restricted 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 Event of Default hereunder or shall result therefromhereof;
(xiv) the Parent Borrower may pay any dividend or consummate any redemption required by provisions in shareholder agreements, partnership agreements, limited liability company organizational governance documents, corporate organizational documents (including, without limitation, certificates of designation), joint venture agreements and other similar agreements that restrict the transfer of ownership interests in such partnership, limited liability company, joint venture or similar Person;
(xv) Borrower may make additional Restricted Payments in an amount not corresponding to exceed the amount Net Proceeds of proceeds received by the Parent Borrower and/or any Restricted Subsidiary under the Representation Sale and Warranty Insurance Policy during the term of this Agreement;Lease-Back Transaction permitted pursuant to Section 6.08; and
(xvxvi) any distributions or payments of Securitization Fees, sales or contributions and other transfers of Securitization Assets and proceeds thereof and purchases of Securitization Assets, in each case in connection with any Securitization Facility.
(Ab) for The Borrower shall not, nor shall it permit any taxable period Subsidiary to, make any payment in Cash, securities or other property on or in respect of principal of or interest on any (x) Subordinated Indebtedness or (y) Indebtedness secured by Liens on the Collateral that are junior to the Liens securing the Secured Obligations, in each case with an outstanding principal amount in excess of the greater of (i) $36,000,000 and (ii) 30% of Consolidated Adjusted EBITDA of the Borrower, as of the last day of the most recently ended Test Period for which financial statements are available (such Indebtedness, the Parent Borrower and/or any of its Subsidiaries are members of a consolidated, combined or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which a direct or indirect parent of the Parent Borrower is the common parent (a “Tax GroupRestricted Debt”), including any sinking fund or for which similar deposit, on account of the Parent Borrower is a disregarded entity for U.S. federal income tax purposes wholly-owned by a corporate parent purchase, redemption, retirement, acquisition, cancellation or termination of any Restricted Debt (a collectively, “Corporate ParentRestricted Debt Payments”), except:
(i) the Parent Borrower and each of its Subsidiaries may make Restricted Payments the proceeds of which shall be used by such common parent to pay the portion of any consolidatedpurchase, combined or similar U.S. federaldefeasance, state or local income Taxes of such Tax Group, or by the Corporate Parent to pay the portion of the U.S. federal, state or local income Taxes of such Corporate Parent, or any franchise taxes imposed in lieu thereof, for such taxable period that are attributable to the income of the Parent Borrower and/or its Subsidiaries, provided that such amount shall not be greater than the amount of such U.S. federal, state or local income taxes that would be paid (for such taxable period) by the Parent Borrower and its Subsidiaries if the Parent Borrower and/or such Subsidiaries had been a stand-alone corporate taxpayer (or stand-alone group of corporate taxpayers filing on a consolidated, combined or similar basis) for all taxable years ending after the Closing Date (taking into account any net operating loss carryforwards attributable to the Parent Borrower and its Subsidiaries, as the case may be) and (B) without duplication of Restricted Payments made under Section 6.04(a)(xv)(A), for any taxable period for which the Parent Borrower is treated as a partnership for U.S. federal and/or applicable state or local income tax purposes, the Parent Borrower may make Restricted Payments to its equity owners at the times and in the amounredemptio
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) The Parent Lead Borrower shall not pay or make, directly or indirectly, any Restricted Payment, except that:
: (i) the Parent Lead Borrower may make Restricted Payments to the extent necessary to permit any Parent Company:
: (A) to pay general operating and compliance administrative costs and expenses (including corporate overhead, legal or similar expenses and customary salary, fees, bonus and other benefits payable to directors, officers, employees, members of management, managers and/or consultants of any Parent Company)) and franchise fees and Taxes and similar fees, Taxes and expenses required to enable such Parent Company to maintain its organizational existence or qualification to do business, in each case, which are reasonable and customary and incurred in the ordinary course of business, plus any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of any Parent Company, in each case, to the extent attributable to the ownership or operations of any Parent Company and its subsidiaries (but excluding, for the avoidance of doubt, excluding the portion of any such amount, if any, amount that is attributable to the ownership or operations of any subsidiary of any Parent Company other than the Borrowers and their subsidiaries); (B) to discharge the consolidated, combined, unitary or similar Tax liabilities of such Parent Company and its subsidiaries when and as due, to the extent such liabilities are attributable to the operations of any Parent Company (but excluding, for the avoidance of doubt, the portion of any such Tax liabilities, if any, that is attributable to the operations of any subsidiary of any Parent Company other than the Lead Borrower and/or its subsidiaries), the Parent Lead Borrower and/or and its subsidiaries;
; provided that the amount paid by the Lead Borrower pursuant to this paragraph (B) to pay franchise, excise shall not exceed the amount of Tax liabilities that would be due if the Lead Borrower and each Restricted Subsidiary were separate corporations filing income and similar TaxesTax returns on a consolidated, and other feescombined, Taxes and expenses, required to maintain unitary or similar basis with the organizational existence Lead Borrower as the common parent of such Parent Company;
affiliated group (Ccalculated at the highest combined applicable federal, state, local and foreign Tax rate); provided further that Restricted Payments under this Section 6.04(a)(i)(B) to pay customary salary, bonus, long-term incentive, severance and other benefits (including payment to certain service providers of the Parent Borrower or its Subsidiaries pursuant that are attributable to any equity plan (whether in the form of options, cash settled options Unrestricted Subsidiary or otherwise)) payable to Permitted Payees, as well as applicable employment, social security or similar taxes in connection therewith, any joint venture shall be permitted only to the extent that either (x) such salaryUnrestricted Subsidiary has made one or more Cash distributions, bonuses, severance and other benefits are attributable and reasonably allocated advances or loans to the operations Lead Borrower or any of its Restricted Subsidiaries for such purpose in an amount up to the Parent Borrower and/or its subsidiariesamount of such Unrestricted Subsidiary’s or joint venture’s, in each caseas applicable, so long as proportionate share of such Parent Company applies Tax liabilities or (y) the amount of any such Restricted Payment for made by the Lead Borrower on behalf of such purpose;
Unrestricted Subsidiary or joint venture is treated as an Investment subject to Section 6.06 hereof; (DC) to pay audit and other accounting and reporting expenses of such Parent Company to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such expenses, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower Borrowers and/or its their subsidiaries), the Parent Borrower Borrowers and its their subsidiaries;
; (ED) for the payment of insurance premiums and deductibles to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower Borrowers and/or its their subsidiaries), the Parent Borrower Borrowers and its their subsidiaries;
(F) to pay (x) fees and expenses related to any debt and/or equity offerings (including refinancings), investments and/or acquisitions permitted or not restricted by this Agreement (whether or not consummated, and including advisory, refinancing, subsequent transaction and exit fees of any Parent Company of the Parent Borrower) and expenses and indemnities of any trustee, agent, arranger, underwriter or similar role and (y) Public Company Costs; and
(G) to finance any Investment permitted under Section 6.06 as if such Parent Company were subject to Section 6.06 (provided that (x) any Restricted Payment under this clause (a)(i)(G) 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 (y) the relevant Parent Company shall, promptly following the closing 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 (I) all property acquired to be contributed to the Parent Borrower or one or more of its Restricted Subsidiaries or (II) the merger, consolidation or amalgamation of the Person formed or acquired into the Parent Borrower or one or more of its Restricted Subsidiaries, in order to consummate such Investment in compliance with the applicable requirements of Section 6.06 as if undertaken as a direct Investment by the Parent Borrower or the relevant Restricted Subsidiary);
(ii) the Parent Borrower may pay (or make Restricted Payments to allow any Parent Company to pay) for the repurchase, redemption, retirement or other acquisition or retirement for value of Capital Stock of any Parent Company or any subsidiary held by any Permitted Payee:
(A) in accordance with the terms of promissory notes issued pursuant to Section 6.01(o), so long as the aggregate amount of all Cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments made pursuant to sub-clause (D) of this clause (ii) below, (1) does not exceed the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied)) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under clause (D) below; plus
(B) with the proceeds of any sale or issuance of, or of any capital contribution in respect of, the Capital Stock of the Parent Borrower or any Parent Company (to the extent such proceeds are contributed to the Parent Borrower or any Restricted Subsidiary in respect of Qualified Capital Stock issued by the Parent Borrower or such Restricted Subsidiary) (other than amounts constituting a Cure Amount or an Available Excluded Contribution Amount); plus
(C) with the net proceeds of any key-man life insurance policies; plus
(D) with Cash and Cash Equivalents in an amount not to exceed, together with the aggregate amount of all cash payments made pursuant to sub-clause (A) of this clause (ii) in respect of promissory notes issued pursuant to Section 6.01(o), (1) the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under the immediately preceding clause (1); plus
(E) with the amount of any Cash bonuses otherwise payable to any Permitted Payee that are foregone in exchange for the receipt of Capital Stock of the Parent Borrower or any Parent Company pursuant to any compensation arrangement, including any deferred compensation plan;
(iii) the Parent Borrower may make additional Restricted Payments in an amount not to exceed (A) the portion, if any, of the Available Amount on such date that the Parent Borrower elects to apply to this clause (iii)(A) plus (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Parent Borrower elects to apply to this clause (iii)(B) (plus, without duplication of amounts 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 with Available Excluded Contribution Amounts up to the amount of such Available Excluded Contribution Amount, less any application thereof under Sections 6.04(b)(vi) or 6.06(r));
(iv) the Parent Borrower may make Restricted Payments (i) to any Parent Company to enable such Parent Company to (A) make Cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of such Parent Company, dividends, share splits, reverse share splits (or any combination thereof) and, mergers, consolidations, amalgamations or other business combinations, and acquisitions and other Investments permitted hereunder and/or (B) honor any conversion request by a holder of Convertible Indebtedness by payment of cash and/or delivery of Capital Stock, make any cash payments in lieu of fractional shares in connection with any conversion of Convertible Indebtedness and otherwise make payments on Convertible Indebtedness in accordance with its terms (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments upon redemption thereof), or, in the case of each of sub-clauses (A) and (B) above, make Restricted Payments to any Parent Company to enable such Parent Company to make the payments and/or deliveries described in such sub-clauses (A) and (B), and (ii) consisting of (A) payments made or expected to be made in respect of withholding or similar Taxes payable by any Permitted Payee and/or (B) repurchases of Capital Stock in consideration of the payments described in sub clause (A) above, including demand repurchases in connection with the exercise of stock options and the issuance of restricted stock units or similar stock based awards;
(v) the Parent Borrower may repurchase, redeem, acquire or retire Capital Stock upon (or make provisions for withholdings in connection with), or make Restricted Payments to any Parent Company to enable it to repurchase, redeem, acquire or retire Capital Stock upon (or make provisions for withholdings in connection with), the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represents all or a portion of the exercise price of, or tax withholdings with respect to, such warrants, options or other securities convertible into or exchangeable for Capital Stock as part of a “cashless” exercise;
(vi) the Parent Borrower may make Restricted Payments the proceeds of which are applied (i) on the Closing Date, solely to effect the consummation of the Transactions and on or about the Amendment No. 1 Effective Date, solely to effect the consummation of the Amendment No. 1 Transactions, (ii) on and after the Closing Date, to satisfy any payment obligations owing, or as otherwise required, under the Acquisition Agreement (including payment of working capital and/or purchase price adjustments) and to pay Transaction Costs, in each case, with respect to the Transactions, (iii) to satisfy obligations to direct or indirect holders of Capital Stock of the Parent Borrower (immediately prior to giving effect to the Transactions) in connection with, or as a result of, any working capital and/or purchase price adjustments, in each case, with respect to the Transactions and (iv) to satisfy any settlement of claims or actions in connection with the Transactions or to satisfy indemnity or other similar obligations in connection with the Transactions;
(vii) the Parent Borrower may (or may make Restricted Payments to any Parent Company to enable it to) make Restricted Payments with respect to any Capital Stock in an amount not to exceed (A) the greater of (x) an amount equal to 7.00% per annum of the net Cash proceeds received by or contributed to the Parent Borrower in connection with the merger of Isos Acquisition Corporation and Bowlero Corp. on December 15, 2021 and the other transactions consummated in connection therewith and (y) an amount equal to 7.00% per annum of the Market Capitalization of the Parent Borrower (or its direct or indirect Parent Company, as applicable) and its subsidiaries minus (B) any utilization of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A);
(viii) the Parent Borrower may make Restricted Payments to (i) redeem, repurchase, defease, discharge, retire or otherwise acquire any (A) Capital Stock (“Treasury Capital Stock”) of the Parent Borrower and/or any Restricted Subsidiary or (B) Capital Stock of any Parent Company, in the case of each of subclauses (A) and (B), in exchange for, or out of the proceeds of the substantially concurrent sale (other than to the Parent Borrower and/or any Restricted Subsidiary) of, Qualified Capital Stock of the Parent Borrower or any Parent Company to the extent any such proceeds are contributed to the capital of the Parent Borrower and/or any Restricted Subsidiary 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 the Parent Borrower or a Restricted Subsidiary) of any Refunding Capital Stock;
(ix) to the extent constituting a Restricted Payment, the Parent Borrower may consummate any transaction permitted by Section 5.19 (other than Section 5.19(d)), Section 6.06 (other than Sections 6.06(j) and (t)) and Section 6.07 (other than Section 6.07(g));
(x) the Parent Borrower may make additional Restricted Payments in an aggregate amount not to exceed (A) the greater of $85,000,000 and 25% of Consolidated Adjusted EBITDA 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);
(xi) the Parent Borrower may pay any dividend or other distribution or consummate any redemption within 60 days after the date of 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);
(xii) the Parent Borrower may make any Restricted Payment constituting the distribution or payment of Receivables Fees;
(xiii) the Parent Borrower may make additional Restricted 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 Event of Default hereunder or shall result therefrom;
(xiv) the Parent Borrower may make additional Restricted Payments in an amount not to exceed the amount of proceeds received by the Parent Borrower and/or any Restricted Subsidiary under the Representation and Warranty Insurance Policy during the term of this Agreement;
(xv) (A) for any taxable period for which the Parent Borrower and/or any of its Subsidiaries are members of a consolidated, combined or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which a direct or indirect parent of the Parent Borrower is the common parent (a “Tax Group”), or for which the Parent Borrower is a disregarded entity for U.S. federal income tax purposes wholly-owned by a corporate parent (a “Corporate Parent”), the Parent Borrower and each of its Subsidiaries may make Restricted Payments the proceeds of which shall be used by such common parent to pay the portion of any consolidated, combined or similar U.S. federal, state or local income Taxes of such Tax Group, or by the Corporate Parent to pay the portion of the U.S. federal, state or local income Taxes of such Corporate Parent, or any franchise taxes imposed in lieu thereof, for such taxable period that are attributable to the income of the Parent Borrower and/or its Subsidiaries, provided that such amount shall not be greater than the amount of such U.S. federal, state or local income taxes that would be paid (for such taxable period) by the Parent Borrower and its Subsidiaries if the Parent Borrower and/or such Subsidiaries had been a stand-alone corporate taxpayer (or stand-alone group of corporate taxpayers filing on a consolidated, combined or similar basis) for all taxable years ending after the Closing Date (taking into account any net operating loss carryforwards attributable to the Parent Borrower and its Subsidiaries, as the case may be) and (B) without duplication of Restricted Payments made under Section 6.04(a)(xv)(A), for any taxable period for which the Parent Borrower is treated as a partnership for U.S. federal and/or applicable state or local income tax purposes, the Parent Borrower may make Restricted Payments to its equity owners at the times and in the amoun
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) The Parent Borrower shall not pay or make, directly or indirectly, any Restricted Payment, except that:
(i) the Parent Borrower may make Restricted Payments to the extent necessary to permit any Parent Company:
(A) to pay general operating and compliance administrative costs and expenses (including corporate overhead, legal or similar expenses and customary wages, salary, bonus and other benefits payable to directors, officers, employees, members of management, managers consultants and/or consultants independent contractors of any Parent Company), franchise fees, franchise Taxes and similar fees, Taxes and expenses required to maintain the organizational existence of such Parent Company, in each case, which are reasonable and customary and incurred in the ordinary course of business, plus any reasonable and customary indemnification claims made by current or former directors, officers, members of management, managers, employees or consultants of any Parent Company, in each case, to the extent attributable to the ownership or operations of any Parent Company Company, plus any costs or expenses associated with complying with the requirements or regulations in connection with becoming or continuing to be a public company (including costs and expenses incurred in connection with compliance with ▇▇▇▇▇▇▇▇-▇▇▇▇▇) (but excluding, for the avoidance of doubt, the portion of any such amount, if any, that is attributable to the ownership or operations operation of any subsidiary of any Parent Company other than Holdings, the Parent Borrower and/or its subsidiaries), the Parent Borrower and/or its subsidiaries;
(B) to pay franchisethe extent applicable, excise and similar Taxes, and other fees, Taxes and expenses, required to maintain the organizational existence of such Parent Companymake Tax Distributions;
(C) to pay customary salary, bonus, long-term incentive, severance and other benefits (including payment to certain service providers of the Parent Borrower or its Subsidiaries pursuant to any equity plan (whether in the form of options, cash settled options or otherwise)) payable to Permitted Payees, as well as applicable employment, social security or similar taxes in connection therewith, to the extent such salary, bonuses, severance and other benefits are attributable and reasonably allocated to the operations of the Parent Borrower and/or its subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose;
(D) to pay audit and other accounting and reporting expenses of at such Parent Company to the extent attributable relating to the ownership or operations of any Parent Company (but excluding, for the avoidance of doubt, the portion of any such expenses, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than Holdings, the Parent Borrower and/or its subsidiaries), Holdings, the Parent Borrower and and/or its subsidiaries;
(ED) for the payment of insurance premiums to the extent attributable relating to the ownership or operations of any Parent Company (but excluding, for the avoidance of doubt, the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than Holdings, the Parent Borrower and/or its subsidiaries), Holdings, the Parent Borrower and and/or its subsidiaries;
(FE) to pay (x) fees and expenses related to any debt and/or or equity offerings (including refinancings)offerings, investments and/or or acquisitions permitted or not restricted by this Agreement (whether or not consummated, and including advisory, refinancing, subsequent transaction and exit fees of any Parent Company of the Parent Borrower) and expenses and indemnities of any trustee, agent, arranger, underwriter or similar role and (y) Public Company Costs; and);
(GF) to finance any Investment permitted under Section 6.06 as if such Parent Company were subject to Section Section 6.06 (provided that (x) any such Restricted Payment Payments under this clause (a)(i)(G(a)(i)(F) 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 (y) the relevant such Parent Company shall, promptly following the closing 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 therewiththereof, cause (I) all such property acquired to be contributed to the Parent Borrower or one or more of its Restricted Subsidiaries Subsidiaries, or (II) the merger, consolidation or amalgamation of the Person formed or acquired into the Parent Borrower or one or more of its Restricted Subsidiaries, in order to consummate such Investment in compliance a manner that causes such Investment to comply with the applicable requirements of Section Section 6.06 as if undertaken as a direct Investment by the Parent Borrower or such Subsidiary) (it being agreed that such contribution or merger, consolidation or amalgamation shall not increase the relevant Available Amount or the Available Excluded Contribution Amount except to the extent in excess of such Restricted SubsidiaryPayment made in reliance on this clause (a)(i)(F));
(G) to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, employees or consultants (or any Immediate Family Member thereof) of any Parent Company plus any reasonable and customary indemnification claims made by current or former directors, officers, members of management, managers, employees or consultants of any Parent Company, to the extent such salary, bonuses, severance and other benefits or claims in respect of any of the foregoing are directly attributable and reasonably allocated to the ownership or operations of any Parent Company (but excluding, for the avoidance of doubt, the portion of any amount, if any, that is attributable to the ownership or operation of any subsidiary of any Parent Company other than Holdings, the Borrower and/or its subsidiaries), Holdings, the Borrower and/or its subsidiaries; and
(H) without duplication of any amounts permitted under clause (a)(i)(B) of this Section 6.04, to pay any United States federal, state or local income tax liabilities of the partners in any Parent Company that are attributable to the receipt by such Parent Company of any Restricted Payment made pursuant to clause (ii) (as well as any amounts with respect to the funding of such tax liabilities) assuming such partners are subject to tax at an effective rate equal to the higher of the combined marginal effective rate of U.S. federal, state and local income tax applicable to a corporation doing business or an individual resident in New York, New York, taking account of any difference in rates applicable to ordinary income, capital gains and “qualified dividends” as such term is defined in Code Section 1(h), any available dividends-received deductions and any allowable deductions in respect of such state and local taxes in computing liability for U.S. federal income taxes; in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose;
(ii) the Parent Borrower may pay (or make Restricted Payments to allow any Parent Company to pay) for the repurchase, redemption, retirement or other acquisition or retirement for value of Capital Stock of any Parent Company or any subsidiary of the Borrower held by any Permitted Payeefuture, present or former employee, director, member of management, officer, manager or consultant (or any Immediate Family Member thereof) of any Parent Company, the Borrower or any subsidiary of the Borrower:
(A) in accordance with the terms of promissory notes issued pursuant to Section 6.01(oSection 6.01(n), so long as the aggregate amount of all Cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments made pursuant to sub-clause (D(D) of this clause (ii) below(ii), (1) does not exceed the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period 12,000,000 in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to the next two subsequent Fiscal Years (until so applied)) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under clause (D) below; plusYears;
(B) with the proceeds of any sale or issuance of, or of any capital contribution in respect of, the Capital Stock of the Parent Borrower or any Parent Company (to the extent such proceeds that are contributed to the Parent Borrower or any Restricted Subsidiary in respect of Qualified Capital Stock issued by the Parent Borrower or such Restricted Subsidiary) (other than amounts constituting a Cure Amount or an Available Excluded Contribution Amount); plusNot Otherwise Applied;
(C) with the net proceeds of any key-man life insurance policiespolicies received during such Fiscal Year; plusor
(D) with Cash and Cash Equivalents in an amount not to exceed, together with the aggregate amount of all cash Cash payments made pursuant to sub-clause (A) of this clause (ii) in respect of promissory notes issued pursuant to Section 6.01(oSection 6.01(n), (1) the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period 12,000,000 in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to the next two subsequent Fiscal Years (until so applied) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under the immediately preceding clause (1); plus
(E) with the amount of any Cash bonuses otherwise payable to any Permitted Payee that are foregone in exchange for the receipt of Capital Stock of the Parent Borrower or any Parent Company pursuant to any compensation arrangement, including any deferred compensation planYears;
(iii) the Parent Borrower may make additional Restricted Payments in an amount not to exceed (A) the portion, if any, of the Available Amount on such date that the Parent Borrower elects to apply to this clause (iii)(A(iii)(A) plus and (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Parent Borrower elects to apply to this clause (iii)(B(iii)(B) (plus, without duplication of amounts 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 with Available Excluded Contribution Amounts up to the amount of such Available Excluded Contribution Amount, less any application thereof under Sections 6.04(b)(vi) or 6.06(r))and that is Not Otherwise Applied;
(iv) the Parent Borrower may make Restricted Payments (i) to any Parent Company to enable such Parent Company to (A) make Cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of such Parent Company, dividends, share splits, reverse share splits (Company or any combination thereof) and, mergers, consolidations, amalgamations or other business combinations, and acquisitions and other Investments permitted hereunder and/or (B) honor any conversion request by a holder of Convertible Indebtedness by payment of cash and/or delivery of Capital Stock, make any cash payments in lieu of fractional shares in connection with any conversion of Convertible Indebtedness and otherwise make payments on Convertible Indebtedness in accordance with its terms (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments upon redemption thereof), or, in the case of each of sub-clauses (A) and (B) above, make Restricted Payments to any Parent Company to enable such Parent Company to make the payments and/or deliveries described in such sub-clauses (A) and (B), and (ii) consisting of (A) payments made or expected to be made in respect of withholding or similar Taxes payable by any Permitted Payee future, present or former officers, directors, employees, members of management, managers or consultants of the Borrower, any subsidiary of the Borrower or Parent Company or any of their respective Immediate Family Members and/or (B) repurchases of Capital Stock in consideration of the payments described in sub clause (A) above(A), including demand repurchases in connection with the exercise of stock options and the issuance of restricted stock units or similar stock based awardsoptions;
(v) the Parent Borrower may repurchase, redeem, acquire or retire Capital Stock upon repurchase (or make provisions for withholdings in connection with), or make Restricted Payments to any Parent Company to enable it to repurchase, redeem, acquire or retire ) Capital Stock upon (or make provisions for withholdings in connection with), the exercise of warrantsoptions, options warrants or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represents all or a portion of the exercise price ofof such options, or tax withholdings with respect to, such warrants, options warrants or other securities convertible into or exchangeable for Capital Stock as part of a “cashless” exercise;
(vi) the Parent Borrower may make Restricted Payments the proceeds of which are applied (iA) on the Closing Date, solely to effect the consummation of the Transactions and on or about the Amendment No. 1 Effective Date, solely to effect the consummation of the Amendment No. 1 Transactions, (iiB) on and after the Closing Date, to satisfy (or to enable any Parent Company to satisfy) any payment obligations owing, or as otherwise required, owing under the Acquisition Agreement (including as in effect on the date hereof) and the payment of working capital and/or purchase price adjustments) and to pay any Transaction Costs, in each case, with respect to the Transactions, (iii) to satisfy obligations to direct or indirect holders of Capital Stock of the Parent Borrower (immediately prior to giving effect to the Transactions) in connection with, or as a result of, any working capital and/or purchase price adjustments, in each case, with respect to the Transactions and (iv) to satisfy any settlement of claims or actions in connection with the Transactions or to satisfy indemnity or other similar obligations in connection with the Transactions;
(vii) so long as no Event of Default shall have occurred and be continuing at the Parent time of the declaration thereof, following the consummation of a Qualifying IPO, the Borrower may (or may make Restricted Payments to any Parent Company to enable it to) make Restricted Payments with respect to any Capital Stock in an amount not of up to exceed (A) the greater of (x) an amount equal to 7.006.0% per annum of the net Cash proceeds received by or contributed to the Parent Borrower in connection with the merger of Isos Acquisition Corporation and Bowlero Corp. on December 15, 2021 and the other transactions consummated in connection therewith and (y) an amount equal to 7.00% per annum of the Market Capitalization of the Parent Borrower (or its direct or indirect Parent Company, as applicable) and its subsidiaries minus (B) from any utilization of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A)such Qualifying IPO;
(viii) the Parent Borrower may make Restricted Payments to (i) redeem, repurchase, defease, discharge, retire or otherwise acquire any (A) Capital Stock (“Treasury Capital Stock”) of the Parent Borrower and/or or any Restricted Subsidiary or (B) Capital Stock of any Parent Company, in the case of each of subclauses (A(A) and (B(B), in exchange for, or out of the proceeds of the substantially concurrent sale (other than to the Parent Borrower and/or any Restricted or a Subsidiary) of, Qualified Capital Stock of the Parent Borrower or any Parent Company to the extent any such proceeds are contributed to the capital of the Parent Borrower and/or or any Restricted Subsidiary in respect of Qualified Capital Stock (“Refunding Capital Stock”) and (ii) declare and pay dividends on any the Treasury Capital Stock out of the proceeds of the substantially concurrent sale or issuance (other than to the Parent Borrower or a Restricted Subsidiary) of any the Refunding Capital Stock;
(ix) to the extent constituting a Restricted Payment, the Parent Borrower may consummate any transaction permitted by Section 5.19 (other than Section 5.19(d)), Section Section 6.06 (other than Sections 6.06(j6.06(j) and (t(t)) and Section ), Section 6.07 (other than Section Section 6.07(g)) and Section 6.09 (other than Sections 6.09(d) and (j));
(x) the Parent Borrower may make additional Restricted Payments in an aggregate amount not to exceed the portion, if any, of the Floating Basket Amount on the relevant date of determination that the Borrower elects to apply pursuant to this clause (x);
(xi) the Borrower may make additional Restricted Payments so long as at the time of the declaration thereof, (A) no Default or Event of Default exists or would result therefrom and (B) the greater of $85,000,000 and 25% of Consolidated Adjusted EBITDA Total Leverage Ratio would not exceed 3.30:1.00 calculated on a Pro Forma Basis as of the last day of the most recently ended Test Period minus for which financial statements have been delivered pursuant to Section 5.01(a) or (B) any utilization of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (Ab);, as applicable; and
(xixii) the Parent Borrower may pay any dividend or other distribution or consummate any redemption within 60 days after the date of 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 dividend or redemption notice would have complied with the provisions hereof.
(b) The Borrower shall not, nor shall it permit any Subsidiary to, make any payment in Cash, securities or other property on or in respect of this Section 6.04(aprincipal of or interest on any Junior Indebtedness (such Indebtedness, the “Restricted Debt”), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Restricted Debt (collectively, “Restricted Debt Payments”), except:
(i) the purchase, defeasance, redemption, repurchase, repayment or other acquisition or retirement of any Restricted Debt made by exchange for, or out of the proceeds of the substantially concurrent incurrence of, Restricted Debt permitted by Section 6.01;
(ii) payments as part of an “applicable high yield discount obligation” catch-up payment;
(iii) payments of regularly scheduled interest and payments of fees, expenses and indemnification obligations as and when due in respect of any Restricted Debt (other than payments with respect to Subordinated Indebtedness prohibited by the subordination provisions thereof);
(xiiiv) payments with respect to intercompany Indebtedness between the Parent Borrower may make any Restricted Payment constituting and its Subsidiaries permitted under Section 6.01, subject to the distribution or payment of Receivables Feessubordination provisions applicable thereto;
(xiiiA) Restricted Debt Payments in exchange for, or with proceeds of any issuance of Capital Stock of any Parent Company or Qualified Capital Stock of the Borrower or any Subsidiary Guarantor (other than issuances to the Borrower or a Subsidiary) and/or any capital contribution in respect of Qualified Capital Stock of the Borrower, in each case, that are Not Otherwise Applied in reliance on the Available Amount, (B) Restricted Debt Payments as a result of the conversion of all or any portion of Restricted Debt into Qualified Capital Stock of any Parent Company, the Borrower or any Subsidiary Guarantor, in each case, that are Not Otherwise Applied in reliance on the Available Amount 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 exceed (A) the Parent portion, if any, of the Available Amount on such date that the Borrower may make elects to apply to this clause (vi)(A), and (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Borrower elects to apply to this clause (vi)(B) and that is Not Otherwise Applied; and
(vii) (A) additional Restricted Debt Payments in an aggregate amount not to exceed the portion, if any, of the Floating Basket Amount on the relevant date of determination that the Borrower elects to apply pursuant to this clause (vii)(A), (B) additional Restricted Debt Payments in an aggregate amount not to exceed the greater of $38,500,000 and 4.40% of Consolidated Total Assets as of the last day of the most recently ended Test Period for which financial statements have been delivered pursuant to Section 5.01(a) or (b), as applicable and (C) so long as, as measured Event of Default exists at the time of delivery of notice with respect thereof or would result therefrom, additional Restricted Debt Payments; provided for that in Section 1.04(ethe case of Restricted Debt Payments made pursuant to this clause (C), (i) at the time of delivery of notice with respect thereto, the Total Leverage Ratio would not exceed 4.00:1.00, 3.90:1.00 calculated on a Pro Forma Basis and (ii) there shall exist no Event as of Default hereunder or shall result therefrom;
(xiv) the Parent Borrower may make additional Restricted Payments in an amount not to exceed last day of the amount of proceeds received by the Parent Borrower and/or any Restricted Subsidiary under the Representation and Warranty Insurance Policy during the term of this Agreement;
(xv) (A) for any taxable period most recently ended Test Period for which the Parent Borrower and/or any of its Subsidiaries are members of a consolidated, combined financial statements have been delivered pursuant to Section 5.01(a) or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which a direct or indirect parent of the Parent Borrower is the common parent (a “Tax Group”b), or for which the Parent Borrower is a disregarded entity for U.S. federal income tax purposes wholly-owned by a corporate parent (a “Corporate Parent”)as applicable, the Parent Borrower and each of its Subsidiaries may make Restricted Payments the proceeds of which shall be used by prior to such common parent to pay the portion of any consolidated, combined or similar U.S. federal, state or local income Taxes of such Tax Group, or by the Corporate Parent to pay the portion of the U.S. federal, state or local income Taxes of such Corporate Parent, or any franchise taxes imposed in lieu thereof, for such taxable period that are attributable to the income of the Parent Borrower and/or its Subsidiaries, provided that such amount shall not be greater than the amount of such U.S. federal, state or local income taxes that would be paid (for such taxable period) by the Parent Borrower and its Subsidiaries if the Parent Borrower and/or such Subsidiaries had been a stand-alone corporate taxpayer (or stand-alone group of corporate taxpayers filing on a consolidated, combined or similar basis) for all taxable years ending after the Closing Date (taking into account any net operating loss carryforwards attributable to the Parent Borrower and its Subsidiaries, as the case may be) and (B) without duplication of Restricted Payments made under Section 6.04(a)(xv)(A), for any taxable period for which the Parent Borrower is treated as a partnership for U.S. federal and/or applicable state or local income tax purposes, the Parent Borrower may make Restricted Payments to its equity owners at the times and in the amountime.
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) The Parent Lead Borrower shall not pay or make, directly or indirectly, any Restricted Payment, except that:
(i) : 133208524_1 the Parent Lead Borrower may make Restricted Payments to the extent necessary to permit any Parent Company:
(A) : to pay general operating and compliance administrative costs and expenses (including corporate overhead, legal or similar expenses, expenses to prepare any Tax returns or defend any Tax claims, and customary salary, bonus and other benefits payable to directors, officers, employees, members of management, managers and/or consultants of any Parent Company)) and franchise fees and Taxes and similar fees, Taxes and expenses required to enable such Parent Company to maintain its organizational existence or qualification to do business, in each case, which are reasonable and customary and incurred in the ordinary course of business, plus any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of any Parent Company, in each case, to the extent attributable to the ownership or operations of any Parent Company and its subsidiaries (but excluding, for the avoidance of doubt, excluding the portion of any such amount, if any, amount that is attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Lead Borrower and/or and its subsidiaries), the Parent Borrower and/or its subsidiaries;
(B) ; to pay franchise, excise scheduled and similar Taxes, overdue interest and other fees, Taxes and expenses, required to maintain the organizational existence payments as part of such Parent Company;
(C) to pay customary salary, bonus, longan AHYDO catch-term incentive, severance and other benefits (including payment to certain service providers of the Parent Borrower or its Subsidiaries pursuant to any equity plan (whether in the form of options, cash settled options or otherwise)) payable to Permitted Payees, as well as applicable employment, social security or similar taxes in connection therewith, to the extent such salary, bonuses, severance and other benefits are attributable and reasonably allocated to the operations of the Parent Borrower and/or its subsidiariesup payment, in each case, so long as such in respect of any Indebtedness of any Parent Company applies to the amount of any such Restricted Payment for such purpose;
(D) extent the Net Proceeds thereof were contributed to the Lead Borrower; to pay audit and other accounting and reporting expenses of such Parent Company to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such expenses, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Lead Borrower and/or its subsidiaries), the Parent Lead Borrower and its subsidiaries;
(E) ; for the payment of insurance premiums to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Lead Borrower and/or its subsidiaries), the Parent Lead Borrower and its subsidiaries;
(F) to ; pay (x) fees and expenses related to any debt and/or or equity offerings (including refinancings)by any Parent Company, investments and/or or acquisitions permitted or not restricted by this Agreement (whether or not consummated, and including advisory, refinancing, subsequent transaction and exit fees of any Parent Company of the Parent Borrower) and expenses and indemnities of any trustee, agent, arranger, underwriter or similar role and (y) Public Company Costs; and
(G) to finance any Investment permitted under Section 6.06 as if such Parent Company were subject to Section Section 6.06 (provided that (x) any Restricted Payment under this clause (a)(i)(G(a)(i)(F) 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 (y) the relevant Parent Company shall, promptly following the closing 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 therewiththereof, cause (I) all property acquired to be contributed to the Parent Lead Borrower or one or more of its Restricted Subsidiaries Subsidiaries, or (II) the merger, consolidation or amalgamation of the Person formed or acquired into the Parent Lead Borrower or one or more of its Restricted Subsidiaries, in order to consummate such Investment in compliance with the applicable requirements of Section Section 6.06 as if undertaken as a direct Investment by the Parent Lead Borrower or the relevant Restricted Subsidiary);
; and to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, employees or consultants of any Parent Company (iior any Immediate Family Member of any of the foregoing) to the extent such salary, bonuses and other benefits are attributable and reasonably allocated to the operations of the Lead Borrower and/or its subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose; 133208524_1 the Lead Borrower may pay (or make Restricted Payments to allow any Parent Company to pay) for the repurchase, redemption, retirement or other acquisition or retirement for value of Capital Stock of any Parent Company or any subsidiary held by any Permitted Payee:
future, present or former employee, director, member of management, officer, manager or consultant (Aor any Affiliate or Immediate Family Member thereof) of any Parent Company, the Lead Borrower or any subsidiary: in accordance with the terms of promissory notes issued pursuant to Section Section 6.01(o), so long as the aggregate amount of all Cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments made pursuant to sub-clause (D(D) of this clause (ii(ii) below, (1) does not exceed in any Fiscal Year the greater of $68,000,000 40,000,000 and 2012.0% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period in any Fiscal YearEBITDA, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied)) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under clause (D) belowYears; plus
(B) with the proceeds of any sale or issuance of, or of any capital contribution in respect of, the Capital Stock of the Parent Lead Borrower or any Parent Company (to the extent such proceeds are contributed to the Parent Borrower or any Restricted Subsidiary in respect of Qualified Capital Stock issued by to the Parent Lead Borrower or such any Restricted Subsidiary) (other than amounts constituting a Cure Amount or an Available Excluded Contribution Amount); plus
(C) with the net proceeds of any key-man life insurance policies; plus
(D) or with Cash and Cash Equivalents in an amount not to exceedexceed in any Fiscal Year, together with the aggregate amount of all cash payments made pursuant to sub-clause (A(A) of this clause (ii(ii) in respect of promissory notes issued pursuant to Section Section 6.01(o), (1) the greater of $68,000,000 40,000,000 and 2012.0% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period in any Fiscal YearEBITDA, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied) minus (2) any utilization of Years; the Available RP Capacity Amount in reliance on unused capacity under the immediately preceding clause (1); plus
(E) with the amount of any Cash bonuses otherwise payable to any Permitted Payee that are foregone in exchange for the receipt of Capital Stock of the Parent Borrower or any Parent Company pursuant to any compensation arrangement, including any deferred compensation plan;
(iii) the Parent Lead Borrower may make additional Restricted Payments in an amount not to exceed (A) the portion, if any, of the Available Amount on such date that the Parent Lead Borrower elects to apply to this clause (iii)(A) plus (B) iii); the portion, if any, of the Available Excluded Contribution Amount on such date that the Parent Borrower elects to apply to this clause (iii)(B) (plus, without duplication of amounts 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 with Available Excluded Contribution Amounts up to the amount of such Available Excluded Contribution Amount, less any application thereof under Sections 6.04(b)(vi) or 6.06(r));
(iv) the Parent Lead Borrower may make Restricted Payments (i) to any Parent Company to enable such Parent Company to (A) make Cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of such Parent Company, dividends, share splits, reverse share splits (or any combination thereof) and, mergers, consolidations, amalgamations or other business combinations, and acquisitions and other Investments permitted hereunder and/or (B) honor any conversion request by a holder of Convertible Indebtedness by payment of cash and/or delivery of Capital Stock, make any cash payments in lieu of fractional shares in connection with any conversion of Convertible Indebtedness and otherwise make payments on Convertible Indebtedness in accordance with its terms (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments upon redemption thereof), or, in the case of each of sub-clauses (A) and (B) above, make Restricted Payments to any Parent Company to enable such Parent Company to make the payments and/or deliveries described in such sub-clauses (A) and (B), and (ii) consisting of (A) payments made or expected to be made in respect of withholding or similar Taxes payable by any Permitted Payee future, present or former officers, directors, employees, members of management, managers or consultants of the Lead Borrower, any Restricted Subsidiary or any Parent Company or any of their respective Immediate Family Members and/or (B) repurchases of Capital Stock in consideration of the payments described in sub sub-clause (A(A) above, including demand repurchases in connection with the exercise of stock options and options; the issuance of restricted stock units or similar stock based awards;
(v) the Parent Lead Borrower may repurchase, redeem, acquire or retire Capital Stock upon repurchase (or make provisions for withholdings in connection with), or make Restricted Payments to any Parent Company to enable it to repurchase, redeem, acquire or retire ) Capital Stock upon (or make provisions for withholdings in connection with), the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represents all or a portion of the exercise price of, or tax Tax withholdings with respect to, such warrants, options or other securities convertible into or exchangeable for Capital Stock as part of a “cashless” exercise;
; for any taxable period (vior portion thereof) that a Parent Company is treated as a corporation for U.S. federal income tax purposes and for which the Lead Borrower and/or any of its subsidiaries are members (or are pass-through entities of such members) of a consolidated, combined, unitary or similar income Tax group for U.S. federal, state, local or foreign income Tax purposes for which such Parent Company is the common parent, the Lead Borrower may make Restricted Payments to such Parent Company to pay the proceeds portion of which any U.S. federal, state, local or foreign income Taxes (as applicable) of such Parent Company for such taxable period that are applied attributable to the income of the Lead Borrower and/or its applicable subsidiaries; provided that, the aggregate amount of such distributions shall not exceed the aggregate Taxes the Lead Borrower and/or its subsidiaries, as applicable, would be required to pay in respect of such U.S. federal, state, local and foreign Taxes on a stand-alone basis for such taxable period; provided further that the amount of such distributions with respect to any Unrestricted Subsidiary for any taxable period shall be limited to the amount actually paid by such Unrestricted Subsidiary for such purpose; the Lead Borrower may make Restricted Payments (iA) on to consummate, to the Closing Dateextent constituting Restricted Payments, solely to effect the consummation of the Transactions and on or about the Amendment No. 1 Effective Date, solely to effect the consummation of the Amendment No. 1 Transactions, (iiB) on and after the Closing Date, to satisfy any payment obligations owing, or as otherwise required, under the Acquisition Agreement (including payment of working capital and/or purchase price adjustments) and to pay Transaction Costs; so long as no Event of Default exists at the time of declaration of such Restricted Payment, in each case, with respect to the Transactions, (iii) to satisfy obligations to direct or indirect holders of Capital Stock of the Parent Borrower (immediately prior to giving effect to the Transactions) in connection with, or as a result of, any working capital and/or purchase price adjustments, in each case, with respect to the Transactions and (iv) to satisfy any settlement of claims or actions in connection with the Transactions or to satisfy indemnity or other similar obligations in connection with the Transactions;
(vii) the Parent Lead Borrower may (or may make Restricted Payments to any Parent Company to enable it to) make Restricted Payments with respect to any Capital Stock in an amount not to exceed an aggregate amount per annum equal to the sum of (A) the greater of (x) an amount equal to 7.006% per annum of the net Cash proceeds received by or contributed to the Parent Borrower in connection with the merger of Isos Acquisition Corporation and Bowlero Corp. on December 15, 2021 and the other transactions consummated in connection therewith from an initial public offering and (yB) an amount equal to 7.007% per annum of Market Capitalization; the Market Capitalization of the Parent Borrower (or its direct or indirect Parent Company, as applicable) and its subsidiaries minus (B) any utilization of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A);
(viii) the Parent Lead Borrower may make Restricted Payments to (i) redeem, repurchase, defease, discharge, retire or otherwise acquire any (A) Capital Stock (“Treasury Capital Stock”) of the Parent Lead Borrower and/or any Restricted Subsidiary or (B) Capital Stock of any Parent Company, in the case of each of subclauses (A(A) and (B(B), in exchange for, or out of the proceeds of the substantially concurrent sale (other than to the Parent Lead Borrower and/or any Restricted Subsidiary) of, Qualified Capital Stock of the Parent Lead Borrower or any Parent Company to the extent any such proceeds are contributed to the capital of the Parent Lead Borrower and/or any Restricted Subsidiary 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 the Parent Lead Borrower or a Restricted Subsidiary) of any Refunding Capital Stock;
(ix) ; to the extent constituting a Restricted Payment, the Parent Lead Borrower may consummate any transaction permitted by Section 5.19 (other than Section 5.19(d)), Section Section 6.06 (other than Sections 6.06(j6.06(j) and (t(t)) and Section ), Section 6.07 (other than Section Section 6.07(g)) and Section 6.09 (other than Section 6.09(d);
(x) ); the Parent Lead Borrower may make additional Restricted Payments in an aggregate amount not to exceed (A) the greater of $85,000,000 120,000,000 and 2535.0% of Consolidated Adjusted EBITDA as minus the sum of the last day of the most recently ended Test Period minus (A) any amounts under this Section 6.04(a)(xi) reallocated to make Restricted Debt Payments pursuant to Section 6.04(b)(iv), (B) any utilization of amounts under this Section 6.04(a)(xi) reallocated to make Investments pursuant to Section 6.06(q), and (C) any amounts under this Section 6.04(a)(xi) reallocated to incur Indebtedness pursuant to Section 6.01(u) (which may be further reallocated as provided therein); the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A);
(xi) the Parent Lead Borrower may pay any dividend or other distribution or consummate any redemption within 60 sixty (60) days after the date of 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 dividend or redemption notice would have complied with the provisions of this Section 6.04(a);
(xii) hereof; the Parent Lead Borrower may make any Restricted Payment constituting the distribution or payment of Receivables Fees;
(xiii) the Parent Borrower may make additional Restricted Payments so long asas the Payment Conditions applicable to Restricted Payments have been satisfied, as measured at on a Pro Forma Basis; the time provided for Lead Borrower may make Restricted Payments to enable any Parent Company to make Restricted Payments solely in Section 1.04(ethe Qualified Capital Stock of such Parent Company; the Lead Borrower may make Restricted Payments (A) to pay amounts permitted under Section 6.09(f), (g), (h), (i), (k) the Total Leverage Ratio would not exceed 4.00:1.00, calculated on a Pro Forma Basis and (iim) there shall exist no Event of Default hereunder or shall result therefrom;
and (xivB) the Parent Borrower may make additional Restricted Payments otherwise in an amount not to exceed $500,000 per calendar year; and the amount of proceeds received by the Parent Borrower and/or any Restricted Subsidiary under the Representation and Warranty Insurance Policy during the term of this Agreement;
(xv) (A) for any taxable period for which the Parent Borrower and/or any of its Subsidiaries are members of a consolidated, combined or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which a direct or indirect parent of the Parent Borrower is the common parent (a “Tax Group”), or for which the Parent Borrower is a disregarded entity for U.S. federal income tax purposes wholly-owned by a corporate parent (a “Corporate Parent”), the Parent Borrower and each of its Subsidiaries may make Restricted Payments the proceeds of which shall be used by such common parent to pay the portion of any consolidated, combined or similar U.S. federal, state or local income Taxes of such Tax Group, or by the Corporate Parent to pay the portion of the U.S. federal, state or local income Taxes of such Corporate Parent, or any franchise taxes imposed in lieu thereof, for such taxable period that are attributable to the income of the Parent Borrower and/or its Subsidiaries, provided that such amount shall not be greater than the amount of such U.S. federal, state or local income taxes that would be paid (for such taxable period) by the Parent Borrower and its Subsidiaries if the Parent Borrower and/or such Subsidiaries had been a stand-alone corporate taxpayer (or stand-alone group of corporate taxpayers filing on a consolidated, combined or similar basis) for all taxable years ending after the Closing Date (taking into account any net operating loss carryforwards attributable to the Parent Borrower and its Subsidiaries, as the case may be) and (B) without duplication of Restricted Payments made under Section 6.04(a)(xv)(A), for any taxable period for which the Parent Borrower is treated as a partnership for U.S. federal and/or applicable state or local income tax purposes, the Parent Borrower may make Restricted Payments in the form of Capital Stock of, or Indebtedness owed to Holdings, the Borrowers or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Cash and Cash Equivalents (except to the extent constituting proceeds from the Disposition of all or substantially all of the assets of such Unrestricted Subsidiary) and/or intellectual property material (as determined by the Lead Borrower in good faith) to the business of the Lead Borrower and its Restricted Subsidiaries, taken as a whole). The Lead Borrower shall not, nor shall it permit any Restricted Subsidiary to, make any payment (whether in Cash, securities or other property) on or in respect of principal of (x) any Junior Lien Indebtedness, (y) any Subordinated Indebtedness or (z) solely to the extent proceeds of Revolving Loans are being used to make such payment, unsecured Indebtedness, in each cases of clauses (x), (y) and (z), with an individual outstanding principal amount in excess of the Threshold Amount (such Indebtedness under clauses (x), (y) and (z), in each case, with an individual outstanding principal amount in excess of the Threshold Amount, the “Restricted Debt”), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Restricted Debt prior to its equity owners scheduled maturity (collectively, “Restricted Debt Payments”), except: any 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 (except to the extent subject to clause (iv)(C) of the proviso to Section 6.01(p)); payments as part of an AHYDO catch-up payment; payments of regularly scheduled interest as and when due in respect of any Restricted Debt, except for any payments with respect to any such Subordinated Indebtedness that are prohibited by the subordination provisions thereof; so long as, at the times time of delivery of irrevocable notice with respect thereto, no Event of Default exists or would result therefrom, Restricted Debt Payments in an aggregate amount not to exceed (i) the sum of (A) the greater of $120,000,000 and in the amoun35.0% of Consolidated Adjusted EBITDA and (B) any amounts reallocated to this Section 6.04(b)(iv) from Section 6.04(a)(xi) and Section 6.06(q), minus (ii) any amounts reallocated from this Section 6.04(b)(iv) to make Investments pursuant to Section 6.06(q);
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) The Parent Borrower No Issuer shall not pay or make, directly or indirectly, any Restricted Payment, except that:
(i) the Parent Borrower Issuer may make Restricted Payments to the extent necessary to permit any Parent Company (and so long as such amounts are promptly applied by such Parent Company:):
(A) to pay general operating and compliance administrative costs and expenses (including corporate overhead, legal or similar expenses and customary salary, bonus and other benefits payable to directors, officers, employees, members of management, managers and/or consultants of any Parent Company)) and franchise fees and Taxes and similar fees, Taxes and expenses required to enable such Parent Company to maintain its organizational existence or qualification to do business, in each case, which are reasonable and customary and incurred in the ordinary course of business, plus any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of any Parent Company, in each case, to the extent attributable to the ownership or operations of any Parent Company and its subsidiaries (but excluding, for the avoidance of doubt, excluding the portion of any such amount, if any, amount that is attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its Issuer and their subsidiaries), the Parent Borrower and/or its subsidiaries;
(B) to pay franchise, excise and similar Taxes, and other fees, Taxes and expenses, required to maintain the organizational existence of such Parent Companymake Permitted Tax Distributions;
(C) to pay customary salary, bonus, long-term incentive, severance and other benefits (including payment to certain service providers of the Parent Borrower or its Subsidiaries pursuant to any equity plan (whether in the form of options, cash settled options or otherwise)) payable to Permitted Payees, as well as applicable employment, social security or similar taxes in connection therewith, to the extent such salary, bonuses, severance and other benefits are attributable and reasonably allocated to the operations of the Parent Borrower and/or its subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose;
(D) to pay audit and other accounting and reporting expenses of such Parent Company to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such expenses, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower Issuer and/or its their subsidiaries), the Parent Borrower Issuer and its their subsidiaries;
(ED) for the payment of insurance premiums to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower Issuer and/or its subsidiaries), the Parent Borrower Issuer and its subsidiaries;
(FE) to pay (x) fees and expenses related to any debt and/or or equity offerings (including refinancings)offerings, investments and/or or acquisitions permitted or not restricted by this Agreement (whether or not consummated, ) relating to the Issuer and including advisory, refinancing, subsequent transaction and exit fees of any Parent Company of the Parent Borrower) and expenses and indemnities of any trustee, agent, arranger, underwriter or similar role its Restricted Subsidiaries and (y) Public Company Costs; and;
(GF) to finance any Investment permitted under Section 6.06 as if such Parent Company were subject to Section Section 6.06 (provided that (x) any Restricted Payment under this clause (a)(i)(G(a)(i)(F) 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 (y) the relevant Parent Company shall, promptly following the closing 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 therewiththereof, cause (I) all property acquired to be contributed to the Parent Borrower Issuer or one or more of its Restricted Subsidiaries Subsidiaries, or (II) the merger, consolidation or amalgamation of the Person formed or acquired into the Parent Borrower Issuer or one or more of its Restricted Subsidiaries, in order to consummate such Investment in compliance with the applicable requirements of Section Section 6.06 as if undertaken as a direct Investment by the Parent Borrower such Issuer or the relevant Restricted Subsidiary);
(G) to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, employees or consultants of any Parent Company (or any Immediate Family Member of any of the foregoing) to the extent such salary, bonuses and other benefits are attributable and reasonably allocated to the operations of the Issuer and/or their subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose; and
(H) to pay costs, expenses and fees associated with litigation or governmental proceedings, investigations or inquires, in each case to the extent such costs, expenses and fees are attributable and reasonably allocated to the operations of the Issuer and/or their subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose; provided, that with respect to Restricted Payments under clauses (A), (B), (C), (D), (G) and (H) above, such Restricted Payments that are attributable to any Unrestricted Subsidiary shall be permitted only to the extent that either (x) such Unrestricted Subsidiary has made one or more cash distributions, advances or loans to the Issuer or any of its Restricted Subsidiaries for such purpose in an amount up to the amount of such Unrestricted Subsidiary’s proportionate share of such Restricted Payment or (y) the amount of any such Restricted Payment made by the Issuer on behalf of such Unrestricted Subsidiary is treated as an Investment subject to Section 6.06 hereof;
(ii) the Parent Borrower Issuer may pay (or make Restricted Payments to allow any Parent Company to pay) for the repurchase, redemption, retirement or other acquisition or retirement for value of Capital Stock of any Parent Company or any subsidiary held by any Permitted Payeefuture, present or former employee, director, member of management, officer, manager or consultant (or any Affiliate or Immediate Family Member thereof) of any Parent Company, the Issuer or any subsidiary:
(A) in accordance with the terms of exchange for promissory notes issued pursuant to Section Section 6.01(o), so long as the aggregate amount of all Cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments made pursuant to sub-clause (D(D) of this clause (ii(ii) below, (1) does not exceed the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period 20,000,000 in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to the next subsequent Fiscal Years (until so applied)) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under clause (D) below; plusYear;
(B) with the proceeds of any sale or issuance of, or of any capital contribution in respect of, the Capital Stock of the Parent Borrower Issuer or any Parent Company (to the extent such proceeds are contributed to the Parent Borrower or any Restricted Subsidiary in respect of Qualified Capital Stock issued by to the Parent Borrower Issuer or such any Restricted Subsidiary) (other than amounts constituting a Cure Amount or an Available Excluded Contribution Amount); plus;
(C) with the net proceeds of any key-man life insurance policies; plusor
(D) with Cash and Cash Equivalents in an amount not to exceed, together with the aggregate amount of all cash payments made pursuant to sub-clause (A(A) of this clause (ii(ii) in respect of promissory notes issued pursuant to Section Section 6.01(o), (1) the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period 20,000,000 in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to the next subsequent Fiscal Years (until so applied) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under the immediately preceding clause (1); plus
(E) with the amount of any Cash bonuses otherwise payable to any Permitted Payee that are foregone in exchange for the receipt of Capital Stock of the Parent Borrower or any Parent Company pursuant to any compensation arrangement, including any deferred compensation planYear;
(iii) so long as no Event of Default then exists or would result therefrom, the Parent Borrower Issuer may make additional Restricted Payments in an amount not to exceed (A) the portion, if any, of the Available Amount on such date that the Parent Borrower such Issuer elects to apply to this clause (iii)(A(iii)(A) plus (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Parent Borrower such Issuer elects to apply to this clause (iii)(B(iii)(B) (plusto the extent such amount has not otherwise been applied to make Investments, without duplication of amounts referred to in this clause (B)Restricted Payments or Restricted Debt Payments hereunder; provided that, in an amount equal to the Net Proceeds from case of clause (A) above, the Total Leverage Ratio, calculated on a Disposition of property or assets acquired after the Closing DatePro Forma Basis, if the acquisition of such property or assets was financed with Available Excluded Contribution Amounts up to the amount of such Available Excluded Contribution Amount, less any application thereof under Sections 6.04(b)(vi) or 6.06(r))would not exceed 1.00:1.00;
(iv) the Parent Borrower Issuer may make Restricted Payments (i) to any Parent Company to enable such Parent Company to (A) make Cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of such Parent Company, dividends, share splits, reverse share splits (or any combination thereof) and, mergers, consolidations, amalgamations or other business combinations, and acquisitions and other Investments permitted hereunder and/or (B) honor any conversion request by a holder of Convertible Indebtedness by payment of cash and/or delivery of Capital Stock, make any cash payments in lieu of fractional shares in connection with any conversion of Convertible Indebtedness and otherwise make payments on Convertible Indebtedness in accordance with its terms (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments upon redemption thereof), or, in the case of each of sub-clauses (A) and (B) above, make Restricted Payments to any Parent Company to enable such Parent Company to make the payments and/or deliveries described in such sub-clauses (A) and (B), and (ii) consisting of (A) payments made or expected to be made in respect of withholding or similar Taxes payable by any Permitted Payee future, present or former officers, directors, employees, members of management, managers or consultants of the Issuer, any Restricted Subsidiary or any Parent Company or any of their respective Immediate Family Members and/or (B) repurchases of Capital Stock in consideration of the payments described in sub sub-clause (A(A) above, including demand repurchases in connection with the exercise of stock options and the issuance of restricted stock units or similar stock based awardsoptions;
(v) the Parent Borrower Issuer may repurchase, redeem, acquire or retire Capital Stock upon repurchase (or make provisions for withholdings in connection with), or make Restricted Payments to any Parent Company to enable it to repurchase, redeem, acquire or retire ) Capital Stock upon (or make provisions for withholdings in connection with), the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represents all or a portion of the exercise price of, or tax withholdings with respect to, of such warrants, options or other securities convertible into or exchangeable for Capital Stock as part of a “cashless” exercise;
(vi) so long as no Event of Default exists or would result therefrom, the Parent Borrower Issuer may pay (or make Restricted Payments to allow any Parent Company to pay) for the proceeds of which are applied (i) on the Closing Daterepurchase, solely to effect the consummation of the Transactions and on redemption, retirement, dividends or about the Amendment No. 1 Effective Date, solely to effect the consummation of the Amendment No. 1 Transactions, (ii) on and after the Closing Date, to satisfy any payment obligations owing, other acquisition or as otherwise required, under the Acquisition Agreement (including payment of working capital and/or purchase price adjustments) and to pay Transaction Costs, in each case, with respect to the Transactions, (iii) to satisfy obligations to direct or indirect holders retirement for value of Capital Stock of any Parent Company or any subsidiary in an amount not to exceed per annum the Parent Borrower greater of (immediately prior to giving effect x) $30,000,000 in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to the Transactions) in connection with, or as a result of, any working capital and/or purchase price adjustments, in each case, with respect to the Transactions next subsequent Fiscal Year and (ivy) to satisfy any settlement 6.0% of claims or actions in connection with the Transactions or to satisfy indemnity or other similar obligations in connection with market capitalization of Indivior PLC measured at the Transactionstime of each such Restricted Payment;
(vii) the Parent Borrower may (or Issuer may make Restricted Payments to any Parent Company to enable it to) make Restricted Payments with respect to any Capital Stock in an amount not to exceed (A) the greater of (x) an amount equal to 7.00% per annum of the net Cash proceeds received by or contributed to the Parent Borrower in connection with the merger of Isos Acquisition Corporation and Bowlero Corp. on December 15, 2021 and the other transactions consummated in connection therewith and (y) an amount equal to 7.00% per annum of the Market Capitalization of the Parent Borrower (or its direct or indirect Parent Company, as applicable) and its subsidiaries minus (B) any utilization of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A)Issuer;
(viii) the Parent Borrower Issuer may make Restricted Payments to (i) redeem, repurchase, defease, discharge, retire or otherwise acquire any (A) Capital Stock (“Treasury Capital Stock”) of the Parent Borrower Issuer and/or any Restricted Subsidiary or (B) Capital Stock of any Parent Company, in the case of each of subclauses (A(A) and (B(B), in exchange for, or out of the proceeds of the substantially concurrent sale (other than to the Parent Borrower Issuer and/or any Restricted Subsidiary) of, Qualified Capital Stock of the Parent Borrower Issuer or any Parent Company to the extent any such proceeds are contributed to the capital of the Parent Borrower Issuer and/or any Restricted Subsidiary 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 the Parent Borrower Issuer or a Restricted Subsidiary) of any Refunding Capital Stock;
(ix) to the extent constituting a Restricted Payment, the Parent Borrower Issuer may consummate any transaction permitted by Section 5.19 (other than Section 5.19(d)), Section Section 6.06 (other than Sections 6.06(j6.06(j) and (t(t)) and Section Section 6.07 (other than Section Section 6.07(g));
(x) the Parent Borrower Issuer may make additional other Restricted Payments in an aggregate amount not to exceed (A) the greater of (i) $85,000,000 42,500,000 and 25(ii) 12.5% of Consolidated Adjusted EBITDA as of for the last day of the Test Period then most recently ended Test Period minus (B) any utilization ended, so long as no Event of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A)Default shall have occurred and be continuing or shall result therefrom;
(xi) the Parent Borrower Issuer may pay any dividend or other distribution or consummate any redemption within 60 days after the date of 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 dividend or redemption notice would have complied with the provisions of this Section 6.04(a)hereof;
(xii) the Parent Borrower Issuer may make any Restricted Payment constituting Payments in an aggregate amount not to exceed $100,000,000 during the distribution term of this Agreement to allow Indivior PLC to repurchase, redeem and/or retire Capital Stock of Indivior PLC from time to time, so long as no Event of Default shall have occurred and be continuing or payment of Receivables Fees;shall result therefrom; and
(xiii) the Parent Borrower may make additional other Restricted Payments so long as, as measured at the time in an unlimited amount; provided for in Section 1.04(e), that (i) no Event of Default then exists or would result therefrom and (ii) the Total Leverage Ratio would be at least 0.50:1.00 on a Pro Forma Basis. For the avoidance of doubt, Holdings may make Restricted Payments with the proceeds of any Restricted Payment permitted hereunder. Notwithstanding anything herein to the contrary, the only baskets available for Investments made in, or Dispositions or Restricted Payments to, Unrestricted Subsidiaries and their respective Subsidiaries and designations of Unrestricted Subsidiaries shall be Section 6.06(x) (it being understood, for the avoidance of doubt, that the amount of any such Investment shall be measured solely as of the date of any designation of such Unrestricted Subsidiary or any additional Investment therein, as applicable). Notwithstanding anything to the contrary set forth herein, this Section 6.04(a) is subject to the provisions set forth in Section 1.03(b).
(b) Neither Holdings nor the Issuer shall, nor shall they permit any Restricted Subsidiary to, make any payment (whether in Cash, securities or other property) on or in respect of principal of or interest on (x) any Junior Lien Indebtedness or (y) any unsecured Indebtedness or Junior Indebtedness (such Indebtedness under clauses (x), (y) and (z), the “Restricted Debt”), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Restricted Debt prior to its scheduled maturity (collectively, “Restricted Debt Payments”), except:
(i) any purchase, defeasance, redemption, repurchase, repayment or other acquisition or retirement of any Restricted Debt made by exchange for, or out of the proceeds of, the substantially concurrent incurrence of Refinancing Indebtedness permitted by Section 6.01(p);
(ii) payments as part of an “applicable high yield discount obligation” catch-up payment;
(iii) payments of regularly scheduled interest as and when due in respect of any Restricted Debt, except for any payments with respect to any Subordinated Indebtedness that are prohibited by the subordination provisions thereof;
(iv) [Reserved];
(A) Restricted Debt Payments in exchange for, or with proceeds of any issuance of, Qualified Capital Stock of the Issuer and/or any Restricted Subsidiary and/or any capital contribution in respect of Qualified Capital Stock of the Issuer or any Restricted Subsidiary, (B) Restricted Debt Payments as a result of the conversion of all or any portion of any Restricted Debt into Qualified Capital Stock of the Issuer 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 to the extent that the incurrence of such additional Restricted Debt is permitted under Section 6.01; and
(vi) so long as no Event of Default exists or would result therefrom, Restricted Debt Payments in an aggregate amount not to exceed 4.00:1.00(A) the portion, if any, of the Available Amount on such date that the Issuer elects to apply to this clause (vi)(A) plus (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Issuer elects to apply to this clause (vi)(B) to the extent such amount has not otherwise been applied to make Investments, Restricted Payments or Restricted Debt Payments hereunder; provided that, in the case of clause (A) above, the Total Leverage Ratio, calculated on a Pro Forma Basis and (ii) there shall exist no Event of Default hereunder or shall result therefrom;
(xiv) the Parent Borrower may make additional Restricted Payments in an amount Basis, would not to exceed the amount of proceeds received by the Parent Borrower and/or any Restricted Subsidiary under the Representation and Warranty Insurance Policy during the term of this Agreement;
(xv) (A) for any taxable period for which the Parent Borrower and/or any of its Subsidiaries are members of a consolidated, combined or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which a direct or indirect parent of the Parent Borrower is the common parent (a “Tax Group”), or for which the Parent Borrower is a disregarded entity for U.S. federal income tax purposes wholly-owned by a corporate parent (a “Corporate Parent”), the Parent Borrower and each of its Subsidiaries may make Restricted Payments the proceeds of which shall be used by such common parent to pay the portion of any consolidated, combined or similar U.S. federal, state or local income Taxes of such Tax Group, or by the Corporate Parent to pay the portion of the U.S. federal, state or local income Taxes of such Corporate Parent, or any franchise taxes imposed in lieu thereof, for such taxable period that are attributable to the income of the Parent Borrower and/or its Subsidiaries, provided that such amount shall not be greater than the amount of such U.S. federal, state or local income taxes that would be paid (for such taxable period) by the Parent Borrower and its Subsidiaries if the Parent Borrower and/or such Subsidiaries had been a stand-alone corporate taxpayer (or stand-alone group of corporate taxpayers filing on a consolidated, combined or similar basis) for all taxable years ending after the Closing Date (taking into account any net operating loss carryforwards attributable to the Parent Borrower and its Subsidiaries, as the case may be) and (B) without duplication of Restricted Payments made under Section 6.04(a)(xv)(A), for any taxable period for which the Parent Borrower is treated as a partnership for U.S. federal and/or applicable state or local income tax purposes, the Parent Borrower may make Restricted Payments to its equity owners at the times and in the amoun1.00:1.00.
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) The Parent Borrower shall not pay or make, directly or indirectly, any Restricted Payment, except that:
(i) the Parent Borrower may make Restricted Payments to the extent necessary to permit any Parent Company:
(A) to pay general operating and compliance costs and expenses (including corporate overhead, legal or similar expenses and customary salary, bonus and other benefits payable to directors, officers, employees, members of management, managers and/or consultants of any Parent Company), in each case, which are reasonable and customary and incurred in the ordinary course of business, plus any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of any Parent Company, in each case, to the extent attributable to the ownership or operations of any Parent Company (but excluding, for the avoidance of doubt, the portion of any such amount, if any, that is attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and/or its subsidiaries;
(B) to pay franchise, excise and similar Taxes, and other fees, Taxes and expenses, required to maintain the organizational existence of such Parent Company;
(C) to pay customary salary, bonus, long-term incentive, severance and other benefits (including payment to certain service providers of the Parent Borrower or its Subsidiaries pursuant to any equity plan (whether in the form of options, cash settled options or otherwise)) payable to Permitted Payees, as well as applicable employment, social security or similar taxes in connection therewith, to the extent such salary, bonuses, severance and other benefits are attributable and reasonably allocated to the operations of the Parent Borrower and/or its subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose;
(D) to pay audit and other accounting and reporting expenses of such Parent Company to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such expenses, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries;
(E) for the payment of insurance premiums to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries;
(F) to pay (x) fees and expenses related to any debt and/or equity offerings (including refinancings), investments and/or acquisitions permitted or not restricted by this Agreement (whether or not consummated, and including advisory, refinancing, subsequent transaction and exit fees of any Parent Company of the Parent Borrower) and expenses and indemnities of any trustee, agent, arranger, underwriter or similar role and (y) after the consummation of an initial public offering or the issuance of debt securities, Public Company Costs; and
(G) to finance any Investment permitted under Section Section 6.06 as if such Parent Company were subject to Section Section 6.06 (provided that (x) any Restricted Payment under this clause (a)(i)(G(a)(i)(G) 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 (y) the relevant Parent Company shall, promptly following the closing 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 (I) all property acquired to be contributed to the Parent Borrower or one or more of its Restricted Subsidiaries or (II) the merger, consolidation or amalgamation of the Person formed or acquired into the Parent Borrower or one or more of its Restricted Subsidiaries, in order to consummate such Investment in compliance with the applicable requirements of Section Section 6.06 as if undertaken as a direct Investment by the Parent Borrower or the relevant Restricted Subsidiary);
(ii) the Parent Borrower may pay (or make Restricted Payments to allow any Parent Company to pay) for the repurchase, redemption, retirement or other acquisition or retirement for value of Capital Stock of any Parent Company or any subsidiary held by any Permitted Payee:
(A) in accordance with the terms of promissory notes issued pursuant to Section Section 6.01(o), so long as the aggregate amount of all Cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments made pursuant to sub-clause (D(D) of this clause (ii(ii) below, (1) does not exceed the greater of $68,000,000 5,500,000 and 204% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period (which amount shall, following a Qualifying IPO, increase to the greater of $7,500,000 and 6% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period) in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied)) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under clause (D(D) below; plus
(B) with the proceeds of any sale or issuance of, or of any capital contribution in respect of, the Capital Stock of the Parent Borrower or any Parent Company (to the extent such proceeds are contributed to the Parent Borrower or any Restricted Subsidiary in respect of Qualified Capital Stock issued by the Parent Borrower or such Restricted Subsidiary) (other than amounts constituting a Cure Amount or an Available Excluded Contribution Amount); plus
(C) with the net proceeds of any key-man life insurance policies; plus
(D) with Cash and Cash Equivalents in an amount not to exceed, together with the aggregate amount of all cash payments made pursuant to sub-clause (A(A) of this clause (ii(ii) in respect of promissory notes issued pursuant to Section Section 6.01(o), (1) the greater of $68,000,000 5,500,000 and 204% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period (which amount shall, following a Qualifying IPO, increase to the greater of $7,500,000 and 6% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period) in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under the immediately preceding clause (1(1); plus
(E) with the amount of any Cash bonuses otherwise payable to any Permitted Payee that are foregone in exchange for the receipt of Capital Stock of the Parent Borrower or any Parent Company pursuant to any compensation arrangement, including any deferred compensation plan;
(iii) the Parent Borrower may make additional Restricted Payments in an amount not to exceed (A) the portion, if any, of the Available Amount on such date that the Parent Borrower elects to apply to this clause (iii)(A(iii)(A) plus (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Parent Borrower elects to apply to this clause (iii)(B(iii)(B) (plus, without duplication of amounts referred to in this clause (B(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 with Available Excluded Contribution Amounts up to the amount of such Available Excluded Contribution Amount, less any application thereof under Sections 6.04(b)(vi6.04(b)(vi) or 6.06(r6.06(r));
(ivi) the Parent Borrower may make Restricted Payments (i) to any Parent Company to enable such Parent Company to (A) make Cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of such Parent Company, dividends, share splits, reverse share splits (or any combination thereof) and, mergers, consolidations, amalgamations or other business combinations, and acquisitions and other Investments permitted hereunder and/or (B) honor any conversion request by a holder of Convertible Indebtedness by payment of cash and/or delivery of Capital Stockconvertible Indebtedness, make any cash payments in lieu of fractional shares in connection with any conversion of Convertible Indebtedness and otherwise make payments on Convertible convertible Indebtedness in accordance with its terms (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments upon redemption thereof), or, in the case of each of sub-clauses (A) and (B) above, make Restricted Payments to any Parent Company to enable such Parent Company to make the payments and/or deliveries described in such sub-clauses (A) and (B), and (ii) consisting of (A) payments made or expected to be made in respect of withholding or similar Taxes payable by any Permitted Payee and/or (B) repurchases of Capital Stock in consideration of the payments described in sub clause (A(A) above, including demand repurchases in connection with the exercise of stock options and the issuance of restricted stock units or similar stock based awards;
(vii) the Parent Borrower may repurchase, redeem, acquire or retire Capital Stock upon (or make provisions for withholdings in connection with), or make Restricted Payments to any Parent Company to enable it to repurchase, redeem, acquire or retire Capital Stock upon (or make provisions for withholdings in connection with), the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represents all or a portion of the exercise price of, or tax withholdings with respect to, such warrants, options or other securities convertible into or exchangeable for Capital Stock as part of a “cashless” exercise;
(viiii) the Parent Borrower may make Restricted Payments the proceeds of which are applied (i) on the Closing Date, solely to effect the consummation of the Transactions and on or about the Amendment No. 1 Effective Date, solely to effect the consummation of the Amendment No. 1 Transactions, (ii) on and after the Closing Date, to satisfy any payment obligations owing, or as otherwise required, under the Acquisition Agreement (including payment of working capital and/or purchase price adjustments) and to pay Transaction Costs, in each case, with respect to the Transactions, (iii) to satisfy obligations to direct or indirect holders of Capital Stock of the Parent Borrower (immediately prior to giving effect to the Transactions) in connection with, or as a result of, any working capital and/or purchase price adjustments, in each case, with respect to the Transactions and (iv) to satisfy any settlement of claims or actions in connection with the Transactions or to satisfy indemnity or other similar obligations in connection with the Transactions;
(viiiv) following the Parent consummation of the first Qualifying IPO, the Borrower may (or may make Restricted Payments to any Parent Company to enable it to) make Restricted Payments with respect to any Capital Stock in an amount not to exceed (A) the greater of (x) an amount equal to 7.006.00% per annum of the net Cash proceeds received by or contributed to the Parent Borrower in connection with the merger of Isos Acquisition Corporation and Bowlero Corp. on December 15, 2021 and the other transactions consummated in connection therewith from any Qualifying IPO and (y) an amount equal to 7.006.00% per annum of the Market Capitalization of the Parent Borrower (or its direct or indirect Parent Company, as applicable) and its subsidiaries minus (B) any utilization of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A(A);
(viiiv) the Parent Borrower may make Restricted Payments to (i) redeem, repurchase, defease, discharge, retire or otherwise acquire any (A) Capital Stock (“Treasury Capital Stock”) of the Parent Borrower and/or any Restricted Subsidiary or (B) Capital Stock of any Parent Company, in the case of each of subclauses (A(A) and (B(B), in exchange for, or out of the proceeds of the substantially concurrent sale (other than to the Parent Borrower and/or any Restricted Subsidiary) of, Qualified Capital Stock of the Parent Borrower or any Parent Company to the extent any such proceeds are contributed to the capital of the Parent Borrower and/or any Restricted Subsidiary 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 the Parent Borrower or a Restricted Subsidiary) of any Refunding Capital Stock;
(ixvi) to the extent constituting a Restricted Payment, the Parent Borrower may consummate any transaction permitted by Section 5.19 (other than Section 5.19(d)), Section Section 6.06 (other than Sections 6.06(j6.06(j) and (t(t)) and Section ), Section 6.07 (other than Section Section 6.07(g)) and Section 6.09 (other than Section 6.09(d));
(xvii) the Parent Borrower may make additional Restricted Payments in an aggregate amount not to exceed (A) the greater of $85,000,000 20,000,000 and 2515% of Consolidated Adjusted EBITDA 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(A);
(xiviii) the Parent Borrower may pay any dividend or other distribution or consummate any redemption within 60 days after the date of 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 Section 6.04(a);
(xiiix) the Parent Borrower may make any Restricted Payment constituting the distribution or payment of Receivables Fees;
(xiiix) the Parent Borrower may make additional Restricted Payments so long as, as measured at the time provided for in Section 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 Event of Default hereunder or shall result therefrom;
(xivxi) the Parent Borrower may make additional Restricted Payments in an amount not to exceed the amount of proceeds received by the Parent Borrower and/or any Restricted Subsidiary under the Representation and Warranty Insurance Policy during the term of this Agreement;
(xvxii) (A) for any taxable period for which the Parent Borrower and/or any of its Subsidiaries are members of a consolidated, combined or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which a direct or indirect parent of the Parent Borrower is the common parent (a “Tax Group”), or for which the Parent Borrower is a disregarded entity for U.S. federal income tax purposes wholly-owned by a corporate parent (a “Corporate Parent”), the Parent Borrower and each of its Subsidiaries may make Restricted Payments (including pursuant to any Tax sharing agreement entered into by the Borrower and any of its Subsidiaries and Comcast Corporation, a Pennsylvania corporation or its Affiliates) the proceeds of which shall be used by such common parent to pay the portion of any consolidated, combined or similar U.S. federal, state or local income Taxes of such Tax Group, or by the Corporate Parent to pay the portion of the U.S. federal, state or local income Taxes of such Corporate Parent, or any franchise taxes imposed in lieu thereof, for such taxable period that are attributable to the income of the Parent Borrower and/or its Subsidiaries, provided that such amount shall not be greater than the amount of such U.S. federal, state or local income taxes that would be paid (for such taxable period) by the Parent Borrower and its Subsidiaries if the Parent Borrower and/or such Subsidiaries had been a stand-alone corporate taxpayer (or stand-alone group of corporate taxpayers filing on a consolidated, combined or similar basis) for all taxable years ending after the Closing Date (taking into account any net operating loss carryforwards attributable to the Parent Borrower and its Subsidiaries, as the case may be) and (B) without duplication of Restricted Payments made under Section Section 6.04(a)(xv)(A), for any taxable period for which the Parent Borrower is treated as a partnership for U.S. federal and/or applicable state or local income tax purposes, the Parent Borrower may make Restricted Payments to its equity owners at the times and in the amounamounts necessary to enable such owners (and their direct or indirect owners) to pay their Tax obligations attributable to their direct or indirect ownership interests in the Borrower in an aggregate amount equal to the product of (1) 50% (or such higher tax rate as shall be applicable to a resident of New York City or California that indirectly owns
Appears in 1 contract
Sources: First Lien Credit Agreement (Isos Acquisition Corp.)
Restricted Payments; Certain Payments of Indebtedness. (a) The Parent Borrower shall not pay or make, directly or indirectly, any Restricted Payment, except that:
(i) the Parent Borrower may make Restricted Payments to the extent necessary to permit any Parent Company:
(A) to pay general operating and compliance administrative costs and expenses (including corporate overhead, legal or similar expenses, expenses to prepare any Tax returns or defend any Tax claims, and customary salary, bonus and other benefits payable to directors, officers, employees, members of management, managers and/or consultants of any Parent Company)) and franchise fees and Taxes and similar fees, Taxes and expenses required to enable such Parent Company to maintain its organizational existence or qualification to do business, in each case, which are reasonable and customary and incurred in the ordinary course of business, plus any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of any Parent Company, in each case, to the extent attributable to the ownership or operations of any Parent Company and its subsidiaries (but excluding, for the avoidance of doubt, excluding the portion of any such amount, if any, amount that is attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or and its subsidiaries), the Parent Borrower and/or its subsidiaries;
(B) to pay franchise, excise scheduled and similar Taxes, overdue interest and other fees, Taxes and expenses, required to maintain the organizational existence payments as part of such Parent Company;
(C) to pay customary salary, bonus, longan AHYDO catch-term incentive, severance and other benefits (including payment to certain service providers of the Parent Borrower or its Subsidiaries pursuant to any equity plan (whether in the form of options, cash settled options or otherwise)) payable to Permitted Payees, as well as applicable employment, social security or similar taxes in connection therewith, to the extent such salary, bonuses, severance and other benefits are attributable and reasonably allocated to the operations of the Parent Borrower and/or its subsidiariesup payment, in each case, so long as such in respect of any Indebtedness of any Parent Company applies to the amount of any such Restricted Payment for such purposeextent the Net Proceeds thereof were contributed to the Parent Borrower;
(DC) to pay audit and other accounting and reporting expenses of such Parent Company to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such expenses, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries;
(ED) for the payment of insurance premiums to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries;
(FE) to pay (x) fees and expenses related to any debt and/or or equity offerings (including refinancings)by any Parent Company, investments and/or or acquisitions permitted or not restricted by this Agreement (whether or not consummated, and including advisory, refinancing, subsequent transaction and exit fees of any Parent Company of the Parent Borrower) and expenses and indemnities of any trustee, agent, arranger, underwriter or similar role and (y) Public Company Costs; and;
(GF) to finance any Investment permitted under Section 6.06 as if such Parent Company were subject to Section Section 6.06 (provided that (x) any Restricted Payment under this clause (a)(i)(G(a)(i)(F) 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 (y) the relevant Parent Company shall, promptly following the closing 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 therewiththereof, cause (I) all property acquired to be contributed to the Parent Borrower or one or more of its Restricted Subsidiaries Subsidiaries, or (II) the merger, consolidation or amalgamation of the Person formed or acquired into the Parent Borrower or one or more of its Restricted Subsidiaries, in order to consummate such Investment in compliance with the applicable requirements of Section Section 6.06 as if undertaken as a direct Investment by the Parent Borrower or the relevant Restricted Subsidiary); and
(G) to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, employees or consultants of any Parent Company (or any Immediate Family Member of any of the foregoing) to the extent such salary, bonuses and other benefits are attributable and reasonably allocated to the operations of the Parent Borrower and/or its subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose;
(ii) the Parent Borrower may pay (or make Restricted Payments to allow any Parent Company to pay) for the repurchase, redemption, retirement or other acquisition or retirement for value of Capital Stock of any Parent Company or any subsidiary held by any Permitted Payeefuture, present or former employee, director, member of management, officer, manager or consultant (or any Affiliate or Immediate Family Member thereof) of any Parent Company, the Parent Borrower or any subsidiary:
(A) in accordance with the terms of promissory notes issued pursuant to Section Section 6.01(o), so long as the aggregate amount of all Cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments made pursuant to sub-clause (D(D) of this clause (ii(ii) below, (1) does not exceed in any Fiscal Year the greater of $68,000,000 25,000,00032,000,000 and 2012.0% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period in any Fiscal YearEBITDA, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied)) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under clause (D) below; plusYears;
(B) with the proceeds of any sale or issuance of, or of any capital contribution in respect of, the Capital Stock of the Parent Borrower or any Parent Company (to the extent such proceeds are contributed in respect of Qualified Capital Stock to the Parent Borrower or any Restricted Subsidiary in respect of Qualified Capital Stock issued by the Parent Borrower or such Restricted Subsidiary) (other than amounts constituting a Cure Amount or an Available Excluded Contribution Amount); plus;
(C) with the net proceeds of any key-man life insurance policies; plusor
(D) with Cash and Cash Equivalents in an amount not to exceedexceed in any Fiscal Year, together with the aggregate amount of all cash payments made pursuant to sub-clause (A(A) of this clause (ii(ii) in respect of promissory notes issued pursuant to Section Section 6.01(o), (1) the greater of $68,000,000 25,000,00032,000,000 and 2012.0% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period in any Fiscal YearEBITDA, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under the immediately preceding clause (1); plus
(E) with the amount of any Cash bonuses otherwise payable to any Permitted Payee that are foregone in exchange for the receipt of Capital Stock of the Parent Borrower or any Parent Company pursuant to any compensation arrangement, including any deferred compensation planYears;
(iii) the Parent Borrower may make additional Restricted Payments in an amount not to exceed (A) the portion, if any, of the Available Amount on such date that the Parent Borrower elects to apply to this clause (iii)(A) plus (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Parent Borrower elects to apply to this clause (iii)(B) (plus, without duplication of amounts 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 with Available Excluded Contribution Amounts up to the amount of such Available Excluded Contribution Amount, less any application thereof under Sections 6.04(b)(vi) or 6.06(r)iii);
(iv) the Parent Borrower may make Restricted Payments (i) to any Parent Company to enable such Parent Company to (A) make Cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of such Parent Company, dividends, share splits, reverse share splits (or any combination thereof) and, mergers, consolidations, amalgamations or other business combinations, and acquisitions and other Investments permitted hereunder and/or (B) honor any conversion request by a holder of Convertible Indebtedness by payment of cash and/or delivery of Capital Stock, make any cash payments in lieu of fractional shares in connection with any conversion of Convertible Indebtedness and otherwise make payments on Convertible Indebtedness in accordance with its terms (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments upon redemption thereof), or, in the case of each of sub-clauses (A) and (B) above, make Restricted Payments to any Parent Company to enable such Parent Company to make the payments and/or deliveries described in such sub-clauses (A) and (B), and (ii) consisting of (A) payments made or expected to be made in respect of withholding or similar Taxes payable by any Permitted Payee future, present or former officers, directors, employees, members of management, managers or consultants of the Parent Borrower, any Restricted Subsidiary or any Parent Company or any of their respective Immediate Family Members and/or (B) repurchases of Capital Stock in consideration of the payments described in sub sub-clause (A(A) above, including demand repurchases in connection with the exercise of stock options and the issuance of restricted stock units or similar stock based awardsoptions;
(v) the Parent Borrower may repurchase, redeem, acquire or retire Capital Stock upon repurchase (or make provisions for withholdings in connection with), or make Restricted Payments to any Parent Company to enable it to repurchase, redeem, acquire or retire ) Capital Stock upon (or make provisions for withholdings in connection with), the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represents all or a portion of the exercise price of, or tax Tax withholdings with respect to, such warrants, options or other securities convertible into or exchangeable for Capital Stock as part of a “cashless” exercise;
(vi) (A) for any taxable period (or portion thereof) that a Parent Company is treated as a corporation for U.S. federal income tax purposes and for which a Borrower and/or any of its subsidiaries are members (or are pass-through entities of such members) of a consolidated, combined, unitary or similar income Tax group for U.S. federal, state, local or foreign income Tax purposes (a “Tax Group”) for which a parent is the common parent, the Parent Borrower may make Restricted Payments to such parent to pay the proceeds portion of which any U.S. federal, state, local or foreign income Taxes (as applicable) of such parent for such taxable period that are applied (i) on attributable to the Closing Date, solely to effect the consummation income of the Transactions Parent Borrower and/or its applicable subsidiaries; provided that the aggregate amount of such distributions shall not exceed the aggregate Taxes the Parent Borrower and/or its subsidiaries, as applicable, would be required to pay in respect of such U.S. federal, state, local and foreign Taxes on a stand-alone consolidated basis for such taxable period; provided further that the amount of such distributions with respect to any Unrestricted Subsidiary for any taxable period shall be limited to the amount actually paid by such Unrestricted Subsidiary to a Borrower or about any of its Restricted Subsidiaries for such purpose and (B) without duplication of amounts payable under clause (A), the Amendment No. 1 Effective DateParent Borrower may make Restricted Payments to pay the Taxes of such Tax Group attributable to the Performance Chemicals Sale;
(vii) to the extent constituting Restricted Payments, solely the Parent Borrower may make Restricted Payments to effect consummate the consummation of the Amendment No. 1 Transactions, (ii) on and after the Closing Date, to satisfy any payment obligations owing, or as otherwise required, under the Acquisition Agreement (including payment of working capital and/or purchase price adjustments) Permitted Restructuring and to pay Transaction Costs, in each case, with respect to the Transactions, (iii) to satisfy obligations to direct or indirect holders of Capital Stock of the Parent Borrower (immediately prior to giving effect to the Transactions) in connection with, or as a result of, any working capital and/or purchase price adjustments, in each case, with respect to the Transactions and (iv) to satisfy any settlement of claims or actions in connection with the Transactions or to satisfy indemnity or other similar obligations in connection with the Transactions;
(viiviii) so long as no Event of Default exists at the time of declaration of such Restricted Payment the Parent Borrower may (or may make Restricted Payments to any Parent Company to enable it to) make Restricted Payments with respect to any Capital Stock in an amount not to exceed an aggregate amount per annum equal to the sum of (A) the greater of $30,000,00040,000,000 and (xB) an amount equal to 7.007% per annum of the net Cash proceeds received by or contributed to the Parent Borrower in connection with the merger of Isos Acquisition Corporation and Bowlero Corp. on December 15, 2021 and the other transactions consummated in connection therewith and (y) an amount equal to 7.00% per annum of the Market Capitalization of the Parent Borrower (or its direct or indirect Parent Company, as applicable) and its subsidiaries minus (B) any utilization of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A)Capitalization;
(viiiix) the Parent Borrower may make Restricted Payments to (i) redeem, repurchase, defease, discharge, retire or otherwise acquire any (A) Capital Stock (“Treasury Capital Stock”) of the Parent Borrower and/or any Restricted Subsidiary or (B) Capital Stock of any Parent Company, in the case of each of subclauses (A(A) and (B(B), in exchange for, or out of the proceeds of the substantially concurrent sale (other than to the Parent Borrower and/or any Restricted Subsidiary) of, Qualified Capital Stock of the Parent Borrower or any Parent Company to the extent any such proceeds are contributed to the capital of the Parent Borrower and/or any Restricted Subsidiary 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 the Parent Borrower or a Restricted Subsidiary) of any Refunding Capital Stock;
(ixx) to the extent constituting a Restricted Payment, the Parent Borrower may consummate any transaction permitted by Section 5.19 (other than Section 5.19(d)), Section Section 6.06 (other than Sections 6.06(j6.06(j) and (t(t)) and Section ), Section 6.07 (other than Section Section 6.07(g)) and Section 6.09 (other than Section 6.09(d);
(x) the Parent Borrower may make additional Restricted Payments in an aggregate amount not to exceed (A) the greater of $85,000,000 and 25% of Consolidated Adjusted EBITDA 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);
(xi) the Parent Borrower may make Restricted Payments in an aggregate amount not to exceed the greater of $71,000,00095,000,000 and 35.0% of Consolidated Adjusted EBITDA minus the sum of (A) any amounts under this Section 6.04(a)(xi) reallocated to make Restricted Debt Payments pursuant to Section 6.04(b)(iv) (B) any amounts under this Section 6.04(a)(xi) reallocated to make Investments pursuant to Section 6.06(q), and (C) any amounts under this Section 6.04(a)(xi) reallocated to incur Indebtedness pursuant to Section 6.01(u) (which may be further reallocated as provided therein);
(xii) the Parent Borrower may pay any dividend or other distribution or consummate any redemption within 60 sixty (60) days after the date of 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 dividend or redemption notice would have complied with the provisions of this Section 6.04(a);
(xii) the Parent Borrower may make any Restricted Payment constituting the distribution or payment of Receivables Feeshereof;
(xiii) the Parent Borrower may make additional Restricted Payments so long as, as measured at the time provided for in Section 1.04(e), (iA) no Event of Default exists or would result therefrom and (B) the Total Leverage Ratio would not exceed 4.00:1.00Ratio, calculated on a Pro Forma Basis and (ii) there shall exist no Event at the time of Default hereunder or shall result therefromdeclaration thereof, would not exceed 4.50:1.00;
(xiv) the Parent Borrower may make additional Restricted Payments to enable any Parent Company to make Restricted Payments solely in the Qualified Capital Stock of such Parent Company;
(xv) the Parent Borrower may make Restricted Payments (A) to pay amounts permitted under Section 6.09(f), (g), (h), (i), (k) and (m) and (B) otherwise in an amount not to exceed $500,000 per calendar year;
(xvi) the Parent Borrower may make Restricted Payments in the form of Capital Stock 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 Cash and Cash Equivalents (except to the extent constituting proceeds from the Disposition of all or substantially all of the assets of such Unrestricted Subsidiary) and/or intellectual property material (as determined by the Parent Borrower in good faith) to the business of the Parent Borrower and its Restricted Subsidiaries, taken as a whole); and
(xvii) the Parent Borrower may make Restricted Payments in an aggregate amount not to exceed $450,000,000 (the “Special Dividend”).
(b) The Parent Borrower shall not, nor shall it permit any Restricted Subsidiary to, make any payment (whether in Cash, securities or other property) on or in respect of principal of (x) any Junior Lien Indebtedness or (y) any Subordinated Indebtedness, in each cases of clauses (x) and (y), with an individual outstanding principal amount in excess of the Threshold Amount (such Indebtedness under clauses (x) and (y), in each case, with an individual outstanding principal amount in excess of the Threshold Amount, the “Restricted Debt”), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Restricted Debt prior to its scheduled maturity (collectively, “Restricted Debt Payments”), except:
(i) any 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 (except to the extent subject to clause (iv)(C) of the proviso to Section 6.01(p));
(ii) payments as part of an AHYDO catch-up payment;
(iii) payments of regularly scheduled interest as and when due in respect of any Restricted Debt, except for any payments with respect to any such Subordinated Indebtedness that are prohibited by the subordination provisions thereof;
(iv) so long as, at the time of delivery of irrevocable notice with respect thereto, no Event of Default exists or would result therefrom, Restricted Debt Payments in an aggregate amount not to exceed (i) the sum of (A) the greater of $71,000,00095,000,000 and 35.0% of Consolidated Adjusted EBITDA and (B) any amounts reallocated to this Section 6.04(b)(iv) from Section 6.04(a)(xi) and Section 6.06(q), minus (ii) any amounts reallocated from this Section 6.04(b)(iv) to make Investments pursuant to Section 6.06(q);
(A) Restricted Debt Payments in exchange for, or with proceeds of any issuance of, Qualified Capital Stock of the Parent Borrower and/or any Restricted Subsidiary and/or any capital contribution in respect of Qualified Capital Stock of the Parent Borrower or any Restricted Subsidiary, (B) Restricted Debt Payments as a result of the conversion of all or any portion of any Restricted Debt into Qualified Capital Stock of the Parent Borrower 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 amount not to exceed the amount portion, if any, of proceeds received by the Available Amount on such date that the Parent Borrower and/or any Restricted Subsidiary under the Representation and Warranty Insurance Policy during the term of elects to apply to this Agreementclause (vi);
(xv) (A) for any taxable period for which the Parent Borrower and/or any of its Subsidiaries are members of a consolidated, combined or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which a direct or indirect parent of the Parent Borrower is the common parent (a “Tax Group”), or for which the Parent Borrower is a disregarded entity for U.S. federal income tax purposes wholly-owned by a corporate parent (a “Corporate Parent”), the Parent Borrower and each of its Subsidiaries may make Restricted Payments the proceeds of which shall be used by such common parent to pay the portion of any consolidated, combined or similar U.S. federal, state or local income Taxes of such Tax Group, or by the Corporate Parent to pay the portion of the U.S. federal, state or local income Taxes of such Corporate Parent, or any franchise taxes imposed in lieu thereof, for such taxable period that are attributable to the income of the Parent Borrower and/or its Subsidiaries, provided that such amount shall not be greater than the amount of such U.S. federal, state or local income taxes that would be paid (for such taxable period) by the Parent Borrower and its Subsidiaries if the Parent Borrower and/or such Subsidiaries had been a stand-alone corporate taxpayer (or stand-alone group of corporate taxpayers filing on a consolidated, combined or similar basis) for all taxable years ending after the Closing Date (taking into account any net operating loss carryforwards attributable to the Parent Borrower and its Subsidiaries, as the case may be) and (B) without duplication of Restricted Payments made under Section 6.04(a)(xv)(A), for any taxable period for which the Parent Borrower is treated as a partnership for U.S. federal and/or applicable state or local income tax purposes, the Parent Borrower may make Restricted Payments to its equity owners at the times and in the amoun
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) The Parent Borrower shall not pay or make, directly or indirectly, any Restricted Payment, except that:
(i) the Parent Borrower may make Restricted Payments to the extent necessary to permit any Parent Company:
(A) to pay general operating and compliance administrative costs and expenses (including corporate overhead, legal or similar expenses and customary salary, bonus and other benefits payable to directors, officers, employees, members of management, managers and/or consultants of any Parent Company)) and franchise fees and Taxes and similar fees, Taxes and expenses required to enable such Parent Company to maintain its organizational existence or qualification to do business, in each case, which are reasonable and customary and incurred in the ordinary course of business, plus any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of any Parent Company, in each case, to the extent attributable to the ownership or operations of any Parent Company and its subsidiaries (but excluding, for the avoidance of doubt, excluding the portion of any such amount, if any, amount that is attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or and its subsidiaries), the Parent Borrower and/or its subsidiaries;
(B) to pay franchise, excise scheduled and similar Taxes, overdue interest and other fees, Taxes and expenses, required to maintain the organizational existence payments as part of such Parent Company;
(C) to pay customary salary, bonus, longan AHYDO catch-term incentive, severance and other benefits (including payment to certain service providers of the Parent Borrower or its Subsidiaries pursuant to any equity plan (whether in the form of options, cash settled options or otherwise)) payable to Permitted Payees, as well as applicable employment, social security or similar taxes in connection therewith, to the extent such salary, bonuses, severance and other benefits are attributable and reasonably allocated to the operations of the Parent Borrower and/or its subsidiariesup payment, in each case, so long as such in respect of any Indebtedness of any Parent Company applies to the amount of any such Restricted Payment for such purposeextent the Net Proceeds thereof were contributed to the Borrower;
(DC) to pay audit and other accounting and reporting expenses of such Parent Company to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such expenses, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries;
(ED) for the payment of insurance premiums to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries;
(FE) to pay (x) fees and expenses related to any debt and/or or equity offerings (including refinancings)by any Parent Company, investments and/or or acquisitions permitted or not restricted by this Agreement (whether or not consummated, and including advisory, refinancing, subsequent transaction and exit fees of any Parent Company of the Parent Borrower) and expenses and indemnities of any trustee, agent, arranger, underwriter or similar role and (y) Public Company Costs; and;
(GF) to finance any Investment permitted under Section 6.06 as if such Parent Company were subject to Section Section 6.06 (provided that (x) any Restricted Payment under this clause (a)(i)(G(a)(i)(F) 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 (y) the relevant Parent Company shall, promptly following the closing 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 therewiththereof, cause (I) all property acquired to be contributed to the Parent Borrower or one or more of its Restricted Subsidiaries Subsidiaries, or (II) the merger, consolidation or amalgamation of the Person formed or acquired into the Parent Borrower or one or more of its Restricted Subsidiaries, in order to consummate such Investment in compliance with the applicable requirements of Section Section 6.06 as if undertaken as a direct Investment by the Parent Borrower or the relevant Restricted Subsidiary); and
(G) to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, employees or consultants of any Parent Company (or any Immediate Family Member of any of the foregoing) to the extent such salary, bonuses and other benefits are attributable and reasonably allocated to the operations of the Borrower and/or its subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose;
(ii) the Parent Borrower may pay (or make Restricted Payments to allow any Parent Company to pay) for the repurchase, redemption, retirement or other acquisition or retirement for value of Capital Stock of any Parent Company or any subsidiary held by any Permitted Payeefuture, present or former employee, director, member of management, officer, manager or consultant (or any Affiliate or Immediate Family Member thereof) of any Parent Company, the Borrower or any subsidiary:
(A) in accordance with the terms of promissory notes issued pursuant to Section Section 6.01(o), so long as the aggregate amount of all Cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments made pursuant to sub-clause (D(D) of this clause (ii(ii) below, (1) does not exceed in any Fiscal Year the greater of $68,000,000 24,000,000 and 2014.0% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period in any Fiscal YearEBITDA, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied)) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under clause (D) below; plusYears;
(B) with the proceeds of any sale or issuance of, or of any capital contribution in respect of, the Capital Stock of the Parent Borrower or any Parent Company (to the extent such proceeds are contributed to the Parent Borrower or any Restricted Subsidiary in respect of Qualified Capital Stock issued by to the Parent Borrower or such any Restricted Subsidiary) (other than amounts constituting a Cure Amount or an Available Excluded Contribution Amount); plus;
(C) with the net proceeds of any key-man life insurance policies; plusor
(D) with Cash and Cash Equivalents in an amount not to exceedexceed in any Fiscal Year, together with the aggregate amount of all cash payments made pursuant to sub-clause (A(A) of this clause (ii(ii) in respect of promissory notes issued pursuant to Section Section 6.01(o), (1) the greater of $68,000,000 24,000,000 and 2014.0% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period in any Fiscal YearEBITDA, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under the immediately preceding clause (1); plus
(E) with the amount of any Cash bonuses otherwise payable to any Permitted Payee that are foregone in exchange for the receipt of Capital Stock of the Parent Borrower or any Parent Company pursuant to any compensation arrangement, including any deferred compensation planYears;
(iii) the Parent Borrower may make additional Restricted Payments in an amount not to exceed (A) the portion, if any, of the Available Amount on such date that the Parent Borrower elects to apply to this clause (iii)(A) plus (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Parent Borrower elects to apply to this clause (iii)(B) (plus, without duplication of amounts 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 with Available Excluded Contribution Amounts up to the amount of such Available Excluded Contribution Amount, less any application thereof under Sections 6.04(b)(vi) or 6.06(r)iii);
(iv) the Parent Borrower may make Restricted Payments (i) to any Parent Company to enable such Parent Company to (A) make Cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of such Parent Company, dividends, share splits, reverse share splits (or any combination thereof) and, mergers, consolidations, amalgamations or other business combinations, and acquisitions and other Investments permitted hereunder and/or (B) honor any conversion request by a holder of Convertible Indebtedness by payment of cash and/or delivery of Capital Stock, make any cash payments in lieu of fractional shares in connection with any conversion of Convertible Indebtedness and otherwise make payments on Convertible Indebtedness in accordance with its terms (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments upon redemption thereof), or, in the case of each of sub-clauses (A) and (B) above, make Restricted Payments to any Parent Company to enable such Parent Company to make the payments and/or deliveries described in such sub-clauses (A) and (B), and (ii) consisting of (A) payments made or expected to be made in respect of withholding or similar Taxes payable by any Permitted Payee future, present or former officers, directors, employees, members of management, managers or consultants of the Borrower, any Restricted Subsidiary or any Parent Company or any of their respective Immediate Family Members and/or (B) repurchases of Capital Stock in consideration of the payments described in sub sub-clause (A(A) above, including demand repurchases in connection with the exercise of stock options and the issuance of restricted stock units or similar stock based awardsoptions;
(v) the Parent Borrower may repurchase, redeem, acquire or retire Capital Stock upon repurchase (or make provisions for withholdings in connection with), or make Restricted Payments to any Parent Company to enable it to repurchase, redeem, acquire or retire ) Capital Stock upon (or make provisions for withholdings in connection with), the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represents all or a portion of the exercise price of, or tax withholdings with respect to, such warrants, options or other securities convertible into or exchangeable for Capital Stock as part of a “cashless” exercise;
(vi) for any taxable period (or portion thereof) that a Parent Company is treated as a corporation for U.S. federal income tax purposes and for which Borrower and/or any of its subsidiaries are members (or are pass-through entities of such members) of a consolidated, combined, unitary or similar income Tax group for U.S. federal, state, local or foreign income Tax purposes for which such Parent Company is the Parent common parent, the Borrower may make Restricted Payments to such Parent Company to pay the proceeds portion of which any U.S. federal, state, local or foreign income Taxes (as applicable) of such Parent Company for such taxable period that are applied (i) on attributable to the Closing Date, solely to effect the consummation income of the Transactions and on or about Borrower and/or its applicable subsidiaries; provided that the Amendment No. 1 Effective Dateaggregate amount of such distributions shall not exceed the aggregate Taxes the Borrower and/or its subsidiaries, solely to effect the consummation of the Amendment No. 1 Transactionsas applicable, (ii) on and after the Closing Date, to satisfy any payment obligations owing, or as otherwise required, under the Acquisition Agreement (including payment of working capital and/or purchase price adjustments) and would be required to pay Transaction Costsin respect of such U.S. federal, in each casestate, local and foreign Taxes on a stand-alone basis for such taxable period; provided further that the amount of such distributions with respect to the Transactions, (iii) to satisfy obligations to direct or indirect holders of Capital Stock of the Parent Borrower (immediately prior to giving effect any Unrestricted Subsidiary for any taxable period shall be limited to the Transactions) in connection with, or as a result of, any working capital and/or purchase price adjustments, in each case, with respect to the Transactions and (iv) to satisfy any settlement of claims or actions in connection with the Transactions or to satisfy indemnity or other similar obligations in connection with the Transactionsamount actually paid by such Unrestricted Subsidiary for such purpose;
(vii) the Parent Borrower may make Restricted Payments to consummate the Transactions on the Closing Date and to the extent not paid on the Closing Date, thereafter to pay working capital and purchase price adjustments and other payment obligations owing under the Merger Agreement and the Transaction Costs;
(viii) so long as no Event of Default exists at the time of declaration of such Restricted Payment, following the consummation of the first Qualifying IPO, the Borrower may (or may make Restricted Payments to any Parent Company to enable it to) make Restricted Payments with respect to any Capital Stock in an amount not to exceed (A) the greater of (x) an amount equal to 7.006% per annum of the net Cash proceeds received by or contributed to the Parent Borrower in connection with the merger of Isos Acquisition Corporation and Bowlero Corp. on December 15, 2021 and the other transactions consummated in connection therewith and (y) an amount equal to 7.00% per annum of the Market Capitalization of the Parent Borrower (or its direct or indirect Parent Company, as applicable) and its subsidiaries minus (B) from any utilization of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A)Qualifying IPO;
(viiiix) the Parent Borrower may make Restricted Payments to (i) redeem, repurchase, defease, discharge, retire or otherwise acquire any (A) Capital Stock (“Treasury Capital Stock”) of the Parent Borrower and/or any Restricted Subsidiary or (B) Capital Stock of any Parent Company, in the case of each of subclauses (A(A) and (B(B), in exchange for, or out of the proceeds of the substantially concurrent sale (other than to the Parent Borrower and/or any Restricted Subsidiary) of, Qualified Capital Stock of the Parent Borrower or any Parent Company to the extent any such proceeds are contributed to the capital of the Parent Borrower and/or any Restricted Subsidiary 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 the Parent Borrower or a Restricted Subsidiary) of any Refunding Capital Stock;
(ixx) to the extent constituting a Restricted Payment, the Parent Borrower may consummate any transaction permitted by Section 5.19 (other than Section 5.19(d)), Section Section 6.06 (other than Sections 6.06(j6.06(j) and (t(t)) and Section ), Section 6.07 (other than Section Section 6.07(g)) and Section 6.09 (other than Section 6.09(d));
(xxi) the Parent Borrower may make additional Restricted Payments in an aggregate amount not to exceed (A) the greater of $85,000,000 48,000,000 and 2528.0% of Consolidated Adjusted EBITDA as minus the sum of the last day of the most recently ended Test Period minus (Bi) any utilization of the Available RP Capacity Amount in reliance on unused capacity amounts under immediately preceding clause (Athis Section 6.04(a)(xi) reallocated to make Restricted Debt Payments pursuant to Section 6.04(b)(iv)(B), (ii) any amounts under this Section 6.04(a)(xi) reallocated to make Investments pursuant to Section 6.06(q), and (iii) any amounts under this Section 6.04(a)(xi) reallocated to incur Indebtedness pursuant to Section 6.01(u);
(xixii) the Parent Borrower may pay any dividend or other distribution or consummate any redemption within 60 days after the date of 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 dividend or redemption notice would have complied with the provisions of this Section 6.04(a);
(xii) the Parent Borrower may make any Restricted Payment constituting the distribution or payment of Receivables Feeshereof;
(xiii) the Parent Borrower may make additional Restricted Payments so long as, as measured at the time provided for in Section 1.04(e), (iA) no Event of Default exists or would result therefrom and (B) the Total Leverage Ratio would not exceed 4.00:1.00Ratio, calculated on a Pro Forma Basis and (ii) there shall exist no Event at the time of Default hereunder or shall result therefromdeclaration thereof, would not exceed 5.50:1.00;
(xiv) the Parent Borrower may make additional Restricted Payments to enable any Parent Company to make Restricted Payments solely in the Qualified Capital Stock of such Parent Company; and
(xv) the Borrower may make Restricted Payments to pay amounts permitted under Section 6.09(f) and (g).
(b) Holdings and the Borrower shall not, nor shall they permit any Restricted Subsidiary to, make any payment (whether in Cash, securities or other property) on or in respect of principal of or interest on (x) any Junior Lien Indebtedness, or (y) any Subordinated Indebtedness, in each cases of clauses (x), and (y), with an individual outstanding principal amount in excess of the Threshold Amount (such Indebtedness under clauses (x) and (y), in each case, with an individual outstanding principal amount in excess of the Threshold Amount, the “Restricted Debt”), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Restricted Debt prior to its scheduled maturity (collectively, “Restricted Debt Payments”), except:
(i) any 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 (except to the extent subject to clause (iv)(C) of the proviso to Section 6.01(p);
(ii) payments as part of an AHYDO catch-up payment;
(iii) payments of regularly scheduled interest as and when due in respect of any Restricted Debt, except for any payments with respect to any such Subordinated Indebtedness that are prohibited by the subordination provisions thereof;
(iv) so long as, at the time of delivery of irrevocable notice with respect thereto, no Event of Default exists or would result therefrom, Restricted Debt Payments in an aggregate amount not to exceed (i) the sum of (A) the greater of $48,000,000 and 28.0% of Consolidated Adjusted EBITDA and (B) any amounts reallocated to this Section 6.04(b)(iv) from Section 6.04(a)(xi) and Section 6.06(q), minus (ii) any amounts reallocated from Section 6.04(b)(iv)(A) to make Investments pursuant to Section 6.06(q);
(A) Restricted Debt Payments in exchange for, or with proceeds of any issuance of, Qualified Capital Stock of the Borrower and/or any Restricted Subsidiary and/or any capital contribution in respect of Qualified Capital Stock of the Borrower or any Restricted Subsidiary, (B) Restricted Debt Payments as a result of the conversion of all or any portion of any Restricted Debt into Qualified Capital Stock of the Borrower 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 amount not to exceed the amount of proceeds received by the Parent Borrower and/or any Restricted Subsidiary under the Representation and Warranty Insurance Policy during the term of this Agreement;
(xv) (A) for any taxable period for which the Parent Borrower and/or any of its Subsidiaries are members of a consolidatedportion, combined or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which a direct or indirect parent if any, of the Parent Available Amount on such date that the Borrower is the common parent elects to apply to this clause (a “Tax Group”vi), or for which the Parent Borrower is a disregarded entity for U.S. federal income tax purposes wholly-owned by a corporate parent (a “Corporate Parent”), the Parent Borrower and each of its Subsidiaries may make Restricted Payments the proceeds of which shall be used by such common parent to pay the portion of any consolidated, combined or similar U.S. federal, state or local income Taxes of such Tax Group, or by the Corporate Parent to pay the portion of the U.S. federal, state or local income Taxes of such Corporate Parent, or any franchise taxes imposed in lieu thereof, for such taxable period that are attributable to the income of the Parent Borrower and/or its Subsidiaries, provided that such amount shall not be greater than the amount of such U.S. federal, state or local income taxes that would be paid (for such taxable period) by the Parent Borrower and its Subsidiaries if the Parent Borrower and/or such Subsidiaries had been a stand-alone corporate taxpayer (or stand-alone group of corporate taxpayers filing on a consolidated, combined or similar basis) for all taxable years ending after the Closing Date (taking into account any net operating loss carryforwards attributable to the Parent Borrower and its Subsidiaries, as the case may be) and (B) without duplication of Restricted Payments made under Section 6.04(a)(xv)(A), for any taxable period for which the Parent Borrower is treated as a partnership for U.S. federal and/or applicable state or local income tax purposes, the Parent Borrower may make Restricted Payments to its equity owners at the times and in the amoun;
Appears in 1 contract
Sources: Second Lien Credit Agreement (Hayward Holdings, Inc.)
Restricted Payments; Certain Payments of Indebtedness. (a) The Parent Borrower Agent shall not pay or make, directly or indirectly, any Restricted Payment, except that:
(i) the Parent Borrower Agent may make Restricted Payments to the extent necessary to permit any Parent Company:;
(A) to pay (x) general operating and compliance administrative costs and expenses (including corporate overhead, legal or similar expenses) and franchise fees and taxes and similar fees, taxes and expenses and customary salary, bonus and other benefits payable required to directors, officers, employees, members maintain the organizational existence of management, managers and/or consultants of any such Parent Company), in each case, which are reasonable and customary and incurred in the ordinary course of business, plus any reasonable and customary indemnification claims made by directors, officers, members of management, managers, management or employees or consultants of any Parent Company, in each case, to the extent attributable to the ownership or operations of any Parent Company (but excluding, for the avoidance of doubtHoldings, the portion Borrowers and their Subsidiaries and (y) without duplication of preceding clause (x), any Public Company Costs;
(B) for any taxable period in which the Borrower Agent and/or any of its Subsidiaries is a member of a consolidated, combined or similar income tax group of which a direct or indirect parent of the Borrowers is the common parent (a “Tax Group”),to discharge the consolidated tax liabilities of such amountTax Group when and as due, if any, that is to the extent such liabilities are attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or Agent and its subsidiaries)Subsidiaries; provided, that the Parent amount paid by the Borrower and/or its subsidiaries;
Agent pursuant to this paragraph (B) to pay franchise, excise shall not exceed the tax liabilities that would be due if the Borrower Agent and each Subsidiary were separate corporations filing income and similar Taxes, and other fees, Taxes and expenses, required to maintain tax returns on a consolidated or combined basis with the organizational existence Borrower Agent as the common parent of such Parent Companyaffiliated group (calculated at the highest combined applicable federal, state, local and foreign tax rate); provided further that the permitted payment pursuant to this paragraph (B) with respect to any taxes of any Unrestricted Subsidiary for any taxable period shall be limited to the amount actually paid with respect to such period by such Unrestricted Subsidiary to the Borrower Agent and its Subsidiaries for the purposes of paying such consolidated, combined or similar taxes;
(C) to pay audit and other accounting and reporting expenses at such Parent Company to the extent relating to the ownership or operations of the Borrowers and their Subsidiaries;
(D) for the payment of insurance premiums to the extent relating to the ownership or operations of the Borrowers and their Subsidiaries;
(E) pay fees and expenses related to debt or equity offerings, investments or acquisitions permitted by this Agreement (whether or not consummated);
(F) to pay the consideration to finance any Investment permitted under Section 6.07 (provided that (x) such Restricted Payments under this clause (a)(i)(F) shall be made substantially concurrently with the closing of such Investment and (y) such Parent Company shall, promptly following the closing thereof, cause all such property acquired to be contributed to the Borrowers or one of their Subsidiaries, or the merger or amalgamation of the Person formed or acquired into the Borrowers or one of their Subsidiaries, in order to consummate such Investment in a manner that causes such Investment to comply with the applicable requirements of Section 6.07 as if undertaken as a direct Investment by such Borrower or such Subsidiary); and
(G) without duplication of clause (A)(y) above, to pay customary salary, bonus, long-term incentive, severance bonus and other benefits (including payment to certain service providers of the Parent Borrower or its Subsidiaries pursuant to any equity plan (whether in the form of options, cash settled options or otherwise)) payable to Permitted Payeesdirectors, as well as applicable employmentofficers, social security members of management or similar taxes in connection therewith, employees of any Parent Company to the extent such salary, bonuses, severance bonuses and other benefits are directly attributable and reasonably allocated to the operations of the Parent Borrower and/or its subsidiariesBorrowers and their Subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose;
(D) to pay audit and other accounting and reporting expenses of such Parent Company to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such expenses, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries;
(E) for the payment of insurance premiums to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries;
(F) to pay (x) fees and expenses related to any debt and/or equity offerings (including refinancings), investments and/or acquisitions permitted or not restricted by this Agreement (whether or not consummated, and including advisory, refinancing, subsequent transaction and exit fees of any Parent Company of the Parent Borrower) and expenses and indemnities of any trustee, agent, arranger, underwriter or similar role and (y) Public Company Costs; and
(G) to finance any Investment permitted under Section 6.06 as if such Parent Company were subject to Section 6.06 (provided that (x) any Restricted Payment under this clause (a)(i)(G) 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 (y) the relevant Parent Company shall, promptly following the closing 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 (I) all property acquired to be contributed to the Parent Borrower or one or more of its Restricted Subsidiaries or (II) the merger, consolidation or amalgamation of the Person formed or acquired into the Parent Borrower or one or more of its Restricted Subsidiaries, in order to consummate such Investment in compliance with the applicable requirements of Section 6.06 as if undertaken as a direct Investment by the Parent Borrower or the relevant Restricted Subsidiary);
(ii) the Parent Borrower Agent may pay (or make Restricted Payments to allow any Parent Company to pay) for the repurchase, redemption, retirement or other acquisition or retirement for value of Capital Stock of any Parent Company or any subsidiary held by any Permitted Payee:future, present or former employee, director, member of management, officer, manager or consultant (or any Affiliate or Immediate Family Member thereof) of any Parent Company, the Borrowers or any Subsidiary;
(A) in accordance with the terms of promissory exchange for notes issued pursuant to Section Section 6.01(o), so long as the aggregate amount of all Cash cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments made (x) pursuant to sub-clause (D(D) of this clause (ii(ii) belowbelow and (y) pursuant to Section 6.05(a)(iv), (1) does not exceed the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period 25,000,000 in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to the next subsequent Fiscal Years (until so applied)) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under clause (D) below; plusYear;
(B) with the proceeds of any sale or issuance of, or of any capital contribution in respect of, the exchange for Capital Stock of the Parent Borrower or any Parent Company (to the extent such proceeds are contributed to the Parent Borrower or any Restricted Subsidiary in respect of Qualified Capital Stock issued by the Parent Borrower or such Restricted Subsidiary) (other than amounts constituting a Cure Amount or an Available Excluded Contribution Amount); plusCompany;
(C) with the in exchange for net proceeds of any key-man life insurance policiespolicies received during such fiscal year; plusor
(D) with in exchange for Cash and Cash Equivalents in an amount not to exceed, together with (x) the aggregate amount of all cash payments made pursuant to sub-clause (A) of this clause (ii) in respect of promissory notes issued pursuant to Section Section 6.01(o) and (y) the aggregate amount of Restricted Payments made pursuant to Section 6.05(a)(iv), (1) the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period 25,000,000 in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to the next subsequent Fiscal Years (until so applied) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under the immediately preceding clause (1); plus
(E) with the amount of any Cash bonuses otherwise payable to any Permitted Payee that are foregone in exchange for the receipt of Capital Stock of the Parent Borrower or any Parent Company pursuant to any compensation arrangement, including any deferred compensation planYear;
(iii) the Parent Borrower Agent may make additional Restricted Payments; provided that at the time they are paid by the Borrower Agent, before and after giving effect to such Restricted Payments in an amount not to exceed (A) the portion, if any, of the Available Amount on such date that the Parent Borrower elects to apply to under this clause (iii)(A) plus (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Parent Borrower elects to apply to this clause (iii)(B) (plus, without duplication of amounts referred to in this clause (Biii), 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 with Available Excluded Contribution Amounts up to the amount of such Available Excluded Contribution Amount, less any application thereof under Sections 6.04(b)(vi) or 6.06(r))Payment Conditions are satisfied;
(iv) the Parent Borrower Agent may make Restricted Payments (i) to any Parent Company to enable such Parent Company to (A) make Cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of such Parent CompanyCompany in an amount not to exceed, dividends, share splits, reverse share splits together with (or any combination thereofx) and, mergers, consolidations, amalgamations or other business combinations, and acquisitions and other Investments permitted hereunder and/or (B) honor any conversion request by a holder the aggregate amount of Convertible Indebtedness by payment of cash and/or delivery of Capital Stock, make any all cash payments in lieu of fractional shares in connection with any conversion of Convertible Indebtedness and otherwise make payments on Convertible Indebtedness in accordance with its terms (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments upon redemption thereof), or, in the case of each of sub-clauses (A) and (B) above, make Restricted Payments to any Parent Company to enable such Parent Company to make the payments and/or deliveries described in such sub-clauses (A) and (B), and (ii) consisting of (A) payments made or expected to be made in respect of withholding or similar Taxes payable by notes issued pursuant to Section 6.01(o) and (y) the aggregate amount of all Restricted Payments made pursuant to Section 6.05(a)(ii)(D), $25,000,000 in any Permitted Payee and/or (B) repurchases of Capital Stock Fiscal Year, which, if not used in consideration of any Fiscal Year, may be carried forward to the payments described in sub clause (A) above, including demand repurchases in connection with the exercise of stock options and the issuance of restricted stock units or similar stock based awardsnext subsequent Fiscal Year;
(v) the Parent Borrower Agent may repurchase, redeem, acquire or retire repurchase Capital Stock upon (or make provisions for withholdings in connection with), or make Restricted Payments to any Parent Company to enable it to repurchase, redeem, acquire or retire Capital Stock upon (or make provisions for withholdings in connection with), the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock warrants if such Capital Stock represents all or a portion of the exercise price of, or tax withholdings with respect to, of such warrants, options or other securities convertible into or exchangeable for Capital Stock warrants as part of a “cashless” exercise;
(vi) the Parent Borrower Agent may make Restricted Payments the proceeds of which are applied (i) on the Closing Date, solely to effect the consummation of the Transactions and on or about the Amendment No. 1 Effective Date, solely to effect the consummation of the Amendment No. 1 Transactions, (ii) on and after the Closing Date, to satisfy any payment obligations owing, or as otherwise required, under the Acquisition Agreement (including payment of working capital and/or purchase price adjustments) and to pay Transaction Costs, in each case, with respect to the Transactions, (iii) to satisfy obligations to direct or indirect holders of Capital Stock of the Parent Borrower (immediately prior to giving effect to the Transactions) in connection with, or as a result of, any working capital and/or purchase price adjustments, in each case, with respect to the Transactions and (iv) to satisfy any settlement of claims or actions in connection with the Transactions or to satisfy indemnity or other similar obligations in connection with the Transactions;
(vii) so long as no Event of Default shall have occurred and be continuing, the Parent Borrower Agent may (or may make Restricted Payments to any Parent Company to enable it to) make Restricted Payments with respect to any Capital Stock in an amount not to exceed (A) the greater of (x) an amount equal to 7.006.00% per annum of the net Cash proceeds received by or contributed to the Parent Borrower Agent in connection with the merger initial public offering of Isos Acquisition Corporation and Bowlero Corp. shares of common stock of Party City Holdco Inc. on December 15April 16, 2021 and the other transactions consummated in connection therewith and (y) an amount equal to 7.00% per annum of the Market Capitalization of the Parent Borrower (or its direct or indirect Parent Company, as applicable) and its subsidiaries minus (B) any utilization of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A)2015;
(viii) the Parent Borrower Agent may make Restricted Payments to (i) redeem, repurchase, defease, discharge, retire or otherwise acquire any (A) Capital Stock (“Treasury Capital Stock”) of the Parent Borrower and/or Agent or any Restricted Subsidiary or (B) Capital Stock of any Parent Company, in the case of each of subclauses (A(A) and (B(B), in exchange for, or out of the proceeds of the substantially concurrent sale (other than to the Parent Borrower and/or any Restricted Agent or a Subsidiary) of, Qualified Capital Stock of the Parent Borrower Agent or any Parent Company to the extent any such proceeds are contributed as a common equity contribution to the capital of the Parent Borrower and/or Agent or any Restricted Subsidiary (in respect of Qualified each case, other than Disqualified Capital Stock Stock) (“Refunding Capital Stock”) and (ii) declare and pay dividends on any the Treasury Capital Stock out of the proceeds of the substantially concurrent sale or issuance (other than to the Parent Borrower Agent or a Restricted Subsidiary) of any the Refunding Capital Stock;
(ix) to the extent constituting a Restricted Payment, the Parent Borrower Agent may consummate any transaction permitted by Section 5.19 (other than Section 5.19(d)), Section 6.06 Sections 6.07 (other than Sections 6.06(j6.07(j) and (t(t)), Section 6.08 (other than Section 6.08(g)) and Section 6.07 (other than Section 6.07(gSections 6.11(h));; and
(x) the Parent Borrower Agent may make additional Restricted Payments after the First Amendment Effective Date in an aggregate amount not to exceed exceed, together with the aggregate amount of any Restricted Debt Payments made after the First Amendment Effective Date pursuant to Section 6.05(b)(viii), $50,000,000 at any time outstanding, so long as no Default or Event of Default shall have occurred and be continuing.
(Ab) The Borrowers and the Subsidiary Guarantors shall not, nor shall they permit any Subsidiary to, make, directly or indirectly, any payment or other distribution (whether in Cash, securities or other property) on or in respect of principal of or interest on the Senior Notes (or Refinancing Indebtedness in respect thereof) or any Junior 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 the Senior Notes (or any Refinancing Indebtedness in respect thereof) or any Junior Indebtedness (collectively, “Restricted Debt Payments”), except:
(i) the greater of $85,000,000 and 25% of Consolidated Adjusted EBITDA as defeasance, redemption, repurchase or other acquisition or retirement of the last day Senior Notes (or Refinancing Indebtedness in respect thereof) or Junior Indebtedness made by exchange for, or out of the most recently ended Test Period minus (B) any utilization proceeds of the Available RP Capacity Amount substantially concurrent incurrence of, Refinancing Indebtedness permitted by Section 6.01;
(ii) payments as part of an “applicable high yield discount obligation” catch-up payment, so long as no Event of Default shall have occurred and be continuing;
(iii) payments of regularly scheduled interest and fees, expenses and indemnification obligations as and when due in reliance on unused capacity under immediately preceding clause (Arespect of any Indebtedness (other than payments with respect to Subordinated Indebtedness prohibited by the subordination provisions thereof);
(xiiv) the Parent Borrower may pay any dividend or other distribution or consummate any redemption within 60 days after the date of the declaration thereof or the provision of a redemption notice payments with respect to intercompany Indebtedness permitted under Section 6.01, subject to the subordination provisions applicable 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);
(xiiv) payments in connection with the Parent Borrower may make any Restricted Payment constituting the distribution or payment of Receivables FeesExisting Debt Refinancing;
(xiii) the Parent Borrower may make additional Restricted 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 Event of Default hereunder or shall result therefrom;
(xiv) the Parent Borrower may make additional Restricted Payments in an amount not to exceed the amount of proceeds received by the Parent Borrower and/or any Restricted Subsidiary under the Representation and Warranty Insurance Policy during the term of this Agreement;
(xvvi) (A) for payments of any taxable period for which the Parent Borrower Senior Notes and/or any Junior Indebtedness in exchange for, or with proceeds of its Subsidiaries are members any substantially contemporaneous issuance of a consolidatedQualified Capital Stock of any Parent Company or the Borrower Agent, combined or similar income tax group for U.S. federal and/or applicable state or local income tax purposes and any substantially contemporaneous capital contribution in respect of which a direct or indirect parent Qualified Capital Stock of the Parent Borrower is the common parent (a “Tax Group”)Agent, or for which the Parent Borrower is a disregarded entity for U.S. federal income tax purposes wholly-owned by a corporate parent (a “Corporate Parent”), the Parent Borrower and each of its Subsidiaries may make Restricted Payments the proceeds of which shall be used by such common parent to pay the portion of any consolidated, combined or similar U.S. federal, state or local income Taxes of such Tax Group, or by the Corporate Parent to pay the portion of the U.S. federal, state or local income Taxes of such Corporate Parent, or any franchise taxes imposed in lieu thereof, for such taxable period that are attributable to the income of the Parent Borrower and/or its Subsidiaries, provided that such amount shall not be greater than the amount of such U.S. federal, state or local income taxes that would be paid (for such taxable period) by the Parent Borrower and its Subsidiaries if the Parent Borrower and/or such Subsidiaries had been a stand-alone corporate taxpayer (or stand-alone group of corporate taxpayers filing on a consolidated, combined or similar basis) for all taxable years ending after the Closing Date (taking into account any net operating loss carryforwards attributable to the Parent Borrower and its Subsidiaries, as the case may be) and (B) without duplication payments of Restricted Payments made under Section 6.04(a)(xv)(A), for Indebtedness by the conversion of all or any taxable period for which portion thereof into Qualified Capital Stock of any Parent Company or the Parent Borrower is treated as a partnership for U.S. federal and/or applicable state or local income tax purposes, the Parent Borrower may make Restricted Payments to its equity owners at the times Agent and (C) payments of interest in respect of Indebtedness in the amounform of payment-in-kind interest with respect to such Indebtedness permitted under Section 6.01;
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) The Parent Borrower Borrowers shall not pay or make, directly or indirectly, any Restricted Payment, except that:
(i) the Parent Borrower Borrowers may make Restricted Payments to the extent necessary to permit any Parent Company:
(A) to pay general operating and compliance administrative costs and expenses (including corporate overhead, legal or similar expenses and customary wages, salary, bonus and other benefits payable to directors, officers, employees, members of management, managers consultants and/or consultants independent contractors of any Parent Company), franchise fees, franchise Taxes and similar fees, Taxes and expenses required to maintain the organizational existence of such Parent Company, in each case, which are reasonable and customary and incurred in the ordinary course of business, plus any reasonable and customary indemnification claims made by current or former directors, officers, members of management, managers, employees or consultants of any Parent Company, in each case, to the extent attributable to the ownership or operations of any Parent Company (but excluding, for the avoidance of doubt, the portion of any such amount, if any, that is attributable to the ownership or operations operation of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries); provided that Restricted Payments under this clause (a)(i)(A) that are attributable to any Unrestricted Subsidiary shall be permitted only to the extent that either (x) such Unrestricted Subsidiary has made one or more Cash distributions, advances or loans to Parent or any of its Subsidiaries for such purpose in an amount up to the Parent amount of such Unrestricted Subsidiary’s proportionate share of such costs, expenses, franchise fees and Taxes and similar fees, Taxes and expenses or (y) the amount of such Restricted Payments made by a Borrower and/or its subsidiarieson behalf of such Unrestricted Subsidiary is treated as an Investment subject to Section 7.06 hereof;
(B) to pay franchise, excise and similar Taxes, and other fees, Taxes and expenses, required to maintain the organizational existence of such Parent Company;
(C) to pay customary salary, bonus, long-term incentive, severance and other benefits (including payment to certain service providers of the Parent Borrower or its Subsidiaries pursuant to any equity plan (whether in the form of options, cash settled options or otherwise)) payable to Permitted Payees, as well as applicable employment, social security or similar taxes in connection therewith, to the extent such salary, bonuses, severance and other benefits are attributable and reasonably allocated to the operations of the Parent Borrower and/or its subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose;
(D) to pay audit and other accounting and reporting expenses of at such Parent Company to the extent attributable relating to the ownership or operations of any Parent Company (but excluding, for the avoidance of doubt, the portion of any such expenses, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), Parent, the Borrowers and/or their subsidiaries; provided that Restricted Payments under this clause (a)(i)(B) that are attributable to any Unrestricted Subsidiary shall be permitted only to the extent that either (x) such Unrestricted Subsidiary has made one or more Cash distributions, advances or loans to Parent Borrower or any of its Subsidiaries for such purpose in an amount up to the amount of such Unrestricted Subsidiary’s proportionate share of such accounting and its subsidiariesreporting expenses or (y) the amount of such Restricted Payments made by Parent on behalf of such Unrestricted Subsidiary is treated as an Investment subject to Section 7.06 hereof;
(EC) for the payment of insurance premiums to the extent attributable relating to the ownership or operations of any Parent Company (but excluding, for the avoidance of doubt, the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Parent, any Borrower and and/or its subsidiaries; provided that Restricted Payments under this clause (a)(i)(C) that are attributable to any Unrestricted Subsidiary shall be permitted only to the extent that either (x) such Unrestricted Subsidiary has made one or more Cash distributions advances or loans to Parent or any of its Subsidiaries for such purpose in an amount up to the amount of such Unrestricted Subsidiary’s proportionate share of such insurance premiums or (y) the amount of such Restricted Payments made by Parent on behalf of such Unrestricted Subsidiary is treated as an Investment subject to Section 7.06 hereof;
(FD) to pay (x) fees and expenses related to any debt and/or or equity offerings (including refinancings)offerings, investments and/or or acquisitions permitted or not restricted by this Agreement (whether or not consummated, and including advisory, refinancing, subsequent transaction and exit fees of any Parent Company of the Parent Borrower) and expenses and indemnities of any trustee, agent, arranger, underwriter or similar role and (y) Public Company Costs; and);
(GE) to pay the consideration to finance any Investment permitted under Section 6.06 as if such Parent Company were subject to Section 6.06 Section 7.06 (provided that (x) any such Restricted Payment Payments under this clause (a)(i)(G(a)(i)(E) 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 (y) the relevant such Parent Company shall, promptly following the closing 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 therewiththereof, cause (I) all such property acquired to be contributed to the Parent any Borrower or one or more of its Restricted Subsidiaries Subsidiaries, or (II) the merger, consolidation or amalgamation of the Person formed or acquired into the Parent any Borrower or one or more of its Restricted Subsidiaries, in order to consummate such Investment in compliance a manner that causes such Investment to comply with the applicable requirements of Section 6.06 Section 7.06 as if undertaken as a direct Investment by the Parent such Borrower or the relevant Restricted such Subsidiary);; and
(F) to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, employees or consultants (or any Immediate Family Member thereof) of any Parent Company plus any reasonable and customary indemnification claims made by current or former directors, officers, members of management, managers, employees or consultants of any Parent Company, to the extent such salary, bonuses, severance and other benefits or claims in respect of any of the foregoing) are directly attributable and reasonably allocated to the ownership or operations of any Parent Company (but excluding, for the avoidance of doubt, the portion of any amount, if any, that is attributable to the ownership or operation of any subsidiary of any Parent Company other than Parent and/or its subsidiaries), Parent, any Borrower and/or its subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose; provided that Restricted Payments under this clause (a)(i)(F) that are attributable to any Unrestricted Subsidiary shall be permitted only to the extent that either (x) such Unrestricted Subsidiary has made one or more Cash distributions, advances or loans to Parent or any of its Subsidiaries for such purpose in an amount up to the amount of such Unrestricted Subsidiary’s proportionate share of such salary, bonus, severance and other benefits or (y) the amount of such Restricted Payments made by Parent on behalf of such Unrestricted Subsidiary is treated as an Investment subject to Section 7.06 hereof.
(ii) the Parent Borrower Borrowers may pay (or make Restricted Payments to allow any Parent Company to pay) for the repurchase, redemption, retirement or other acquisition or retirement for value of Capital Stock of any Parent Company Company, any Borrower or any subsidiary held by any Permitted Payeefuture, present or former employee, director, member of management, officer, manager or consultant (or any Immediate Family Member thereof) of any Parent Company, any Borrower or any subsidiary:
(A) in accordance with the terms of promissory notes issued pursuant to Section 6.01(oSection 7.01(n), so long as the aggregate amount of all Cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments made pursuant to sub-clause (D(D) of this clause (ii) below(ii), (1) does not exceed the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period €10,000,000 in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to the next subsequent Fiscal Years (until so applied)) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under clause (D) below; plusYear;
(B) with the proceeds of any sale or issuance of, or of any capital contribution in respect of, the Capital Stock of the Parent Borrower or any Parent Company (to the extent such proceeds are contributed to the Parent Borrower or any Restricted Subsidiary in respect of Qualified Capital Stock issued by the Parent Borrower or such Restricted Subsidiary) (other than amounts constituting a Cure Amount or an Available Excluded Contribution Amount); plusCompany;
(C) with the net proceeds of any key-man life insurance policiespolicies received by Parent and the Subsidiaries during such Fiscal Year; plusor
(D) with Cash and Cash Equivalents in an amount not to exceed, together with the aggregate amount of all cash Cash payments made pursuant to sub-clause (A) of this clause (ii) in respect of promissory notes issued pursuant to Section 6.01(oSection 7.01(n), (1) the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period €10,000,000 in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward solely to the next subsequent Fiscal Years (until so applied) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under the immediately preceding clause (1); plus
(E) with the amount of any Cash bonuses otherwise payable to any Permitted Payee that are foregone in exchange for the receipt of Capital Stock of the Parent Borrower or any Parent Company pursuant to any compensation arrangement, including any deferred compensation planYear;
(iii) the Parent Borrower Borrowers may make additional Restricted Payments in an amount not to exceed (A) the portion, if any, of the Available Amount on such date that the Parent such Borrower elects to apply to this clause (iii)(A(iii); provided that (i) plus no Default or Event of Default shall have occurred and be continuing either before or after giving effect to such Restricted Payment and (Bii) the portion, if any, with respect to amounts utilized pursuant to clauses (a)(i) and (ii) of the definition of “Available Excluded Contribution Amount Amount”, after giving Pro Forma Effect thereto, the Total Leverage Ratio (calculated on such date that a Pro Forma Basis) is not greater than 4.00:1.00 as of the Parent Borrower elects last day of the most recently ended Test Period for which financial statements have been delivered pursuant to apply to this clause (iii)(BSection 6.01(b) or (plus, without duplication of amounts referred to in this clause (Bc), in an amount equal as applicable, on or prior to the Net Proceeds from a Disposition of property or assets acquired after the Closing Date, if the acquisition making of such property or assets was financed with Available Excluded Contribution Amounts up to the amount of such Available Excluded Contribution Amount, less any application thereof under Sections 6.04(b)(vi) or 6.06(r))Restricted Payment;
(iv) the Parent Borrower Borrowers may make Restricted Payments (i) to any Parent Company to enable such Parent Company to (A) make Cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of such Parent Company, dividends, share splits, reverse share splits (Company or any combination thereof) and, mergers, consolidations, amalgamations or other business combinations, and acquisitions and other Investments permitted hereunder and/or (B) honor any conversion request by a holder of Convertible Indebtedness by payment of cash and/or delivery of Capital Stock, make any cash payments in lieu of fractional shares in connection with any conversion of Convertible Indebtedness and otherwise make payments on Convertible Indebtedness in accordance with its terms (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments upon redemption thereof), or, in the case of each of sub-clauses (A) and (B) above, make Restricted Payments to any Parent Company to enable such Parent Company to make the payments and/or deliveries described in such sub-clauses (A) and (B), and (ii) consisting of (A) payments made or expected to be made in respect of withholding or similar Taxes payable by any Permitted Payee future, present or former officers, directors, employees, members of management, managers or consultants of the Borrowers, any subsidiary or Parent Company or any of their respective Immediate Family Members and/or (B) repurchases of Capital Stock in consideration of the payments described in sub clause (A(A) above, including demand repurchases in connection with the exercise of stock options and the issuance of restricted stock units or similar stock based awardsoptions;
(v) the Parent Borrower Borrowers may repurchase, redeem, acquire or retire Capital Stock upon repurchase (or make provisions for withholdings in connection with), or make Restricted Payments to any Parent Company to enable it to repurchase, redeem, acquire or retire ) Capital Stock upon (or make provisions for withholdings in connection with), the exercise of warrants, options or warrants or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represents all or a portion of the exercise price of, of such options or tax withholdings with respect to, such warrants, options warrants or other securities convertible into or exchangeable for Capital Stock as part of a “cashless” exercise;
(vi) the Parent Borrower Borrowers may make Restricted Payments the proceeds of which are applied (i) on the Closing Date, solely to effect the consummation of the Transactions and on or about the Amendment No. 1 Effective Date, solely to effect the consummation of the Amendment No. 1 Transactions, (ii) on and after the Closing Date, to satisfy any payment obligations owing, or as otherwise required, under the Acquisition Agreement (including payment of working capital and/or purchase price adjustments) and to pay any Transaction Costs, in each case, with respect to the Transactions, (iii) to satisfy obligations to direct or indirect holders of Capital Stock of the Parent Borrower (immediately prior to giving effect to the Transactions) in connection with, or as a result of, any working capital and/or purchase price adjustments, in each case, with respect to the Transactions and (iv) to satisfy any settlement of claims or actions in connection with the Transactions or to satisfy indemnity or other similar obligations in connection with the Transactions;
(vii) so long as no Event of Default shall have occurred and be continuing at the Parent Borrower time of the declaration thereof, the Borrowers may (or may make Restricted Payments to any Parent Company to enable it to) make Restricted Payments with respect to any Capital Stock in an amount not of up to exceed (A) the greater of (x) an amount equal to 7.006.0% per annum of the net Cash proceeds received by or contributed to any Borrower or any equityholder thereof from the Parent Borrower in connection with the merger of Isos Acquisition Corporation and Bowlero Corp. on December 15, 2021 and the other transactions consummated in connection therewith and (y) an amount equal to 7.00% per annum of the Market Capitalization of the Parent Borrower (or its direct or indirect Parent Company, as applicable) and its subsidiaries minus (B) any utilization of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A)IPO;
(viii) the Parent Borrower Borrowers may make Restricted Payments to (i) redeem, repurchase, defease, discharge, retire or otherwise acquire any (A) Capital Stock (“Treasury Capital Stock”) of the Parent such Borrower and/or or any Restricted of such Borrower’s Subsidiary or (B) Capital Stock of any Parent Company, in the case of each of subclauses (A(A) and (B)(B) above, in exchange for, or out of the proceeds of the substantially concurrent sale (other than to the Parent such Borrower and/or any Restricted or such Subsidiary) of, Qualified Capital Stock of the Parent such Borrower or any Parent Company to the extent any such proceeds are contributed to the capital of the Parent such Borrower and/or or any Restricted Subsidiary of such Borrower in respect of Qualified Capital Stock (“Refunding Capital Stock”) and (ii) declare and pay dividends on any the Treasury Capital Stock out of the proceeds of the substantially concurrent sale or issuance (other than to the Parent such Borrower or a Restricted SubsidiarySubsidiary of such Borrower) of any the Refunding Capital Stock;
(ix) to the extent constituting a Restricted Payment, the Parent Borrower Borrowers may consummate any transaction permitted by Section 5.19 (other than Section 5.19(d)), Section 6.06 Section 7.06 (other than Sections 6.06(j7.06(j) and (t(t)), Section 7.07 (other than Section 7.07(g)) and Section 6.07 Section 7.09 (other than Section 6.07(gSection 7.09(d));; and
(x) so long as no Event of Default under Sections 8.01(a), 8.01(f) or 8.01(g) shall have occurred and be continuing at the Parent Borrower time of the declaration thereof, the Borrowers may make additional Restricted Payments in an aggregate amount not to exceed (A) the greater of $85,000,000 €30,000,000 and 253% of Consolidated Adjusted EBITDA Total Assets of the Borrowers as of the last day of the most recently ended Test Period for which financial statements have been delivered pursuant to Section 6.01(b) or (c), as applicable, minus (B) the amount of (1) any utilization Restricted Debt Payments or other distributions made pursuant to clause (A) of the Available RP Capacity Amount Section 7.04(b)(vii) and (2) any Investments made in reliance on unused capacity under immediately preceding clause (ASection 7.06(aa);
(xi) the Parent Borrower Borrowers may pay any dividend or other distribution or consummate any redemption within 60 days after the date of 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 dividend or redemption notice would have complied with the provisions of this Section 6.04(a);hereof; and
(xii) the Parent Borrower may make Borrowers or any Restricted Payment constituting the distribution or payment of Receivables Fees;
(xiii) the Parent Borrower Subsidiary may make additional Restricted Payments so long as, as measured at the time Payments; provided for in Section 1.04(e)that after giving Pro Forma Effect thereto, (i) the Total Leverage Ratio would not exceed 4.00:1.00, (calculated on a Pro Forma Basis Basis) is not greater than 3.30:1.00 as of the last day of the most recently ended Test Period for which financial statements have been delivered pursuant to Section 6.01(b) or (c), as applicable, on or prior to the making of such Restricted Payment and (ii) there shall exist no Default or Event of Default hereunder shall have occurred and be continuing.
(b) No Borrower shall, nor shall they permit any Subsidiary or shall result therefromany other Loan Parties to, make any payment in Cash, securities or other property on or in respect of principal of or interest on any Junior Indebtedness (such Indebtedness, the “Restricted Debt”), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Restricted Debt (collectively, “Restricted Debt Payments”), except:
(i) the purchase, defeasance, redemption, repurchase, repayment or other acquisition or retirement of any Restricted Debt made by exchange for, or out of the proceeds of the substantially concurrent incurrence of, Refinancing Indebtedness permitted by Section 7.01(o);
(xivii) payments as part of an “applicable high yield discount obligation” catch-up payment;
(iii) payments of regularly scheduled interest and payments of fees, expenses and indemnification obligations as and when due in respect of any Restricted Debt (other than payments with respect to Subordinated Indebtedness prohibited by the subordination provisions thereof);
(iv) payments with respect to intercompany Indebtedness permitted under Section 7.01, subject to the subordination provisions applicable thereto;
(A) Restricted Debt Payments in exchange for, or with proceeds of any issuance of Capital Stock of any Parent Company or Qualified Capital Stock of any Borrower may make additional or any Subsidiary, and/or any capital contribution in respect of Qualified Capital Stock of any Borrower or any Subsidiary, (B) Restricted Debt Payments as a result of the conversion of all or any portion of Restricted Debt into Qualified Capital Stock of any Parent Company, any Borrower or any 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 7.01;
(vi) Restricted Debt Payments in an aggregate amount not to exceed the amount portion, if any, of proceeds received by the Parent Available Amount on such date that any Borrower and/or any elects to apply to this clause (vi); provided that (x) no Default or Event of Default shall have occurred and be continuing either before or after giving effect to such Restricted Subsidiary under Debt Payment and (y) with respect to amounts utilized pursuant to clauses (a)(i) and (ii) of the Representation and Warranty Insurance Policy during definition of “Available Amount”, after giving Pro Forma Effect thereto, the term Total Leverage Ratio (calculated on a Pro Forma Basis) is not greater than 4.00 to 1.00 as of this Agreement;the last day of the most recently ended Test Period for which financial statements have been delivered pursuant to Section 6.01(b) or (c), as applicable, on or prior to the making of such Restricted Debt Payment; and
(xvvii) so long as no Default or Event of Default exists at the time of delivery of irrevocable notice with respect thereof or would result therefrom, (A) for any taxable period additional Restricted Debt Payments in an aggregate amount not to exceed the greater of €30,000,000 and 3% of Consolidated Total Assets of the Borrowers as of the last day of the most recently ended Test Period for which the Parent Borrower and/or any of its Subsidiaries are members of a consolidated, combined financial statements have been delivered pursuant to Section 6.01(b) or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which a direct or indirect parent of the Parent Borrower is the common parent (a “Tax Group”c), or for which the Parent Borrower is a disregarded entity for U.S. federal income tax purposes wholly-owned by a corporate parent (a “Corporate Parent”)as applicable, the Parent Borrower and each of its Subsidiaries may make Restricted Payments the proceeds of which shall be used by such common parent to pay the portion of any consolidated, combined or similar U.S. federal, state or local income Taxes of such Tax Group, or by the Corporate Parent to pay the portion of the U.S. federal, state or local income Taxes of such Corporate Parent, or any franchise taxes imposed in lieu thereof, for such taxable period that are attributable to the income of the Parent Borrower and/or its Subsidiaries, provided that such amount shall not be greater than minus the amount of such U.S. federal, state or local income taxes that would be paid (for such taxable period1) by the Parent Borrower and its Subsidiaries if the Parent Borrower and/or such Subsidiaries had been a stand-alone corporate taxpayer (or stand-alone group of corporate taxpayers filing on a consolidated, combined or similar basis) for all taxable years ending after the Closing Date (taking into account any net operating loss carryforwards attributable to the Parent Borrower and its Subsidiaries, as the case may be) and (B) without duplication of Restricted Payments made under Section 6.04(a)(xv)(A), for any taxable period for which the Parent Borrower is treated as a partnership for U.S. federal and/or applicable state or local income tax purposes, the Parent Borrower may make Restricted Payments to its equity owners at the times and in the amounreliance on Section 7.04(a)(x)
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) The Parent Borrower shall not pay or make, directly or indirectly, any Restricted Payment, except that:
(i) the Parent Borrower may make Restricted Payments to the extent necessary to permit any Parent Company:
(A) to pay general operating and compliance administrative costs and expenses (including corporate overhead, legal or similar expenses and customary salary, bonus and other benefits payable to directors, officers, employees, members of management, managers and/or consultants of any Parent Company)) and franchise fees and Taxes and similar fees, Taxes and expenses required to enable such Parent Company to maintain its organizational existence or qualification to do business, in each case, which are reasonable and customary and incurred in the ordinary course of business, plus any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of any Parent Company, in each case, to the extent attributable to the ownership or operations of any Parent Company and its subsidiaries (but excluding, for the avoidance of doubt, excluding the portion of any such amount, if any, amount that is attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or and its subsidiaries), the Parent Borrower and/or its subsidiaries;
(B) to pay franchise, excise and similar Taxes, and other fees, Taxes and expenses, required to maintain the organizational existence of such Parent Company;[Reserved].
(C) to pay customary salary, bonus, long-term incentive, severance and other benefits (including payment to certain service providers of the Parent Borrower or its Subsidiaries pursuant to any equity plan (whether in the form of options, cash settled options or otherwise)) payable to Permitted Payees, as well as applicable employment, social security or similar taxes in connection therewith, to the extent such salary, bonuses, severance and other benefits are attributable and reasonably allocated to the operations of the Parent Borrower and/or its subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose;
(D) to pay audit and other accounting and reporting expenses of such Parent Company to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such expenses, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries;
(ED) for the payment of insurance premiums to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries;
(FE) to pay (x) fees and expenses related to any debt and/or or equity offerings (including refinancings)offerings, investments and/or or acquisitions permitted or not restricted by this Agreement (whether or not consummated, and including advisory, refinancing, subsequent transaction and exit fees of any Parent Company of the Parent Borrower) and expenses and indemnities of any trustee, agent, arranger, underwriter or similar role and (y) Public Company Costs; and;
(GF) to finance any Investment permitted under Section 6.06 as if such Parent Company were subject to Section Section 6.06 (provided that (x) any Restricted Payment under this clause (a)(i)(G(a)(i)(F) 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 (y) the relevant Parent Company shall, promptly following the closing 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 therewiththereof, cause (I) all property acquired to be contributed to the Parent Borrower or one or more of its Restricted Subsidiaries Subsidiaries, or (II) the merger, consolidation or amalgamation of the Person formed or acquired into the Parent Borrower or one or more of its Restricted Subsidiaries, in order to consummate such Investment in compliance with the applicable requirements of Section Section 6.06 as if undertaken as a direct Investment by the Parent Borrower or the relevant Restricted Subsidiary); and
(G) to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, employees or consultants of any Parent Company (or any Immediate Family Member of any of the foregoing) to the extent such salary, bonuses and other benefits are attributable and reasonably allocated to the operations of the Borrower and/or its subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose;
(ii) the Parent Borrower may pay (or make Restricted Payments to allow any Parent Company to pay) for the repurchase, redemption, retirement or other acquisition or retirement for value of Capital Stock of any Parent Company or any subsidiary held by any Permitted Payeefuture, present or former employee, director, member of management, officer, manager or consultant (or any Affiliate or Immediate Family Member thereof) of any Parent Company, the Borrower or any subsidiary:
(A) in accordance with the terms of promissory notes issued pursuant to Section Section 6.01(o), so long as the aggregate amount of all Cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments made pursuant to sub-clause (D(D) of this clause (ii(ii) below, (1) does not exceed the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period 30,000,000 in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied)) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under clause (D) below; plusYears;
(B) with the proceeds of any sale or issuance of, or of any capital contribution in respect of, the Capital Stock of the Parent Borrower or any Parent Company (to the extent such proceeds are contributed to the Parent Borrower or any Restricted Subsidiary in respect of Qualified Capital Stock issued by to the Parent Borrower or such any Restricted Subsidiary) (other than any amounts constituting a Cure Amount or an any amount that has been added to the Available Excluded Contribution Amount or the Available Amount); plus;
(C) with the net proceeds of any key-man life insurance policies; plusor
(D) with Cash and Cash Equivalents in an amount not to exceed, together with the aggregate amount of all cash payments made pursuant to sub-clause (A(A) of this clause (ii(ii) in respect of promissory notes issued pursuant to Section Section 6.01(o), (1) the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period 30,000,000 in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under the immediately preceding clause (1); plus
(E) with the amount of any Cash bonuses otherwise payable to any Permitted Payee that are foregone in exchange for the receipt of Capital Stock of the Parent Borrower or any Parent Company pursuant to any compensation arrangement, including any deferred compensation planYears;
(iii) the Parent Borrower may make additional Restricted Payments in an amount not to exceed (A) so long as the Fixed Charge Coverage Ratio, calculated on a Pro Forma Basis, would not be less than 2.00:1.00, the portion, if any, of the Available Amount on such date that the Parent Borrower elects to apply to this clause (iii)(A(iii)(A) plus (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Parent Borrower elects to apply to this clause (iii)(B) (plus, without duplication of amounts 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 with Available Excluded Contribution Amounts up to the amount of such Available Excluded Contribution Amount, less any application thereof under Sections 6.04(b)(vi) or 6.06(r)iii)(B);
(iv) the Parent Borrower may make Restricted Payments (i) to any Parent Company to enable such Parent Company to (A) make Cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of such Parent Company, dividends, share splits, reverse share splits (or any combination thereof) and, mergers, consolidations, amalgamations or other business combinations, and acquisitions and other Investments permitted hereunder and/or (B) honor any conversion request by a holder of Convertible Indebtedness by payment of cash and/or delivery of Capital Stock, make any cash payments in lieu of fractional shares in connection with any conversion of Convertible Indebtedness and otherwise make payments on Convertible Indebtedness in accordance with its terms (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments upon redemption thereof), or, in the case of each of sub-clauses (A) and (B) above, make Restricted Payments to any Parent Company to enable such Parent Company to make the payments and/or deliveries described in such sub-clauses (A) and (B), and (ii) consisting of (A) payments made or expected to be made in respect of withholding or similar Taxes payable by any Permitted Payee future, present or former officers, directors, employees, members of management, managers or consultants of the Borrower, any Restricted Subsidiary or any Parent Company or any of their respective Immediate Family Members and/or (B) repurchases of Capital Stock in consideration of the payments described in sub sub-clause (A(A) above, including demand repurchases in connection with the exercise of stock options and the issuance of restricted stock units or similar stock based awardsoptions;
(v) the Parent Borrower may repurchase, redeem, acquire or retire Capital Stock upon repurchase (or make provisions for withholdings in connection with), or make Restricted Payments to any Parent Company to enable it to repurchase, redeem, acquire or retire ) Capital Stock upon (or make provisions for withholdings in connection with), the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represents all or a portion of the exercise price of, or tax withholdings with respect to, of such warrants, options or other securities convertible into or exchangeable for Capital Stock as part of a “cashless” exercise;
(viA) for any taxable year (or portion thereof) that Borrower is a partnership or disregarded entity for U.S. federal income Tax purposes and no Parent Company is treated as a corporation for U.S. federal income tax purposes, the Parent Borrower may make Restricted Payments to fund the income tax liabilities of the direct or indirect equity owners of Borrower, in an assumed amount equal to the product of (x) the highest combined marginal federal and applicable state and/or local statutory Tax rate applicable to a direct or indirect taxpayer equity owner of Borrower, and (y) the U.S. federal taxable income of the Borrower for such year (or portion thereof), provided that (i) such calculation shall take into account the character of income or gain, preferential tax rates and the deductibility of state and local income taxes for US federal income tax purposes; (ii) such taxable income shall be reduced by any losses previously allocated to the equity owners to the extent such loss has not previously been used to offset taxable income of Borrower; (iii) such distributions shall be reduced by any amounts withheld by the Borrower or its Subsidiaries (or otherwise paid directly to any Governmental Authority) with respect to any taxable income or gain of Borrower and any tax credits Borrower allocated to its equity owners); or (B) for any taxable period (or portion thereof) that a Parent Company is treated as a corporation for U.S. federal income tax purposes and for which Borrower and any of its subsidiaries are members (or are pass-through entities of such members) of a consolidated, combined or similar income Tax group for U.S. federal, state or local income Tax purposes for which such Parent Company is the common parent, the Borrower may make Restricted Payments to such Parent Company to pay the portion of any U.S. federal, state or local income Taxes (as applicable) of such Parent Company for such taxable period that are attributable to the income of the Borrower and/or its applicable subsidiaries; provided that the aggregate amount of any such distributions with respect to federal, state or local Taxes, as applicable, shall not exceed the aggregate amount of such Taxes the Borrower and its subsidiaries that are part of such group would be required to pay in respect of such U.S. federal, state or local Taxes on a stand-alone basis for such taxable period; provided, further, that the amount of such distributions with respect to any Unrestricted Subsidiary for any taxable period shall be limited to the amount actually paid by such Unrestricted Subsidiary for such purpose.
(vii) the Borrower may make Restricted Payments, the proceeds of which are applied (i) on the Closing Date, solely to effect the consummation of the Transactions and on or about the Amendment No. 1 Effective Date, solely to effect the consummation of the Amendment No. 1 Transactions, (ii) on and after the Closing Date, to satisfy any payment obligations owing, or as otherwise required, owing under the Acquisition Agreement (including payment of working capital and/or purchase price adjustments) and to pay Transaction Costs, in each case, with respect to the Transactions, (iii) to satisfy obligations to direct or indirect holders of Capital Stock of the Parent Borrower (immediately prior to giving effect to the Transactions) in connection with, or as a result of, any working capital and/or purchase price adjustments, in each case, with respect to the Transactions and (iv) to satisfy any settlement of claims or actions in connection with the Transactions or to satisfy indemnity or other similar obligations in connection with the TransactionsReorganization Agreement;
(viiviii) so long as no Event of Default exists, following the Parent consummation of the first Qualifying IPO, the Borrower may (or may make Restricted Payments to any Parent Company to enable it to) make Restricted Payments with respect to any Capital Stock in an amount not to exceed (A) the greater of (xi) an amount equal to 7.006% per annum of the net Cash proceeds received by or contributed to the Parent Borrower in connection with the merger of Isos Acquisition Corporation and Bowlero Corp. on December 15, 2021 and the other transactions consummated in connection therewith and from any Qualifying IPO or (yb) an amount equal to 7.005% per annum of the Market Capitalization aggregate market capitalization of the Parent Borrower (or its direct or indirect applicable Parent Company, as applicable) and its subsidiaries minus (B) any utilization of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A);
(viiiix) the Parent Borrower may make Restricted Payments to (i) redeem, repurchase, defease, discharge, retire or otherwise acquire any (A) Capital Stock (“Treasury Capital Stock”) of the Parent Borrower and/or any Restricted Subsidiary or (B) Capital Stock of any Parent Company, in the case of each of subclauses (A(A) and (B(B), in exchange for, or out of the proceeds of the substantially concurrent sale (other than to the Parent Borrower and/or any Restricted Subsidiary) of, Qualified Capital Stock of the Parent Borrower or any Parent Company to the extent any such proceeds are contributed to the capital of the Parent Borrower and/or any Restricted Subsidiary 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 the Parent Borrower or a Restricted Subsidiary) of any Refunding Capital Stock;
(ixx) to the extent constituting a Restricted Payment, the Parent Borrower may consummate any transaction permitted by Section 5.19 (other than Section 5.19(d)), Section Section 6.06 (other than Sections 6.06(j6.06(j) and (t(t)) and Section ), Section 6.07 (other than Section Section 6.07(g)) and Section 6.09 (other than Section 6.09(d));
(xxi) the Parent Borrower may make additional Restricted Payments in an aggregate amount not to exceed (A) the greater of $85,000,000 160,000,000 and 254.0% of Consolidated Adjusted EBITDA Total Assets as of the last day of the most recently ended Test Period minus (BA) the amount of Restricted Debt Payments made by the Borrower or any utilization of the Available RP Capacity Amount Restricted Subsidiary in reliance on unused capacity under immediately preceding clause (ASection 6.04(b)(iv)(B), minus (B) the outstanding amount of Investments made by the Borrower or any Restricted Subsidiary in reliance on Section 6.06(q)(ii);
(xixii) the Parent Borrower may pay any dividend or other distribution or consummate any redemption within 60 days after the date of 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 dividend or redemption notice would have complied with the provisions of this Section 6.04(a);
(xii) the Parent Borrower may make any Restricted Payment constituting the distribution or payment of Receivables Fees;hereof; and
(xiii) the Parent Borrower may make additional Restricted Payments so long as, as measured at the time provided for in Section 1.04(e), (i) no Event of Default exists or would result therefrom and (ii) the Total Leverage Ratio would not exceed 4.00:1.00Ratio, calculated on a Pro Forma Basis Basis, would not exceed 4.50:1.00;
(b) The Borrower shall not, nor shall they permit any Restricted Subsidiary to, make any payment (whether in Cash, securities or other property) on or in respect of principal of or interest on (y) any Junior Lien Indebtedness or (z) any Junior Indebtedness (such Indebtedness under clauses (y) and (z), the “Restricted Debt”), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Restricted Debt prior to its scheduled maturity (collectively, “Restricted Debt Payments”), except:
(i) any 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) there shall exist payments as part of an “applicable high yield discount obligation” catch-up payment;
(iii) payments of regularly scheduled interest as and when due in respect of any Restricted Debt, except for any payments with respect to any Subordinated Indebtedness that are prohibited by the subordination provisions thereof;
(iv) so long as, at the time of delivery of irrevocable notice with respect thereto, no Event of Default hereunder exists or shall would result therefrom, additional Restricted Debt Payments in an aggregate amount not to exceed:
(A) the greater of $160,000,000 and 4.0% of Consolidated Total Assets as of the last day of the most recently ended Test Period, minus the amount of Investments made in reliance on Section 6.06(q)(iii); plus
(B) the greater of $160,000,000 and 4.0% of Consolidated Total Assets as of the last day of the most recently ended Test Period, minus (1) the amount of Restricted Payments made by the Borrower or any Restricted Subsidiary in reliance on Section 6.04(a)(x), minus (2) the outstanding amount of Investments made by the Borrower or any Restricted Subsidiary in reliance on Section 6.06(q)(ii);
(xivA) the Parent Borrower may make additional Restricted Debt Payments in an amount not to exceed exchange for, or with proceeds of any issuance of, Qualified Capital Stock of the amount of proceeds received by the Parent Borrower and/or any Restricted Subsidiary and/or any capital contribution in respect of Qualified Capital Stock of the Borrower or any Restricted Subsidiary, in each case, other than any amounts constituting a Cure Amount or any amount that has been added to the Available Excluded Contribution Amount or the Available Amount, (B) Restricted Debt Payments as a result of the conversion of all or any portion of any Restricted Debt into Qualified Capital Stock of the Borrower 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 the Representation and Warranty Insurance Policy during the term of this AgreementSection 6.01;
(xvvi) Restricted Debt Payments in an aggregate amount not to exceed (A) for any taxable period for which the Parent Borrower and/or any of its Subsidiaries are members of a consolidatedportion, combined or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which a direct or indirect parent if any, of the Parent Available Amount on such date that the Borrower is the common parent elects to apply to this clause (a “Tax Group”), or for which the Parent Borrower is a disregarded entity for U.S. federal income tax purposes wholly-owned by a corporate parent (a “Corporate Parent”), the Parent Borrower and each of its Subsidiaries may make Restricted Payments the proceeds of which shall be used by such common parent to pay the portion of any consolidated, combined or similar U.S. federal, state or local income Taxes of such Tax Group, or by the Corporate Parent to pay the portion of the U.S. federal, state or local income Taxes of such Corporate Parent, or any franchise taxes imposed in lieu thereof, for such taxable period that are attributable to the income of the Parent Borrower and/or its Subsidiaries, provided that such amount shall not be greater than the amount of such U.S. federal, state or local income taxes that would be paid (for such taxable periodvi)(A) by the Parent Borrower and its Subsidiaries if the Parent Borrower and/or such Subsidiaries had been a stand-alone corporate taxpayer (or stand-alone group of corporate taxpayers filing on a consolidated, combined or similar basis) for all taxable years ending after the Closing Date (taking into account any net operating loss carryforwards attributable to the Parent Borrower and its Subsidiaries, as the case may be) and plus (B) without duplication the portion, if any, of the Available Excluded Contribution Amount on such date that the Borrower elects to apply to this clause (vi)(B);
(vii) additional Restricted Debt Payments; provided that the Total Leverage Ratio, calculated on a Pro Forma Basis, would not exceed 4.75:1.00; and
(viii) Restricted Debt Payments made under Section 6.04(a)(xv)(A), for with respect to any taxable period for which the Parent Borrower is treated as a partnership for U.S. federal and/or applicable state or local income tax purposes, the Parent Borrower may make Restricted Payments to its equity owners at the times and Indebtedness incurred in the amounconnection with any NMTC Transaction.
Appears in 1 contract
Sources: Term Loan Credit Agreement (PQ Group Holdings Inc.)
Restricted Payments; Certain Payments of Indebtedness. (a) The Parent Borrower shall not pay or make, directly or indirectly, any Restricted Payment, except that:
(i) the Parent Borrower may make Restricted Payments to the extent necessary to permit any Parent Company:
(A) to pay general operating and compliance administrative costs and expenses (including corporate overhead, legal or similar expenses and customary salary, bonus and other benefits payable to directors, officers, employees, members of management, managers and/or consultants of any Parent Company)) and franchise fees and Taxes and similar fees, Taxes and expenses required to enable such Parent Company to maintain its organizational existence or qualification to do business, in each case, which are reasonable and customary and incurred in the ordinary course of business, plus any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of any Parent Company, in each case, to the extent attributable to the ownership or operations of any Parent Company and its subsidiaries (but excluding, for the avoidance of doubt, excluding the portion of any such amount, if any, amount that is attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or and its subsidiaries), the Parent Borrower and/or its subsidiaries;
(B) to pay franchise, excise scheduled and similar Taxes, overdue interest and other fees, Taxes and expenses, required to maintain the organizational existence payments as part of such Parent Company;
(C) to pay customary salary, bonus, longan AHYDO catch-term incentive, severance and other benefits (including payment to certain service providers of the Parent Borrower or its Subsidiaries pursuant to any equity plan (whether in the form of options, cash settled options or otherwise)) payable to Permitted Payees, as well as applicable employment, social security or similar taxes in connection therewith, to the extent such salary, bonuses, severance and other benefits are attributable and reasonably allocated to the operations of the Parent Borrower and/or its subsidiariesup payment, in each case, so long as such in respect of any Indebtedness of any Parent Company applies to the amount of any such Restricted Payment for such purposeextent the Net Proceeds thereof were contributed to the Borrower;
(DC) to pay audit and other accounting and reporting expenses of such Parent Company to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such expenses, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries;
(ED) for the payment of insurance premiums to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries;
(FE) to pay (x) fees and expenses related to any debt and/or or equity offerings (including refinancings)by any Parent Company, investments and/or or acquisitions permitted or not restricted by this Agreement (whether or not consummated, and including advisory, refinancing, subsequent transaction and exit fees of any Parent Company of the Parent Borrower) and expenses and indemnities of any trustee, agent, arranger, underwriter or similar role and (y) Public Company Costs; and;
(GF) to finance any Investment permitted under Section 6.06 as if such Parent Company were subject to Section Section 6.06 (provided that (x) any Restricted Payment under this clause (a)(i)(G(a)(i)(F) 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 (y) the relevant Parent Company shall, promptly following the closing 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 therewiththereof, cause (I) all property acquired to be contributed to the Parent Borrower or one or more of its Restricted Subsidiaries Subsidiaries, or (II) the merger, consolidation or amalgamation of the Person formed or acquired into the Parent Borrower or one or more of its Restricted Subsidiaries, in order to consummate such Investment in compliance with the applicable requirements of Section Section 6.06 as if undertaken as a direct Investment by the Parent Borrower or the relevant Restricted Subsidiary); and
(G) to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, employees or consultants of any Parent Company (or any Immediate Family Member of any of the foregoing) to the extent such salary, bonuses and other benefits are attributable and reasonably allocated to the operations of the Borrower and/or its subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose;
(ii) the Parent Borrower may pay (or make Restricted Payments to allow any Parent Company to pay) for the repurchase, redemption, retirement or other acquisition or retirement for value of Capital Stock of any Parent Company or any subsidiary held by any Permitted Payeefuture, present or former employee, director, member of management, officer, manager or consultant (or any Affiliate or Immediate Family Member thereof) of any Parent Company, the Borrower or any subsidiary:
(A) in accordance with the terms of promissory notes issued pursuant to Section Section 6.01(o), so long as the aggregate amount of all Cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments made pursuant to sub-clause (D(D) of this clause (ii(ii) below, (1) does not exceed in any Fiscal Year the greater of $68,000,000 20,000,000 and 2012.0% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period in any Fiscal YearEBITDA, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied)) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under clause (D) below; plusYears;
(B) with the proceeds of any sale or issuance of, or of any capital contribution in respect of, the Capital Stock of the Parent Borrower or any Parent Company (to the extent such proceeds are contributed to the Parent Borrower or any Restricted Subsidiary in respect of Qualified Capital Stock issued by to the Parent Borrower or such any Restricted Subsidiary) (other than amounts constituting a Cure Amount or an Available Excluded Contribution Amount); plus;
(C) with the net proceeds of any key-man life insurance policies; plusor
(D) with Cash and Cash Equivalents in an amount not to exceedexceed in any Fiscal Year, together with the aggregate amount of all cash payments made pursuant to sub-clause (A(A) of this clause (ii(ii) in respect of promissory notes issued pursuant to Section Section 6.01(o), (1) the greater of $68,000,000 20,000,000 and 2012.0% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period in any Fiscal YearEBITDA, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under the immediately preceding clause (1); plus
(E) with the amount of any Cash bonuses otherwise payable to any Permitted Payee that are foregone in exchange for the receipt of Capital Stock of the Parent Borrower or any Parent Company pursuant to any compensation arrangement, including any deferred compensation planYears;
(iii) the Parent Borrower may make additional Restricted Payments in an amount not to exceed (A) the portion, if any, of the Available Amount on such date that the Parent Borrower elects to apply to this clause (iii)(A) plus (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Parent Borrower elects to apply to this clause (iii)(B) (plus, without duplication of amounts 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 with Available Excluded Contribution Amounts up to the amount of such Available Excluded Contribution Amount, less any application thereof under Sections 6.04(b)(vi) or 6.06(r)iii);
(iv) the Parent Borrower may make Restricted Payments (i) to any Parent Company to enable such Parent Company to (A) make Cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of such Parent Company, dividends, share splits, reverse share splits (or any combination thereof) and, mergers, consolidations, amalgamations or other business combinations, and acquisitions and other Investments permitted hereunder and/or (B) honor any conversion request by a holder of Convertible Indebtedness by payment of cash and/or delivery of Capital Stock, make any cash payments in lieu of fractional shares in connection with any conversion of Convertible Indebtedness and otherwise make payments on Convertible Indebtedness in accordance with its terms (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments upon redemption thereof), or, in the case of each of sub-clauses (A) and (B) above, make Restricted Payments to any Parent Company to enable such Parent Company to make the payments and/or deliveries described in such sub-clauses (A) and (B), and (ii) consisting of (A) payments made or expected to be made in respect of withholding or similar Taxes payable by any Permitted Payee future, present or former officers, directors, employees, members of management, managers or consultants of the Borrower, any Restricted Subsidiary or any Parent Company or any of their respective Immediate Family Members and/or (B) repurchases of Capital Stock in consideration of the payments described in sub sub-clause (A(A) above, including demand repurchases in connection with the exercise of stock options and the issuance of restricted stock units or similar stock based awardsoptions;
(v) the Parent Borrower may repurchase, redeem, acquire or retire Capital Stock upon repurchase (or make provisions for withholdings in connection with), or make Restricted Payments to any Parent Company to enable it to repurchase, redeem, acquire or retire ) Capital Stock upon (or make provisions for withholdings in connection with), the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represents all or a portion of the exercise price of, or tax withholdings with respect to, such warrants, options or other securities convertible into or exchangeable for Capital Stock as part of a “cashless” exercise;
(vi) for any taxable period (or portion thereof) that a Parent Company is treated as a corporation for U.S. federal income tax purposes and for which Borrower and/or any of its subsidiaries are members (or are pass-through entities of such members) of a consolidated, combined, unitary or similar income Tax group for U.S. federal, state, local or foreign income Tax purposes for which such Parent Company is the Parent common parent, the Borrower may make Restricted Payments to such Parent Company to pay the proceeds portion of which any U.S. federal, state, local or foreign income Taxes (as applicable) of such Parent Company for such taxable period that are applied (i) on attributable to the Closing Date, solely to effect the consummation income of the Transactions and on or about Borrower and/or its applicable subsidiaries; provided that the Amendment No. 1 Effective Dateaggregate amount of such distributions shall not exceed the aggregate Taxes the Borrower and/or its subsidiaries, solely to effect the consummation of the Amendment No. 1 Transactionsas applicable, (ii) on and after the Closing Date, to satisfy any payment obligations owing, or as otherwise required, under the Acquisition Agreement (including payment of working capital and/or purchase price adjustments) and would be required to pay Transaction Costsin respect of such U.S. federal, in each casestate, local and foreign Taxes on a stand-alone basis for such taxable period; provided further that the amount of such distributions with respect to the Transactions, (iii) to satisfy obligations to direct or indirect holders of Capital Stock of the Parent Borrower (immediately prior to giving effect any Unrestricted Subsidiary for any taxable period shall be limited to the Transactions) in connection with, or as a result of, any working capital and/or purchase price adjustments, in each case, with respect to the Transactions and (iv) to satisfy any settlement of claims or actions in connection with the Transactions or to satisfy indemnity or other similar obligations in connection with the Transactionsamount actually paid by such Unrestricted Subsidiary for such purpose;
(vii) the Parent Borrower may make Restricted Payments to pay Transaction Costs;
(viii) so long as no Event of Default exists at the time of declaration of such Restricted Payment, following the consummation of the first Qualifying IPO, the Borrower may (or may make Restricted Payments to any Parent Company to enable it to) make Restricted Payments with respect to any Capital Stock in an amount not to exceed (A) the greater of (x) an amount equal to 7.006% per annum of the net Cash proceeds received by or contributed to the Parent Borrower in connection with the merger of Isos Acquisition Corporation and Bowlero Corp. on December 15, 2021 and the other transactions consummated in connection therewith and (y) an amount equal to 7.00% per annum of the Market Capitalization of the Parent Borrower (or its direct or indirect Parent Company, as applicable) and its subsidiaries minus (B) from any utilization of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A)Qualifying IPO;
(viiiix) the Parent Borrower may make Restricted Payments to (i) redeem, repurchase, defease, discharge, retire or otherwise acquire any (A) Capital Stock (“Treasury Capital Stock”) of the Parent Borrower and/or any Restricted Subsidiary or (B) Capital Stock of any Parent Company, in the case of each of subclauses (A(A) and (B(B), in exchange for, or out of the proceeds of the substantially concurrent sale (other than to the Parent Borrower and/or any Restricted Subsidiary) of, Qualified Capital Stock of the Parent Borrower or any Parent Company to the extent any such proceeds are contributed to the capital of the Parent Borrower and/or any Restricted Subsidiary 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 the Parent Borrower or a Restricted Subsidiary) of any Refunding Capital Stock;
(ixx) to the extent constituting a Restricted Payment, the Parent Borrower may consummate any transaction permitted by Section 5.19 (other than Section 5.19(d)), Section Section 6.06 (other than Sections 6.06(j6.06(j) and (t(t)) and Section ), Section 6.07 (other than Section Section 6.07(g)) and Section 6.09 (other than Section 6.09(d));
(xxi) the Parent Borrower may make additional Restricted Payments in an aggregate amount not to exceed (Ai) the greater of $85,000,000 60,000,000 and 2535.0% of Consolidated Adjusted EBITDA as minus the (ii) sum of the last day of the most recently ended Test Period minus (A) any amounts under this Section 6.04(a)(xi) reallocated to make Restricted Debt Payments pursuant to Section 6.04(b)(iv)(B), (B) any utilization of the Available RP Capacity Amount in reliance on unused capacity amounts under immediately preceding clause (Athis Section 6.04(a)(xi) reallocated to make Investments pursuant to Section 6.06(q), and (C) any amounts under this Section 6.04(a)(xi) reallocated to incur Indebtedness pursuant to Section 6.01(u) (which may be further reallocated as provided therein);
(xixii) the Parent Borrower may pay any dividend or other distribution or consummate any redemption within 60 days after the date of 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 dividend or redemption notice would have complied with the provisions of this Section 6.04(a);
(xii) the Parent Borrower may make any Restricted Payment constituting the distribution or payment of Receivables Feeshereof;
(xiii) the Parent Borrower may make additional Restricted Payments so long as, as measured at the time provided for in Section 1.04(e), (iA) no Event of Default exists or would result therefrom and (B) the Total Leverage Ratio would not exceed 4.00:1.00Ratio, calculated on a Pro Forma Basis and (ii) there shall exist no Event at the time of Default hereunder or shall result therefromdeclaration thereof, would not exceed 5.25:1.00;
(xiv) the Parent Borrower may make additional Restricted Payments in an amount not to exceed the amount of proceeds received by the Parent Borrower and/or any Restricted Subsidiary under the Representation and Warranty Insurance Policy during the term of this Agreement;
(xv) (A) for any taxable period for which the Parent Borrower and/or any of its Subsidiaries are members of a consolidated, combined or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which a direct or indirect parent of the Parent Borrower is the common parent (a “Tax Group”), or for which the Parent Borrower is a disregarded entity for U.S. federal income tax purposes wholly-owned by a corporate parent (a “Corporate Parent”), the Parent Borrower and each of its Subsidiaries may make Restricted Payments the proceeds of which shall be used by such common parent to pay the portion of any consolidated, combined or similar U.S. federal, state or local income Taxes of such Tax Group, or by the Corporate Parent to pay the portion of the U.S. federal, state or local income Taxes of such Corporate Parent, or any franchise taxes imposed in lieu thereof, for such taxable period that are attributable to the income of the Parent Borrower and/or its Subsidiaries, provided that such amount shall not be greater than the amount of such U.S. federal, state or local income taxes that would be paid (for such taxable period) by the Parent Borrower and its Subsidiaries if the Parent Borrower and/or such Subsidiaries had been a stand-alone corporate taxpayer (or stand-alone group of corporate taxpayers filing on a consolidated, combined or similar basis) for all taxable years ending after the Closing Date (taking into account any net operating loss carryforwards attributable to the Parent Borrower and its Subsidiaries, as the case may be) and (B) without duplication of Restricted Payments made under Section 6.04(a)(xv)(A), for any taxable period for which the Parent Borrower is treated as a partnership for U.S. federal and/or applicable state or local income tax purposes, the Parent Borrower may make Restricted Payments to enable any Parent Company to make Restricted Payments solely in the Qualified Capital Stock of such Parent Company;
(xv) the Borrower may make Restricted Payments to pay amounts permitted under Section 6.09(f) and (g); and
(xvi) the Borrower may make Restricted Payments to permit any Parent Company (A) to redeem or make any payments in respect of the Junior Debentures (and corresponding distributions and redemptions in respect of the Trust Preferred Securities), so long as the Net Interest Coverage Ratio, calculated on a Pro Forma Basis, would not be less than 2.00:1.00, and (B) to redeem or make any payments in respect of the Junior Debentures (and corresponding distributions and redemptions in respect of the Trust Preferred Securities), from the proceeds of (x) any indebtedness of any of Holdings, the Borrower and its equity owners Restricted Subsidiaries permitted to be incurred hereunder and (y) any capital contribution to, or sale or issuance of Capital Stock by, the Borrower or any Parent Company (to the extent such proceeds are contributed by such Parent Company to the Borrower or any Restricted Subsidiary).
(b) Holdings and the Borrower shall not, nor shall they permit any Restricted Subsidiary to, make any payment (whether in Cash, securities or other property) on or in respect of principal of or interest on (x) any Junior Lien Indebtedness, (y) any Subordinated Indebtedness or (z) the Junior Debenture, in each cases of clauses (x), (y) and (z), with an individual outstanding principal amount in excess of the Threshold Amount (such Indebtedness under clauses (x), (y) and (z), in each case, with an individual outstanding principal amount in excess of the Threshold Amount, the “Restricted Debt”), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Restricted Debt prior to its scheduled maturity (collectively, “Restricted Debt Payments”), except:
(i) any 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 (except to the extent subject to clause (iv)(C) of the proviso to Section 6.01(p) and/or any Permitted Junior Debenture Refinancing;
(ii) payments as part of an AHYDO catch-up payment;
(iii) payments of regularly scheduled interest as and when due in respect of any Restricted Debt (other than the Junior Debentures), except for any payments with respect to any such Subordinated Indebtedness that are prohibited by the subordination provisions thereof;
(iv) so long as, at the times time of delivery of irrevocable notice with respect thereto, no Event of Default exists or would result therefrom, Restricted Debt Payments in an aggregate amount not to exceed (A) the sum of (1) the greater of $60,000,000 and 35.0% of Consolidated Adjusted EBITDA and (2) any amounts reallocated to this Section 6.04(b)(iv) from Section 6.04(a)(xi) and Section 6.06(q), minus (B) any amounts reallocated from Section 6.04(b)(iv)(A) to make Investments pursuant to Section 6.06(q);
(A) Restricted Debt Payments in exchange for, or with proceeds of any issuance of, Qualified Capital Stock of the amounBorrower and/or any Restricted Subsidiary and/or any capital contribution in respect of Qualified Capital Stock of the Borrower or any Restricted Subsidiary, (B) Restricted Debt Payments as a result of the conversion of all or any portion of any Restricted Debt into Qualified Capital Stock of the Borrower and/or any Restricted Subsidiary and
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) The Parent Borrower Agent shall not pay or make, directly or indirectly, any Restricted Payment, except that:
(i) the Parent Borrower Agent may make Restricted Payments to the extent necessary to permit any Parent Company:;
(A) to pay general operating and compliance administrative costs and expenses (including corporate overhead, legal or similar expenses) and franchise fees and taxes and similar fees, taxes and expenses and customary salary, bonus and other benefits payable required to directors, officers, employees, members maintain the organizational existence of management, managers and/or consultants of any such Parent Company), in each case, which are reasonable and customary and incurred in the ordinary course of business, plus any reasonable and customary indemnification claims made by directors, officers, members of management, managers, management or employees or consultants of any Parent Company, in each case, to the extent attributable to the ownership or operations of any Parent Company (but excluding, for the avoidance of doubtHoldings, the portion Borrowers and their Subsidiaries;
(B) to discharge its consolidated tax liabilities of any Holdings and its Subsidiaries when and as due, to the extent such amount, if any, that is liabilities are attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or Agent and its subsidiaries)Subsidiaries; provided, that the Parent amount paid by the Borrower and/or its subsidiaries;
Agent pursuant to this paragraph (B) to pay franchise, excise shall not exceed the tax liabilities that would be due if the Borrower Agent and each Subsidiary were separate corporations filing income and similar Taxes, and other fees, Taxes and expenses, required to maintain tax returns on a consolidated or combined basis with the organizational existence Borrower Agent as the common parent of such Parent Companyaffiliated group (calculated at the highest combined applicable federal, state, local and foreign tax rate);
(C) to pay audit and other accounting and reporting expenses at such Parent Company to the extent relating to the ownership or operations of the Borrowers and their Subsidiaries;
(D) for the payment of insurance premiums to the extent relating to the ownership or operations of the Borrowers and their Subsidiaries;
(E) pay fees and expenses related to debt or equity offerings, investments or acquisitions permitted by this Agreement (whether or not consummated);
(F) to pay the consideration to finance any Investment permitted under Section 6.07 (provided that (x) such Restricted Payments under this clause (a)(i)(F) shall be made substantially concurrently with the closing of such Investment and (y) such Parent Company shall, promptly following the closing thereof, cause all such property acquired to be contributed to the Borrowers or one of their Subsidiaries, or the merger or amalgamation of the Person formed or acquired into the Borrowers or one of their Subsidiaries, in order to consummate such Investment in a manner that causes such Investment to comply with the applicable requirements of Section 6.07 as if undertaken as a direct Investment by such Borrower or such Subsidiary); and
(G) to pay customary salary, bonus, long-term incentive, severance bonus and other benefits (including payment to certain service providers of the Parent Borrower or its Subsidiaries pursuant to any equity plan (whether in the form of options, cash settled options or otherwise)) payable to Permitted Payeesdirectors, as well as applicable employmentofficers, social security members of management or similar taxes in connection therewith, employees of any Parent Company to the extent such salary, bonuses, severance bonuses and other benefits are directly attributable and reasonably allocated to the operations of the Parent Borrower and/or its subsidiariesBorrowers and their Subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose;
(D) to pay audit and other accounting and reporting expenses of such Parent Company to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such expenses, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries;
(E) for the payment of insurance premiums to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries;
(F) to pay (x) fees and expenses related to any debt and/or equity offerings (including refinancings), investments and/or acquisitions permitted or not restricted by this Agreement (whether or not consummated, and including advisory, refinancing, subsequent transaction and exit fees of any Parent Company of the Parent Borrower) and expenses and indemnities of any trustee, agent, arranger, underwriter or similar role and (y) Public Company Costs; and
(G) to finance any Investment permitted under Section 6.06 as if such Parent Company were subject to Section 6.06 (provided that (x) any Restricted Payment under this clause (a)(i)(G) 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 (y) the relevant Parent Company shall, promptly following the closing 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 (I) all property acquired to be contributed to the Parent Borrower or one or more of its Restricted Subsidiaries or (II) the merger, consolidation or amalgamation of the Person formed or acquired into the Parent Borrower or one or more of its Restricted Subsidiaries, in order to consummate such Investment in compliance with the applicable requirements of Section 6.06 as if undertaken as a direct Investment by the Parent Borrower or the relevant Restricted Subsidiary);
(ii) the Parent Borrower Agent may pay (or make Restricted Payments to allow any Parent Company to pay) for the repurchase, redemption, retirement or other acquisition or retirement for value of Capital Stock of any Parent Company or any subsidiary held by any Permitted Payee:future, present or former employee, director, member of management, officer, manager or consultant (or any Affiliate or Immediate Family Member thereof) of any Parent Company, the Borrowers or any Subsidiary;
(A) in accordance with the terms of promissory exchange for notes issued pursuant to Section Section 6.01(o), so long as the aggregate amount of all Cash cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments made (x) pursuant to sub-clause (D(D) of this clause (ii(ii) belowbelow and (y) pursuant to Section 6.05(a)(iv), (1) does not exceed the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period 15,000,000 in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to the next subsequent Fiscal Years (until so applied)) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under clause (D) below; plusYear;
(B) with the proceeds of any sale or issuance of, or of any capital contribution in respect of, the exchange for Capital Stock of the Parent Borrower or any Parent Company (to the extent such proceeds are contributed to the Parent Borrower or any Restricted Subsidiary in respect of Qualified Capital Stock issued by the Parent Borrower or such Restricted Subsidiary) (other than amounts constituting a Cure Amount or an Available Excluded Contribution Amount); plusCompany;
(C) with the in exchange for net proceeds of any key-man life insurance policiespolicies received during such fiscal year; plusor
(D) with in exchange for Cash and Cash Equivalents in an amount not to exceed, together with (x) the aggregate amount of all cash payments made pursuant to sub-clause (A) of this clause (ii) in respect of promissory notes issued pursuant to Section Section 6.01(o) and (y) the aggregate amount of Restricted Payments made pursuant to Section 6.05(a)(iv), (1) the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period 15,000,000 in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to the next subsequent Fiscal Years (until so applied) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under the immediately preceding clause (1); plus
(E) with the amount of any Cash bonuses otherwise payable to any Permitted Payee that are foregone in exchange for the receipt of Capital Stock of the Parent Borrower or any Parent Company pursuant to any compensation arrangement, including any deferred compensation planYear;
(iii) the Parent Borrower Agent may make additional Restricted Payments; provided that at the time they are paid by the Borrower Agent, before and after giving effect to such Restricted Payments in an amount not to exceed (A) the portion, if any, of the Available Amount on such date that the Parent Borrower elects to apply to under this clause (iii)(A) plus (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Parent Borrower elects to apply to this clause (iii)(B) (plus, without duplication of amounts referred to in this clause (Biii), 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 with Available Excluded Contribution Amounts up to the amount of such Available Excluded Contribution Amount, less any application thereof under Sections 6.04(b)(vi) or 6.06(r))Payment Conditions are satisfied;
(iv) the Parent Borrower Agent may make Restricted Payments (i) to any Parent Company to enable such Parent Company to (A) make Cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of such Parent CompanyCompany in an amount not to exceed, dividends, share splits, reverse share splits together with (or any combination thereofx) and, mergers, consolidations, amalgamations or other business combinations, and acquisitions and other Investments permitted hereunder and/or (B) honor any conversion request by a holder the aggregate amount of Convertible Indebtedness by payment of cash and/or delivery of Capital Stock, make any all cash payments in lieu of fractional shares in connection with any conversion of Convertible Indebtedness and otherwise make payments on Convertible Indebtedness in accordance with its terms (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments upon redemption thereof), or, in the case of each of sub-clauses (A) and (B) above, make Restricted Payments to any Parent Company to enable such Parent Company to make the payments and/or deliveries described in such sub-clauses (A) and (B), and (ii) consisting of (A) payments made or expected to be made in respect of withholding or similar Taxes payable by notes issued pursuant to Section 6.01(o) and (y) the aggregate amount of all Restricted Payments made pursuant to Section 6.05(a)(ii)(D), $15,000,000 in any Permitted Payee and/or (B) repurchases of Capital Stock Fiscal Year, which, if not used in consideration of any Fiscal Year, may be carried forward to the payments described in sub clause (A) above, including demand repurchases in connection with the exercise of stock options and the issuance of restricted stock units or similar stock based awardsnext subsequent Fiscal Year;
(v) the Parent Borrower Agent may repurchase, redeem, acquire or retire repurchase Capital Stock upon (or make provisions for withholdings in connection with), or make Restricted Payments to any Parent Company to enable it to repurchase, redeem, acquire or retire Capital Stock upon (or make provisions for withholdings in connection with), the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock warrants if such Capital Stock represents all or a portion of the exercise price of, or tax withholdings with respect to, of such warrants, options or other securities convertible into or exchangeable for Capital Stock warrants as part of a “cashless” exercise;
(vi) the Parent Borrower Agent may make Restricted Payments the proceeds of which are applied (iA) on the Closing Date, solely to effect the consummation of the Transactions and on or about the Amendment No. 1 Effective Date, solely to effect the consummation of the Amendment No. 1 Transactions, (iiB) on and after the Closing Date, to satisfy any payment obligations owing, or as otherwise required, owing under the Acquisition Merger Agreement (including payment of working capital and/or purchase price adjustments) and to pay Transaction Costs, as in each case, with respect to effect on the Transactions, (iii) to satisfy obligations to direct or indirect holders of Capital Stock of the Parent Borrower (immediately prior to giving effect to the Transactions) in connection with, or as a result of, any working capital and/or purchase price adjustments, in each case, with respect to the Transactions and (iv) to satisfy any settlement of claims or actions in connection with the Transactions or to satisfy indemnity or other similar obligations in connection with the Transactionsdate hereof);
(vii) so long as no Event of Default shall have occurred and be continuing, following the Parent consummation of the first Qualifying IPO, the Borrower Agent may (or may make Restricted Payments to any Parent Company to enable it to) make Restricted Payments with respect to any Capital Stock in an amount not of up to exceed (A) the greater of (x) an amount equal to 7.006.0% per annum of the net Cash proceeds received by or contributed to the Parent Borrower in connection with the merger of Isos Acquisition Corporation and Bowlero Corp. on December 15, 2021 and the other transactions consummated in connection therewith and (y) an amount equal to 7.00% per annum of the Market Capitalization of the Parent Borrower (or its direct or indirect Parent Company, as applicable) and its subsidiaries minus (B) Agent from any utilization of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A)such Qualifying IPO;
(viii) the Parent Borrower Agent may make Restricted Payments to (i) redeem, repurchase, defease, discharge, retire or otherwise acquire any (A) Capital Stock (“Treasury Capital Stock”) of the Parent Borrower and/or Agent or any Restricted Subsidiary or (B) Capital Stock of any Parent Company, in the case of each of subclauses (A(A) and (B(B), in exchange for, or out of the proceeds of the substantially concurrent sale (other than to the Parent Borrower and/or any Restricted Agent or a Subsidiary) of, Qualified Capital Stock of the Parent Borrower Agent or any Parent Company to the extent any such proceeds are contributed as a common equity contribution to the capital of the Parent Borrower and/or Agent or any Restricted Subsidiary (in respect of Qualified Capital Stock each case, other than Disqualified Stock) (“Refunding Capital Stock”) and (ii) declare and pay dividends on any the Treasury Capital Stock out of the proceeds of the substantially concurrent sale or issuance (other than to the Parent Borrower Agent or a Restricted Subsidiary) of any the Refunding Capital Stock;
(ix) to the extent constituting a Restricted Payment, the Parent Borrower Agent may consummate any transaction permitted by Section 5.19 (other than Section 5.19(d)), Section 6.06 Sections 6.07 (other than Sections 6.06(j6.07(j) and (t(t)), Section 6.08 (other than Section 6.08(g)) and Section 6.07 Sections 6.11(f) and (other than Section 6.07(gh));; and
(x) the Parent Borrower Agent may make additional Restricted Payments in an aggregate amount not to exceed exceed, together with the aggregate amount of any Restricted Debt Payments made pursuant to Section 6.05(b)(viii), $30,000,000 at any time outstanding, so long as no Default or Event of Default shall have occurred and be continuing.
(Ab) The Borrowers and the Subsidiary Guarantors shall not, nor shall they permit any Subsidiary to, make, directly or indirectly, any payment or other distribution (whether in Cash, securities or other property) on or in respect of principal of or interest on the Senior Notes (or Refinancing Indebtedness in respect thereof) or any Junior 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 the Senior Notes (or any Refinancing Indebtedness in respect thereof) or any Junior Indebtedness (collectively, “Restricted Debt Payments”), except:
(i) the greater of $85,000,000 and 25% of Consolidated Adjusted EBITDA as defeasance, redemption, repurchase or other acquisition or retirement of the last day Senior Notes (or Refinancing Indebtedness in respect thereof) or Junior Indebtedness made by exchange for, or out of the most recently ended Test Period minus (B) any utilization proceeds of the Available RP Capacity Amount substantially concurrent incurrence of, Refinancing Indebtedness permitted by Section 6.01;
(ii) payments as part of an “applicable high yield discount obligation” catch-up payment, so long as no Event of Default shall have occurred and be continuing;
(iii) payments of regularly scheduled interest and fees, expenses and indemnification obligations as and when due in reliance on unused capacity under immediately preceding clause (Arespect of any Indebtedness (other than payments with respect to Subordinated Indebtedness prohibited by the subordination provisions thereof);
(xiiv) payments with respect to intercompany Indebtedness permitted under Section 6.01, subject to the subordination provisions applicable thereto;
(v) [Reserved];
(vi) (A) payments of any Senior Notes and/or any Junior Indebtedness in exchange for, or with proceeds of any substantially contemporaneous issuance of Qualified Capital Stock of any Parent Company or the Borrower may pay Agent, and any dividend substantially contemporaneous capital contribution in respect of Qualified Capital Stock of the Borrower Agent, (B) payments of Indebtedness by the conversion of all or other distribution any portion thereof into Qualified Capital Stock of any Parent Company or consummate the Borrower Agent and (C) payments of interest in respect of Indebtedness in the form of payment-in-kind interest with respect to such Indebtedness permitted under Section 6.01;
(vii) additional Restricted Debt Payments; provided that as of the date of any redemption within 60 days such payment and after giving effect thereto, each of the Applicable Conditions is satisfied (provided that in the case of an irrevocable notice required under the terms of the applicable agreements or instruments to be given in respect of a Restricted Debt Payment prior to the date of the declaration thereof or making of such payment, the provision of a redemption notice Applicable Conditions with respect thereto, as to such Restricted Debt Payment shall be satisfied at the case may be, if at time of the giving of such irrevocable notice and on the date of the making of such declaration or noticepayment); and
(viii) additional Restricted Debt Payments in an aggregate principal amount not to exceed, the dividend, distribution or redemption contemplated by such declaration or redemption notice would have complied together with the provisions aggregate amount of this Section 6.04(a);
(xii) the Parent Borrower may make any Restricted Payment constituting the distribution or payment of Receivables Fees;
(xiii) the Parent Borrower may make additional Restricted Payments made pursuant to Section 6.05(a)(x), $30,000,000, so long as, as measured at the time provided for in Section 1.04(eno Default under Sections 7.01(a), (if) the Total Leverage Ratio would not exceed 4.00:1.00, calculated on a Pro Forma Basis and or (iig) there shall exist no or Event of Default hereunder or shall result therefrom;
(xiv) the Parent Borrower may make additional Restricted Payments in an amount not to exceed the amount of proceeds received by the Parent Borrower and/or any Restricted Subsidiary under the Representation have occurred and Warranty Insurance Policy during the term of this Agreement;
(xv) (A) for any taxable period for which the Parent Borrower and/or any of its Subsidiaries are members of a consolidated, combined or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which a direct or indirect parent of the Parent Borrower is the common parent (a “Tax Group”), or for which the Parent Borrower is a disregarded entity for U.S. federal income tax purposes wholly-owned by a corporate parent (a “Corporate Parent”), the Parent Borrower and each of its Subsidiaries may make Restricted Payments the proceeds of which shall be used by such common parent to pay the portion of any consolidated, combined or similar U.S. federal, state or local income Taxes of such Tax Group, or by the Corporate Parent to pay the portion of the U.S. federal, state or local income Taxes of such Corporate Parent, or any franchise taxes imposed in lieu thereof, for such taxable period that are attributable to the income of the Parent Borrower and/or its Subsidiaries, provided that such amount shall not be greater than the amount of such U.S. federal, state or local income taxes that would be paid (for such taxable period) by the Parent Borrower and its Subsidiaries if the Parent Borrower and/or such Subsidiaries had been a stand-alone corporate taxpayer (or stand-alone group of corporate taxpayers filing on a consolidated, combined or similar basis) for all taxable years ending after the Closing Date (taking into account any net operating loss carryforwards attributable to the Parent Borrower and its Subsidiaries, as the case may be) and (B) without duplication of Restricted Payments made under Section 6.04(a)(xv)(A), for any taxable period for which the Parent Borrower is treated as a partnership for U.S. federal and/or applicable state or local income tax purposes, the Parent Borrower may make Restricted Payments to its equity owners at the times and in the amouncontinuing.
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) The Parent Lead Borrower shall not pay or make, directly or indirectly, any Restricted Payment, except that:: #94513555v35
(i) the Parent Lead Borrower may make Restricted Payments to the extent necessary to permit any Parent Company:
(A) to pay general operating and compliance administrative costs and expenses (including corporate overhead, legal or similar expenses, expenses to prepare any Tax returns or defend any Tax claims, and customary salary, bonus and other benefits payable to directors, officers, employees, members of management, managers and/or consultants of any Parent Company)) and franchise fees and Taxes and similar fees, Taxes and expenses required to enable such Parent Company to maintain its organizational existence or qualification to do business, in each case, which are reasonable and customary and incurred in the ordinary course of business, plus any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of any Parent Company, in each case, to the extent attributable to the ownership or operations of any Parent Company and its subsidiaries (but excluding, for the avoidance of doubt, excluding the portion of any such amount, if any, amount that is attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Lead Borrower and/or and its subsidiaries), the Parent Borrower and/or its subsidiaries;
(B) to pay franchise, excise scheduled and similar Taxes, overdue interest and other fees, Taxes and expenses, required to maintain the organizational existence payments as part of such Parent Company;
(C) to pay customary salary, bonus, longan AHYDO catch-term incentive, severance and other benefits (including payment to certain service providers of the Parent Borrower or its Subsidiaries pursuant to any equity plan (whether in the form of options, cash settled options or otherwise)) payable to Permitted Payees, as well as applicable employment, social security or similar taxes in connection therewith, to the extent such salary, bonuses, severance and other benefits are attributable and reasonably allocated to the operations of the Parent Borrower and/or its subsidiariesup payment, in each case, so long as such in respect of any Indebtedness of any Parent Company applies to the amount of any such Restricted Payment for such purposeextent the Net Proceeds thereof were contributed to the Lead Borrower;
(DC) to pay audit and other accounting and reporting expenses of such Parent Company to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such expenses, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Lead Borrower and/or its subsidiaries), the Parent Lead Borrower and its subsidiaries;
(ED) for the payment of insurance premiums to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Lead Borrower and/or its subsidiaries), the Parent Lead Borrower and its subsidiaries;
(FE) to pay (x) fees and expenses related to any debt and/or or equity offerings (including refinancings)by any Parent Company, investments and/or or acquisitions permitted or not restricted by this Agreement (whether or not consummated, and including advisory, refinancing, subsequent transaction and exit fees of any Parent Company of the Parent Borrower) and expenses and indemnities of any trustee, agent, arranger, underwriter or similar role and (y) Public Company Costs; and;
(GF) to finance any Investment permitted under Section 6.06 as if such Parent Company were subject to Section Section 6.06 (provided that (x) any Restricted Payment under this clause (a)(i)(G(a)(i)(F) 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 (y) the relevant Parent Company shall, promptly following the closing 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 therewiththereof, cause (I) all property acquired to be contributed to the Parent Lead Borrower or one or more of its Restricted Subsidiaries Subsidiaries, or (II) the merger, consolidation or amalgamation of the Person formed or acquired into the Parent Lead Borrower or one or more of its Restricted Subsidiaries, in order to consummate such Investment in compliance with the applicable requirements of Section Section 6.06 as if undertaken as a direct Investment by the Parent Lead Borrower or the relevant Restricted Subsidiary); and
(G) to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, employees or consultants of any Parent Company (or any Immediate Family Member of any of the foregoing) to the extent such salary, bonuses and other benefits are attributable and reasonably allocated to the operations of the Lead Borrower and/or its subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose;
(ii) the Parent Lead Borrower may pay (or make Restricted Payments to allow any Parent Company to pay) for the repurchase, redemption, retirement or other acquisition or #94513555v35 retirement for value of Capital Stock of any Parent Company or any subsidiary held by any Permitted Payeefuture, present or former employee, director, member of management, officer, manager or consultant (or any Affiliate or Immediate Family Member thereof) of any Parent Company, the Lead Borrower or any subsidiary:
(A) in accordance with the terms of promissory notes issued pursuant to Section Section 6.01(o), so long as the aggregate amount of all Cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments made pursuant to sub-clause (D(D) of this clause (ii(ii) below, (1) does not exceed in any Fiscal Year the greater of $68,000,000 40,000,000 and 2012.0% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period in any Fiscal YearEBITDA, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied)) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under clause (D) below; plusYears;
(B) with the proceeds of any sale or issuance of, or of any capital contribution in respect of, the Capital Stock of the Parent Lead Borrower or any Parent Company (to the extent such proceeds are contributed to the Parent Borrower or any Restricted Subsidiary in respect of Qualified Capital Stock issued by to the Parent Lead Borrower or such any Restricted Subsidiary) (other than amounts constituting a Cure Amount or an Available Excluded Contribution Amount); plus;
(C) with the net proceeds of any key-man life insurance policies; plusor
(D) with Cash and Cash Equivalents in an amount not to exceedexceed in any Fiscal Year, together with the aggregate amount of all cash payments made pursuant to sub-clause (A(A) of this clause (ii(ii) in respect of promissory notes issued pursuant to Section Section 6.01(o), (1) the greater of $68,000,000 40,000,000 and 2012.0% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period in any Fiscal YearEBITDA, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under the immediately preceding clause (1); plus
(E) with the amount of any Cash bonuses otherwise payable to any Permitted Payee that are foregone in exchange for the receipt of Capital Stock of the Parent Borrower or any Parent Company pursuant to any compensation arrangement, including any deferred compensation planYears;
(iii) the Parent Lead Borrower may make additional Restricted Payments in an amount not to exceed (A) the portion, if any, of the Available Amount on such date that the Parent Lead Borrower elects to apply to this clause (iii)(A) plus (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Parent Borrower elects to apply to this clause (iii)(B) (plus, without duplication of amounts 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 with Available Excluded Contribution Amounts up to the amount of such Available Excluded Contribution Amount, less any application thereof under Sections 6.04(b)(vi) or 6.06(r)iii);
(iv) the Parent Lead Borrower may make Restricted Payments (i) to any Parent Company to enable such Parent Company to (A) make Cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of such Parent Company, dividends, share splits, reverse share splits (or any combination thereof) and, mergers, consolidations, amalgamations or other business combinations, and acquisitions and other Investments permitted hereunder and/or (B) honor any conversion request by a holder of Convertible Indebtedness by payment of cash and/or delivery of Capital Stock, make any cash payments in lieu of fractional shares in connection with any conversion of Convertible Indebtedness and otherwise make payments on Convertible Indebtedness in accordance with its terms (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments upon redemption thereof), or, in the case of each of sub-clauses (A) and (B) above, make Restricted Payments to any Parent Company to enable such Parent Company to make the payments and/or deliveries described in such sub-clauses (A) and (B), and (ii) consisting of (A) payments made or expected to be made in respect of withholding or similar Taxes payable by any Permitted Payee future, present or former officers, directors, employees, members of management, managers or consultants of the Lead Borrower, any Restricted Subsidiary or any Parent Company or any of their respective Immediate Family Members and/or (B) repurchases of Capital Stock in consideration of the payments described in sub sub-clause (A(A) above, including demand repurchases in connection with the exercise of stock options and the issuance of restricted stock units or similar stock based awardsoptions;
(v) the Parent Lead Borrower may repurchase, redeem, acquire or retire Capital Stock upon repurchase (or make provisions for withholdings in connection with), or make Restricted Payments to any Parent Company to enable it to repurchase, redeem, acquire or retire ) Capital Stock upon (or make provisions for withholdings in connection with), the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represents all or a portion of the exercise price of, or tax Tax withholdings with respect to, such warrants, options or other securities convertible into or exchangeable for Capital Stock as part of a “cashless” exercise;
(vi) for any taxable period (or portion thereof) that a Parent Company is treated as a corporation for U.S. federal income tax purposes and for which the Lead Borrower and/or any of its subsidiaries are members (or are pass-through entities of such members) of a consolidated, combined, unitary or similar income Tax group for U.S. federal, state, local or foreign income Tax purposes for which such Parent Company is the common parent, the Lead Borrower may make Restricted Payments to such Parent Company to pay the proceeds portion of which any U.S. federal, state, local or foreign income Taxes (as applicable) of such Parent Company for such taxable period that are applied (i) on attributable to the Closing Date, solely to effect the consummation income of the Transactions and on or about Lead Borrower and/or its applicable subsidiaries; provided that, the Amendment No. 1 Effective Dateaggregate amount of such distributions shall not exceed the aggregate Taxes the Lead Borrower and/or its subsidiaries, solely to effect the consummation of the Amendment No. 1 Transactionsas applicable, (ii) on and after the Closing Date, to satisfy any payment obligations owing, or as otherwise required, under the Acquisition Agreement (including payment of working capital and/or purchase price adjustments) and would be required to pay Transaction Costsin respect of such U.S. federal, in each casestate, local and foreign Taxes on a stand-alone basis for such #94513555v35 taxable period; provided further that the amount of such distributions with respect to the Transactions, (iii) to satisfy obligations to direct or indirect holders of Capital Stock of the Parent Borrower (immediately prior to giving effect any Unrestricted Subsidiary for any taxable period shall be limited to the Transactions) in connection with, or as a result of, any working capital and/or purchase price adjustments, in each case, with respect to the Transactions and (iv) to satisfy any settlement of claims or actions in connection with the Transactions or to satisfy indemnity or other similar obligations in connection with the Transactionsamount actually paid by such Unrestricted Subsidiary for such purpose;
(vii) the Parent Lead Borrower may make Restricted Payments (A) to consummate, to the extent constituting Restricted Payments, the Transactions and (B) to pay Transaction Costs;
(viii) so long as no Event of Default exists at the time of declaration of such Restricted Payment, the Lead Borrower may (or may make Restricted Payments to any Parent Company to enable it to) make Restricted Payments with respect to any Capital Stock in an amount not to exceed an aggregate amount per annum equal to the sum of (A) the greater of (x) an amount equal to 7.006% per annum of the net Cash proceeds received by or contributed to the Parent Borrower in connection with the merger of Isos Acquisition Corporation and Bowlero Corp. on December 15, 2021 and the other transactions consummated in connection therewith from an initial public offering and (yB) an amount equal to 7.007% per annum of the Market Capitalization of the Parent Borrower (or its direct or indirect Parent Company, as applicable) and its subsidiaries minus (B) any utilization of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A)Capitalization;
(viiiix) the Parent Lead Borrower may make Restricted Payments to (i) redeem, repurchase, defease, discharge, retire or otherwise acquire any (A) Capital Stock (“Treasury Capital Stock”) of the Parent Lead Borrower and/or any Restricted Subsidiary or (B) Capital Stock of any Parent Company, in the case of each of subclauses (A(A) and (B(B), in exchange for, or out of the proceeds of the substantially concurrent sale (other than to the Parent Lead Borrower and/or any Restricted Subsidiary) of, Qualified Capital Stock of the Parent Lead Borrower or any Parent Company to the extent any such proceeds are contributed to the capital of the Parent Lead Borrower and/or any Restricted Subsidiary 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 the Parent Lead Borrower or a Restricted Subsidiary) of any Refunding Capital Stock;
(ixx) to the extent constituting a Restricted Payment, the Parent Lead Borrower may consummate any transaction permitted by Section 5.19 (other than Section 5.19(d)), Section Section 6.06 (other than Sections 6.06(j6.06(j) and (t(t)) and Section ), Section 6.07 (other than Section Section 6.07(g)) and Section 6.09 (other than Section 6.09(d));
(xxi) the Parent Lead Borrower may make additional Restricted Payments in an aggregate amount not to exceed (A) the greater of $85,000,000 120,000,000 and 2535.0% of Consolidated Adjusted EBITDA as minus the sum of the last day of the most recently ended Test Period minus (A) any amounts under this Section 6.04(a)(xi) reallocated to make Restricted Debt Payments pursuant to Section 6.04(b)(iv), (B) any utilization of the Available RP Capacity Amount in reliance on unused capacity amounts under immediately preceding clause (Athis Section 6.04(a)(xi) reallocated to make Investments pursuant to Section 6.06(q), and (C) any amounts under this Section 6.04(a)(xi) reallocated to incur Indebtedness pursuant to Section 6.01(u) (which may be further reallocated as provided therein);
(xixii) the Parent Lead Borrower may pay any dividend or other distribution or consummate any redemption within 60 sixty (60) days after the date of 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 dividend or redemption notice would have complied with the provisions of this Section 6.04(a);
(xii) the Parent Borrower may make any Restricted Payment constituting the distribution or payment of Receivables Feeshereof;
(xiii) the Parent Lead Borrower may make additional Restricted Payments so long asas the Payment Conditions applicable to Restricted Payments have been satisfied, 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 Event of Default hereunder or shall result therefromBasis;
(xiv) the Parent Lead Borrower may make additional Restricted Payments to enable any Parent Company to make Restricted Payments solely in the Qualified Capital Stock of such Parent Company;
(xv) the Lead Borrower may make Restricted Payments (A) to pay amounts permitted under Section 6.09(f), (g), (h), (i), (k) and (m) and (B) otherwise in an amount not to exceed $500,000 per calendar year; and
(xvi) the Borrower may make Restricted Payments in the form of Capital Stock of, or Indebtedness owed to Holdings, the Borrowers or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Cash and Cash Equivalents (except to the extent constituting proceeds from the Disposition of all or substantially all of the assets of such Unrestricted Subsidiary) and/or intellectual property #94513555v35 material (as determined by the Lead Borrower in good faith) to the business of the Lead Borrower and its Restricted Subsidiaries, taken as a whole).
(b) The Lead Borrower shall not, nor shall it permit any Restricted Subsidiary to, make any payment (whether in Cash, securities or other property) on or in respect of principal of (x) any Junior Lien Indebtedness, (y) any Subordinated Indebtedness or (z) solely to the extent proceeds of Revolving Loans are being used to make such payment, unsecured Indebtedness, in each cases of clauses (x), (y) and (z), with an individual outstanding principal amount in excess of the Threshold Amount (such Indebtedness under clauses (x), (y) and (z), in each case, with an individual outstanding principal amount in excess of the Threshold Amount, the “Restricted Debt”), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Restricted Debt prior to its scheduled maturity (collectively, “Restricted Debt Payments”), except:
(i) any 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 (except to the extent subject to clause (iv)(C) of the proviso to Section 6.01(p));
(ii) payments as part of an AHYDO catch-up payment;
(iii) payments of regularly scheduled interest as and when due in respect of any Restricted Debt, except for any payments with respect to any such Subordinated Indebtedness that are prohibited by the subordination provisions thereof;
(iv) so long as, at the time of delivery of irrevocable notice with respect thereto, no Event of Default exists or would result therefrom, Restricted Debt Payments in an aggregate amount not to exceed (i) the sum of (A) the greater of $120,000,000 and 35.0% of Consolidated Adjusted EBITDA and (B) any amounts reallocated to this Section 6.04(b)(iv) from Section 6.04(a)(xi) and Section 6.06(q), minus (ii) any amounts reallocated from this Section 6.04(b)(iv) to make Investments pursuant to Section 6.06(q);
(A) Restricted Debt Payments in exchange for, or with proceeds of any issuance of, Qualified Capital Stock of the Lead Borrower and/or any Restricted Subsidiary and/or any capital contribution in respect of Qualified Capital Stock of the Lead Borrower or any Restricted Subsidiary, in each case, other than any amounts constituting a Cure Amount, (B) Restricted Debt Payments as a result of the conversion of all or any portion of any Restricted Debt into Qualified Capital Stock of the Lead Borrower 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 amount not to exceed the amount portion, if any, of proceeds received by the Parent Available Amount on such date that the Lead Borrower and/or any Restricted Subsidiary under the Representation and Warranty Insurance Policy during the term of elects to apply to this Agreementclause (vi);
(xvvii) Restricted Debt Payments; provided that the Payment Conditions applicable to Restricted Debt Payments have been satisfied on a Pro Forma Basis; and
(viii) mandatory prepayments of Restricted Debt (and related payments of interest) made with “Declined Proceeds” (as defined in the First Lien Credit Agreement) (Ait being understood that any “Declined Proceeds” (as defined in the First Lien Credit Agreement) for any taxable period for which applied to make Restricted Debt Payments in reliance on this Section 6.04(b)(viii) shall not increase the Parent Borrower and/or any of its Subsidiaries are members of a consolidated, combined or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which a direct or indirect parent amount available under clause (a)(viii) of the Parent Borrower is the common parent (a definition of “Tax Group”), or for which the Parent Borrower is a disregarded entity for U.S. federal income tax purposes wholly-owned by a corporate parent (a “Corporate Parent”), the Parent Borrower and each of its Subsidiaries may make Restricted Payments the proceeds of which shall be used by such common parent to pay the portion of any consolidated, combined or similar U.S. federal, state or local income Taxes of such Tax Group, or by the Corporate Parent to pay the portion of the U.S. federal, state or local income Taxes of such Corporate Parent, or any franchise taxes imposed in lieu thereof, for such taxable period that are attributable Available Amount” to the income of the Parent Borrower and/or its Subsidiaries, provided that such amount shall not be greater than the amount of such U.S. federal, state or local income taxes that would be paid (for such taxable period) by the Parent Borrower and its Subsidiaries if the Parent Borrower and/or such Subsidiaries had been a stand-alone corporate taxpayer (or stand-alone group of corporate taxpayers filing on a consolidated, combined or similar basis) for all taxable years ending after the Closing Date (taking into account any net operating loss carryforwards attributable to the Parent Borrower and its Subsidiaries, as the case may be) and (B) without duplication of Restricted Payments made under Section 6.04(a)(xv)(Aextent so applied), for any taxable period for which the Parent Borrower is treated as a partnership for U.S. federal and/or applicable state or local income tax purposes, the Parent Borrower may make Restricted Payments to its equity owners at the times and in the amoun.
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) The Parent Borrower shall not not, nor will it permit any Restricted Subsidiary to, pay or make, directly or indirectly, any Restricted Payment, except that:
(i) the Parent Borrower may make Restricted Payments to the extent necessary to permit any Parent Company:
(A) to pay general operating and compliance administrative costs and expenses (including corporate overhead, legal or similar expenses and customary salary, bonus and other benefits payable to directors, officers, employees, members of management, managers and/or consultants of any Parent Company)) and franchise fees and Taxes and similar fees, Taxes and expenses required to maintain the organizational existence of such Parent Company, in each case, which are reasonable and customary and incurred in the ordinary course of business, plus any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of any Parent Company, in each case, to the extent attributable to the ownership or operations of any Parent Company (but excluding, for the avoidance of doubt, the portion of any such amount, if any, that is attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and/or its subsidiariessubsidiaries (and/or Joint Ventures); provided that Restricted Payments under this Section 6.04(a)(i)(A) that are attributable to any Unrestricted Subsidiary or any Specified Joint Venture shall be permitted only to the extent that either (x) such Unrestricted Subsidiary or Specified Joint Venture has made one or more cash distributions, advances or loans to the Borrower or any of its Restricted Subsidiaries for such purpose in an amount up to the amount of such Unrestricted Subsidiary’s or Specified Joint Venture’s proportionate share of such costs, expenses, franchise fees and Taxes and similar fees, Taxes and expenses or (y) the amount of such Restricted Payments made by the Borrower on behalf of such Unrestricted Subsidiary or Specified Joint Venture is treated as an Investment subject to Section 6.06 hereof;
(B) to pay franchisedischarge the consolidated, excise and combined, unitary or similar Taxes, and other fees, Taxes and expenses, required to maintain the organizational existence Tax liabilities of such Parent Company;
(C) to pay customary salary, bonus, long-term incentive, severance Company and other benefits (including payment to certain service providers of the Parent Borrower or its Subsidiaries pursuant to any equity plan (whether in the form of options, cash settled options or otherwise)) payable to Permitted Payees, subsidiaries when and as well as applicable employment, social security or similar taxes in connection therewithdue, to the extent such salary, bonuses, severance and other benefits liabilities are attributable and reasonably allocated to the ownership or operations of the Parent Borrower and/or its subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose;
(D) to pay audit and other accounting and reporting expenses of such Parent Company to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such expensesTax liabilities, if any, that is attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Borrower and its subsidiaries;
subsidiaries (E) for the payment of insurance premiums to the extent attributable to and/or any Parent Company (but excluding, for the avoidance of doubt, the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiariesJoint Venture), the Parent Borrower and its subsidiaries;
(F) to pay (x) fees and expenses related to any debt and/or equity offerings (including refinancings), investments and/or acquisitions permitted or not restricted by this Agreement (whether or not consummated, and including advisory, refinancing, subsequent transaction and exit fees of any Parent Company of the Parent Borrower) and expenses and indemnities of any trustee, agent, arranger, underwriter or similar role and (y) Public Company Costs; and
(G) to finance any Investment permitted under Section 6.06 as if such Parent Company were subject to Section 6.06 (provided that (x) any Restricted Payment under this clause (a)(i)(G) 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 (y) the relevant Parent Company shall, promptly following the closing 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 (I) all property acquired to be contributed to the Parent Borrower or one or more of its Restricted Subsidiaries or (II) the merger, consolidation or amalgamation of the Person formed or acquired into the Parent Borrower or one or more of its Restricted Subsidiaries, in order to consummate such Investment in compliance with the applicable requirements of Section 6.06 as if undertaken as a direct Investment amount paid by the Parent Borrower or the relevant Restricted Subsidiary);
(ii) the Parent Borrower may pay (or make Restricted Payments to allow any Parent Company to pay) for the repurchase, redemption, retirement or other acquisition or retirement for value of Capital Stock of any Parent Company or any subsidiary held by any Permitted Payee:
(A) in accordance with the terms of promissory notes issued pursuant to Section 6.01(o), so long as the aggregate amount of all Cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments made pursuant to sub-clause (D) of this clause (ii) below, (1) does not exceed the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied)) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under clause (D) below; plus
(B) with the proceeds of any sale or issuance of, or of any capital contribution in respect of, the Capital Stock of the Parent Borrower or any Parent Company (to the extent such proceeds are contributed to the Parent Borrower or any Restricted Subsidiary in respect of Qualified Capital Stock issued by the Parent Borrower or such Restricted Subsidiary) (other than amounts constituting a Cure Amount or an Available Excluded Contribution Amount); plus
(C) with the net proceeds of any key-man life insurance policies; plus
(D) with Cash and Cash Equivalents in an amount not to exceed, together with the aggregate amount of all cash payments made pursuant to sub-clause (A) of this clause (ii) in respect of promissory notes issued pursuant to Section 6.01(o), (1) the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under the immediately preceding clause (1); plus
(E) with the amount of any Cash bonuses otherwise payable to any Permitted Payee that are foregone in exchange for the receipt of Capital Stock of the Parent Borrower or any Parent Company pursuant to any compensation arrangement, including any deferred compensation plan;
(iii) the Parent Borrower may make additional Restricted Payments in an amount not to exceed (A) the portion, if any, of the Available Amount on such date that the Parent Borrower elects to apply to this clause (iii)(A) plus (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Parent Borrower elects to apply to this clause (iii)(B) (plus, without duplication of amounts 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 with Available Excluded Contribution Amounts up to the amount of such Available Excluded Contribution Amount, less any application thereof under Sections 6.04(b)(vi) or 6.06(r));
(iv) the Parent Borrower may make Restricted Payments (i) to any Parent Company to enable such Parent Company to (A) make Cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of such Parent Company, dividends, share splits, reverse share splits (or any combination thereof) and, mergers, consolidations, amalgamations or other business combinations, and acquisitions and other Investments permitted hereunder and/or (B) honor any conversion request by a holder of Convertible Indebtedness by payment of cash and/or delivery of Capital Stock, make any cash payments in lieu of fractional shares in connection with any conversion of Convertible Indebtedness and otherwise make payments on Convertible Indebtedness in accordance with its terms (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments upon redemption thereof), or, in the case of each of sub-clauses (A) and (B) above, make Restricted Payments to any Parent Company to enable such Parent Company to make the payments and/or deliveries described in such sub-clauses (A) and (B), and (ii) consisting of (A) payments made or expected to be made in respect of withholding or similar Taxes payable by any Permitted Payee and/or (B) repurchases of Capital Stock in consideration of the payments described in sub clause (A) above, including demand repurchases in connection with the exercise of stock options and the issuance of restricted stock units or similar stock based awards;
(v) the Parent Borrower may repurchase, redeem, acquire or retire Capital Stock upon (or make provisions for withholdings in connection with), or make Restricted Payments to any Parent Company to enable it to repurchase, redeem, acquire or retire Capital Stock upon (or make provisions for withholdings in connection with), the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represents all or a portion of the exercise price of, or tax withholdings with respect to, such warrants, options or other securities convertible into or exchangeable for Capital Stock as part of a “cashless” exercise;
(vi) the Parent Borrower may make Restricted Payments the proceeds of which are applied (i) on the Closing Date, solely to effect the consummation of the Transactions and on or about the Amendment No. 1 Effective Date, solely to effect the consummation of the Amendment No. 1 Transactions, (ii) on and after the Closing Date, to satisfy any payment obligations owing, or as otherwise required, under the Acquisition Agreement (including payment of working capital and/or purchase price adjustments) and to pay Transaction Costs, in each case, with respect to the Transactions, (iii) to satisfy obligations to direct or indirect holders of Capital Stock of the Parent Borrower (immediately prior to giving effect to the Transactions) in connection with, or as a result of, any working capital and/or purchase price adjustments, in each case, with respect to the Transactions and (iv) to satisfy any settlement of claims or actions in connection with the Transactions or to satisfy indemnity or other similar obligations in connection with the Transactions;
(vii) the Parent Borrower may (or may make Restricted Payments to any Parent Company to enable it to) make Restricted Payments with respect to any Capital Stock in an amount not to exceed (A) the greater of (x) an amount equal to 7.00% per annum of the net Cash proceeds received by or contributed to the Parent Borrower in connection with the merger of Isos Acquisition Corporation and Bowlero Corp. on December 15, 2021 and the other transactions consummated in connection therewith and (y) an amount equal to 7.00% per annum of the Market Capitalization of the Parent Borrower (or its direct or indirect Parent Company, as applicable) and its subsidiaries minus (B) any utilization of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A);
(viii) the Parent Borrower may make Restricted Payments to (i) redeem, repurchase, defease, discharge, retire or otherwise acquire any (A) Capital Stock (“Treasury Capital Stock”) of the Parent Borrower and/or any Restricted Subsidiary or (B) Capital Stock of any Parent Company, in the case of each of subclauses (A) and (B), in exchange for, or out of the proceeds of the substantially concurrent sale (other than to the Parent Borrower and/or any Restricted Subsidiary) of, Qualified Capital Stock of the Parent Borrower or any Parent Company to the extent any such proceeds are contributed to the capital of the Parent Borrower and/or any Restricted Subsidiary 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 the Parent Borrower or a Restricted Subsidiary) of any Refunding Capital Stock;
(ix) to the extent constituting a Restricted Payment, the Parent Borrower may consummate any transaction permitted by Section 5.19 (other than Section 5.19(d)), Section 6.06 (other than Sections 6.06(j) and (t)) and Section 6.07 (other than Section 6.07(g));
(x) the Parent Borrower may make additional Restricted Payments in an aggregate amount not to exceed (A) the greater of $85,000,000 and 25% of Consolidated Adjusted EBITDA 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);
(xi) the Parent Borrower may pay any dividend or other distribution or consummate any redemption within 60 days after the date of 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);
(xii) the Parent Borrower may make any Restricted Payment constituting the distribution or payment of Receivables Fees;
(xiii) the Parent Borrower may make additional Restricted 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 Event of Default hereunder or shall result therefrom;
(xiv) the Parent Borrower may make additional Restricted Payments in an amount not to exceed the amount of proceeds received by the Parent Borrower and/or any Restricted Subsidiary under the Representation and Warranty Insurance Policy during the term of this Agreement;
(xv) (A) for any taxable period for which the Parent Borrower and/or any of its Subsidiaries are members of a consolidated, combined or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which a direct or indirect parent of the Parent Borrower is the common parent (a “Tax Group”), or for which the Parent Borrower is a disregarded entity for U.S. federal income tax purposes wholly-owned by a corporate parent (a “Corporate Parent”), the Parent Borrower and each of its Subsidiaries may make Restricted Payments the proceeds of which shall be used by such common parent to pay the portion of any consolidated, combined or similar U.S. federal, state or local income Taxes of such Tax Group, or by the Corporate Parent to pay the portion of the U.S. federal, state or local income Taxes of such Corporate Parent, or any franchise taxes imposed in lieu thereof, for such taxable period that are attributable to the income of the Parent Borrower and/or its Subsidiaries, provided that such amount shall not be greater than the amount of such U.S. federal, state or local income taxes that would be paid (for such taxable period) by the Parent Borrower and its Subsidiaries if the Parent Borrower and/or such Subsidiaries had been a stand-alone corporate taxpayer (or stand-alone group of corporate taxpayers filing on a consolidated, combined or similar basis) for all taxable years ending after the Closing Date (taking into account any net operating loss carryforwards attributable to the Parent Borrower and its Subsidiaries, as the case may be) and (B) without duplication of Restricted Payments made under Section 6.04(a)(xv)(A), for any taxable period for which the Parent Borrower is treated as a partnership for U.S. federal and/or applicable state or local income tax purposes, the Parent Borrower may make Restricted Payments to its equity owners at the times and in the amounparagraph
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) The Parent Borrower Borrowers shall not pay or make, directly or indirectly, any Restricted Payment, except that:
(i) the Parent Borrower Borrowers may make Restricted Payments to the extent necessary to permit any Parent Company:
(A) to pay general operating and compliance administrative costs and expenses (including corporate overhead, legal or similar expenses and customary wages, salary, bonus and other benefits payable to directors, officers, employees, members of management, managers consultants and/or consultants independent contractors of any Parent Company), franchise fees, franchise Taxes and similar fees, Taxes and expenses required to maintain the organizational existence of such Parent Company, in each case, which are reasonable and customary and incurred in the ordinary course of business, plus any reasonable and customary indemnification claims made by current or former directors, officers, members of management, managers, employees or consultants of any Parent Company, in each case, to the extent attributable to the ownership or operations of any Parent Company (but excluding, for the avoidance of doubt, the portion of any such amount, if any, that is attributable to the ownership or operations operation of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries); provided that Restricted Payments under this clause (a)(i)(A) that are attributable to any Unrestricted Subsidiary shall be permitted only to the extent that either (x) such Unrestricted Subsidiary has made one or more Cash distributions, advances or loans to Parent or any of its Subsidiaries for such purpose in an amount up to the Parent amount of such Unrestricted Subsidiary’s proportionate share of such costs, expenses, franchise fees and Taxes and similar fees, Taxes and expenses or (y) the amount of such Restricted Payments made by a Borrower and/or its subsidiarieson behalf of such Unrestricted Subsidiary is treated as an Investment subject to Section 7.06 hereof;
(B) to pay franchise, excise and similar Taxes, and other fees, Taxes and expenses, required to maintain the organizational existence of such Parent Company;
(C) to pay customary salary, bonus, long-term incentive, severance and other benefits (including payment to certain service providers of the Parent Borrower or its Subsidiaries pursuant to any equity plan (whether in the form of options, cash settled options or otherwise)) payable to Permitted Payees, as well as applicable employment, social security or similar taxes in connection therewith, to the extent such salary, bonuses, severance and other benefits are attributable and reasonably allocated to the operations of the Parent Borrower and/or its subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose;
(D) to pay audit and other accounting and reporting expenses of at such Parent Company to the extent attributable relating to the ownership or operations of any Parent Company (but excluding, for the avoidance of doubt, the portion of any such expenses, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), Parent, the Borrowers and/or their subsidiaries; provided that Restricted Payments under this clause (a)(i)(B) that are attributable to any Unrestricted Subsidiary shall be permitted only to the extent that either (x) such Unrestricted Subsidiary has made one or more Cash distributions, advances or loans to Parent Borrower or any of its Subsidiaries for such purpose in an amount up to the amount of such Unrestricted Subsidiary’s proportionate share of NY\6497185.2 such accounting and its subsidiariesreporting expenses or (y) the amount of such Restricted Payments made by Parent on behalf of such Unrestricted Subsidiary is treated as an Investment subject to Section 7.06 hereof;
(EC) for the payment of insurance premiums to the extent attributable relating to the ownership or operations of any Parent Company (but excluding, for the avoidance of doubt, the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or its subsidiaries), the Parent Parent, any Borrower and and/or its subsidiaries; provided that Restricted Payments under this clause (a)(i)(C) that are attributable to any Unrestricted Subsidiary shall be permitted only to the extent that either (x) such Unrestricted Subsidiary has made one or more Cash distributions advances or loans to Parent or any of its Subsidiaries for such purpose in an amount up to the amount of such Unrestricted Subsidiary’s proportionate share of such insurance premiums or (y) the amount of such Restricted Payments made by Parent on behalf of such Unrestricted Subsidiary is treated as an Investment subject to Section 7.06 hereof;
(FD) to pay (x) fees and expenses related to any debt and/or or equity offerings (including refinancings)offerings, investments and/or or acquisitions permitted or not restricted by this Agreement (whether or not consummated, and including advisory, refinancing, subsequent transaction and exit fees of any Parent Company of the Parent Borrower) and expenses and indemnities of any trustee, agent, arranger, underwriter or similar role and (y) Public Company Costs; and);
(GE) to pay the consideration to finance any Investment permitted under Section 6.06 as if such Parent Company were subject to Section 6.06 Section 7.06 (provided that (x) any such Restricted Payment Payments under this clause (a)(i)(G(a)(i)(E) 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 (y) the relevant such Parent Company shall, promptly following the closing 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 therewiththereof, cause (I) all such property acquired to be contributed to the Parent any Borrower or one or more of its Restricted Subsidiaries Subsidiaries, or (II) the merger, consolidation or amalgamation of the Person formed or acquired into the Parent any Borrower or one or more of its Restricted Subsidiaries, in order to consummate such Investment in compliance a manner that causes such Investment to comply with the applicable requirements of Section 6.06 Section 7.06 as if undertaken as a direct Investment by the Parent such Borrower or the relevant Restricted such Subsidiary);; and
(F) to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, employees or consultants (or any Immediate Family Member thereof) of any Parent Company plus any reasonable and customary indemnification claims made by current or former directors, officers, members of management, managers, employees or consultants of any Parent Company, to the extent such salary, bonuses, severance and other benefits or claims in respect of any of the foregoing) are directly attributable and reasonably allocated to the ownership or operations of any Parent Company (but excluding, for the avoidance of doubt, the portion of any amount, if any, that is attributable to the ownership or operation of any subsidiary of any Parent Company other than Parent and/or its subsidiaries), Parent, any Borrower and/or its subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose; provided that Restricted Payments under this clause (a)(i)(F) that are attributable to any Unrestricted Subsidiary shall be permitted only to the extent that either (x) such Unrestricted Subsidiary has made one or more Cash distributions, advances or loans to Parent or any of its Subsidiaries for such purpose in an amount up to the amount of such Unrestricted Subsidiary’s proportionate share of such salary, bonus, severance and other benefits or (y) the amount of such Restricted Payments made by Parent on behalf of such Unrestricted Subsidiary is treated as an Investment subject to Section 7.06 hereof.
(ii) the Parent Borrower Borrowers may pay (or make Restricted Payments to allow any Parent Company to pay) for the repurchase, redemption, retirement or other acquisition or retirement for value of Capital Stock of any Parent Company Company, any Borrower or any subsidiary held by any Permitted Payeefuture, present or former employee, director, member of management, officer, manager or consultant (or any Immediate Family Member thereof) of any Parent Company, any Borrower or any subsidiary:
(A) in accordance with the terms of promissory notes issued pursuant to Section 6.01(oSection 7.01(n), so long as the aggregate amount of all Cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments made pursuant to sub-clause (D(D) of this clause (ii) below(ii), (1) does not exceed the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period 11,900,000 in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to the next subsequent Fiscal Years (until so applied)) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under clause (D) belowYear; plus
(B) with the proceeds of any sale or issuance of, or of any capital contribution in respect of, the Capital Stock of the Parent Borrower or any Parent Company (to the extent such proceeds are contributed to the Parent Borrower or any Restricted Subsidiary in respect of Qualified Capital Stock issued by the Parent Borrower or such Restricted Subsidiary) (other than amounts constituting a Cure Amount or an Available Excluded Contribution Amount); plus
(C) with the net proceeds of any key-man life insurance policies; plus
(D) with Cash and Cash Equivalents in an amount not to exceed, together with the aggregate amount of all cash payments made pursuant to sub-clause (A) of this clause (ii) in respect of promissory notes issued pursuant to Section 6.01(o), (1) the greater of $68,000,000 and 20% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period in any Fiscal Year, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under the immediately preceding clause (1); plus
(E) with the amount of any Cash bonuses otherwise payable to any Permitted Payee that are foregone in exchange for the receipt of Capital Stock of the Parent Borrower or any Parent Company pursuant to any compensation arrangement, including any deferred compensation plan;
(iii) the Parent Borrower may make additional Restricted Payments in an amount not to exceed (A) the portion, if any, of the Available Amount on such date that the Parent Borrower elects to apply to this clause (iii)(A) plus (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Parent Borrower elects to apply to this clause (iii)(B) (plus, without duplication of amounts 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 with Available Excluded Contribution Amounts up to the amount of such Available Excluded Contribution Amount, less any application thereof under Sections 6.04(b)(vi) or 6.06(r));
(iv) the Parent Borrower may make Restricted Payments (i) to any Parent Company to enable such Parent Company to (A) make Cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of such Parent Company, dividends, share splits, reverse share splits (or any combination thereof) and, mergers, consolidations, amalgamations or other business combinations, and acquisitions and other Investments permitted hereunder and/or (B) honor any conversion request by a holder of Convertible Indebtedness by payment of cash and/or delivery of Capital Stock, make any cash payments in lieu of fractional shares in connection with any conversion of Convertible Indebtedness and otherwise make payments on Convertible Indebtedness in accordance with its terms (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments upon redemption thereof), or, in the case of each of sub-clauses (A) and (B) above, make Restricted Payments to any Parent Company to enable such Parent Company to make the payments and/or deliveries described in such sub-clauses (A) and (B), and (ii) consisting of (A) payments made or expected to be made in respect of withholding or similar Taxes payable by any Permitted Payee and/or (B) repurchases of Capital Stock in consideration of the payments described in sub clause (A) above, including demand repurchases in connection with the exercise of stock options and the issuance of restricted stock units or similar stock based awards;
(v) the Parent Borrower may repurchase, redeem, acquire or retire Capital Stock upon (or make provisions for withholdings in connection with), or make Restricted Payments to any Parent Company to enable it to repurchase, redeem, acquire or retire Capital Stock upon (or make provisions for withholdings in connection with), the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represents all or a portion of the exercise price of, or tax withholdings with respect to, such warrants, options or other securities convertible into or exchangeable for Capital Stock as part of a “cashless” exercise;
(vi) the Parent Borrower may make Restricted Payments the proceeds of which are applied (i) on the Closing Date, solely to effect the consummation of the Transactions and on or about the Amendment No. 1 Effective Date, solely to effect the consummation of the Amendment No. 1 Transactions, (ii) on and after the Closing Date, to satisfy any payment obligations owing, or as otherwise required, under the Acquisition Agreement (including payment of working capital and/or purchase price adjustments) and to pay Transaction Costs, in each case, with respect to the Transactions, (iii) to satisfy obligations to direct or indirect holders of Capital Stock of the Parent Borrower (immediately prior to giving effect to the Transactions) in connection with, or as a result of, any working capital and/or purchase price adjustments, in each case, with respect to the Transactions and (iv) to satisfy any settlement of claims or actions in connection with the Transactions or to satisfy indemnity or other similar obligations in connection with the Transactions;
(vii) the Parent Borrower may (or may make Restricted Payments to any Parent Company to enable it to) make Restricted Payments with respect to any Capital Stock in an amount not to exceed (A) the greater of (x) an amount equal to 7.00% per annum of the net Cash proceeds received by or contributed to the Parent Borrower in connection with the merger of Isos Acquisition Corporation and Bowlero Corp. on December 15, 2021 and the other transactions consummated in connection therewith and (y) an amount equal to 7.00% per annum of the Market Capitalization of the Parent Borrower (or its direct or indirect Parent Company, as applicable) and its subsidiaries minus (B) any utilization of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A);
(viii) the Parent Borrower may make Restricted Payments to (i) redeem, repurchase, defease, discharge, retire or otherwise acquire any (A) Capital Stock (“Treasury Capital Stock”) of the Parent Borrower and/or any Restricted Subsidiary or (B) Capital Stock of any Parent Company, in the case of each of subclauses (A) and (B), in exchange for, or out of the proceeds of the substantially concurrent sale (other than to the Parent Borrower and/or any Restricted Subsidiary) of, Qualified Capital Stock of the Parent Borrower or any Parent Company to the extent any such proceeds are contributed to the capital of the Parent Borrower and/or any Restricted Subsidiary 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 the Parent Borrower or a Restricted Subsidiary) of any Refunding Capital Stock;
(ix) to the extent constituting a Restricted Payment, the Parent Borrower may consummate any transaction permitted by Section 5.19 (other than Section 5.19(d)), Section 6.06 (other than Sections 6.06(j) and (t)) and Section 6.07 (other than Section 6.07(g));
(x) the Parent Borrower may make additional Restricted Payments in an aggregate amount not to exceed (A) the greater of $85,000,000 and 25% of Consolidated Adjusted EBITDA 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);
(xi) the Parent Borrower may pay any dividend or other distribution or consummate any redemption within 60 days after the date of 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);
(xii) the Parent Borrower may make any Restricted Payment constituting the distribution or payment of Receivables Fees;
(xiii) the Parent Borrower may make additional Restricted 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 Event of Default hereunder or shall result therefrom;
(xiv) the Parent Borrower may make additional Restricted Payments in an amount not to exceed the amount of proceeds received by the Parent Borrower and/or any Restricted Subsidiary under the Representation and Warranty Insurance Policy during the term of this Agreement;
(xv) (A) for any taxable period for which the Parent Borrower and/or any of its Subsidiaries are members of a consolidated, combined or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which a direct or indirect parent of the Parent Borrower is the common parent (a “Tax Group”), or for which the Parent Borrower is a disregarded entity for U.S. federal income tax purposes wholly-owned by a corporate parent (a “Corporate Parent”), the Parent Borrower and each of its Subsidiaries may make Restricted Payments the proceeds of which shall be used by such common parent to pay the portion of any consolidated, combined or similar U.S. federal, state or local income Taxes of such Tax Group, or by the Corporate Parent to pay the portion of the U.S. federal, state or local income Taxes of such Corporate Parent, or any franchise taxes imposed in lieu thereof, for such taxable period that are attributable to the income of the Parent Borrower and/or its Subsidiaries, provided that such amount shall not be greater than the amount of such U.S. federal, state or local income taxes that would be paid (for such taxable period) by the Parent Borrower and its Subsidiaries if the Parent Borrower and/or such Subsidiaries had been a stand-alone corporate taxpayer (or stand-alone group of corporate taxpayers filing on a consolidated, combined or similar basis) for all taxable years ending after the Closing Date (taking into account any net operating loss carryforwards attributable to the Parent Borrower and its Subsidiaries, as the case may be) and (B) without duplication of Restricted Payments made under Section 6.04(a)(xv)(A), for any taxable period for which the Parent Borrower is treated as a partnership for U.S. federal and/or applicable state or local income tax purposes, the Parent Borrower may make Restricted Payments to its equity owners at the times and in the amoun
Appears in 1 contract
Sources: Credit Agreement (Orion S.A.)
Restricted Payments; Certain Payments of Indebtedness. (a) The Parent Lead Borrower shall not pay or make, directly or indirectly, any Restricted Payment, except that:
(i) the Parent Lead Borrower may make Restricted Payments to the extent necessary to permit any Parent Company:
(A) to pay general operating and compliance administrative costs and expenses (including corporate overhead, legal or similar expenses and customary salary, bonus and other benefits payable to directors, officers, employees, members of management, managers and/or consultants of any Parent Company)) and franchise fees and Taxes and similar fees, Taxes and expenses required to enable such Parent Company to maintain its organizational existence or qualification to do business, in each case, which are reasonable and customary and incurred in the ordinary course of business, plus any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of any Parent Company, in each case, to the extent attributable to the ownership or operations of any Parent Company and its subsidiaries (but excluding, for the avoidance of doubt, excluding the portion of any such amount, if any, amount that is attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Borrower and/or and its subsidiaries), the Parent Borrower and/or its subsidiaries;
(B) to pay franchise, excise scheduled and similar Taxes, overdue interest and other fees, Taxes and expenses, required to maintain the organizational existence payments as part of such Parent Company;
(C) to pay customary salary, bonus, longan AHYDO catch-term incentive, severance and other benefits (including payment to certain service providers of the Parent Borrower or its Subsidiaries pursuant to any equity plan (whether in the form of options, cash settled options or otherwise)) payable to Permitted Payees, as well as applicable employment, social security or similar taxes in connection therewith, to the extent such salary, bonuses, severance and other benefits are attributable and reasonably allocated to the operations of the Parent Borrower and/or its subsidiariesup payment, in each case, so long as such in respect of any Indebtedness of any Parent Company applies to the amount of any such Restricted Payment for such purposeextent the Net Proceeds thereof were contributed to the Lead Borrower;
(DC) to pay audit and other accounting and reporting expenses of such Parent Company to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such expenses, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Lead Borrower and/or its subsidiaries), the Parent Lead Borrower and its subsidiaries;
(ED) for the payment of insurance premiums to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt, the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Parent Lead Borrower and/or its subsidiaries), the Parent Lead Borrower and its subsidiaries;
(FE) to pay (x) fees and expenses related to any debt and/or or equity offerings (including refinancings)by any Parent Company, investments and/or or acquisitions permitted or not restricted by this Agreement (whether or not consummated, and including advisory, refinancing, subsequent transaction and exit fees of any Parent Company of the Parent Borrower) and expenses and indemnities of any trustee, agent, arranger, underwriter or similar role and (y) Public Company Costs; and;
(GF) to finance any Investment permitted under Section 6.06 as if such Parent Company were subject to Section Section 6.06 (provided that (x) any Restricted Payment under this clause (a)(i)(G(a)(i)(F) 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 (y) the relevant Parent Company shall, promptly following the closing 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 therewiththereof, cause (I) all property acquired to be contributed to the Parent Lead Borrower or one or more of its Restricted Subsidiaries Subsidiaries, or (II) the merger, consolidation or amalgamation of the Person formed or acquired into the Parent Lead Borrower or one or more of its Restricted Subsidiaries, in order to consummate such Investment in compliance with the applicable requirements of Section Section 6.06 as if undertaken as a direct Investment by the Parent Lead Borrower or the relevant Restricted Subsidiary); and
(G) to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, employees or consultants of any Parent Company (or any Immediate Family Member of any of the foregoing) to the extent such salary, bonuses and other benefits are attributable and reasonably allocated to the operations of the Lead Borrower and/or its subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose;
(ii) the Parent Lead Borrower may pay (or make Restricted Payments to allow any Parent Company to pay) for the repurchase, redemption, retirement or other acquisition or retirement for value of Capital Stock of any Parent Company or any subsidiary held by any Permitted Payeefuture, present or former employee, director, member of management, officer, manager or consultant (or any Affiliate or Immediate Family Member thereof) of any Parent Company, the Lead Borrower or any subsidiary:
(A) in accordance with the terms of promissory notes issued pursuant to Section Section 6.01(o), so long as the aggregate amount of all Cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments made pursuant to sub-clause (D(D) of this clause (ii(ii) below, (1) does not exceed in any Fiscal Year the greater of $68,000,000 20,000,000 and 2012.0% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period in any Fiscal YearEBITDA, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied)) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under clause (D) below; plusYears;
(B) with the proceeds of any sale or issuance of, or of any capital contribution in respect of, the Capital Stock of the Parent Lead Borrower or any Parent Company (to the extent such proceeds are contributed to the Parent Borrower or any Restricted Subsidiary in respect of Qualified Capital Stock issued by to the Parent Lead Borrower or such any Restricted Subsidiary) (other than amounts constituting a Cure Amount or an Available Excluded Contribution Amount); plus;
(C) with the net proceeds of any key-man life insurance policies; plusor
(D) with Cash and Cash Equivalents in an amount not to exceedexceed in any Fiscal Year, together with the aggregate amount of all cash payments made pursuant to sub-clause (A(A) of this clause (ii(ii) in respect of promissory notes issued pursuant to Section Section 6.01(o), (1) the greater of $68,000,000 20,000,000 and 2012.0% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period in any Fiscal YearEBITDA, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years (until so applied) minus (2) any utilization of the Available RP Capacity Amount in reliance on unused capacity under the immediately preceding clause (1); plus
(E) with the amount of any Cash bonuses otherwise payable to any Permitted Payee that are foregone in exchange for the receipt of Capital Stock of the Parent Borrower or any Parent Company pursuant to any compensation arrangement, including any deferred compensation planYears;
(iii) the Parent Lead Borrower may make additional Restricted Payments in an amount not to exceed (A) the portion, if any, of the Available Amount on such date that the Parent Borrower elects to apply to this clause (iii)(A) plus (B) the portion, if any, of the Available Excluded Contribution Amount on such date that the Parent Lead Borrower elects to apply to this clause (iii)(B) (plus, without duplication of amounts 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 with Available Excluded Contribution Amounts up to the amount of such Available Excluded Contribution Amount, less any application thereof under Sections 6.04(b)(vi) or 6.06(r)iii);
(iv) the Parent Lead Borrower may make Restricted Payments (i) to any Parent Company to enable such Parent Company to (A) make Cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of such Parent Company, dividends, share splits, reverse share splits (or any combination thereof) and, mergers, consolidations, amalgamations or other business combinations, and acquisitions and other Investments permitted hereunder and/or (B) honor any conversion request by a holder of Convertible Indebtedness by payment of cash and/or delivery of Capital Stock, make any cash payments in lieu of fractional shares in connection with any conversion of Convertible Indebtedness and otherwise make payments on Convertible Indebtedness in accordance with its terms (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments upon redemption thereof), or, in the case of each of sub-clauses (A) and (B) above, make Restricted Payments to any Parent Company to enable such Parent Company to make the payments and/or deliveries described in such sub-clauses (A) and (B), and (ii) consisting of (A) payments made or expected to be made in respect of withholding or similar Taxes payable by any Permitted Payee future, present or former officers, directors, employees, members of management, managers or consultants of the Lead Borrower, any Restricted Subsidiary or any Parent Company or any of their respective Immediate Family Members and/or (B) repurchases of Capital Stock in consideration of the payments described in sub sub-clause (A(A) above, including demand repurchases in connection with the exercise of stock options and the issuance of restricted stock units or similar stock based awardsoptions;
(v) the Parent Lead Borrower may repurchase, redeem, acquire or retire Capital Stock upon repurchase (or make provisions for withholdings in connection with), or make Restricted Payments to any Parent Company to enable it to repurchase, redeem, acquire or retire ) Capital Stock upon (or make provisions for withholdings in connection with), the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represents all or a portion of the exercise price of, or tax withholdings with respect to, such warrants, options or other securities convertible into or exchangeable for Capital Stock as part of a “cashless” exercise;
(vi) for any taxable period (or portion thereof) that a Parent Company is treated as a corporation for U.S. federal income tax purposes and for which the Lead Borrower and/or any of its subsidiaries are members (or are pass-through entities of such members) of a consolidated, combined, unitary or similar income Tax group for U.S. federal, state, local or foreign income Tax purposes for which such Parent Company is the common parent, the Borrower may make Restricted Payments to such Parent Company to pay the proceeds portion of which any U.S. federal, state, local or foreign income Taxes (as applicable) of such Parent Company for such taxable period that are applied (i) on attributable to the Closing Date, solely to effect the consummation income of the Transactions and on or about Lead Borrower and/or its applicable subsidiaries; provided that, the Amendment No. 1 Effective Dateaggregate amount of such distributions shall not exceed the aggregate Taxes the Lead Borrower and/or its subsidiaries, solely to effect the consummation of the Amendment No. 1 Transactionsas applicable, (ii) on and after the Closing Date, to satisfy any payment obligations owing, or as otherwise required, under the Acquisition Agreement (including payment of working capital and/or purchase price adjustments) and would be required to pay Transaction Costsin respect of such U.S. federal, in each casestate, local and foreign Taxes on a stand-alone basis for such taxable period; provided further that the amount of such distributions with respect to the Transactions, (iii) to satisfy obligations to direct or indirect holders of Capital Stock of the Parent Borrower (immediately prior to giving effect any Unrestricted Subsidiary for any taxable period shall be limited to the Transactions) in connection with, or as a result of, any working capital and/or purchase price adjustments, in each case, with respect to the Transactions and (iv) to satisfy any settlement of claims or actions in connection with the Transactions or to satisfy indemnity or other similar obligations in connection with the Transactionsamount actually paid by such Unrestricted Subsidiary for such purpose;
(vii) the Parent Lead Borrower may pay Transaction Costs;
(viii) so long as no Event of Default exists at the time of declaration of such Restricted Payment, following the consummation of the first Qualifying IPO, the Lead Borrower may (or may make Restricted Payments to any Parent Company to enable it to) make Restricted Payments with respect to any Capital Stock in an amount not to exceed (A) the greater of (x) an amount equal to 7.006% per annum of the net Cash proceeds received by or contributed to the Parent Lead Borrower in connection with the merger of Isos Acquisition Corporation and Bowlero Corp. on December 15, 2021 and the other transactions consummated in connection therewith and (y) an amount equal to 7.00% per annum of the Market Capitalization of the Parent Borrower (or its direct or indirect Parent Company, as applicable) and its subsidiaries minus (B) from any utilization of the Available RP Capacity Amount in reliance on unused capacity under immediately preceding clause (A)Qualifying IPO;
(viiiix) the Parent Lead Borrower may make Restricted Payments to (i) redeem, repurchase, defease, discharge, retire or otherwise acquire any (A) Capital Stock (“Treasury Capital Stock”) of the Parent Lead Borrower and/or any Restricted Subsidiary or (B) Capital Stock of any Parent Company, in the case of each of subclauses (A(A) and (B(B), in exchange for, or out of the proceeds of the substantially concurrent sale (other than to the Parent Lead Borrower and/or any Restricted Subsidiary) of, Qualified Capital Stock of the Parent Lead Borrower or any Parent Company to the extent any such proceeds are contributed to the capital of the Parent Lead Borrower and/or any Restricted Subsidiary 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 the Parent Lead Borrower or a Restricted Subsidiary) of any Refunding Capital Stock;
(ixx) to the extent constituting a Restricted Payment, the Parent Lead Borrower may consummate any transaction permitted by Section 5.19 (other than Section 5.19(d)), Section Section 6.06 (other than Sections 6.06(j6.06(j) and (t(t)) and Section ), Section 6.07 (other than Section Section 6.07(g)) and Section 6.09 (other than Section 6.09(d));
(xxi) the Parent Lead Borrower may make additional Restricted Payments in an aggregate amount not to exceed (A) the greater of $85,000,000 60,000,000 and 2535.0% of Consolidated Adjusted EBITDA as minus the sum of the last day of the most recently ended Test Period minus (Bi) any utilization of the Available RP Capacity Amount in reliance on unused capacity amounts under immediately preceding clause (Athis Section 6.04(a)(xi) reallocated to make Restricted Debt Payments pursuant to Section 6.04(b)(iv)(B), (ii) any amounts under this Section 6.04(a)(xi) reallocated to make Investments pursuant to Section 6.06(q), and (iii) any amounts under this Section 6.04(a)(xi) reallocated to incur Indebtedness pursuant to Section 6.01(u);
(xixii) the Parent Lead Borrower may pay any dividend or other distribution or consummate any redemption within 60 days after the date of 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 dividend or redemption notice would have complied with the provisions of this Section 6.04(a);
(xii) the Parent Borrower may make any Restricted Payment constituting the distribution or payment of Receivables Feeshereof;
(xiii) the Parent Lead Borrower may make additional Restricted Payments so long asas the Payment Conditions applicable to Restricted Payments have been satisfied, as measured at on a Pro Forma Basis;
(xiv) the time provided for Lead Borrower may make Restricted Payments to enable any Parent Company to make Restricted Payments solely in Section 1.04(ethe Qualified Capital Stock of such Parent Company;
(xv) the Lead Borrower may make Restricted Payments to pay amounts permitted under Section 6.09(f) and (g); and
(xvi) the Lead Borrower may make Restricted Payments to permit any Parent Company (A) to redeem or make any payments in respect of the Junior Debentures (and corresponding distributions and redemptions in respect of the Trust Preferred Securities), (i) so long as the Total Leverage Ratio would not exceed 4.00:1.00Net Interest Coverage Ratio, calculated on a Pro Forma Basis Basis, would not be less than 2.00:1.00, and (B) to redeem or make any payments in respect of the Junior Debentures (and corresponding distributions and redemptions in respect of the Trust Preferred Securities), from the proceeds of (x) any indebtedness of any of Holdings, the Lead Borrower and its Restricted Subsidiaries permitted to be incurred hereunder and (y) any capital contribution to, or sale or issuance of Capital Stock by, the Lead Borrower or any Parent Company (to the extent such proceeds are contributed by such Parent Company to the Borrower or any Restricted Subsidiary).
(b) Holdings and the Lead Borrower shall not, nor shall they permit any Restricted Subsidiary to, make any payment (whether in Cash, securities or other property) on or in respect of principal of or interest on (w) any Junior Lien Indebtedness, (x) any Subordinated Indebtedness, (y) the Junior Debentures or (z) solely to the extent proceeds of Revolving Loans are being used to make such payment, unsecured Indebtedness, in each cases of clauses (w), (x), (y) and (z) with an individual outstanding principal amount in excess of the Threshold Amount (such Indebtedness under clauses (w), (x), (y) and (z), in each case, with an individual outstanding principal amount in excess of the Threshold Amount, the “Restricted Debt”), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Restricted Debt prior to its scheduled maturity (collectively, “Restricted Debt Payments”), except:
(i) any 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 (except to the extent subject to clause (iv)(C) of the proviso to Section 6.01(p)) and/or any Permitted Junior Debenture Refinancing;
(ii) there shall exist payments as part of an AHYDO catch-up payment;
(iii) payments of regularly scheduled interest as and when due in respect of any Restricted Debt (other than the Junior Debentures), except for any payments with respect to any such Subordinated Indebtedness that are prohibited by the subordination provisions thereof;
(iv) so long as, at the time of delivery of irrevocable notice with respect thereto, no Event of Default hereunder exists or shall would result therefrom, Restricted Debt Payments in an aggregate amount not to exceed (i) the sum of (A) the greater of $60,000,000 and 35.0% of Consolidated Adjusted EBITDA and (B) any amounts reallocated to this Section 6.04(b)(iv) from Section 6.04(a)(xi) and Section 6.06(q), minus (ii) any amounts reallocated from Section 6.04(b)(iv)(A) to make Investments pursuant to Section 6.06(q);
(xivA) Restricted Debt Payments in exchange for, or with proceeds of any issuance of, Qualified Capital Stock of the Parent Lead Borrower may make additional and/or any Restricted Subsidiary and/or any capital contribution in respect of Qualified Capital Stock of the Lead Borrower or any Restricted Subsidiary, in each case, other than any amounts constituting a Cure Amount, (B) Restricted Debt Payments as a result of the conversion of all or any portion of any Restricted Debt into Qualified Capital Stock of the Lead Borrower 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 amount not to exceed the amount of proceeds received by the Parent Borrower and/or any Restricted Subsidiary under the Representation and Warranty Insurance Policy during the term of this Agreement;
(xv) (A) for any taxable period for which the Parent Borrower and/or any of its Subsidiaries are members of a consolidatedportion, combined or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which a direct or indirect parent if any, of the Parent Available Excluded Contribution Amount on such date that the Lead Borrower is the common parent elects to apply to this clause (a “Tax Group”vi), or for which the Parent Borrower is a disregarded entity for U.S. federal income tax purposes wholly-owned by a corporate parent (a “Corporate Parent”), the Parent Borrower and each of its Subsidiaries may make Restricted Payments the proceeds of which shall be used by such common parent to pay the portion of any consolidated, combined or similar U.S. federal, state or local income Taxes of such Tax Group, or by the Corporate Parent to pay the portion of the U.S. federal, state or local income Taxes of such Corporate Parent, or any franchise taxes imposed in lieu thereof, for such taxable period that are attributable to the income of the Parent Borrower and/or its Subsidiaries, provided that such amount shall not be greater than the amount of such U.S. federal, state or local income taxes that would be paid (for such taxable period) by the Parent Borrower and its Subsidiaries if the Parent Borrower and/or such Subsidiaries had been a stand-alone corporate taxpayer (or stand-alone group of corporate taxpayers filing on a consolidated, combined or similar basis) for all taxable years ending after the Closing Date (taking into account any net operating loss carryforwards attributable to the Parent Borrower and its Subsidiaries, as the case may be) and (B) without duplication of Restricted Payments made under Section 6.04(a)(xv)(A), for any taxable period for which the Parent Borrower is treated as a partnership for U.S. federal and/or applicable state or local income tax purposes, the Parent Borrower may make Restricted Payments to its equity owners at the times and in the amoun;
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