Restricted Payments; Certain Payments of Indebtedness. (a) Holdings will not, nor will it permit any Restricted Subsidiary to, pay or make, directly or indirectly, any Restricted Payment, except: (i) each Restricted Subsidiary may make Restricted Payments to Holdings or any Restricted Subsidiary (and, in the case of any such Subsidiary that is not a wholly-owned Subsidiary, to each other owner of Equity Interests of such Subsidiary ratably based on their relative ownership interests of the relevant class of Equity Interests); (ii) [reserved]; (iii) [reserved]; (iv) [reserved]; (v) repurchases of Equity Interests in Holdings or any Parent Entity (or make Restricted Payments to allow repurchases of Equity Interest in Holdings any Parent Entity) deemed to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price of such stock options or warrants or other incentive interests; (vi) Holdings may redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted stock, stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) or make Restricted Payments to allow any of its Parent Entities to so redeem, retire, acquire or repurchase their Equity Interests (or any options, warrants, restricted stock, stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests), in each case, held by current or former officers, managers, consultants, directors, employees, independent contractors or other service providers (or their respective spouses, former spouses, domestic partners, successors, executors, administrators, heirs, legatees or distributees) of Holdings or any Parent Entity thereof and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment or service of, or breach of restrictive covenants by, any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, stock subscription or equity incentive award agreement, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that, the aggregate amount of Restricted Payments permitted by this clause (vi) after the Closing Date shall not exceed the greater of $10,000,000 and 5.0% of Consolidated EBITDA for the most recently ended Test Period, in any fiscal year, with unused amounts in any fiscal year being carried over to succeeding fiscal years, so long as the aggregate amount of Restricted Payments permitted by this clause (vi) in any fiscal year shall not exceed the greater of $20,000,000 and 10.0% of Consolidated EBITDA for the most recently ended Test Period, in the aggregate, plus all net cash proceeds obtained from any key-man life insurance policies received during such fiscal year (without giving effect to the foregoing proviso); (vii) Holdings may make Restricted Payments in cash to any Parent Entity: (A) for any taxable period for which Holdings and/or any of its Subsidiaries is a member of a consolidated, combined or similar income or similar tax group (a “Tax Group”) of which a Parent Entity is the common parent to pay the consolidated, combined or similar income or similar taxes, as applicable, of such Tax Group that are attributable to the taxable income of Holdings and/or its applicable Subsidiaries (as applicable), net of any payment already made by Holdings or its Subsidiaries in respect of such Taxes; provided that (1) Restricted Payments pursuant to this subclause (A) shall not exceed the amount of Taxes that Holdings would have paid if Holdings and/or such Subsidiaries were a stand-alone taxpayer or stand-alone Tax Group for all relevant taxable periods after the Closing Date, (2) Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to any Loan Party and (3) with respect to any taxable period (or portion thereof) ending prior to the date hereof, any distribution otherwise permitted under this clause (A) shall be permitted only to the extent such distribution relates to a tax payable after the date hereof; (B) the proceeds of which shall be used by such Parent Entity to pay (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties), that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of Holdings (or any parent thereof) attributable to the ownership or operations of any Parent Entity, Holdings and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by the Borrower or any Restricted Subsidiary and (y) otherwise permitted to be paid by Holdings and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (v); (C) the proceeds of which shall be used by Holdings (or any Parent Entity) to pay franchise and similar Taxes, other fees and expenses, required to maintain its organizational existence and auditing fees and expenses; (D) [reserved]; (E) the proceeds of which shall be used by any Parent Entity to finance any Investment that would be permitted to be made by Holdings or a Restricted Subsidiary pursuant to Section 6.04; provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) such Parent Entity shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests) to be contributed to Holdings or any Restricted Subsidiary (any in no event shall any such contribution increase the Available Amount) or (y) the Person formed or acquired to merge into or consolidate with Holdings or any Restricted Subsidiary to the extent such merger or consolidation is permitted by Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.13 and 5.14; (F) the proceeds of which shall be used to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, consultants, independent contractors or employees of Holdings, Borrower or any Parent Entity to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, Borrower and/or the Restricted Subsidiaries; (G) the proceeds of which shall be used by Holdings (or any Parent Entity) to pay (i) fees and expenses related to any successful or unsuccessful equity issuance or offering or debt issuance, incurrence or offering, disposition or acquisition, Investment or other transaction permitted by this Agreement and (ii) public company costs; and (H) the proceeds of which shall be used for the payment of insurance premiums to the extent attributable to any Parent Entity, Holdings, the Borrower and its subsidiaries; (viii) Restricted Payments in an aggregate amount not to exceed the Available Amount that is Not Otherwise Applied as in effect immediately prior to the time of making of such Restricted Payment so long as (x) no Event of Default has occurred and is continuing (or would occur after giving Pro Forma Effect to such action) and (y) where such Restricted Payment is funded from the Growth Amount, the Borrower is in compliance with the Financial Covenants (determined on a Pro Forma Basis); (ix) redemptions in whole or in part of any of its Equity Interests for another class of its Qualified Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Qualified Equity Interests (and in no event shall such contribution or issuance so utilized increase the Available Amount); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (x) [reserved]; (xi) Holdings may make Restricted Payments to any Parent Entity to enable such Parent Entity to pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment); (xii) Restricted Payments to fund the payment of regularly scheduled dividends and repurchases on Holdings’ Equity Interests, in an aggregate amount per annum not to exceed the greater of (x) $50,000,000 in any fiscal year, with unused amounts in any fiscal year being carried over to the succeeding fiscal year, and (y) 6.0% of market capitalization; (xiii) payments made by Holdings or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment on a Pro Forma Basis, the Total Net Leverage Ratio is less than or equal to 2.75:1.00 and there is no continuing Event of Default on the date of declaration; (xv) [reserved]; (xvi) [reserved]; (xvii) Restricted Payments related to settlement of Holdings’ defined benefit pension plan in the United Kingdom; (xviii) [reserved]; and (xix) additional Restricted Payments; provided that (A) such Restricted Payments shall not exceed the greater of $50,000,000 and 25.0% of Consolidated EBITDA for the most recently ended Test Period and (B) there is no continuing Specified Event of Default on the date of declaration.
Appears in 4 contracts
Sources: Credit Agreement (Koppers Holdings Inc.), Credit Agreement (Koppers Holdings Inc.), Credit Agreement (Koppers Holdings Inc.)
Restricted Payments; Certain Payments of Indebtedness. (a) Holdings will not, nor and will it not permit any Restricted Subsidiary to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, except:
(i) each Restricted Subsidiary may make Restricted Payments to Holdings or any other Restricted Subsidiary (and, Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a wholly-owned SubsidiaryWholly Owned Subsidiary of Holdings, such Restricted Payment is made to Holdings, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary ratably based on their relative ownership interests of the relevant class of Equity Interests);
(ii) [reserved]Holdings and each Restricted Subsidiary may declare and make dividend payments or other distributions payable solely in the Equity Interests of such Person;
(iii) [reserved]Restricted Payments made to consummate the Transactions;
(iv) [reserved];
(v) repurchases of Equity Interests in Holdings (or any Parent Entity (direct or make indirect parent of Holdings) or any Restricted Payments to allow repurchases of Equity Interest in Holdings any Parent Entity) Subsidiary deemed to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price or withholding taxes payable in connection with the exercise of such stock options or warrants or other incentive interests;
(viv) Holdings may Restricted Payments to redeem, acquire, retire retire, repurchase or repurchase its settle the Equity Interests (or any options, warrants, restricted stock, stock or stock appreciation rights or other equity-linked interests similar securities issued with respect to any of such Equity Interests) or make Restricted Payments to allow any of its Parent Entities to so redeem, retire, acquire or repurchase their Equity Interests (or any options, warrants, restricted stock, stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests), in each caseother than Disqualified Equity Interests, held directly or indirectly by current or former officers, managers, consultants, directorsmembers of the Board of Directors, employees, employees or independent contractors or other service providers (or their respective spouses, former spouses, domestic partners, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any Parent Entity thereof direct or indirect parent thereof) and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment or service of, or breach of restrictive covenants by, any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, stock subscription or equity incentive award agreement, employment termination agreement or any other employment agreements or equity holders’ agreement; provided thatagreement in an aggregate amount after the Effective Date, when taken together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (vi) after the Closing Date shall v), not to exceed the greater of $10,000,000 and 5.0% of Consolidated EBITDA for the most recently ended Test Period, in any fiscal year, calendar year with unused amounts in any fiscal calendar year being carried over to succeeding fiscal years, so long as the aggregate amount calendar years subject to a maximum of Restricted Payments permitted by this clause (vi) $15,000,000 in any fiscal year shall not exceed the greater of $20,000,000 and 10.0% of Consolidated EBITDA for the most recently ended Test Period, in the aggregate, plus all net cash proceeds obtained from any key-man life insurance policies received during such fiscal calendar year (without giving effect to the foregoing following proviso); provided that such amount in any calendar year may be increased by an amount not to exceed the cash proceeds of key man life insurance policies received by Holdings or any direct or indirect parent thereof after the Effective Date (so long as, in the case of such proceeds received by a direct or indirect parent of Holdings, such proceeds have been contributed to Holdings or the Restricted Subsidiaries);
(vi) other Restricted Payments; provided that, at the time of making such Restricted Payments, (x) no Default or Event of Default shall have occurred and be continuing or would result therefrom and (y) on a Pro Forma Basis, the Senior Secured First Lien Net Leverage Ratio is equal to or less than 1.75 to 1.00;
(vii) Holdings and the Restricted Subsidiaries may make Restricted Payments in cash to any Parent Entitydirect or indirect parent of Holdings:
(A) for with respect to any taxable period for in which Holdings and/or any of its Restricted Subsidiaries is a member of a consolidated, combined or similar income combined, unitary or similar tax group (a “Tax Group”) (or if Holdings or any of its Restricted Subsidiaries is a disregarded entity or a pass-through entity for U.S. federal income tax purposes, the owner of Holdings or such Restricted Subsidiary is a member of a Tax Group) for U.S. federal and/or applicable foreign, state or local income tax purposes of which a Parent Entity Holdings or any direct or indirect parent of Holdings is the common parent parent, to pay the consolidatedportion of the U.S. federal, combined or similar foreign, state, and/or local income or similar taxes, as applicable, Taxes of such Tax Group for such taxable period that are is attributable to the taxable income of Holdings and/or its applicable Subsidiaries (as applicable)Subsidiaries; provided that for each taxable period, net the amount of any payment already such payments made by Holdings or its Subsidiaries in respect of such Taxes; provided that (1) Restricted Payments pursuant to this subclause (A) taxable period in the aggregate shall not exceed the amount of such Taxes that Holdings and/or its applicable Restricted Subsidiaries would have paid been required to pay if Holdings and/or such Subsidiaries they were a stand-alone taxpayer or Tax Group with Holdings as the corporate common parent of such stand-alone Tax Group for all relevant taxable periods after the Closing Date, Group; and
(2) Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to any Loan Party and (3B) with respect to any taxable period for which Holdings or any Restricted Subsidiary is a partnership for U.S. federal and/or applicable state or local income tax purposes, to pay the portion of the U.S. federal, state or local income Taxes of its direct owner(s) (or portion thereofor, where a direct owner is a pass-through entity, indirect owner(s)) ending prior for such taxable period that is attributable to the date hereoftaxable income of Holdings or any Restricted Subsidiary, as the case may be, in an amount not to exceed the product of (x) the highest combined marginal federal and applicable state and/or local statutory tax rate (after taking into account the deductibility of state and local income tax for U.S. federal income tax purposes and the character of the income in question) applicable to any distribution otherwise permitted under this clause direct (Aor, where the direct owner is a pass-through entity, indirect) shall be permitted only equity owner of Holdings or such Restricted Subsidiaries, as the case may be, for the taxable period in question and (y) the taxable income of Holdings or such Restricted Subsidiaries, as the case may be, for such period, reduced by all taxable losses with respect to any prior taxable year of Holdings or such Restricted Subsidiaries, as the case may be, to the extent such distribution relates losses are of a character that would permit such losses to a tax payable after be deducted by the date hereofdirect or indirect owners of Holdings or such Restricted Subsidiaries, as the case may be, against the current taxable income of Holdings or such Restricted Subsidiaries, as the case may be (any distributions permitted under this Section 6.07(a)(vii) collectively, “Tax Distributions”);
(Bviii) the proceeds of which shall be used by such Parent Entity to pay (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties), that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of Holdings (or any parent thereof) attributable addition to the ownership or operations of any Parent Entityforegoing Restricted Payments, Holdings and the Restricted SubsidiariesSubsidiaries may make additional Restricted Payments, (3) fees and expenses (x) due and payable by the Borrower or any Restricted Subsidiary and (y) otherwise permitted to be paid by Holdings and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (v);
(C) the proceeds of which shall be used by Holdings (or any Parent Entity) to pay franchise and similar Taxes, other fees and expenses, required to maintain its organizational existence and auditing fees and expenses;
(D) [reserved];
(E) the proceeds of which shall be used by any Parent Entity to finance any Investment that would be permitted to be made by Holdings or a Restricted Subsidiary pursuant to Section 6.04; provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) such Parent Entity shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests) to be contributed to Holdings or any Restricted Subsidiary (any in no event shall any such contribution increase the Available Amount) or (y) the Person formed or acquired to merge into or consolidate with Holdings or any Restricted Subsidiary to the extent such merger or consolidation is permitted by Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.13 and 5.14;
(F) the proceeds of which shall be used to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, consultants, independent contractors or employees of Holdings, Borrower or any Parent Entity to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, Borrower and/or the Restricted Subsidiaries;
(G) the proceeds of which shall be used by Holdings (or any Parent Entity) to pay (i) fees and expenses related to any successful or unsuccessful equity issuance or offering or debt issuance, incurrence or offering, disposition or acquisition, Investment or other transaction permitted by this Agreement and (ii) public company costs; and
(H) the proceeds of which shall be used for the payment of insurance premiums to the extent attributable to any Parent Entity, Holdings, the Borrower and its subsidiaries;
(viii) Restricted Payments in an aggregate amount not to exceed the sum of (A) so long as no Event of Default shall have occurred and be continuing or would result therefrom and, on a Pro Forma Basis, the Interest Coverage Ratio is no less than 2.00 to 1.00, the Available Amount that is Not Otherwise Applied as in effect immediately prior to the time of making of such Restricted Payment so long plus (B) the Available Equity Amount that is Not Otherwise Applied as (x) no Event in effect immediately prior to the time of Default has occurred and is continuing (or would occur after giving Pro Forma Effect to such action) and (y) where making of such Restricted Payment is funded from the Growth Amount, the Borrower is in compliance with the Financial Covenants (determined on a Pro Forma Basis)Payment;
(ix) redemptions in whole or in part of any of its Equity Interests for another class of its Qualified Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Qualified Equity Interests (and in no event shall such contribution or issuance so utilized increase the Available Amount); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed therebyInterests;
(x) [reserved]payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests (including any payments made or expected to be made in connection with any payroll taxes incurred by Holdings, the Co-Borrowers, or any Restricted Subsidiary in connection with such repurchases of Equity Interests) in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units;
(xi) payments to Holdings may make Restricted Payments to any Parent Entity permit it to enable such Parent Entity to (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment)) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xii) payments made to an Investor pursuant to the Tax Receivables Agreement;
(xiii) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings (or any direct or indirect parent thereof) or any Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments);
(xiv) the declaration and payment of Restricted Payments to fund the payment of regularly scheduled dividends and repurchases on Holdings’ Equity Interestscommon stock following consummation of an IPO, of up to $150,000,000 per annum;
(xv) any distributions or payments of Securitization Fees; and
(xvi) additional Restricted Payments in an aggregate amount, when taken together with the aggregate amount per annum of Investments previously made pursuant to Section 6.04(m)(D) in lieu of Restricted Payments permitted by this clause (xvi) and payments in respect of Junior Financings previously made pursuant to Section 6.07(b)(iv)(D), not to exceed the greater of (x) $50,000,000 in any fiscal year, with unused amounts in any fiscal year being carried over to the succeeding fiscal year, 125,000,000 and (y) 6.0% of market capitalization;
(xiii) payments made by Holdings or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment on a Pro Forma Basis, the Total Net Leverage Ratio is less than or equal to 2.75:1.00 and there is no continuing Event of Default on the date of declaration;
(xv) [reserved];
(xvi) [reserved];
(xvii) Restricted Payments related to settlement of Holdings’ defined benefit pension plan in the United Kingdom;
(xviii) [reserved]; and
(xix) additional Restricted Payments; provided that (A) such Restricted Payments shall not exceed the greater of $50,000,000 and 25.012.5% of Consolidated EBITDA for the most recently ended Test Period as of the time.
(b) Holdings will not, and will not permit any Restricted 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 Junior Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoing, except:
(i) payment of regularly scheduled interest and principal payments, with respect to such Junior Financing, other than payments in respect of any Junior Financing prohibited by the subordination provisions thereof;
(ii) refinancings of Indebtedness to the extent permitted by Section 6.01;
(iii) the conversion of any Junior Financing to Equity Interests (other than Disqualified Equity Interests) of Holdings or any of its direct or indirect parent companies and any payment that is intended to prevent any Junior Financing from being treated as an “applicable high yield discount obligation” within the meaning of Section 163(i)(1) of the Code;
(iv) prepayments, redemptions, repurchases, defeasances and other payments in respect of Junior Financings prior to their scheduled maturity in an aggregate amount, not to exceed the sum of (A) an amount at the time of making any such prepayment, redemption, repurchase, defeasance or other payment and after giving Pro Forma Effect thereto, and together with any other prepayments, redemptions, repurchases, defeasances and other payments made utilizing this subclause (A), not to exceed the greater of $100,000,000 and 10% of Consolidated EBITDA for the most recently ended Test Period as of such time plus (B) there is so long as no continuing Specified Event of Default shall have occurred and be continuing or would result therefrom and, on a Pro Forma Basis, the date Interest Coverage Ratio is no less than 2.00 to 1.00, the Available Amount that is Not Otherwise Applied as in effect immediately prior to the time of declarationmaking of such Investment plus (C) the Available Equity Amount that is Not Otherwise Applied as in effect immediately prior to the time of making of such Investment plus (D) the amount of Restricted Payments permitted to be made under Section 6.07(a)(xvi) (so long as the amount of any such payment in respect of Junior Financings is deducted from the amount available to be made as a Restricted Payment under Section 6.07(a)(xvi));
(v) payments made in connection with the Transactions;
(vi) prepayments, redemptions, purchases, defeasances and other payments in respect of Junior Financing prior to their scheduled maturity; provided that after giving effect to such prepayment, redemption, repurchase, defeasance or other payment, (x) no Default or Event of Default shall have occurred and be continuing or would result therefrom and (y) on a Pro Forma Basis, the Senior Secured First Lien Net Leverage Ratio is less than or equal to 1.75 to 1.00; and
(vii) prepayment of Junior Financing owed to Holdings or any Restricted Subsidiary or the prepayment of Permitted Refinancing of such Indebtedness, in each case with the proceeds of any other Junior Financing, other than payments in respect of any such Junior Financing prohibited by the subordination provisions thereof.
Appears in 3 contracts
Sources: Second Amendment (Graftech International LTD), Credit Agreement (Graftech International LTD), Credit Agreement (Graftech International LTD)
Restricted Payments; Certain Payments of Indebtedness. (a) Holdings None of the Company or any Subsidiary will not, nor will it permit any Restricted Subsidiary to, pay declare or make, directly or indirectly, any Restricted Payment, exceptor incur any obligation (contingent or otherwise) to do so, except that:
(i) each Restricted any Subsidiary may declare and pay dividends or make Restricted Payments other distributions with respect to Holdings or any Restricted Subsidiary (andits Equity Interests, in each case ratably to the case holders of any such Subsidiary that is not a wholly-owned Subsidiary, to each other owner of Equity Interests of such Subsidiary ratably based (or if not ratably, on their relative ownership interests of a basis more favorable to the relevant class of Equity InterestsCompany and the Loan Parties);
(ii) [reserved]the Company may declare and pay dividends with respect to its Equity Interests payable solely in shares of Qualified Equity Interests of the Company;
(iii) [reserved]the Company may repurchase, purchase, acquire, cancel or retire for value Equity Interests of the Company from present or former employees, officers, directors or consultants (or their estates or beneficiaries under their estates) of the Company or any Subsidiary upon the death, disability, retirement or termination of employment or service of such employees, officers, directors or consultants, or to the extent required, pursuant to employee benefit plans, employment agreements, stock purchase agreements or stock purchase plans, or other benefit plans; provided that the aggregate amount of Restricted Payments made pursuant to this Section 6.08(a)(iii) shall not exceed $15,000,000 in any fiscal year;
(iv) [reserved]the Company may make cash payments in lieu of the issuance of fractional shares representing insignificant interests in the Company in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Equity Interests in the Company;
(v) repurchases of the Company may acquire Equity Interests in Holdings or any Parent Entity (or make Restricted Payments to allow repurchases of Equity Interest in Holdings any Parent Entity) deemed to occur the Company upon the exercise of stock options or warrants or other incentive interests for such Equity Interests of the Company if such Equity Interests represent a portion of the exercise price of such stock options or warrants in connection with tax withholding obligations arising in connection with the exercise of options by, or other incentive intereststhe vesting of restricted Equity Interests held by, any current or former director, officer or employee of the Company or its Subsidiaries;
(vi) Holdings the Company may redeem, acquire, retire convert or repurchase its exchange any Equity Interests (of the Company for or any options, warrants, restricted stock, stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) or make Restricted Payments to allow any of its Parent Entities to so redeem, retire, acquire or repurchase their into Qualified Equity Interests (or any options, warrants, restricted stock, stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests), in each case, held by current or former officers, managers, consultants, directors, employees, independent contractors or other service providers (or their respective spouses, former spouses, domestic partners, successors, executors, administrators, heirs, legatees or distributees) of Holdings or any Parent Entity thereof and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment or service of, or breach of restrictive covenants by, any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, stock subscription or equity incentive award agreement, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that, the aggregate amount of Restricted Payments permitted by this clause (vi) after the Closing Date shall not exceed the greater of $10,000,000 and 5.0% of Consolidated EBITDA for the most recently ended Test Period, in any fiscal year, with unused amounts in any fiscal year being carried over to succeeding fiscal years, so long as the aggregate amount of Restricted Payments permitted by this clause (vi) in any fiscal year shall not exceed the greater of $20,000,000 and 10.0% of Consolidated EBITDA for the most recently ended Test Period, in the aggregate, plus all net cash proceeds obtained from any key-man life insurance policies received during such fiscal year (without giving effect to the foregoing proviso)Company;
(vii) Holdings so long as no Default shall have occurred and be continuing, the Company may on any date make Restricted Payments in cash to any Parent Entity:
(A) for any taxable period for which Holdings and/or any an amount not in excess of its Subsidiaries is a member of a consolidated, combined or similar income or similar tax group (a “Tax Group”) of which a Parent Entity is the common parent to pay the consolidated, combined or similar income or similar taxes, as applicable, of such Tax Group that are attributable to the taxable income of Holdings and/or its applicable Subsidiaries (as applicable), net of any payment already made by Holdings or its Subsidiaries in respect of such Taxes; provided that (1) Restricted Payments pursuant to this subclause (A) shall not exceed the amount of Taxes that Holdings would have paid if Holdings and/or Qualifying Equity Proceeds available on such Subsidiaries were a stand-alone taxpayer or stand-alone Tax Group for all relevant taxable periods after the Closing Date, (2) Restricted Payments under this subclause (A) in respect of any Taxes attributable date and not previously applied to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to any Loan Party and (3) with respect to any taxable period (or portion thereof) ending prior to the date hereof, any distribution otherwise permitted under this clause (A) shall be permitted only to the extent such distribution relates to a tax payable after the date hereof;
(B) the proceeds of which shall be used by such Parent Entity to pay (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties), that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of Holdings (or any parent thereof) attributable to the ownership or operations of any Parent Entity, Holdings and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by the Borrower or any Restricted Subsidiary and (y) otherwise permitted to be paid by Holdings and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (v);
(C) the proceeds of which shall be used by Holdings (or any Parent Entity) to pay franchise and similar Taxes, other fees and expenses, required to maintain its organizational existence and auditing fees and expenses;
(D) [reserved];
(E) the proceeds of which shall be used by any Parent Entity to finance any Investment that would be permitted to be made by Holdings or a Restricted Subsidiary pursuant to Section 6.04; provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) such Parent Entity shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests) to be contributed to Holdings or any Restricted Subsidiary (any in no event shall any such contribution increase the Available Amount) or (y) the Person formed or acquired to merge into or consolidate with Holdings or any Restricted Subsidiary to the extent such merger or consolidation is permitted by Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.13 and 5.14;
(F) the proceeds of which shall be used to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, consultants, independent contractors or employees of Holdings, Borrower or any Parent Entity to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, Borrower and/or the Restricted Subsidiaries;
(G) the proceeds of which shall be used by Holdings (or any Parent Entity) to pay (i) fees and expenses related to any successful or unsuccessful equity issuance or offering or debt issuance, incurrence or offering, disposition or acquisition, Investment or other transaction permitted by this Agreement and (ii) public company costs; and
(H) the proceeds of which shall be used for the payment of insurance premiums to the extent attributable to any Parent Entity, Holdings, the Borrower and its subsidiariesSpecified Uses;
(viii) so long as no Default shall have occurred and be continuing or would result therefrom, the Company may on any date make Restricted Payments in an aggregate amount not to exceed equal (A)$25,000,000 plus (B) the Available Amount on such date; provided, however, that is Not Otherwise Applied as in effect immediately prior to at the time of the making of such Restricted Payment so long as (x) no Event of Default has occurred Payments and is continuing (or would occur immediately after giving Pro Forma Effect effect to such action) and Restricted Payments made in reliance on subclause (y) where such Restricted Payment is funded from the Growth Amountviii)(B), the Borrower is in compliance with the Financial Covenants (determined Net Leverage Ratio on such date, calculated on a Pro Forma Basis)Basis to give effect to any such Restricted Payment, is not in excess of 3.00 to 1.00;
(ix) redemptions in whole or in part of any of Subsidiary may repurchase its Equity Interests held by minority shareholders or interest holders in a Permitted Acquisition or another transaction permitted by Section 6.04(w) or (x) (it being understood that for another class purposes of its Qualified Section 6.04, the Borrower shall be deemed the purchaser of such Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Qualified Equity Interests (and such repurchase shall constitute an Investment by the Borrower in no event shall such contribution or issuance so utilized increase the Available Amount); provided a Person that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained is not a Subsidiary in the Equity Interests redeemed therebyamount of such purchase unless such Subsidiary becomes a Loan Party in connection with such repurchase);
(x) [reserved]so long as, at the date of declaration thereof, no Event of Default under clause (a), (b), (h) or (i) of Article VII shall have occurred and be continuing or would result therefrom, the Company may pay dividends and make distributions to, or repurchase or redeem its Equity Interests from, its equity holders in an amount not to exceed $15,000,000 in any fiscal year;
(xi) Holdings so long as no Default shall have occurred and be continuing or would result therefrom, the Company may on any date make Restricted Payments to any Parent Entity to enable such Parent Entity to pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment);
(xii) Restricted Payments to fund the payment of regularly scheduled dividends and repurchases on Holdings’ Equity Interests, in an aggregate amount per annum not to exceed the greater of (x) $50,000,000 in any fiscal year, with unused amounts in any fiscal year being carried over to the succeeding fiscal year, and (y) 6.0% of market capitalization;
(xiii) payments made by Holdings or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiv) additional Restricted Payments; provided that the Net Secured Leverage Ratio immediately after giving effect to any such Restricted Payment, calculated on a Pro Forma Basis at the time such Restricted Payment is made, is less than 2.50 to 1.00; and
(xii) the Company may make Restricted Payments within 60 days after the date of declaration thereof, if at the date of declaration of such Restricted Payments, such Restricted Payments would have been permitted pursuant to another clause of this Section 6.08(a).
(b) None of the Company or any Subsidiary will 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 Subordinated Indebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, defeasance, cancelation or termination of such Subordinated Indebtedness, except:
(i) regularly scheduled interest and principal payments as and when due in respect of any Subordinated Indebtedness, other than payments prohibited by the subordination provisions thereof;
(ii) refinancings of Subordinated Indebtedness with the proceeds of Refinancing Indebtedness permitted in respect thereof under Section 6.01;
(iii) payments of or in respect of Subordinated Indebtedness made solely with Qualified Equity Interests in the Company or the conversion of any Subordinated Indebtedness into Qualified Equity Interests of the Company;
(iv) prepayments of intercompany Subordinated Indebtedness permitted hereby owed by the Company or any Subsidiary to the Company or any Subsidiary, other than prepayments prohibited by the subordination provisions governing such Subordinated Indebtedness; provided that, for the avoidance of doubt, no prepayment of any Subordinated Indebtedness owed by any Loan Party to any Subsidiary that is not a Loan Party shall be permitted so long as a Default shall have occurred and be continuing or would result therefrom;
(v) so long as no Default shall have occurred and be continuing or would result therefrom, the Company may on any date make payments of or in respect of Subordinated Indebtedness in an amount equal to (A) $25,000,000 plus (B) the Available Amount on such date; provided, however, that at the time of the making of such payments and immediately after giving effect to such Restricted Payment payments made in reliance on subclause (v)(B), the Net Leverage Ratio on such date, calculated on a Pro Forma BasisBasis to give effect to any payment, the Total Net Leverage Ratio is less than or equal not in excess of 3.00 to 2.75:1.00 and there is no continuing Event of Default on the date of declaration1.00;
(xvvi) [reserved];
(xvi) [reserved];
(xvii) Restricted Payments related so long as no Default shall have occurred and be continuing, the Company may on any date make payments of or in respect of Subordinated Indebtedness in an amount not in excess of the amount of Qualifying Equity Proceeds available on such date and not previously applied to settlement of Holdings’ defined benefit pension plan in the United Kingdom;
(xviii) [reserved]Specified Uses; and
(xixvii) so long as no Default shall have occurred and be continuing or would result therefrom, the Company may on any date make additional Restricted Paymentspayments of or in respect of Subordinated Indebtedness; provided that (A) the Net Secured Leverage Ratio immediately after giving effect to any such Restricted Payments shall not exceed payment, calculated on a Pro Forma Basis at the greater of $50,000,000 and 25.0% of Consolidated EBITDA for the most recently ended Test Period and (B) there time such payment is no continuing Specified Event of Default on the date of declarationmade, is less than 2.50 to 1.00.
Appears in 3 contracts
Sources: Credit Agreement (Minerals Technologies Inc), Refinancing Facility Agreement (Minerals Technologies Inc), Credit Agreement (Minerals Technologies Inc)
Restricted Payments; Certain Payments of Indebtedness. (a) Holdings will not, nor will it permit any Restricted Subsidiary to, pay or make, directly or indirectly, any Restricted Payment, except:
(i) each Restricted Subsidiary may make Restricted Payments to Holdings or any Restricted Subsidiary (and, in the case of any such Subsidiary that is not a wholly-owned Subsidiary, to each other owner of Equity Interests of such Subsidiary ratably based on their relative ownership interests of the relevant class of Equity Interests);
(ii) [reserved];
(iii) [reserved];
(iv) [reserved];
(v) repurchases of Equity Interests in Holdings or any Parent Entity (or make Restricted Payments to allow repurchases of Equity Interest in Holdings any Parent Entity) deemed to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price of such stock options or warrants or other incentive interests;
(vi) Holdings may redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted stock, stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) or make Restricted Payments to allow any of its Parent Entities to so redeem, retire, acquire or repurchase their Equity Interests (or any options, warrants, restricted stock, stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests), in each case, held by current or former officers, managers, consultants, directors, employees, independent contractors or other service providers (or their respective spouses, former spouses, domestic partners, successors, executors, administrators, heirs, legatees or distributees) of Holdings or any Parent Entity thereof and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment or service of, or breach of restrictive covenants by, any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, stock subscription or equity incentive award agreement, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that, the aggregate amount of Restricted Payments permitted by this clause (vi) after the Closing Date shall not exceed the greater of $10,000,000 and 5.0% of Consolidated EBITDA for the most recently ended Test Period, in any fiscal year, with unused amounts in any fiscal year being carried over to succeeding fiscal years, so long as the aggregate amount of Restricted Payments permitted by this clause (vi) in any fiscal year shall not exceed the greater of $20,000,000 and 10.0% of Consolidated EBITDA for the most recently ended Test Period, in the aggregate, plus all net cash proceeds obtained from any key-man life insurance policies received during such fiscal year (without giving effect to the foregoing proviso);
(vii) Holdings may make Restricted Payments in cash to any Parent Entity:
(A) for any taxable period for which Holdings and/or any of its Subsidiaries is a member of a consolidated, combined or similar income or similar tax group (a “Tax Group”) of which a Parent Entity is the common parent to pay the consolidated, combined or similar income or similar taxes, as applicable, of such Tax Group that are attributable to the taxable income of Holdings and/or its applicable Subsidiaries (as applicable), net of any payment already made by Holdings or its Subsidiaries in respect of such Taxes; provided that (1) Restricted Payments pursuant to this subclause (A) shall not exceed the amount of Taxes that Holdings would have paid if Holdings and/or such Subsidiaries were a stand-alone taxpayer or stand-alone Tax Group for all relevant taxable periods after the Closing Date, (2) Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to any Loan Party and (3) with respect to any taxable period (or portion thereof) ending prior to the date hereof, any distribution otherwise permitted under this clause (A) shall be permitted only to the extent such distribution relates to a tax payable after the date hereof;
(B) the proceeds of which shall be used by such Parent Entity to pay (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties), that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of Holdings (or any parent thereof) attributable to the ownership or operations of any Parent Entity, Holdings and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by the Borrower or any Restricted Subsidiary and (y) otherwise permitted to be paid by Holdings and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (v);
(C) the proceeds of which shall be used by Holdings (or any Parent Entity) to pay franchise and similar Taxes, other fees and expenses, required to maintain its organizational existence and auditing fees and expenses;
(D) [reserved];
(E) the proceeds of which shall be used by any Parent Entity to finance any Investment that would be permitted to be made by Holdings or a Restricted Subsidiary pursuant to Section 6.04; provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) such Parent Entity shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests) to be contributed to Holdings or any Restricted Subsidiary (any in no event shall any such contribution increase the Available Amount) or (y) the Person formed or acquired to merge into or consolidate with Holdings or any Restricted Subsidiary to the extent such merger or consolidation is permitted by Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.13 and 5.14;
(F) the proceeds of which shall be used to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, consultants, independent contractors or employees of Holdings, Borrower or any Parent Entity to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, Borrower and/or the Restricted Subsidiaries;
(G) the proceeds of which shall be used by Holdings (or any Parent Entity) to pay (i) fees and expenses related to any successful or unsuccessful equity issuance or offering or debt issuance, incurrence or offering, disposition or acquisition, Investment or other transaction permitted by this Agreement and (ii) public company costs; and
(H) the proceeds of which shall be used for the payment of insurance premiums to the extent attributable to any Parent Entity, Holdings, the Borrower and its subsidiaries;
(viii) Restricted Payments in an aggregate amount not to exceed the Available Amount that is Not Otherwise Applied as in effect immediately prior to the time of making of such Restricted Payment so long as (x) no Event of Default has occurred and is continuing (or would occur after giving Pro Forma Effect to such action) and (y) where such Restricted Payment is funded from the Growth Amount, the Borrower is in compliance with the Financial Covenants (determined on a Pro Forma Basis);
(ix) redemptions in whole or in part of any of its Equity Interests for another class of its Qualified Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Qualified Equity Interests (and in no event shall such contribution or issuance so utilized increase the Available Amount); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(x) [reserved];
(xi) Holdings may make Restricted Payments to any Parent Entity to enable such Parent Entity to pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment);
(xii) Restricted Payments to fund the payment of regularly scheduled dividends and repurchases on Holdings’ Equity Interests, in an aggregate amount per annum not to exceed the greater of (x) $50,000,000 in any fiscal year, with unused amounts in any fiscal year being carried over to the succeeding fiscal year, and (y) 6.0% of market capitalization;
(xiii) payments made by Holdings or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment on a Pro Forma Basis, the Total Net Leverage Ratio is less than or equal to 2.75:1.00 and there is no continuing Event of Default on the date of declaration;
(xv) [reserved];
(xvi) [reserved];
(xvii) Restricted Payments related to settlement of Holdings’ defined benefit pension plan in the United Kingdom;
(xviii) [reserved]; and
(xix) additional Restricted Payments; provided that (A) such Restricted Payments shall not exceed the greater of $50,000,000 and 25.0% of Consolidated EBITDA for the most recently ended Test Period and (B) there is no continuing Specified Event of Default on the date of declaration.
(b) Holdings will not, nor will it permit any Restricted Subsidiary to, make or pay, directly or indirectly, any voluntary payment or other distribution (whether in cash, securities or other property) of or in respect of principal of Junior Debt, or any voluntary 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 such Junior Debt, in each case, on or prior to date that occurs earlier than one year prior to the scheduled maturity date thereof (collectively, “Restricted Debt Payments”), except:
(i) [reserved];
(ii) refinancings or exchanges of Junior Debt with proceeds of any Permitted Refinancing, in each case, to the extent such Indebtedness is permitted to be incurred under Section 6.01;
(iii) (1) the conversion of any Junior Debt to, or payments with, Equity Interests (other than Disqualified Equity Interests unless permitted to be incurred under Section 6.01) of Holdings or any of its direct or indirect parent companies and (2) mandatory redemptions of Disqualified Equity Interests;
(iv) prepayments, redemptions, purchases, defeasances and other payments or distributions in respect of Junior Debt prior to their scheduled maturity in an aggregate amount not to exceed the Available Amount that is Not Otherwise Applied as in effect immediately prior to the time of making of such Restricted Debt Payment, so long as (x) no Event of Default has occurred and is continuing (or would occur after giving Pro Forma Effect to such action) and (y) if such Restricted Debt Payment is funded from the Growth Amount, the Borrower is in compliance with the Financial Covenants (determined on a Pro Forma Basis);
(v) prepayments, redemptions, purchases, defeasances and other payments in respect of Junior Debt prior to their scheduled maturity; provided that after giving effect to such prepayment, redemption, purchase, defeasance or other payment on a Pro Forma Basis, the Total Net Leverage Ratio is less than or equal to 2.75:1.00 as of the end of the most recently ended Test Period as of such time;
(vi) subject to the terms of the Global Intercompany Note, prepayments, redemptions, purchases, defeasances and other payments or distributions in respect of Junior Debt owing by Holdings or any Restricted Subsidiary to Holdings or any Restricted Subsidiary;
(vii) additional Restricted Debt Payments; provided that (A) such Restricted Debt Payments shall not exceed the greater of $50,000,000 and 25.0% of Consolidated EBITDA for the most recently ended Test Period and (B) there is no continuing Specified Event of Default on the date of declaration; and
(viii) regularly scheduled interest and principal payments as and when due (including any payments as part of an applicable high yield discount obligation or AHYDO catch-up payment).
(c) Holdings will not, nor will it permit any Restricted Subsidiary to, amend or modify its Organizational Documents or any documentation governing any Junior Debt, in each case if the effect of such amendment or modification (when taken as a whole) is materially adverse to the Lenders. Notwithstanding anything herein to the contrary, the foregoing provisions of this Section 6.08 will not prohibit the payment of any Restricted Payment or the consummation of any irrevocable redemption, purchase, defeasance or other payment within 60 days after the date of declaration of such Restricted Payment or the giving of irrevocable notice of such redemption, purchase, defeasance or other payment, as applicable, if at the date of declaration or the giving of such notice such payment would have complied with the provisions of this Agreement.
Appears in 2 contracts
Sources: Credit Agreement (Koppers Holdings Inc.), Credit Agreement (Koppers Holdings Inc.)
Restricted Payments; Certain Payments of Indebtedness. (a) Holdings will not, nor will it permit any Restricted Subsidiary to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, except:
or incur any obligation (contingent or otherwise) to do so, except (i) each Subsidiaries of Holdings may declare and pay dividends or distributions ratably with respect to their Equity Interests, (ii) Restricted Subsidiary Payments deemed to have occurred in connection with cashless exercise of warrants and options in respect of Equity Interests shall be permitted, (iii) so long as no Event of Default shall have occurred and be continuing or would result therefrom, Holdings, the Borrower or any of their respective Subsidiaries may make Restricted Payments to Holdings any present, former or future director, officer, employee, member of management or consultant of Holdings, the Borrower or any Restricted Subsidiary (and, in the case of any such Subsidiary that is not a wholly-owned Subsidiary, to each other owner of Equity Interests of such Subsidiary ratably based on their relative ownership interests of the relevant class of Equity Interests);
(ii) [reserved];
(iii) [reserved];
(iv) [reserved];
(v) repurchases of Equity Interests in Holdings or any Parent Entity (or make Restricted Payments to allow repurchases of Equity Interest in Holdings any Parent Entity) deemed to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price of such stock options or warrants or other incentive interests;
(vi) Holdings may redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted stock, stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) or make Restricted Payments to allow any of its Parent Entities to so redeem, retire, acquire or repurchase their Equity Interests (or any options, warrants, restricted stock, stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests), in each case, held by current or former officers, managers, consultants, directors, employees, independent contractors or other service providers respective Subsidiaries (or their respective spouses, former spouses, domestic partners, successors, executors, administratorsestates, heirs, legatees family members, spouses or distributeesformer spouses) of Holdings pursuant to any management equity or stock option plan or any Parent Entity thereof and the Restricted Subsidiaries, other management or employee benefit plan or agreement or arrangement or upon the such person’s death, disability, retirement or termination of employment or service ofemployment, or breach of restrictive covenants by, any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, stock subscription or equity incentive award agreement, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that, the an aggregate amount of Restricted Payments permitted by this clause (vi) after the Closing Date shall not to exceed the greater of $10,000,000 and 5.0% of Consolidated EBITDA for the most recently ended Test Period, 4,000,000 in any fiscal year, with unused amounts in any fiscal year being carried over to succeeding fiscal years(iv) Holdings, so long as the aggregate amount of Restricted Payments permitted by this clause (vi) in any fiscal year shall not exceed the greater of $20,000,000 and 10.0% of Consolidated EBITDA for the most recently ended Test Period, in the aggregate, plus all net cash proceeds obtained from any key-man life insurance policies received during such fiscal year (without giving effect to the foregoing proviso);
(vii) Holdings may make Restricted Payments in cash to any Parent Entity:
(A) for any taxable period for which Holdings and/or any of its Subsidiaries is a member of a consolidated, combined or similar income or similar tax group (a “Tax Group”) of which a Parent Entity is the common parent to pay the consolidated, combined or similar income or similar taxes, as applicable, of such Tax Group that are attributable to the taxable income of Holdings and/or its applicable Subsidiaries (as applicable), net of any payment already made by Holdings or its Subsidiaries in respect of such Taxes; provided that (1) Restricted Payments pursuant to this subclause (A) shall not exceed the amount of Taxes that Holdings would have paid if Holdings and/or such Subsidiaries were a stand-alone taxpayer or stand-alone Tax Group for all relevant taxable periods after the Closing Date, (2) Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to any Loan Party and (3) with respect to any taxable period (or portion thereof) ending prior to the date hereof, any distribution otherwise permitted under this clause (A) shall be permitted only to the extent such distribution relates to a tax payable after the date hereof;
(B) the proceeds of which shall be used by such Parent Entity to pay (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties), that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of Holdings (or any parent thereof) attributable to the ownership or operations of any Parent Entity, Holdings and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by the Borrower or any Restricted Subsidiary and (y) otherwise permitted to be paid by Holdings and the Restricted of their respective Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (v);
(C) the proceeds of which shall be used by Holdings (or any Parent Entity) to pay franchise and similar Taxes, may make other fees and expenses, required to maintain its organizational existence and auditing fees and expenses;
(D) [reserved];
(E) the proceeds of which shall be used by any Parent Entity to finance any Investment that would be permitted to be made by Holdings or a Restricted Subsidiary pursuant to Section 6.04; provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) such Parent Entity shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests) to be contributed to Holdings or any Restricted Subsidiary (any in no event shall any such contribution increase the Available Amount) or (y) the Person formed or acquired to merge into or consolidate with Holdings or any Restricted Subsidiary to the extent such merger or consolidation is permitted by Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.13 and 5.14;
(F) the proceeds of which shall be used to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, consultants, independent contractors or employees of Holdings, Borrower or any Parent Entity to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, Borrower and/or the Restricted Subsidiaries;
(G) the proceeds of which shall be used by Holdings (or any Parent Entity) to pay (i) fees and expenses related to any successful or unsuccessful equity issuance or offering or debt issuance, incurrence or offering, disposition or acquisition, Investment or other transaction permitted by this Agreement and (ii) public company costs; and
(H) the proceeds of which shall be used for the payment of insurance premiums to the extent attributable to any Parent Entity, Holdings, the Borrower and its subsidiaries;
(viii) Restricted Payments in an aggregate amount not to exceed the Available Amount that is Not Otherwise Applied as in effect immediately prior to at the time of making of such Restricted Payment so long as (x) no Event of Default has occurred and is continuing (or would occur after giving Pro Forma Effect with respect to such action) which Restricted Payments the Available Amount Conditions have been satisfied and (yv) where such Restricted Payment is funded from on the Growth AmountClosing Date, the Borrower is in compliance may make a Restricted Payment to Holdings with the Financial Covenants proceeds of the Loans to be used to in accordance with Section 2.05.
(determined b) Holdings will not, nor will it permit any 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 a Pro Forma Basisany 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 such Indebtedness, in each case, prior to the maturity thereof, except:
(i) payment of Indebtedness created under the Loan Documents;
(ixii) redemptions in whole or in part of any of its Equity Interests for another class of its Qualified Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Qualified Equity Interests (and in no event shall such contribution or issuance so utilized increase the Available Amount); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(x) [reserved];
(xi) Holdings may make Restricted Payments to any Parent Entity to enable such Parent Entity to pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment);
(xii) Restricted Payments to fund the payment of regularly scheduled dividends and repurchases on Holdings’ Equity Interests, in an aggregate amount per annum not to exceed the greater of (x) $50,000,000 in any fiscal year, with unused amounts in any fiscal year being carried over interest and principal payments on Indebtedness incurred pursuant to the succeeding fiscal year, and Section 6.01(a)(viii) or (y) 6.0% regularly scheduled interest and scheduled principal payments as and when due in respect of market capitalizationany Indebtedness (other than Indebtedness incurred pursuant to Section 6.01(a)(viii)), in each case, other than payments in respect of subordinated Indebtedness to the extent prohibited by the subordination provisions thereof;
(xiiiiii) payments made refinancings of Indebtedness to the extent permitted by Holdings or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxesSection 6.01;
(xiviv) additional Restricted Payments; provided payment of secured Indebtedness that after giving effect to becomes due as a result of the voluntary sale or transfer of the property or assets securing such Restricted Payment on a Pro Forma Basis, the Total Net Leverage Ratio is less than or equal to 2.75:1.00 and there is no continuing Event of Default on the date of declarationIndebtedness;
(xvv) [reserved];
(xvi) [reserved];
(xvii) Restricted Payments related to settlement prepayment of Holdings’ defined benefit pension plan Capital Lease Obligations outside the ordinary course of business in an aggregate cumulative amount from and after the United Kingdom;
(xviii) [reserved]Closing Date not exceeding $5,000,000; and
(xixvi) additional payment of any Indebtedness owing to the Borrower or any other Loan Party.
(c) Holdings will not, and will not permit any Subsidiary to, furnish any funds to, make any Investment in, or provide other consideration to any other Person for purposes of enabling such Person to, or otherwise permit any such Person to, make any Restricted Payments; provided Payment or other payment or distribution restricted by this Section that (A) such Restricted Payments shall could not exceed be made directly by Holdings in accordance with the greater provisions of $50,000,000 and 25.0% of Consolidated EBITDA for the most recently ended Test Period and (B) there is no continuing Specified Event of Default on the date of declarationthis Section.
Appears in 2 contracts
Sources: Credit Agreement (Thryv Holdings, Inc.), Credit Agreement (Thryv Holdings, Inc.)
Restricted Payments; Certain Payments of Indebtedness. (a) Holdings None of the Company or any Subsidiary will not, nor will it permit any Restricted Subsidiary to, pay declare or make, directly or indirectly, any Restricted Payment, exceptor incur any obligation (contingent or otherwise) to do so, except that:
(i) each Restricted any Subsidiary may declare and pay dividends or make Restricted Payments other distributions with respect to Holdings or any Restricted Subsidiary (andits Equity Interests, in each case ratably to the case holders of any such Subsidiary that is not a wholly-owned Subsidiary, to each other owner of Equity Interests of such Subsidiary ratably based (or if not ratably, on their relative ownership interests of a basis more favorable to the relevant class of Equity InterestsCompany and the Loan Parties);
(ii) [reserved]the Company may declare and pay dividends with respect to its Equity Interests payable solely in shares of Qualified Equity Interests of the Company;
(iii) [reserved]the Company may repurchase, purchase, acquire, cancel or retire for value Equity Interests of the Company from present or former employees, officers, directors or consultants (or their estates or beneficiaries under their estates) of the Company or any Subsidiary upon the death, disability, retirement or termination of employment or service of such employees, officers, directors or consultants, or to the extent required, pursuant to employee benefit plans, employment agreements, stock purchase agreements or stock purchase plans, or other benefit plans; provided that the aggregate amount of Restricted Payments made pursuant to this Section 6.08(a)(iii) shall not exceed $5,000,000 in any fiscal year;
(iv) [reserved]the Company may make cash payments in lieu of the issuance of fractional shares representing insignificant interests in the Company in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Equity Interests in the Company;
(v) repurchases of the Company may acquire Equity Interests in Holdings or any Parent Entity (or make Restricted Payments to allow repurchases of Equity Interest in Holdings any Parent Entity) deemed to occur the Company upon the exercise of stock options or warrants or other incentive interests for such Equity Interests of the Company if such Equity Interests represent a portion of the exercise price of such stock options or warrants in connection with tax withholding obligations arising in connection with the exercise of options by, or other incentive intereststhe vesting of restricted Equity Interests held by, any current or former director, officer or employee of the Company or its Subsidiaries;
(vi) Holdings the Company may redeem, acquire, retire convert or repurchase its exchange any Equity Interests (of the Company for or any options, warrants, restricted stock, stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) or make Restricted Payments to allow any of its Parent Entities to so redeem, retire, acquire or repurchase their into Qualified Equity Interests (or any options, warrants, restricted stock, stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests), in each case, held by current or former officers, managers, consultants, directors, employees, independent contractors or other service providers (or their respective spouses, former spouses, domestic partners, successors, executors, administrators, heirs, legatees or distributees) of Holdings or any Parent Entity thereof and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment or service of, or breach of restrictive covenants by, any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, stock subscription or equity incentive award agreement, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that, the aggregate amount of Restricted Payments permitted by this clause (vi) after the Closing Date shall not exceed the greater of $10,000,000 and 5.0% of Consolidated EBITDA for the most recently ended Test Period, in any fiscal year, with unused amounts in any fiscal year being carried over to succeeding fiscal years, so long as the aggregate amount of Restricted Payments permitted by this clause (vi) in any fiscal year shall not exceed the greater of $20,000,000 and 10.0% of Consolidated EBITDA for the most recently ended Test Period, in the aggregate, plus all net cash proceeds obtained from any key-man life insurance policies received during such fiscal year (without giving effect to the foregoing proviso)Company;
(vii) Holdings any Receivables Entity may make Restricted Payments in cash to any Parent Entity:
(A) for any taxable period for which Holdings and/or any of its Subsidiaries is a member of a consolidated, combined declare and pay dividends or similar income or similar tax group (a “Tax Group”) of which a Parent Entity is the common parent to pay the consolidated, combined or similar income or similar taxes, as applicable, of such Tax Group that are attributable other distributions to the taxable income of Holdings and/or its applicable Subsidiaries (as applicable), net of any payment already made by Holdings or its Subsidiaries in respect of such Taxes; provided that (1) Restricted Payments pursuant to this subclause (A) shall not exceed the amount of Taxes that Holdings would have paid if Holdings and/or such Subsidiaries were a stand-alone taxpayer or stand-alone Tax Group for all relevant taxable periods after the Closing Date, (2) Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to any Loan Party and (3) with respect to any taxable period (or portion thereof) ending prior to the date hereof, any distribution otherwise permitted under this clause (A) shall be permitted only to the extent such distribution relates to a tax payable after the date hereof;
(B) the proceeds of which shall be used by such Parent Entity to pay (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties), that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of Holdings (Company or any parent wholly owned Subsidiary thereof) attributable to the ownership or operations of any Parent Entity, Holdings and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by the Borrower or any Restricted Subsidiary and (y) otherwise permitted to be paid by Holdings and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (v);
(C) the proceeds of which shall be used by Holdings (or any Parent Entity) to pay franchise and similar Taxes, other fees and expenses, required to maintain its organizational existence and auditing fees and expenses;
(D) [reserved];
(E) the proceeds of which shall be used by any Parent Entity to finance any Investment that would be permitted to be made by Holdings or a Restricted Subsidiary pursuant to Section 6.04; provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) such Parent Entity shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests) to be contributed to Holdings or any Restricted Subsidiary (any in no event shall any such contribution increase the Available Amount) or (y) the Person formed or acquired to merge into or consolidate with Holdings or any Restricted Subsidiary to the extent such merger or consolidation is permitted by Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.13 and 5.14;
(F) the proceeds of which shall be used to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, consultants, independent contractors or employees of Holdings, Borrower or any Parent Entity to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, Borrower and/or the Restricted Subsidiaries;
(G) the proceeds of which shall be used by Holdings (or any Parent Entity) to pay (i) fees and expenses related to any successful or unsuccessful equity issuance or offering or debt issuance, incurrence or offering, disposition or acquisition, Investment or other transaction permitted by this Agreement and (ii) public company costs; and
(H) the proceeds of which shall be used for the payment of insurance premiums to the extent attributable to any Parent Entity, Holdings, the Borrower and its subsidiaries;
(viii) Restricted Payments any Subsidiary may repurchase its Equity Interests held by minority shareholders or interest holders in a Permitted Acquisition or another transaction expressly permitted by Section 6.04 (other than Section 6.04(u)) (it being understood that for purposes of Section 6.04, the Company shall be deemed the purchaser of such Equity Interests and such repurchase shall constitute an aggregate amount not to exceed Investment by the Available Amount Company in a Person that is Not Otherwise Applied as not a Subsidiary in effect immediately prior to the time of making amount of such Restricted Payment so long as (x) no Event of Default has occurred and is continuing (or would occur after giving Pro Forma Effect to purchase unless such action) and (y) where Subsidiary becomes a Loan Party in connection with such Restricted Payment is funded from the Growth Amount, the Borrower is in compliance with the Financial Covenants (determined on a Pro Forma Basisrepurchase);
(ix) redemptions in whole or in part of any of its Equity Interests for another class of its Qualified Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Qualified Equity Interests (and in no event shall such contribution or issuance so utilized increase the Available Amount); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in extent such Investment constitutes a Restricted Payment, the Equity Interests redeemed therebyCompany and its Subsidiaries may enter into any Investment expressly permitted by Section 6.04 (other than Section 6.04(u));
(x) [reserved]additional Restricted Payments; provided that the Total Net Leverage Ratio immediately after giving effect to any such Restricted Payment, calculated on a Pro Forma Basis at the time such Restricted Payment is made, is not in excess of 3.00 to 1.00; provided, further, that at the time any such Restricted Payment is made pursuant to this clause (x), no Event of Default shall have occurred and be continuing or would result therefrom;
(xi) Holdings the Company may make Restricted Payments pay regularly scheduled quarterly cash dividends to any Parent Entity to enable such Parent Entity to pay cash in lieu of fractional Equity Interests in connection its shareholders consistent with any dividend, split or combination thereof its past practice or any Permitted Acquisition (or other similar Investment);
(xii) Restricted Payments to fund the payment of regularly scheduled dividends and repurchases on Holdings’ Equity Interests, Payment in an aggregate amount per annum not to exceed the greater of (xA) $50,000,000 and (B) $1.00 per share of the total issued and outstanding shares of common Equity Interests of the Company on the date of the declaration of a Restricted Payment; provided that such per share amount shall be adjusted to give effect to any stock split or issuance on account of equity for no consideration effected; and
(xii) additional Restricted Payments in an aggregate principal amount not to exceed $75,000,000.
(b) None of the Company or any fiscal yearSubsidiary will make or agree to pay or make, with unused amounts 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 (i) any fiscal year being carried over Subordinated Indebtedness that is subordinated to the succeeding fiscal year, payment of the Obligations or (ii) other Indebtedness that is required pursuant to the Loan Documents to not mature later than the Latest Maturity Date at the time of incurrence thereof (Indebtedness described in the foregoing clauses (i) and (yii), “Restricted Indebtedness”), or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, defeasance, cancelation or termination of such Restricted Indebtedness, except:
(i) 6.0% regularly scheduled interest and principal payments as and when due in respect of market capitalizationsuch Indebtedness, other than payments prohibited by the subordination provisions thereof;
(xiiiii) refinancings of such Indebtedness with the proceeds of Refinancing Indebtedness permitted in respect thereof under Section 6.01;
(iii) payments made by Holdings of or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of such Indebtedness made solely with Qualified Equity Interests by any future, present in the Company or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or Permitted Transferees) and any repurchases the conversion of such Indebtedness into Qualified Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxesCompany;
(xiviv) additional Restricted Paymentsprepayments of intercompany Indebtedness permitted hereby owed by the Company or any Subsidiary to the Company or any Subsidiary, other than prepayments prohibited by the subordination provisions governing such Indebtedness;
(v) [Intentionally Omitted]; and
(vi) the Company may on any date make payments of or in respect of any such Indebtedness in an unlimited amount; provided that after giving effect to such Restricted Payment on a Pro Forma Basis, the Total Net Leverage Ratio immediately after giving effect to any such payment, calculated on a Pro Forma Basis at the time such payment is less than or equal made, is not in excess of 3.00 to 2.75:1.00 and there 1.00; provided, further, that at the time any such payment is made pursuant to this clause (vi), no continuing Event of Default on the date of declaration;
(xv) [reserved];
(xvi) [reserved];
(xvii) Restricted Payments related to settlement of Holdings’ defined benefit pension plan in the United Kingdom;
(xviii) [reserved]; and
(xix) additional Restricted Payments; provided that (A) such Restricted Payments shall not exceed the greater of $50,000,000 have occurred and 25.0% of Consolidated EBITDA for the most recently ended Test Period and (B) there is no be continuing Specified Event of Default on the date of declarationor would result therefrom.
Appears in 2 contracts
Sources: Credit Agreement (Abm Industries Inc /De/), Credit Agreement (Abm Industries Inc /De/)
Restricted Payments; Certain Payments of Indebtedness. (a) Neither Holdings will notnor the Borrower will, nor will it they permit any Restricted Subsidiary to, pay or make, directly or indirectly, any Restricted Payment, except:
(i) The Borrower and each Restricted Subsidiary may make Restricted Payments to Holdings Holdings, the Borrower or any other Restricted Subsidiary (and, Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a wholly-owned SubsidiarySubsidiary of the Borrower, such Restricted Payment is made to Holdings, the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary ratably based on their relative ownership interests of the relevant class of Equity Interests; provided further that in the case of any Restricted Payment to Holdings the proceeds of which shall be used by Holdings to make any payments in respect of any Permitted Holdings Debt, such Restricted Payment shall only be permitted to be made pursuant to Section 6.08(a)(vii) or (xiii);
(ii) [reserved]Holdings may declare and make dividend payments or other distributions payable solely in the Equity Interests of Holdings;
(iii) [reserved];
(iv) [reserved];
(v) repurchases of Equity Interests in Holdings or any Parent Entity (or make Restricted Payments by Holdings to allow repurchases of Equity Interest in Holdings any Parent Entitydirect or indirect parent of Holdings) or the Borrower deemed to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price of such stock options or warrants or other incentive interestswarrants;
(viiv) Restricted Payments made to consummate the Transactions or made to consummate (and contemplated by) the Reorganization Transactions;
(v) Restricted Payments to Holdings which Holdings may use to redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted stock, stock units or stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) (or make Restricted Payments to allow any of its Parent Entities Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests (or any options, warrants, restricted stock, stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests), in each case, ) held by current or former officers, managers, consultants, directors, employees, independent contractors or other service providers directors and employees (or their respective spouses, former spouses, domestic partners, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any Parent Entity thereof direct or indirect parent thereof), Holdings, the Borrower and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment or service of, or breach of restrictive covenants by, any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, stock subscription or equity incentive award agreement, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that, that the aggregate amount of Restricted Payments permitted by this clause (viv) after the Closing Date Effective Date, together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu thereof, shall not exceed the greater sum of (A) $10,000,000 and 5.0% of Consolidated EBITDA for the most recently ended Test Period, in any fiscal year, with unused amounts 250,000,000 in any fiscal year being carried over to succeeding fiscal years, so long as of the aggregate Borrower and (B) the amount of Restricted Payments permitted by this clause (vi) in any fiscal year shall not exceed equal to the greater of $20,000,000 and 10.0% of Consolidated EBITDA for the most recently ended Test Period, in the aggregate, plus all net cash proceeds obtained from any key-of key man life insurance policies received during such by Holdings, the Borrower or the Restricted Subsidiaries after the Effective Date; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year (without giving effect may be carried forward to the foregoing proviso)succeeding fiscal years;
(viivi) Holdings the Borrower may make Restricted Payments in cash to any Parent EntityHoldings and, where applicable, Holdings may make Restricted Payments in cash:
(A) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries is a member are members of a consolidated, combined or similar income or similar unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”) ), the portion of which a Parent Entity is the common parent to pay the consolidatedany U.S. federal, combined state, local or similar income or similar taxes, foreign Taxes (as applicable, ) of such Tax Group for such taxable period that are attributable to the taxable income of Holdings and/or its applicable Subsidiaries (as applicable), net of any payment already made by Holdings or its Subsidiaries in respect of such TaxesSubsidiaries; provided that (1) Restricted Payments made pursuant to this subclause (Aa)(vi)(A) shall not exceed the amount of Taxes Tax liability that Holdings and/or its applicable Subsidiaries would have paid incurred in respect of such Taxes were such Taxes determined as if Holdings and/or such Subsidiaries entity(ies) were a stand-alone taxpayer or a stand-alone Tax Group for all relevant taxable periods after the Closing Dategroup; and provided, (2) further, that Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to any Loan Party and (3) with respect to any taxable period (Holdings or portion thereof) ending prior to the date hereof, any distribution otherwise permitted under this clause (A) shall be permitted only to the extent such distribution relates to a tax payable after the date hereofits Restricted Subsidiaries;
(B) the proceeds of which shall be used by such Parent Entity Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting accounting and similar expenses payable to third parties), ) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees directors or consultants officers of Holdings (or any parent thereof) attributable to the ownership or operations of any Parent EntityHoldings, Holdings the Borrower and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of Holdings, the Borrower or any and the Restricted Subsidiary Subsidiaries and (y) otherwise permitted to be paid by Holdings Holdings, the Borrower and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings Holdings, the Borrower or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (v6.09(ix);
(C) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any Parent Entitydirect or indirect parent of Holdings to pay) to pay franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence and auditing fees and expensescorporate existence;
(D) [reserved];
(E) the proceeds of which shall be used by any Parent Entity Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(v);
(E) to finance any Investment that would be permitted to be made by Holdings or a Restricted Subsidiary pursuant to Section 6.046.04 other than Section 6.04(m); provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) such Parent Entity Holdings shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity InterestsInterests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to Holdings Holdings, the Borrower or any the Restricted Subsidiary (any in no event shall any such contribution increase the Available Amount) Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with Holdings Holdings, the Borrower or any of the Restricted Subsidiary Subsidiaries to the extent such merger or consolidation is permitted by in Section 6.03) 6.03 in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.13 5.11 and 5.145.12;
(F) the proceeds of which shall be used to pay customary salary, bonus, severance bonus and other benefits payable to current or former directors, officers, members of management, managers, consultants, independent contractors or officers and employees of Holdings, Borrower Holdings or any Parent Entity direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrower and/or and the Restricted Subsidiaries;
(G) the proceeds of which shall be used by Holdings (or any Parent Entity) to pay (ior to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any successful or unsuccessful equity issuance or offering or debt issuance, incurrence or offering, disposition or acquisition, Investment or other transaction permitted offering not prohibited by this Agreement and (ii) public company costswhether or not such offering is successful); and
(H) the proceeds of which shall be used for the payment of insurance premiums by Holdings to the extent attributable pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) taxes related to any Parent Entityrestricted stock units held by current or former officers, Holdingsmanagers, the Borrower consultants, directors and its subsidiariesemployees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees);
(viiivii) in addition to the foregoing Restricted Payments, Holdings may make additional Restricted Payments or payments in respect of Permitted Holdings Debt in an aggregate amount, when taken together with the aggregate amount of prepayments, redemptions, purchases, defeasances and other payments in respect of Junior Financings made pursuant to Section 6.08(b)(iv), not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $1,000,000,000 and 16% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as no Event of Default shall have occurred and be continuing or would result therefrom, the Available Amount that is Not Otherwise Applied as in (after giving effect immediately prior to any payments made pursuant to the following provisos to this Section 6.08(a)(vii)(B)) (provided that, notwithstanding the proviso set forth at the end of the definition of “Available Amount” herein, if at the time of the making of such the applicable Restricted Payment so long as Payment, (x) no Event of Default has occurred and the Available Amount is continuing (or would occur after giving Pro Forma Effect to such action) greater than $0 and (y) where such Restricted Payment is funded from the Growth Amount, the Borrower is in compliance with the Financial Covenants (determined on a Pro Forma BasisBasis after giving effect to such Restricted Payment, the Interest Coverage Ratio is less than 2.00 to 1.00, Holdings shall be permitted to use up to $1,250,000,000 per fiscal year, on a non-cumulative basis, of the Available Amount to pay (or to make Restricted Payments to allow any Parent Entity to pay) regularly scheduled dividends or distributions to shareholders or unitholders of any Parent Entity (including the Broadcom Shareholders in respect of their Exchangeable Units); provided further that the Available Amount (excluding the Starter Basket) shall be reduced on a dollar-for-dollar basis by the amount of any such Restricted Payment (it being understood that the Available Amount may be negative as a result)) plus (C) the Available Equity Amount that is Not Otherwise Applied;
(ixviii) redemptions in whole or in part of any of its Equity Interests for another class of its Qualified Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Qualified Equity Interests (and in no event shall such contribution or issuance so utilized increase the Available Amount)Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(xix) [reserved]payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units;
(xix) Holdings may make Restricted Payments to any Holdings, the Borrower or a Parent Entity to enable such Parent Entity to may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment)) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any Parent Entity to pay) regularly scheduled dividends or distributions to shareholders or unitholders of any Parent Entity (including the Broadcom Shareholders in respect of their Exchangeable Units) in an amount not to exceed $1,000,000,000 in any fiscal year;
(xii) Restricted Payments to fund the payment of regularly scheduled dividends and repurchases on Holdings’ Equity Interests, in an aggregate amount per annum not to exceed the greater of (x) $50,000,000 in any fiscal year, with unused amounts in any fiscal year being carried over to the succeeding fiscal year, and (y) 6.0% of market capitalization;
(xiii) payments made or expected to be made by Holdings Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or Permitted TransfereesImmediate Family Members) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xivxiii) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Net Leverage Ratio is less than or equal to 2.75:1.00 2.75 to 1.00 and (B) there is no continuing Event of Default on Default;
(xiv) the date distribution, by dividend or otherwise, of declarationshares of Equity Interests of, or Indebtedness owed to Holdings, the Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments);
(xv) [reserved];the Borrower may make Restricted Payments to Holdings and Holdings may make Restricted Payments directly or indirectly to Parent in an amount not to exceed $1,000,000 in any fiscal year to pay the liquidation preference upon redemption of any voting preference shares issued by Parent; and
(xvi) [reserved]so long as no Event of Default is continuing, any Restricted Payment made to any Parent Entity in connection with stock-based compensation programs so long as the aggregate amount of any such Restricted Payment is contributed or otherwise paid by a Parent Entity to a Borrower or a Restricted Subsidiary in the same form as the original Restricted Payment or in cash within seven (7) Business Days of such Restricted Payment.
(b) Neither Holdings nor the Borrower will, nor will they permit any Restricted Subsidiary to make or pay, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, except:
(i) payment of regularly scheduled interest and principal payments as, in the form of payment and on or around when due in respect of any Indebtedness, other than payments in respect of any Junior Financing prohibited by the subordination provisions thereof;
(xviiii) Restricted Payments related refinancings of Indebtedness with proceeds of Indebtedness permitted to settlement of Holdings’ defined benefit pension plan in the United Kingdombe incurred under Section 6.01;
(xviiiiii) [reserved]; andthe conversion of any Junior Financing to Equity Interests (other than Disqualified Equity Interests) of Holdings or any of its direct or indirect parents;
(xixiv) additional prepayments, redemptions, purchases, defeasances and other payments in respect of Junior Financings prior to their scheduled maturity in an aggregate amount, when taken together with the aggregate amount of Restricted Payments; provided that Payments made pursuant to Section 6.08(a)(vii), not to exceed the sum of (A) an amount at the time of making any such Restricted Payments shall prepayment, redemption, purchase, defeasance or other payment and together with any other prepayment, redemption, purchase, defeasance or other payment made utilizing this clause (A) not to exceed the greater of $50,000,000 1,000,000,000 and 25.016% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such prepayment, redemption, purchase, defeasance or other payment plus (B) so long as no Event of Default shall have occurred and be continuing or would result therefrom, the Available Amount that is Not Otherwise Applied (after giving effect to any payments made pursuant to the provisos to Section 6.08(a)(vii)(B)) plus (C) the Available Equity Amount that is Not Otherwise Applied;
(v) prepayments, redemptions, purchases, defeasances and other payments in respect of Junior Financings prior to their scheduled maturity; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to 2.75 to 1.00 and (B) there is no continuing Specified Event of Default on Default; and
(vi) prepayments of Indebtedness contemplated by the date Reorganization Transactions.
(c) Neither Holdings nor the Borrower will, nor will they permit any Restricted Subsidiary to, amend or modify any documentation governing any Junior Financing, in each case if the effect of declaration.such amendment or modification (when
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) Holdings The Borrower will not, nor and will it not permit any Restricted Subsidiary of its Subsidiaries to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, except:
(i) each Restricted Subsidiary may make Restricted Payments to Holdings the Borrower or any Restricted Subsidiary (and, other Subsidiary; provided that in the case of any such Restricted Payment by a Subsidiary that is not a wholly-owned SubsidiaryWholly Owned Subsidiary of the Borrower, such Restricted Payment is made to the Borrower and/or any Subsidiary and to each other owner of Equity Interests of such Subsidiary ratably based on their relative ownership interests of the relevant class of Equity Interests);
(ii) [reserved]the Borrower and each Subsidiary may declare and make dividend payments or other distributions payable solely in the Equity Interests of such Person;
(iii) [reserved]Restricted Payments made on or substantially contemporaneously with the Effective Date to consummate the Transactions, including to finance the payment of Transaction Costs;
(iv) [reserved];
(v) repurchases of Equity Interests in Holdings the Borrower or any Parent Entity (or make Restricted Payments to allow repurchases of Equity Interest in Holdings any Parent Entity) Subsidiary deemed to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price or withholding taxes payable in connection with the exercise of such stock options or warrants or other incentive interests;
(viv) Holdings may Restricted Payments used to redeem, acquire, retire retire, repurchase or repurchase its settle the Borrower’s Equity Interests (or any options, warrants, restricted stock, stock or stock appreciation rights or other equity-linked interests similar securities issued with respect to any of such Equity Interests) held directly or make Restricted Payments to allow any of its Parent Entities to so redeem, retire, acquire or repurchase their Equity Interests (or any options, warrants, restricted stock, stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests), in each case, held indirectly by current or former officers, managers, consultants, directorsmembers of the Board of Directors, employees, employees or independent contractors or other service providers (or their respective spouses, former spouses, domestic partners, successors, executors, administrators, heirs, legatees or distributees) of Holdings the Lead Borrower (or any Parent Entity thereof direct or indirect parent thereof), and its Subsidiaries (in each case, other than the Restricted Subsidiariesexecutive management (i.e., the CEO, the CFO, any executive vice presidents and any similar executive management positions)), upon the death, disability, retirement or termination of employment or service of, or breach of restrictive covenants by, any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, stock subscription or equity incentive award agreement, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that, the agreement in an aggregate amount of Restricted Payments permitted by this clause (vi) after the Closing Effective Date shall not to exceed the greater of $10,000,000 and 5.0% of Consolidated EBITDA for the most recently ended Test Period, 11,500,000 in any fiscal year, year of the Lead Borrower with unused amounts in any fiscal year being carried over solely to the next succeeding fiscal years; provided that such amount in any fiscal year may be increased by (1) an amount not to exceed the cash proceeds of key man life insurance policies received by the Borrower or the Subsidiaries after the Effective Date, so long as or (2) the amount of any bona fide cash bonuses otherwise payable to members of the Board of Directors, consultants, officers, employees, managers or independent contractors the Borrower or any Subsidiary that are foregone in return for the receipt of Equity Interests, the fair market value of which is equal to or less than the amount of such cash bonuses, which, if not used in any year, may be carried forward solely to the next subsequent fiscal year; provided further that cancellation of Indebtedness owning to the Borrower or any Subsidiary from members of the Board of Directors, consultants, officers, employees, managers or independent contractors (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of the Borrower or any Subsidiary in connection with a repurchase of Equity Interests of the Borrower will not be deemed to constitute a Restricted Payment for purposes of this Section 6.07 or any other provisions of this Agreement.
(vi) [reserved];
(vii) in addition to the foregoing Restricted Payments, the Borrower may make additional Restricted Payments, in an aggregate amount, when taken together with the aggregate amount of loans and advances previously made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (vi) in any fiscal year shall vii), not to exceed the greater sum of $20,000,000 and 10.0% of Consolidated EBITDA for the most recently ended Test Period, in the aggregate, plus all net cash proceeds obtained from any key-man life insurance policies received during such fiscal year (without giving effect to the foregoing proviso);
(vii) Holdings may make Restricted Payments in cash to any Parent Entity:
(A) for any taxable period for which Holdings and/or any of its Subsidiaries is a member of a consolidated, combined or similar income or similar tax group (a “Tax Group”) of which a Parent Entity is the common parent to pay the consolidated, combined or similar income or similar taxes, as applicable, of such Tax Group that are attributable to the taxable income of Holdings and/or its applicable Subsidiaries (as applicable), net of any payment already made by Holdings or its Subsidiaries in respect of such Taxes; provided that (1) Restricted Payments pursuant to this subclause (A) shall not exceed the amount of Taxes that Holdings would have paid if Holdings and/or such Subsidiaries were a stand-alone taxpayer or stand-alone Tax Group for all relevant taxable periods after the Closing Date, (2) Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to any Loan Party and (3) with respect to any taxable period (or portion thereof) ending prior to the date hereof, any distribution otherwise permitted under this clause (A) shall be permitted only to the extent such distribution relates to a tax payable after the date hereof;
(B) the proceeds of which shall be used by such Parent Entity to pay (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties), that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of Holdings (or any parent thereof) attributable to the ownership or operations of any Parent Entity, Holdings and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by the Borrower or any Restricted Subsidiary and (y) otherwise permitted to be paid by Holdings and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (v);
(C) the proceeds of which shall be used by Holdings (or any Parent Entity) to pay franchise and similar Taxes, other fees and expenses, required to maintain its organizational existence and auditing fees and expenses;
(D) [reserved];
(E) the proceeds of which shall be used by any Parent Entity to finance any Investment that would be permitted to be made by Holdings or a Restricted Subsidiary pursuant to Section 6.04; provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) such Parent Entity shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests) to be contributed to Holdings or any Restricted Subsidiary (any in no event shall any such contribution increase the Available Amount) or (y) the Person formed or acquired to merge into or consolidate with Holdings or any Restricted Subsidiary to the extent such merger or consolidation is permitted by Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.13 and 5.14;
(F) the proceeds of which shall be used to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, consultants, independent contractors or employees of Holdings, Borrower or any Parent Entity to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, Borrower and/or the Restricted Subsidiaries;
(G) the proceeds of which shall be used by Holdings (or any Parent Entity) to pay (i) fees and expenses related to any successful or unsuccessful equity issuance or offering or debt issuance, incurrence or offering, disposition or acquisition, Investment or other transaction permitted by this Agreement and (ii) public company costs; and
(H) the proceeds of which shall be used for the payment of insurance premiums to the extent attributable to any Parent Entity, Holdings, the Borrower and its subsidiaries;
(viii) Restricted Payments in an aggregate amount not to exceed the Available Amount that is Not Otherwise Applied as in effect immediately prior to the time of making of such Restricted Payment, plus (B) the Available Equity Amount that is Not Otherwise Applied as in effect immediately prior to the time of making of such Restricted Payment; provided that any Restricted Payment so long as made in reliance on preceding clause (A) shall be subject to, (x) no Event of Default has having occurred and is be continuing or resulting therefrom (or would occur tested at the time of declaration of such Restricted Payment) and (y) before and after giving Pro Forma Effect to such action) and (y) where such Restricted Payment is funded from the Growth AmountPayment, the Borrower is in compliance with the Financial Covenants (determined on a Pro Forma Basis, the Total Net Leverage Ratio being less than or equal to 3.21 to 1.00 as of the end of the most recently ended Test Period (tested at the time of declaration of such Restricted Payment);
(ixviii) redemptions in whole or in part of any of its Equity Interests for another class of its Qualified Equity Interests or with proceeds from substantially concurrent equity contributions contributions;
(ix) payments made or issuances expected to be made in respect of new Qualified withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests (in consideration of such payments including deemed repurchases in connection with the exercise of stock options and in no event shall such contribution or issuance so utilized increase the Available Amount); provided that such new Equity Interests contain terms vesting of restricted stock and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed therebyrestricted stock units;
(x) [reserved];
(xi) Holdings may make Restricted Payments to any Parent Entity to enable such Parent Entity to pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment)) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xii) Restricted Payments to fund the payment of regularly scheduled dividends and repurchases on Holdings’ Equity Interests, in an aggregate amount per annum not to exceed the greater of (x) $50,000,000 in any fiscal year, with unused amounts in any fiscal year being carried over to the succeeding fiscal year, and (y) 6.0% of market capitalization;
(xiiixi) payments made or expected to be made by Holdings the Borrower or any Restricted Subsidiary in respect of withholding or similar taxes Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or Permitted Transfereespermitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xii) [Reserved];
(xiii) [Reserved];
(xiv) [Reserved];
(xv) additional Restricted PaymentsPayments in an amount not to exceed $138,000,000; provided that after giving effect to such Restricted Payment no Event of Default exists or would result therefrom;
(xvi) [Reserved]; and
(xvii) additional Restricted Payments (other than Restricted Payments of Equity Interests of any Wholly Owned Subsidiary); provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Net Leverage Ratio is equal to or less than or equal 2.96 to 2.75:1.00 1.00 and there is (B) no continuing Event of Default exists or would result therefrom.
(b) The Borrower will not, and will not permit any of its Subsidiaries 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 Junior Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the date purchase, redemption, retirement, acquisition, cancellation or termination of declarationany Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoing, in each case, except:
(i) payment of regularly scheduled interest and principal payments, mandatory offers to repay, repurchase or redeem, mandatory prepayments of principal, premium and interest, and payment of fees, expenses and indemnification obligations, with respect to such Junior Financing, other than payments in respect of any Junior Financing prohibited by the subordination provisions thereof;
(xvii) [reserved]refinancings of Indebtedness to the extent permitted by Section 6.01;
(xvi1) [reserved]the conversion of any Junior Financing to Equity Interests (other than Disqualified Equity Interests) of the Borrower and (2) any payment that is intended to prevent any Junior Financing from being treated as an “applicable high yield discount obligation” within the meaning of Section 163(i)(1) of the Code;
(xviiiv) Restricted Payments related prepayments, redemptions, purchases, defeasances and other payments in respect of any Junior Financing; provided that after giving effect to settlement such prepayments, redemptions, purchases, defeasances or other payments (A) on a Pro Forma Basis, the Total Net Leverage Ratio is equal to or less than 2.96 to 1.00 and (B) no Event of Holdings’ defined benefit pension plan in the United KingdomDefault exists or would result therefrom;
(xviiiv) [reserved]; andpayments made in connection with, or in order to consummate, the Transactions;
(xixvi) additional Restricted Payments; provided that (A) such Restricted Payments shall prepayments, redemptions, purchases, defeasances and other payments in respect of any Junior Financing in an aggregate amount not to exceed the greater of $50,000,000 92,000,000 and 25.028.75% of Consolidated EBITDA on a Pro Forma Basis for the most recently ended Test Period and plus (B) there the amount of Restricted Payments that may be made pursuant to Section 6.07(a)(xv) at such time;
(vii) additional prepayments, redemptions, purchases, defeasances and other payments in respect of any Junior Financing; provided that the aggregate amount of such prepayments, redemptions, purchases, defeasances and other payments made in reliance on this clause (vii), shall not exceed the sum of (A) the Available Amount that is Not Otherwise Applied as in effect immediately prior to the time of making of such prepayments, redemptions, purchases, defeasances and other payments, plus (B) the Available Equity Amount that is Not Otherwise Applied as in effect immediately prior to the time of making of such prepayments, redemptions, purchases, defeasances and other payments; provided that any prepayments, redemptions, purchases, defeasances and other payments made in reliance on preceding clause (A) shall be subject to, before and after giving Pro Forma Effect to such prepayments, redemptions, purchases, defeasances and other payments, the Total Net Leverage Ratio being less than or equal to 3.21 to 1.00 as of the end of the most recently ended Test Period (tested at the time of distribution or delivery of any irrevocable notice of prepayment, redemption, repurchase or defeasance, as applicable, in respect thereof);
(viii) the prepayment of any Junior Financing owed to the Borrower or a Subsidiary or the prepayment of any Permitted Refinancing of such Indebtedness with the proceeds of any other Junior Financing; provided that no continuing Specified Loan Party shall make any prepayment of any Junior Financing owed to any Subsidiary that is not a Loan Party pursuant to this clause (viii); and
(ix) prepayments, redemptions, purchases, defeasances and other payments in respect of any Junior Financing within one year of the scheduled maturity of such Junior Financing; provided, that after giving effect to such prepayments, redemptions, purchases, defeasances and other payments, no Event of Default on the date under paragraph (a), (b), (h) or (i) of declarationSection 7.01 exists or would result therefrom.
Appears in 1 contract
Sources: Second Lien Credit Agreement (Franchise Group, Inc.)
Restricted Payments; Certain Payments of Indebtedness. (a) Holdings will not, nor will it permit any Restricted Subsidiary to, pay or make, directly or indirectly, any Restricted Payment, except:
(i) each Restricted Subsidiary may make Restricted Payments to Holdings the Borrower or any Restricted Subsidiary (and, in the case of any such Subsidiary that is not a wholly-owned Subsidiary, to each other owner of Equity Interests of such Subsidiary ratably based on their relative ownership interests of the relevant class of Equity Interests);
(ii) [reservedReserved];
(iii) [reservedReserved];
(iv) [reservedReserved];
(v) repurchases of Equity Interests in Holdings or any Parent Entity (or make Restricted Payments to allow repurchases of Equity Interest in Holdings any Parent Entity) deemed to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price of such stock options or warrants or other incentive interests;
(vi) Holdings may redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted stock, stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) or make Restricted Payments to allow any of its Parent Entities to so redeem, retire, acquire or repurchase their Equity Interests (or any options, warrants, restricted stock, stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests), in each case, held by current or former officers, managers, consultants, directors, employees, independent contractors or other service providers (or their respective spouses, former spouses, domestic partners, successors, executors, administrators, heirs, legatees or distributees) of Holdings or any Parent Entity thereof and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment or service of, or breach of restrictive covenants by, any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, stock subscription or equity incentive award agreement, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that, the aggregate amount of Restricted Payments permitted by this clause (vi) after the Closing Date Date, together with the aggregate amount of loans and advances to any Parent Entity previously made pursuant to Section 6.04(n) in lieu of Restricted Payments permitted by this clause (vi), shall not exceed the greater of $10,000,000 and 5.0% of Consolidated EBITDA for the most recently ended Test Period, 40,000,000 in any fiscal year, year with unused amounts in any fiscal year being carried over to succeeding fiscal years, so long as the aggregate amount of Restricted Payments permitted by this clause (vi) in any fiscal year shall not exceed the greater of $20,000,000 and 10.0% of Consolidated EBITDA for the most recently ended Test Period, in the aggregate, years plus all net cash proceeds obtained from any key-man life insurance policies received during such fiscal year (without giving effect to the foregoing proviso);
(vii) Holdings may make Restricted Payments in cash to any Parent Entity:
(A) for the proceeds of which shall be used by such Parent Entity to pay Taxes of Holdings, any taxable period for which other Subsidiary of Holdings and/or or any group that includes Holdings, the Borrower or any other Subsidiary of its Subsidiaries is a member of the Borrower and that files Taxes on a consolidated, combined combined, affiliated, unitary or similar income or similar tax group (a “Tax Group”) of which a Parent Entity is the common parent to pay the consolidatedbasis, combined or similar income or similar taxes, as applicable, of such Tax Group that are in each case attributable to the taxable income of Holdings and/or and its applicable Subsidiaries (as applicable)Subsidiaries, net of any payment already made by Holdings or its Subsidiaries in respect of such Taxes; provided that (1) Restricted Payments pursuant to this subclause (A) shall not exceed the amount of Taxes that Holdings would have paid if Holdings and/or such and its Subsidiaries were a stand-alone taxpayer or stand-alone Tax Group for all relevant taxable periods after the Closing Datetax group, (2) reduced by any payment made by Holdings or its Subsidiaries; and provided further that Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings or any Loan Party and (3) with respect to any taxable period (or portion thereof) ending prior to the date hereof, any distribution otherwise permitted under this clause (A) shall be permitted only to the extent such distribution relates to a tax payable after the date hereofRestricted Subsidiary;
(B) the proceeds of which shall be used by such Parent Entity to pay (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties), that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of Holdings (or any parent thereof) attributable to the ownership or operations of any Parent Entity, Holdings and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by the Borrower or any Restricted Subsidiary and (y) otherwise permitted to be paid by Holdings and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (v);
(C) the proceeds of which shall be used by Holdings (or any Parent Entity) to pay franchise and similar Taxes, other fees and expenses, required to maintain its organizational existence and auditing fees and expenses;
(D) [reservedReserved];
(E) the proceeds of which shall be used by any Parent Entity to finance any Investment that would be permitted to be made by Holdings or a Restricted Subsidiary pursuant to Section 6.046.04 (other than Section 6.04(n)); provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) such Parent Entity shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests) to be contributed to Holdings or any Restricted Subsidiary (any in no event shall any such contribution increase the Available Amount) or (y) the Person formed or acquired to merge into or consolidate with Holdings or any Restricted Subsidiary to the extent such merger or consolidation is permitted by Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections Section 5.13 and 5.14;
(F) the proceeds of which shall be used to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, consultants, independent contractors or employees of Holdings, Borrower Holdings or any Parent Entity to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, Borrower and/or Holdings and the Restricted Subsidiaries;
(G) the proceeds of which shall be used by Holdings (or any Parent Entity) to pay (i) fees and expenses related to any successful or unsuccessful equity issuance or offering or debt issuance, incurrence or offering, disposition or acquisition, Investment or other transaction permitted by this Agreement and (ii) public company costsPublic Company Costs; and
(H) the proceeds of which shall be used for the payment of insurance premiums to the extent attributable to any Parent Entity, Holdings, the Borrower and its subsidiaries;
(viii) Restricted Payments in an aggregate amount not to exceed the Available Amount that is Not Otherwise Applied as in effect immediately prior to the time of making of such Restricted Payment so long as (x) no Event of Default has occurred and is continuing (or would occur after giving Pro Forma Effect to such action) and (y) the Total Net Leverage Ratio on a Pro Forma Basis is less than or equal to 4.75:1.00, provided that where such Restricted Payment is funded from the Growth Amount, the Borrower is in compliance with the Financial Covenants (determined Total Net Leverage Ratio, on a Pro Forma Basis), is less than or equal to 4.25:1.00;
(ix) redemptions in whole or in part of any of its Equity Interests for another class of its Qualified Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Qualified Equity Interests (and in no event shall such contribution or issuance so utilized increase the Available Amount); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(x) [reservedReserved];
(xi) Holdings the Borrower may make Restricted Payments to any Parent Entity to enable such Parent Entity to pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment);
(xii) following the consummation of a Public Offering after the Closing Date, the payment of Restricted Payments to any direct Parent Entity of Holdings to fund the payment of regularly scheduled regular dividends and repurchases on Holdings’ such company’s Equity Interests, in an aggregate amount per annum not to exceed 6.0 % per annum of the greater aggregate amount of (x) $50,000,000 in proceeds from such Public Offering received by, or contributed to Holdings, the Borrower or any fiscal year, with unused amounts in any fiscal year being carried over to the succeeding fiscal year, and (y) 6.0% of market capitalizationRestricted Subsidiary;
(xiii) payments made by Holdings or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment on a Pro Forma Basis, the Total Net Leverage Ratio is less than or equal to 2.75:1.00 3.25:1.00 and there is no continuing Event of Default on the date of declaration;
(xv) [reservedReserved];
(xvi) [reserved]any Restricted Subsidiary may make Restricted Payments to Holdings, the proceeds of which are applied by Holdings to satisfy any payment obligations owing under the Cristal Purchase Agreement;
(xvii) Restricted Payments related to settlement of Holdings’ defined benefit pension plan in the United Kingdom[Reserved];
(xviii) [reserved]Holdings may make Restricted Payments to holders of the common stock of Holdings or any Parent Entity in an amount equal to (a) $40,000,000 per annum plus (b) in any fiscal quarter, up to $0.25 per share for each such fiscal quarter (as such amount shall be appropriately adjusted for any stock, splits, stock dividends, reverse stock splits, stock consolidations and similar transactions provided that the amount permitted to be paid under this clause (xviii) in any fiscal year, or, in the case of clause (b), fiscal quarter may be increased by an amount equal to the difference (if positive) between the permitted amount in a preceding fiscal year or, in the case of clause (b), fiscal quarter and the amount actually used or applied by Holdings during such relevant period; and
(xix) additional Restricted Payments; provided that (A) such Restricted Payments shall not exceed the greater of $50,000,000 175,000,000 and 25.020.0% of Consolidated EBITDA for the most recently ended Test Period and (B) there is no continuing Specified Event of Default on the date of declaration.
(b) Holdings will not, nor will it permit any Restricted Subsidiary to, make or pay, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any (x) Subordinated Indebtedness, (y) Indebtedness secured by a Lien that is junior to the Lien securing the Secured Obligations or (z) unsecured Indebtedness that is incurred or assumed pursuant to a basket set forth in Section 6.01(a) that requires such Indebtedness to have a maturity or Weighted Average Life to Maturity no shorter or earlier than that of the Term Loans, in each case that constitutes Material Indebtedness (collectively, “Junior Debt”), or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such Junior Debt, in each case, on or prior to date that occurs earlier than one year prior to the scheduled maturity date thereof (collectively, “Restricted Debt Payments”), except:
(i) payment of regularly scheduled interest and principal payments, payments of fees, expenses and indemnification obligations when due in respect of any Indebtedness, other than payments in respect of any Junior Debt prohibited by the subordination provisions thereof;
(ii) refinancings or exchanges of Junior Debt with proceeds of Permitted Refinancing Indebtedness that constitutes the same category of Junior Debt, which matures no earlier than the Junior Debt being refinanced or exchanged, in each case, to the extent such Indebtedness is permitted to be incurred under Section 6.01;
(iii) (1) the conversion of any Junior Debt to or payments with Equity Interests (other than Disqualified Equity Interests) of Holdings or any of its direct or indirect parent companies and (2) mandatory redemptions of Disqualified Equity Interests;
(iv) prepayments, redemptions, purchases, defeasances and other payments or distributions in respect of Junior Debt prior to their scheduled maturity in an aggregate amount not to exceed the Available Amount that is Not Otherwise Applied as in effect immediately prior to the time of making of such Restricted Debt Payment, so long as (x) no Event of Default has occurred and is continuing (or would occur after giving Pro Forma Effect to such action) and (y) the Total Net Leverage Ratio on a Pro Forma Basis is less than or equal to 4.75:1.00, provided that where such Restricted Debt Payment is funded from the Growth Amount, the Total Net Leverage Ratio, on a Pro Forma Basis, is less than or equal to 4.25:1.00;
(v) prepayments, redemptions, purchases, defeasances and other payments in respect of Junior Debt prior to their scheduled maturity; provided that after giving effect to such prepayment, redemption, purchase, defeasance or other payment (A) on a Pro Forma Basis, the Total Net Leverage Ratio is less than or equal to 3.75:1.00 as of the end of the most recently ended Test Period as of such time and (B) there is no continuing Event of Default;
(vi) [Reserved]
(vii) [Reserved]
(viii) payments as part of an applicable high yield discount obligation or AHYDO catch-up payment.
(c) Holdings will not, nor will it permit any Restricted Subsidiary to, amend or modify its Organizational Documents or any documentation governing any Junior Debt, in each case if the effect of such amendment or modification (when taken as a whole) is materially adverse to the Lenders. Notwithstanding anything herein to the contrary, the foregoing provisions of this Section 6.08 will not prohibit the payment of any Restricted Payment or the consummation of any irrevocable redemption, purchase, defeasance or other payment within 60 days after the date of declaration of such Restricted Payment or the giving of irrevocable notice of such redemption, purchase, defeasance or other payment, as applicable, if at the date of declaration or the giving of such notice such payment would have complied with the provisions of this Agreement.
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) Holdings The Borrower will not, nor and will it not permit any Restricted Subsidiary of its Subsidiaries to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, except:
(i) each Restricted Subsidiary may make Restricted Payments to Holdings the Borrower or any Restricted Subsidiary (and, other Subsidiary; provided that in the case of any such Restricted Payment by a Subsidiary that is not a wholly-owned SubsidiaryWholly Owned Subsidiary of the Borrower, such Restricted Payment is made to the Borrower and/or any Subsidiary and to each other owner of Equity Interests of such Subsidiary ratably based on their relative ownership interests of the relevant class of Equity Interests);
(ii) [reserved]the Borrower and each Subsidiary may declare and make dividend payments or other distributions payable solely in the Equity Interests of such Person;
(iii) [reserved]Restricted Payments made on or substantially contemporaneously with the Effective Date to consummate the Transactions, including to finance the payment of Transaction Costs;
(iv) [reserved];
(v) repurchases of Equity Interests in Holdings the Borrower or any Parent Entity (or make Restricted Payments to allow repurchases of Equity Interest in Holdings any Parent Entity) Subsidiary deemed to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price or withholding taxes payable in connection with the exercise of such stock options or warrants or other incentive interests;
(viv) Holdings may Restricted Payments used to redeem, acquire, retire retire, repurchase or repurchase its settle the Borrower’s Equity Interests (or any options, warrants, restricted stock, stock or stock appreciation rights or other equity-linked interests similar securities issued with respect to any of such Equity Interests) held directly or make Restricted Payments to allow any of its Parent Entities to so redeem, retire, acquire or repurchase their Equity Interests (or any options, warrants, restricted stock, stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests), in each case, held indirectly by current or former officers, managers, consultants, directorsmembers of the Board of Directors, employees, employees or independent contractors or other service providers (or their respective spouses, former spouses, domestic partners, successors, executors, administrators, heirs, legatees or distributees) of Holdings the Lead Borrower (or any Parent Entity thereof direct or indirect parent thereof), and its Subsidiaries (in each case, other than the Restricted Subsidiariesexecutive management (i.e., the CEO, the CFO, any executive vice presidents and any similar executive management positions)), upon the death, disability, retirement or termination of employment or service of, or breach of restrictive covenants by, any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, stock subscription or equity incentive award agreement, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that, the agreement in an aggregate amount of Restricted Payments permitted by this clause (vi) after the Closing Effective Date shall not to exceed the greater of $10,000,000 and 5.0% of Consolidated EBITDA for the most recently ended Test Period, in any fiscal year, year of the Lead Borrower with unused amounts in any fiscal year being carried over solely to the next succeeding fiscal years; provided that such amount in any fiscal year may be increased by (1) an amount not to exceed the cash proceeds of key man life insurance policies received by the Borrower or the Subsidiaries after the Effective Date, so long as or (2) the amount of any bona fide cash bonuses otherwise payable to members of the Board of Directors, consultants, officers, employees, managers or independent contractors the Borrower or any Subsidiary that are foregone in return for the receipt of Equity Interests, the fair market value of which is equal to or less than the amount of such cash bonuses, which, if not used in any year, may be carried forward solely to the next subsequent fiscal year; provided further that cancellation of Indebtedness owning to the Borrower or any Subsidiary from members of the Board of Directors, consultants, officers, employees, managers or independent contractors (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of the Borrower or any Subsidiary in connection with a repurchase of Equity Interests of the Borrower will not be deemed to constitute a Restricted Payment for purposes of this Section 6.07 or any other provisions of this Agreement.
(vi) [reserved];
(vii) in addition to the foregoing Restricted Payments, the Borrower may make additional Restricted Payments, in an aggregate amount, when taken together with the aggregate amount of loans and advances previously made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (vi) in any fiscal year shall vii), not to exceed the greater sum of $20,000,000 and 10.0% of Consolidated EBITDA for the most recently ended Test Period, in the aggregate, plus all net cash proceeds obtained from any key-man life insurance policies received during such fiscal year (without giving effect to the foregoing proviso);
(vii) Holdings may make Restricted Payments in cash to any Parent Entity:
(A) for any taxable period for which Holdings and/or any of its Subsidiaries is a member of a consolidated, combined or similar income or similar tax group (a “Tax Group”) of which a Parent Entity is the common parent to pay the consolidated, combined or similar income or similar taxes, as applicable, of such Tax Group that are attributable to the taxable income of Holdings and/or its applicable Subsidiaries (as applicable), net of any payment already made by Holdings or its Subsidiaries in respect of such Taxes; provided that (1) Restricted Payments pursuant to this subclause (A) shall not exceed the amount of Taxes that Holdings would have paid if Holdings and/or such Subsidiaries were a stand-alone taxpayer or stand-alone Tax Group for all relevant taxable periods after the Closing Date, (2) Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to any Loan Party and (3) with respect to any taxable period (or portion thereof) ending prior to the date hereof, any distribution otherwise permitted under this clause (A) shall be permitted only to the extent such distribution relates to a tax payable after the date hereof;
(B) the proceeds of which shall be used by such Parent Entity to pay (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties), that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of Holdings (or any parent thereof) attributable to the ownership or operations of any Parent Entity, Holdings and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by the Borrower or any Restricted Subsidiary and (y) otherwise permitted to be paid by Holdings and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (v);
(C) the proceeds of which shall be used by Holdings (or any Parent Entity) to pay franchise and similar Taxes, other fees and expenses, required to maintain its organizational existence and auditing fees and expenses;
(D) [reserved];
(E) the proceeds of which shall be used by any Parent Entity to finance any Investment that would be permitted to be made by Holdings or a Restricted Subsidiary pursuant to Section 6.04; provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) such Parent Entity shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests) to be contributed to Holdings or any Restricted Subsidiary (any in no event shall any such contribution increase the Available Amount) or (y) the Person formed or acquired to merge into or consolidate with Holdings or any Restricted Subsidiary to the extent such merger or consolidation is permitted by Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.13 and 5.14;
(F) the proceeds of which shall be used to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, consultants, independent contractors or employees of Holdings, Borrower or any Parent Entity to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, Borrower and/or the Restricted Subsidiaries;
(G) the proceeds of which shall be used by Holdings (or any Parent Entity) to pay (i) fees and expenses related to any successful or unsuccessful equity issuance or offering or debt issuance, incurrence or offering, disposition or acquisition, Investment or other transaction permitted by this Agreement and (ii) public company costs; and
(H) the proceeds of which shall be used for the payment of insurance premiums to the extent attributable to any Parent Entity, Holdings, the Borrower and its subsidiaries;
(viii) Restricted Payments in an aggregate amount not to exceed the Available Amount that is Not Otherwise Applied as in effect immediately prior to the time of making of such Restricted Payment, plus (B) the Available Equity Amount that is Not Otherwise Applied as in effect immediately prior to the time of making of such Restricted Payment; provided that any Restricted Payment so long as made in reliance on preceding clause (A) shall be subject to, (x) no Event of Default has having occurred and is be continuing or resulting therefrom (or would occur tested at the time of declaration of such Restricted Payment) and (y) before and after giving Pro Forma Effect to such action) and (y) where such Restricted Payment is funded from the Growth AmountPayment, the Borrower is in compliance with the Financial Covenants (determined on a Pro Forma Basis, the Total Net Leverage Ratio being less than or equal to 3.06 to 1.00 as of the end of the most recently ended Test Period (tested at the time of declaration of such Restricted Payment);
(ixviii) redemptions in whole or in part of any of its Equity Interests for another class of its Qualified Equity Interests or with proceeds from substantially concurrent equity contributions contributions;
(ix) payments made or issuances expected to be made in respect of new Qualified withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests (in consideration of such payments including deemed repurchases in connection with the exercise of stock options and in no event shall such contribution or issuance so utilized increase the Available Amount); provided that such new Equity Interests contain terms vesting of restricted stock and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed therebyrestricted stock units;
(x) [reserved];
(xi) Holdings may make Restricted Payments to any Parent Entity to enable such Parent Entity to pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment)) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xii) Restricted Payments to fund the payment of regularly scheduled dividends and repurchases on Holdings’ Equity Interests, in an aggregate amount per annum not to exceed the greater of (x) $50,000,000 in any fiscal year, with unused amounts in any fiscal year being carried over to the succeeding fiscal year, and (y) 6.0% of market capitalization;
(xiiixi) payments made or expected to be made by Holdings the Borrower or any Restricted Subsidiary in respect of withholding or similar taxes Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or Permitted Transfereespermitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xii) [Reserved];
(xiii) [Reserved];
(xiv) [Reserved];
(xv) additional Restricted Payments in an amount not to exceed $120,000,000; provided that after giving effect to such Restricted Payment no Event of Default exists or would result therefrom;
(xvi) [Reserved]; and
(xvii) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Net Leverage Ratio is equal to or less than or equal 2.81 to 2.75:1.00 1.00 and there is (B) no continuing Event of Default exists or would result therefrom.
(b) The Borrower will not, and will not permit any of its Subsidiaries 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 Junior Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the date purchase, redemption, retirement, acquisition, cancellation or termination of declarationany Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoing, in each case, except:
(i) payment of regularly scheduled interest and principal payments, mandatory offers to repay, repurchase or redeem, mandatory prepayments of principal, premium and interest, and payment of fees, expenses and indemnification obligations, with respect to such Junior Financing, other than payments in respect of any Junior Financing prohibited by the subordination provisions thereof;
(xvii) [reserved]refinancings of Indebtedness to the extent permitted by Section 6.01;
(xvi1) [reserved]the conversion of any Junior Financing to Equity Interests (other than Disqualified Equity Interests) of the Borrower and (2) any payment that is intended to prevent any Junior Financing from being treated as an “applicable high yield discount obligation” within the meaning of Section 163(i)(1) of the Code;
(xviiiv) Restricted Payments related prepayments, redemptions, purchases, defeasances and other payments in respect of any Junior Financing; provided that after giving effect to settlement such prepayments, redemptions, purchases, defeasances or other payments (A) on a Pro Forma Basis, the Total Net Leverage Ratio is equal to or less than 2.81 to 1.00 and (B) no Event of Holdings’ defined benefit pension plan in the United KingdomDefault exists or would result therefrom;
(xviiiv) [reserved]; andpayments made in connection with, or in order to consummate, the Transactions;
(xixvi) additional Restricted Payments; provided that (A) such Restricted Payments shall prepayments, redemptions, purchases, defeasances and other payments in respect of any Junior Financing in an aggregate amount not to exceed the greater of $50,000,000 80,000,000 and 25.0% of Consolidated EBITDA on a Pro Forma Basis for the most recently ended Test Period and plus (B) there the amount of Restricted Payments that may be made pursuant to Section 6.07(a)(xv) at such time;
(vii) additional prepayments, redemptions, purchases, defeasances and other payments in respect of any Junior Financing; provided that the aggregate amount of such prepayments, redemptions, purchases, defeasances and other payments made in reliance on this clause (vii), shall not exceed the sum of (A) the Available Amount that is Not Otherwise Applied as in effect immediately prior to the time of making of such prepayments, redemptions, purchases, defeasances and other payments, plus (B) the Available Equity Amount that is Not Otherwise Applied as in effect immediately prior to the time of making of such prepayments, redemptions, purchases, defeasances and other payments; provided that any prepayments, redemptions, purchases, defeasances and other payments made in reliance on preceding clause (A) shall be subject to, before and after giving Pro Forma Effect to such prepayments, redemptions, purchases, defeasances and other payments, the Total Net Leverage Ratio being less than or equal to 3.06 to 1.00 as of the end of the most recently ended Test Period (tested at the time of distribution or delivery of any irrevocable notice of prepayment, redemption, repurchase or defeasance, as applicable, in respect thereof);
(viii) the prepayment of any Junior Financing owed to the Borrower or a Subsidiary or the prepayment of any Permitted Refinancing of such Indebtedness with the proceeds of any other Junior Financing; provided that no continuing Specified Loan Party shall make any prepayment of any Junior Financing owed to any Subsidiary that is not a Loan Party pursuant to this clause (viii); and
(ix) prepayments, redemptions, purchases, defeasances and other payments in respect of any Junior Financing within one year of the scheduled maturity of such Junior Financing; provided, that after giving effect to such prepayments, redemptions, purchases, defeasances and other payments, no Event of Default on the date under paragraph (a), (b), (h) or (i) of declarationSection 7.01 exists or would result therefrom.
Appears in 1 contract
Sources: First Lien Credit Agreement (Franchise Group, Inc.)
Restricted Payments; Certain Payments of Indebtedness. (a) Holdings will notNo Loan Party will, nor will it permit any Restricted Subsidiary to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, except:
(i) each Restricted Subsidiary of Holdings and the Borrower may declare and pay dividends or make other distributions with respect to its Equity Interests payable solely in additional shares of its Equity Interests (other than Disqualified Equity Interests not permitted by Section 6.01);
(ii) Subsidiaries may declare and pay dividends or make other distributions ratably with respect to their Equity Interests;
(iii) the Borrower and its Subsidiaries may make Restricted Payments to Holdings or any Restricted Subsidiary (and, in the case of any such Subsidiary that is not a wholly-owned Subsidiary, to each other owner of Equity Interests of such Subsidiary ratably based on their relative ownership interests of the relevant class of Equity Interests);
(ii) [reserved];
(iii) [reserved];
(iv) [reserved];
(v) repurchases of Equity Interests in and Holdings or any Parent Entity (or may make Restricted Payments to allow repurchases any direct or indirect parent thereof) the proceeds of Equity Interest in Holdings any Parent Entity) deemed which are used to occur upon exercise of stock options purchase, retire, redeem or warrants or other incentive interests if such otherwise acquire the Equity Interests represent a portion of Holdings (or of any such direct or indirect parent of Holdings) or of the exercise price Borrower (following a Qualified Public Offering of such stock options or warrants or other incentive interests;
the Borrower) (vi) Holdings may redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted stock, including related stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interestssimilar securities) or make Restricted Payments to allow any of its Parent Entities to so redeem, retire, acquire or repurchase their Equity Interests (or any options, warrants, restricted stock, stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests), in each case, held by current then present or former officers, managersdirectors, consultants, directorsofficers or employees of Holdings (or of any such direct or indirect parent), employees, independent contractors the Borrower or any of the Subsidiaries or by any stock option plan or other service providers (or their respective spouses, former spouses, domestic partners, successors, executors, administrators, heirs, legatees or distributees) of Holdings or any Parent Entity thereof and the Restricted Subsidiaries, benefit plan upon the such Person’s death, disability, retirement or termination of employment or service of, or breach under the terms of restrictive covenants by, any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, stock subscription or equity incentive award agreement, employment termination agreement plan or any other employment agreements agreement under which such shares of stock or equity holders’ agreementrelated rights were issued; provided that, that the aggregate amount of Restricted Payments permitted by such purchases, redemptions or other acquisitions under this clause (via)(iii) after the Closing Date shall not exceed the greater of $10,000,000 and 5.0% of Consolidated EBITDA for the most recently ended Test Period, in any fiscal year, with unused amounts in any fiscal year being carried over to succeeding fiscal years, so long as $5,000,000 (plus the aggregate amount of Restricted Payments net proceeds (x) received by Holdings during such calendar year from sales of Equity Interests of Holdings to directors, consultants, officers or employees of Holdings, the Borrower or any Subsidiary in connection with permitted by this clause employee compensation and incentive arrangements and (viy) in any fiscal year shall not exceed the greater of $20,000,000 and 10.0% of Consolidated EBITDA for the most recently ended Test Period, in the aggregate, plus all net cash proceeds obtained from any key-man life insurance policies received during such fiscal year (without giving effect to the foregoing provisocalendar year);
(viiiv) Holdings may make Restricted Payments in non-cash to any Parent Entity:
(A) for any taxable period for which Holdings and/or any of its Subsidiaries is a member of a consolidated, combined or similar income or similar tax group (a “Tax Group”) of which a Parent Entity is the common parent to pay the consolidated, combined or similar income or similar taxes, as applicable, of such Tax Group that are attributable to the taxable income of Holdings and/or its applicable Subsidiaries (as applicable), net of any payment already made by Holdings or its Subsidiaries in respect of such Taxes; provided that (1) Restricted Payments pursuant to this subclause (A) shall not exceed the amount of Taxes that Holdings would have paid if Holdings and/or such Subsidiaries were a stand-alone taxpayer or stand-alone Tax Group for all relevant taxable periods after the Closing Date, (2) Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to any Loan Party and (3) with respect to any taxable period (or portion thereof) ending prior to the date hereof, any distribution otherwise permitted under this clause (A) shall be permitted only to the extent such distribution relates to a tax payable after the date hereof;
(B) the proceeds of which shall be used by such Parent Entity to pay (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties), that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of Holdings (or any parent thereof) attributable to the ownership or operations of any Parent Entity, Holdings and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by the Borrower or any Restricted Subsidiary and (y) otherwise permitted to be paid by Holdings and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (v);
(C) the proceeds of which shall be used by Holdings (or any Parent Entity) to pay franchise and similar Taxes, other fees and expenses, required to maintain its organizational existence and auditing fees and expenses;
(D) [reserved];
(E) the proceeds of which shall be used by any Parent Entity to finance any Investment that would be permitted to be made by Holdings or a Restricted Subsidiary pursuant to Section 6.04; provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) such Parent Entity shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests) to be contributed to Holdings or any Restricted Subsidiary (any in no event shall any such contribution increase the Available Amount) or (y) the Person formed or acquired to merge into or consolidate with Holdings or any Restricted Subsidiary to the extent such merger or consolidation is permitted by Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.13 and 5.14;
(F) the proceeds of which shall be used to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, consultants, independent contractors or employees of Holdings, Borrower or any Parent Entity to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, Borrower and/or the Restricted Subsidiaries;
(G) the proceeds of which shall be used by Holdings (or any Parent Entity) to pay (i) fees and expenses related to any successful or unsuccessful equity issuance or offering or debt issuance, incurrence or offering, disposition or acquisition, Investment or other transaction permitted by this Agreement and (ii) public company costs; and
(H) the proceeds of which shall be used for the payment of insurance premiums to the extent attributable to any Parent Entity, Holdings, the Borrower and its subsidiaries;
(viii) Restricted Payments in an aggregate amount not to exceed the Available Amount that is Not Otherwise Applied as in effect immediately prior to the time of making of such Restricted Payment so long as (x) no Event of Default has occurred and is continuing (or would occur after giving Pro Forma Effect to such action) and (y) where such Restricted Payment is funded from the Growth Amount, the Borrower is in compliance with the Financial Covenants (determined on a Pro Forma Basis);
(ix) redemptions in whole or in part of any of its Equity Interests for another class of its Qualified Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Qualified Equity Interests (and in no event shall such contribution or issuance so utilized increase the Available Amount); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(x) [reserved];
(xi) Holdings may make Restricted Payments to any Parent Entity to enable such Parent Entity to pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment);
(xii) Restricted Payments to fund the payment of regularly scheduled dividends and repurchases on Holdings’ Equity Interests, in an aggregate amount per annum not to exceed the greater of (x) $50,000,000 in any fiscal year, with unused amounts in any fiscal year being carried over to the succeeding fiscal year, and (y) 6.0% of market capitalization;
(xiii) payments made by Holdings or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxeswarrants;
(xivv) additional the Borrower and its Subsidiaries may make Restricted PaymentsPayments to Holdings (x) in an amount (together with loans or advances made pursuant to Section 6.04(n)) not to exceed $1,500,000 in any fiscal year, to the extent necessary to pay (or allow any direct or indirect parent of Holdings to pay) its general corporate and overhead expenses incurred by Holdings (or any direct or indirect parent thereof) in the ordinary course of business, plus the amount of any reasonable and customary indemnification claims made by any director or officer of Holdings (or any direct or indirect parent thereof), (y) 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 (z) in an amount necessary to pay the Tax liabilities of Holdings (or any such direct or indirect parent) attributable to (or arising as a result of) the operations of the Borrower and its Subsidiaries; provided provided, however, that after giving effect to such Restricted Payment on a Pro Forma Basisin the case of clause (z), the Total Net Leverage Ratio is less than or equal amount of such dividends shall not exceed the amount that the Borrower and its Subsidiaries would be required to 2.75:1.00 pay in respect of Federal, state and there is no continuing Event of Default on local taxes and any other taxes were the date of declarationBorrower and the Subsidiaries to pay such taxes as stand-alone taxpayers;
(xvvi) [reserved]Restricted Payments made on the Closing Date to consummate the Transactions;
(xvivii) [reserved]to the extent constituting Restricted Payments, Holdings, the Borrower and its Subsidiaries may enter into and consummate transactions expressly permitted by any provision of Section 6.03 or 6.09;
(xviiviii) the Borrower and its Subsidiaries may make Restricted Payments related to settlement of Holdings’ defined benefit pension plan in the United Kingdom;
(xviii) [reserved]; and
(xix) additional Restricted Payments; Holdings to finance any investment permitted to be made pursuant to Section 6.04 provided that (A) such Restricted Payments Payment shall not exceed be made substantially concurrently with the greater closing of $50,000,000 and 25.0% of Consolidated EBITDA for the most recently ended Test Period such investment and (B) there Holdings shall, immediately following the closing thereof, cause (i) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or its Subsidiaries or (ii) the merger (to the extent permitted in Section 6.03) of the Person formed or acquired into the Borrower or its Subsidiaries in order to consummate such Permitted Acquisition;
(ix) Holdings may make Restricted Payments with the proceeds of the issuance of Indebtedness of Holdings;
(x) in addition to the foregoing Restricted Payments, Holdings and the Borrower may make additional Restricted Payments provided that, at the time such Restricted Payment is no continuing Specified Event made, the Payment Conditions are satisfied;
(xi) the distribution, as a dividend or otherwise (and the declaration of Default such dividend), of shares of capital stock of, or Indebtedness owed to the Borrower or a Subsidiary by, any Unrestricted Subsidiary so designated on the date of declarationhereof; and
(xii) other Restricted Payments by Holdings and the Borrower which, together with investments, loans and advances made pursuant to Section 6.04(w) and Restricted Debt Payments made pursuant to Section 6.08(b)(x), do not exceed $30,000,000 in the aggregate.
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) Holdings No Loan Party will, or will not, nor will it permit any Restricted Subsidiary of its subsidiaries to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, except:
or incur any obligation (contingent or otherwise) to do so prior to the Tranche C Maturity Date, except (i) each Holdings may declare and pay dividends with respect to its Equity Interests payable solely in Equity Interests of Holdings that do not require (or permit the holder of such Equity Interest to require) any payments or other distribution (whether in cash, securities or other property) to the holder of such Equity Interests prior to the Tranche C Maturity Date, (ii) Loan Parties (other than Holdings) that are wholly-owned subsidiaries of Holdings may declare and pay dividends ratably with respect to their Equity Interests, (iii) provided no Event of Default is occurring or would result therefrom, Restricted Subsidiary Payments to repurchase Equity Interests in Holdings (or any Parent) from retired, deceased or terminated employees or directors (including their Heirs) of any Parent, Holdings or any of its subsidiaries in an amount not to exceed $1,000,000 in any fiscal year and $5,000,000 in the aggregate, (iv) Restricted Payments to repurchase Equity Interests in Holdings (or any Parent) from retired, deceased or terminated employees or directors (including their Heirs) of any Parent, Holdings or any of its subsidiaries, to the extent such Restricted Payments constitute Indebtedness that is not secured and is subordinated to the Obligations on terms reasonably acceptable to the Administrative Agent; provided that no more than $5,000,000 in aggregate principal amount of such Indebtedness may be outstanding at any time, (v) any Restricted Payment made pursuant to the Acquisition Documents, (vi) Restricted Payments to any Parent for the maintenance of its corporate existence and compliance with applicable law or accounting, legal, public relations, investor relations, financial or management activities (including the employment of employees, agents, accountants, consultants, bankers, advisors or other professionals in connection with any of the foregoing) in an amount not to exceed $5,000,000 per year, (vii) any Loan Party may issue Equity Interests that do not require (or permit the holder of such Equity Interest to require) any payments or other distributions (whether in cash, securities or other property) to the holder of such Equity Interests prior to the Tranche C Maturity Date, to the extent such issuance is in connection with a Permitted Acquisition or a transaction permitted by Section 6.05(j), (viii) any Loan Party may make any payments related to an Earnout, (ix) the payments permitted under Section 6.09(d) and (e) shall be permitted to be made, (x) so long as no Event of Default shall have occurred and be continuing or would result therefrom, immediately at or prior to any cash interest payment becoming due on the H-Lines Finance Discount Notes, the Loan Parties may make Restricted Payments to Holdings or any Restricted Subsidiary (and, in the case of any such Subsidiary that is not a whollyH-owned Subsidiary, to each other owner of Equity Interests of such Subsidiary ratably based on their relative ownership interests of the relevant class of Equity Interests);
(ii) [reserved];
(iii) [reserved];
(iv) [reserved];
(v) repurchases of Equity Interests in Holdings or any Parent Entity (or make Restricted Payments to allow repurchases of Equity Interest in Holdings any Parent Entity) deemed to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price of such stock options or warrants or other incentive interests;
(vi) Holdings may redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted stock, stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) or make Restricted Payments to allow any of its Parent Entities to so redeem, retire, acquire or repurchase their Equity Interests (or any options, warrants, restricted stock, stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests), in each case, held by current or former officers, managers, consultants, directors, employees, independent contractors or other service providers (or their respective spouses, former spouses, domestic partners, successors, executors, administrators, heirs, legatees or distributees) of Holdings or any Parent Entity thereof and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment or service of, or breach of restrictive covenants by, any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, stock subscription or equity incentive award agreement, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that, the aggregate amount of Restricted Payments permitted by this clause (vi) after the Closing Date shall not exceed the greater of $10,000,000 and 5.0% of Consolidated EBITDA for the most recently ended Test Period, in any fiscal year, with unused amounts in any fiscal year being carried over to succeeding fiscal years, so long as the aggregate amount of Restricted Payments permitted by this clause (vi) in any fiscal year shall not exceed the greater of $20,000,000 and 10.0% of Consolidated EBITDA for the most recently ended Test Period, in the aggregate, plus all net cash proceeds obtained from any key-man life insurance policies received during such fiscal year (without giving effect to the foregoing proviso);
(vii) Holdings may make Restricted Payments in cash to any Parent Entity:
(A) for any taxable period for which Holdings and/or any of its Subsidiaries is a member of a consolidated, combined or similar income or similar tax group (a “Tax Group”) of which a Parent Entity is the common parent to pay the consolidated, combined or similar income or similar taxes, as applicable, of such Tax Group that are attributable to the taxable income of Holdings and/or its applicable Subsidiaries (as applicable), net of any payment already made by Holdings or its Subsidiaries in respect of such Taxes; provided that (1) Restricted Payments pursuant to this subclause (A) shall not exceed the amount of Taxes that Holdings would have paid if Holdings and/or such Subsidiaries were a stand-alone taxpayer or stand-alone Tax Group for all relevant taxable periods after the Closing Date, (2) Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to any Loan Party and (3) with respect to any taxable period (or portion thereof) ending prior to the date hereof, any distribution otherwise permitted under this clause (A) shall be permitted only to the extent such distribution relates to a tax payable after the date hereof;
(B) the proceeds of which shall be used by such Parent Entity to pay (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties), that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of Holdings (or any parent thereof) attributable to the ownership or operations of any Parent Entity, Holdings and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by the Borrower or any Restricted Subsidiary and (y) otherwise permitted to be paid by Holdings and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (v);
(C) the proceeds of which shall be used by Holdings (or any Parent Entity) to pay franchise and similar Taxes, other fees and expenses, required to maintain its organizational existence and auditing fees and expenses;
(D) [reserved];
(E) the proceeds of which shall be used by any Parent Entity to finance any Investment that would be permitted to be made by Holdings or a Restricted Subsidiary pursuant to Section 6.04; provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) such Parent Entity shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests) to be contributed to Holdings or any Restricted Subsidiary (any in no event shall any such contribution increase the Available Amount) or (y) the Person formed or acquired to merge into or consolidate with Holdings or any Restricted Subsidiary to the extent such merger or consolidation is permitted by Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.13 and 5.14;
(F) the proceeds of which shall be used to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, consultants, independent contractors or employees of Holdings, Borrower or any Parent Entity to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, Borrower and/or the Restricted Subsidiaries;
(G) the proceeds of which shall be used by Holdings (or any Parent Entity) to pay (i) fees and expenses related to any successful or unsuccessful equity issuance or offering or debt issuance, incurrence or offering, disposition or acquisition, Investment or other transaction permitted by this Agreement and (ii) public company costs; and
(H) the proceeds of which shall be used for the payment of insurance premiums to the extent attributable to any Parent Entity, Holdings, the Borrower and its subsidiaries;
(viii) Restricted Payments Lines Finance in an aggregate amount not to exceed the Available Amount amount of such cash interest payment; provided that is Not Otherwise Applied the H-Lines Finance Discount Notes shall not have been amended after the issuance thereof to accelerate any date on which, or increase the amount of, cash interest payable thereon, (xi) following the consummation of the Specified IPO and so long as no Event of Default shall have occurred and be continuing or would result therefrom, the Loan Parties may make any Restricted Payment if Holdings would have been permitted to make such Restricted Payment under Section 4.11 of the High Yield Indenture (as in effect immediately prior on the Amendment Effective Date), assuming for the purposes of this Section 6.08(a)(xi) that (i) clauses (a)(3)(b), (a)(3)(c) and (a)(3)(d) and clauses (1) through (17) inclusive of clause (b) were not applicable (except that clauses (2), (3), (4), (6), (7), (9), (14), (15) and (16) of such clause (b) shall be deemed to be applicable for purposes of interpreting the first parenthetical phrase in clause (a)(3)) and (ii) notwithstanding the definition of “Consolidated Net Income” in the High Yield Indenture and to the time extent deducted in determining such “Consolidated Net Income”, transaction costs and expenses incurred in connection with the Specified IPO and the other transactions consummated in accordance with the use of making proceeds set forth in the Registration Statement and the amendment and restatement of such this Agreement and reasonable and customary transaction costs and expenses incurred in connection with financing transactions consummated following consummation of the Specified IPO shall, for purposes of this Section 6.08(a)(xi), be excluded from the calculation of “Consolidated Net Income” under the Indenture; provided that no more than an aggregate of $15,000,000 of Restricted Payment Payments may be made pursuant to this Section 6.08(a)(xi) in any consecutive four-quarter period, (xii) upon the consummation of the Specified IPO, Restricted Payments consisting of cash dividends to Horizon Lines, Inc. in an aggregate amount not to exceed $40,000,000 for application by Horizon Lines, Inc. in accordance with the use of proceeds set forth in the Registration Statement; (xiii) following the consummation of the Specified IPO, so long as (x) no Event of Default has occurred and is continuing (or would occur after giving Pro Forma Effect result therefrom, Restricted Payments made directly or indirectly to such actionthe Public Parent, to the extent used promptly by the Public Parent to effect the purchase, redemption, acquisition, cancellation or other retirement for value of Excess Equity Interests; provided that (a) the Borrower gives written notice to the Administrative Agent at or prior to making any Restricted Payment pursuant to this Section 6.08(a)(xiii) and (yb) where any such purchase, redemption, acquisition, cancellation or other retirement for value is done solely to maintain compliance with citizenship requirements of applicable Maritime Laws or the Certificate of Incorporation; (xiv) so long as no Event of Default shall have occurred and be continuing or would result therefrom, the Loan Parties may make any other Restricted Payment is funded Payments not to exceed $1,000,000, in the aggregate, in any fiscal year of Holdings and $5,000,000 in the aggregate during the term of this Agreement; provided that any amount referenced in this clause (xiv) not utilized in a previous fiscal year may be utilized in the immediately succeeding (but no other) fiscal year; and (xv) the payment by Holdings to any Parent of proceeds from the Growth Amountexercise of stock options of Holdings, so long as such stock options shall have been issued and outstanding on or before the Borrower is in compliance with the Financial Covenants (determined on a Pro Forma Basis);Effective Date.
(ixb) redemptions in whole No Loan Party will, or in part of will permit any of its Equity Interests for another class subsidiaries to, make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of its Qualified Equity Interests or with proceeds from substantially concurrent equity contributions in respect of principal of or issuances interest on any Indebtedness other than the Obligations as a result of new Qualified Equity Interests any asset sale, change of control or similar event or any payment or other distribution (and whether in no event shall cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of such contribution Indebtedness as a result of any asset sale, change of control or issuance so utilized increase the Available Amount); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;similar event, except:
(xi) [reserved];
(xi) Holdings may make Restricted Payments to any Parent Entity to enable such Parent Entity to pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment);
(xii) Restricted Payments to fund the payment of regularly scheduled dividends interest and repurchases on Holdings’ Equity Interests, in an aggregate amount per annum not to exceed the greater of (x) $50,000,000 in any fiscal year, with unused amounts in any fiscal year being carried over to the succeeding fiscal year, principal payments as and (y) 6.0% of market capitalization;
(xiii) payments made by Holdings or any Restricted Subsidiary when due in respect of withholding or similar taxes payable upon exercise of Equity Interests any such Indebtedness to the extent permitted by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment on a Pro Forma Basis, the Total Net Leverage Ratio is less than or equal to 2.75:1.00 and there is no continuing Event of Default on the date of declaration;
(xv) [reserved];
(xvi) [reserved];
(xvii) Restricted Payments related to settlement of Holdings’ defined benefit pension plan in the United Kingdom;
(xviii) [reserved]Section 6.01; and
(xixii) additional Restricted Payments; provided that (A) refinancings of such Restricted Payments shall not exceed Indebtedness to the greater of $50,000,000 and 25.0% of Consolidated EBITDA for the most recently ended Test Period and (B) there is no continuing Specified Event of Default on the date of declarationextent permitted by Section 6.01.
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) Neither Holdings will notnor the Borrower will, nor will it they permit any Restricted Subsidiary to, pay or make, directly or indirectly, any Restricted Payment, except:
(i) The Borrower and each Restricted Subsidiary may make Restricted Payments to Holdings Holdings, the Borrower or any other Restricted Subsidiary (and, Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a wholly-owned SubsidiarySubsidiary of the Borrower, such Restricted Payment is made to Holdings, the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary ratably based on their relative ownership interests of the relevant class of Equity Interests; provided further that in the case of any Restricted Payment to Holdings the proceeds of which shall be used by Holdings to make any payments in respect of any Permitted Holdings Debt, such Restricted Payment shall only be permitted to be made pursuant to Section 6.08(a)(vii) or (xiii);
(ii) [reserved]Holdings may declare and make dividend payments or other distributions payable solely in the Equity Interests of Holdings;
(iii) [reserved];
(iv) [reserved];
(v) repurchases of Equity Interests in Holdings or any Parent Entity (or make Restricted Payments by Holdings to allow repurchases of Equity Interest in Holdings any Parent Entitydirect or indirect parent of Holdings) or the Borrower deemed to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price of such stock options or warrants or other incentive interestswarrants;
(viiv) Restricted Payments made to consummate the Transactions or made to consummate (and contemplated by) the Reorganization Transactions;
(v) Restricted Payments to Holdings which Holdings may use to redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted stock, stock units or stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) (or make Restricted Payments to allow any of its Parent Entities Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests (or any options, warrants, restricted stock, stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests), in each case, ) held by current or former officers, managers, consultants, directors, employees, independent contractors or other service providers directors and employees (or their respective spouses, former spouses, domestic partners, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any Parent Entity thereof direct or indirect parent thereof), Holdings, the Borrower and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment or service of, or breach of restrictive covenants by, any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, stock subscription or equity incentive award agreement, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that, that the aggregate amount of Restricted Payments permitted by this clause (viv) after the Closing Date Effective Date, together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(m) in lieu thereof, shall not exceed the greater sum of (A) $10,000,000 and 5.0% of Consolidated EBITDA for the most recently ended Test Period, in any fiscal year, with unused amounts 250,000,000 in any fiscal year being carried over to succeeding fiscal years, so long as of the aggregate Borrower and (B) the amount of Restricted Payments permitted by this clause (vi) in any fiscal year shall not exceed equal to the greater of $20,000,000 and 10.0% of Consolidated EBITDA for the most recently ended Test Period, in the aggregate, plus all net cash proceeds obtained from any key-of key man life insurance policies received during such by Holdings, the Borrower or the Restricted Subsidiaries after the Effective Date; provided that any unused portion of the preceding basket calculated pursuant to clauses (A) and (B) above for any fiscal year (without giving effect may be carried forward to the foregoing proviso)succeeding fiscal years;
(viivi) Holdings the Borrower may make Restricted Payments in cash to any Parent EntityHoldings and, where applicable, Holdings may make Restricted Payments in cash:
(A) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay), for any taxable period for which Holdings and/or any of its Subsidiaries is a member are members of a consolidated, combined or similar income or similar unitary tax group for U.S. federal and/or applicable state, local or foreign income Tax purposes of which a direct or indirect parent of Holdings is the common parent (a “Tax Group”) ), the portion of which a Parent Entity is the common parent to pay the consolidatedany U.S. federal, combined state, local or similar income or similar taxes, foreign Taxes (as applicable, ) of such Tax Group for such taxable period that are attributable to the taxable income of Holdings and/or its applicable Subsidiaries (as applicable), net of any payment already made by Holdings or its Subsidiaries in respect of such TaxesSubsidiaries; provided that (1) Restricted Payments made pursuant to this subclause (Aa)(vi)(A) shall not exceed the amount of Taxes Tax liability that Holdings and/or its applicable Subsidiaries would have paid incurred in respect of such Taxes were such Taxes determined as if Holdings and/or such Subsidiaries entity(ies) were a stand-alone taxpayer or a stand-alone Tax Group for all relevant taxable periods after the Closing Dategroup; and provided, (2) further, that Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to any Loan Party and (3) with respect to any taxable period (Holdings or portion thereof) ending prior to the date hereof, any distribution otherwise permitted under this clause (A) shall be permitted only to the extent such distribution relates to a tax payable after the date hereofits Restricted Subsidiaries;
(B) the proceeds of which shall be used by such Parent Entity Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting accounting and similar expenses payable to third parties), ) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees directors or consultants officers of Holdings (or any parent thereof) attributable to the ownership or operations of any Parent EntityHoldings, Holdings the Borrower and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by any of Holdings, the Borrower or any and the Restricted Subsidiary Subsidiaries and (y) otherwise permitted to be paid by Holdings Holdings, the Borrower and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings Holdings, the Borrower or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (v6.09(ix);
(C) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any Parent Entitydirect or indirect parent of Holdings to pay) to pay franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence and auditing fees and expensescorporate existence;
(D) [reserved];
(E) the proceeds of which shall be used by any Parent Entity Holdings to make Restricted Payments permitted by Section 6.08(a)(iv) or Section 6.08(a)(v);
(E) to finance any Investment that would be permitted to be made by Holdings or a Restricted Subsidiary pursuant to Section 6.046.04 other than Section 6.04(m); provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) such Parent Entity Holdings shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity InterestsInterests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to Holdings Holdings, the Borrower or any the Restricted Subsidiary (any in no event shall any such contribution increase the Available Amount) Subsidiaries or (y) the Person formed or acquired to merge into or consolidate with Holdings Holdings, the Borrower or any of the Restricted Subsidiary Subsidiaries to the extent such merger or consolidation is permitted by in Section 6.03) 6.03 in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.13 5.11 and 5.145.12;
(F) the proceeds of which shall be used to pay customary salary, bonus, severance bonus and other benefits payable to current or former directors, officers, members of management, managers, consultants, independent contractors or officers and employees of Holdings, Borrower Holdings or any Parent Entity direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrower and/or and the Restricted Subsidiaries;
(G) the proceeds of which shall be used by Holdings (or any Parent Entity) to pay (ior to make Restricted Payments to allow any direct or indirect parent thereof to pay) fees and expenses related to any successful or unsuccessful equity issuance or offering or debt issuance, incurrence or offering, disposition or acquisition, Investment or other transaction permitted offering not prohibited by this Agreement and (ii) public company costswhether or not such offering is successful); and
(H) the proceeds of which shall be used for the payment of insurance premiums by Holdings to the extent attributable pay (or to make Restricted Payments to allow any direct or indirect parent thereof to pay) taxes related to any Parent Entityrestricted stock units held by current or former officers, Holdingsmanagers, the Borrower consultants, directors and its subsidiariesemployees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees);
(viiivii) in addition to the foregoing Restricted Payments, Holdings may make additional Restricted Payments or payments in respect of Permitted Holdings Debt in an aggregate amount, when taken together with the aggregate amount of prepayments, redemptions, purchases, defeasances and other payments in respect of Junior Financings made pursuant to Section 6.08(b)(iv), not to exceed the sum of (A) an amount at the time of making any such Restricted Payment and together with any other Restricted Payment made utilizing this clause (A) not to exceed the greater of $1,000,000,000 and 16% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Restricted Payment plus (B) so long as no Event of Default shall have occurred and be continuing or would result therefrom, the Available Amount that is Not Otherwise Applied as in (after giving effect immediately prior to any payments made pursuant to the following provisos to this Section 6.08(a)(vii)(B)) (provided that, notwithstanding the proviso set forth at the end of the definition of “Available Amount” herein, if at the time of the making of such the applicable Restricted Payment so long as Payment, (x) no Event of Default has occurred and the Available Amount is continuing (or would occur after giving Pro Forma Effect to such action) greater than $0 and (y) where such Restricted Payment is funded from the Growth Amount, the Borrower is in compliance with the Financial Covenants (determined on a Pro Forma BasisBasis after giving effect to such Restricted Payment, the Interest Coverage Ratio is less than 2.00 to 1.00, Holdings shall be permitted to use up to $1,250,000,000 per fiscal year, on a non-cumulative basis, of the Available Amount to pay (or to make Restricted Payments to allow any Parent Entity to pay) regularly scheduled dividends or distributions to shareholders or unitholders of any Parent Entity (including the Broadcom Shareholders in respect of their Exchangeable Units); provided further that the Available Amount (excluding the Starter Basket) shall be reduced on a dollar-for-dollar basis by the amount of any such Restricted Payment (it being understood that the Available Amount may be negative as a result)) plus (C) the Available Equity Amount that is Not Otherwise Applied;
(ixviii) redemptions in whole or in part of any of its Equity Interests for another class of its Qualified Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Qualified Equity Interests (and in no event shall such contribution or issuance so utilized increase the Available Amount)Interests; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(xix) [reserved]payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units;
(xix) Holdings may make Restricted Payments to any Holdings, the Borrower or a Parent Entity to enable such Parent Entity to may (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment)) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any Parent Entity to pay) regularly scheduled dividends or distributions to shareholders or unitholders of any Parent Entity (including the Broadcom Shareholders in respect of their Exchangeable Units) in an amount not to exceed $1,000,000,000 in any fiscal year;
(xii) Restricted Payments to fund the payment of regularly scheduled dividends and repurchases on Holdings’ Equity Interests, in an aggregate amount per annum not to exceed the greater of (x) $50,000,000 in any fiscal year, with unused amounts in any fiscal year being carried over to the succeeding fiscal year, and (y) 6.0% of market capitalization;
(xiii) payments made or expected to be made by Holdings Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or Permitted TransfereesImmediate Family Members) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xivxiii) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Net Leverage Ratio is less than or equal to 2.75:1.00 2.75 to 1.00 and (B) there is no continuing Event of Default on Default;
(xiv) the date distribution, by dividend or otherwise, of declaration;shares of Equity Interests of, or Indebtedness owed to Holdings, the Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Permitted Investments); and
(xv) [reserved]the Borrower may make Restricted Payments to Holdings and Holdings may make Restricted Payments directly or indirectly to Parent in an amount not to exceed $1,000,000 in any fiscal year to pay the liquidation preference upon redemption of any voting preference shares issued by Parent.
(b) Neither Holdings nor the Borrower will, nor will they permit any Restricted Subsidiary to make or pay, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, except:
(i) payment of regularly scheduled interest and principal payments as, in the form of payment and on or around when due in respect of any Indebtedness, other than payments in respect of any Junior Financing prohibited by the subordination provisions thereof;
(xviii) [reserved]refinancings of Indebtedness with proceeds of Indebtedness permitted to be incurred under Section 6.01;
(xviiiii) Restricted Payments related the conversion of any Junior Financing to settlement Equity Interests (other than Disqualified Equity Interests) of Holdings’ defined benefit pension plan in the United KingdomHoldings or any of its direct or indirect parents;
(xviiiiv) [reserved]; and
(xix) additional prepayments, redemptions, purchases, defeasances and other payments in respect of Junior Financings prior to their scheduled maturity in an aggregate amount, when taken together with the aggregate amount of Restricted Payments; provided that Payments made pursuant to Section 6.08(a)(vii), not to exceed the sum of (A) an amount at the time of making any such Restricted Payments shall prepayment, redemption, purchase, defeasance or other payment and together with any other prepayment, redemption, purchase, defeasance or other payment made utilizing this clause (A) not to exceed the greater of $50,000,000 1,000,000,000 and 25.016% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such prepayment, redemption, purchase, defeasance or other payment plus (B) so long as no Event of Default shall have occurred and be continuing or would result therefrom, the Available Amount that is Not Otherwise Applied (after giving effect to any payments made pursuant to the provisos to Section 6.08(a)(vii)(B)) plus (C) the Available Equity Amount that is Not Otherwise Applied;
(v) prepayments, redemptions, purchases, defeasances and other payments in respect of Junior Financings prior to their scheduled maturity; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Leverage Ratio is less than or equal to 2.75 to 1.00 and (B) there is no continuing Specified Event of Default on Default; and
(vi) prepayments of Indebtedness contemplated by the Reorganization Transactions.
(c) Neither Holdings nor the Borrower will, nor will they permit any Restricted Subsidiary to, amend or modify any documentation governing any Junior Financing, in each case if the effect of such amendment or modification (when taken as a whole) is materially adverse to the Lenders. Notwithstanding anything herein to the contrary, the foregoing provisions of Section 6.08 will not prohibit the payment of any Restricted Payment or the consummation of any irrevocable redemption, purchase, defeasance or other payment within 60 days after the date of declaration.declaration thereof or the giving of such irrevocable notice, as applicable, if at the date of declaration
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) Holdings The Borrower will not, nor and will it not permit any Restricted Subsidiary to, pay declare or make, directly or indirectly, make any Restricted Payment, except:
(i) the Borrower and each Restricted Subsidiary may make Restricted Payments to Holdings the Borrower or any Restricted Subsidiary (andSubsidiary, provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a wholly-owned Wholly Owned Subsidiary, such Restricted Payment is made to the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary ratably based on their relative ownership interests of the relevant class of Equity Interests);
(ii) [reserved]the Borrower and each Restricted Subsidiary may declare and make dividend payments or other distributions payable solely in the Equity Interests of such Person;
(iii) [reserved]Restricted Payments made to consummate the Transactions and Restricted Payments constituting any part of a Permitted Reorganization;
(iv) [reserved];
(v) repurchases of Equity Interests in any Holdings Parent, Holdings, the Borrower or any Parent Entity (or make Restricted Payments to allow repurchases of Equity Interest in Holdings any Parent Entity) Subsidiary deemed to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price or withholding taxes payable in connection with the exercise of such stock options or warrants or other incentive interests;
(viv) Restricted Payments to Holdings or any Holdings Parent, which Holdings or such Holdings Parent may use to redeem, acquire, retire retire, repurchase or repurchase settle its Equity Interests (or any options, warrants, restricted stock, stock or stock appreciation rights or other equity-linked interests similar securities issued with respect to any of such Equity Interests) or make Restricted Payments Indebtedness or to allow any of its Parent Entities to so redeem, retire, acquire or repurchase their Equity Interests (service Indebtedness incurred by Holdings or any optionsHoldings Parent to finance the redemption, warrantsacquisition, restricted stockretirement, stock appreciation rights repurchase or other equity-linked interests issued with respect to any settlement of such Equity Interests), in each caseInterest or Indebtedness, held directly or indirectly by current or former officers, managers, consultants, directorsmembers of the Board of Directors, employees, employees or independent contractors or other service providers (or their respective spouses, former spouses, domestic partners, successors, executors, administrators, heirs, legatees or distributees) of Holdings or any Parent Entity thereof Holdings Parent, the Borrower and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment or service of, or breach of restrictive covenants by, any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, stock subscription or equity incentive award agreement, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that, agreement in an aggregate amount after the Effective Date together with the aggregate amount of loans and advances to Holdings or any Holdings Parent made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (v) not to exceed $20,000,000 in any calendar year with unused amounts in any calendar year being carried over to the next two succeeding calendar years (without giving effect to the following proviso); provided that such amount in any calendar year may be increased by (1) an amount not to exceed the cash proceeds of key man life insurance policies received by the Borrower, Holdings (or by any Holdings Parent and contributed to the Borrower) or the Restricted Subsidiaries after the Effective Date, or (2) the amount of any bona fide cash bonuses otherwise payable to members of the Board of Directors, consultants, officers, employees, managers or independent contractors of Holdings or any Holdings Parent, the Borrower or any Restricted Subsidiary that are foregone in return for the receipt of Equity Interests, the fair market value of which is equal to or less than the amount of such cash bonuses, which, if not used in any year, may be carried forward to any subsequent fiscal year; provided further that cancellation of Indebtedness owing to Holdings, the Borrower or any Restricted Subsidiary from members of the Board of Directors, consultants, officers, employees, managers or independent contractors (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings or any Holdings Parent, the Borrower or any Restricted Subsidiary in connection with a repurchase of Equity Interests of Holdings or any direct or indirect parent of the Borrower or the Borrower will not be deemed to constitute a Restricted Payment for purposes of this Section 6.07 or any other provisions of this Agreement.
(vi) after other Restricted Payments made by the Closing Date Borrower; provided that, on the date of declaration of such Restricted Payments, (x) no Specified Event of Default shall not exceed have occurred and be continuing or would result therefrom and (y) on a Pro Forma Basis, the greater of $10,000,000 and 5.0% of Consolidated EBITDA Total Net Leverage Ratio is equal to or less than 2.25 to 1.00 for the most recently ended Test Period, in any fiscal year, with unused amounts in any fiscal year being carried over to succeeding fiscal years, so long as the aggregate amount of Restricted Payments permitted by this clause (vi) in any fiscal year shall not exceed the greater of $20,000,000 and 10.0% of Consolidated EBITDA for the most recently ended Test Period, in the aggregate, plus all net cash proceeds obtained from any key-man life insurance policies received during such fiscal year (without giving effect to the foregoing proviso);
(vii) Holdings the Borrower may make Restricted Payments in cash to Holdings or any Parent EntityHoldings Parent:
(A) as distributions by the Borrower or any Restricted Subsidiary to Holdings or any Holdings Parent in amounts required for Holdings or any Holdings Parent to pay, with respect to any taxable period for in which Holdings the Borrower and/or any of its the Restricted Subsidiaries is a member of a consolidated, combined or similar income combined, unitary or similar tax group (a “Tax Group”) of which a Holdings or such Holdings Parent Entity is the common parent parent, an amount equal to pay the consolidatedU.S. federal, combined or similar state and local and non-U.S. income or similar taxes, as applicable, Taxes of such Tax Group that are attributable to the taxable income income, revenue, receipts, gross receipts, gross profits, capital or margin of Holdings the Borrower and/or its applicable Subsidiaries (as applicable)Subsidiaries; provided that, net for each taxable period, the amount of any payment already such payments made by Holdings or its Subsidiaries in respect of such Taxes; provided that (1) Restricted Payments pursuant to this subclause (A) taxable period in the aggregate shall not exceed the amount of Taxes such taxes that Holdings the Borrower and its Subsidiaries would have paid been required to pay if Holdings and/or such Subsidiaries they were a stand-alone taxpayer or Tax Group with the Borrower as the corporate common parent of such stand-alone Tax Group for all relevant taxable periods after the Closing Date(collectively, (2) Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to any Loan Party and (3) with respect to any taxable period (or portion thereof) ending prior to the date hereof, any distribution otherwise permitted under this clause (A) shall be permitted only to the extent such distribution relates to a tax payable after the date hereof“Tax Distributions”);
(B) the proceeds of which shall be used by such Parent Entity Holdings or a direct or indirect parent of the Borrower to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings or such direct or indirect parent of the Borrower to pay)
(1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting accounting and similar expenses payable to third parties), ) that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors, members of the Board of Directors or officers, members of managementemployees, directors, managers, employees consultants or consultants independent contractors of Holdings (or any direct or indirect parent thereof) of the Borrower attributable to the ownership or operations of any Parent Entity, Holdings the Borrower and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by Holdings, the Borrower or any and the Restricted Subsidiary Subsidiaries and (y) otherwise permitted to be paid by Holdings Holdings, the Borrower and the any Restricted Subsidiaries under this Agreement and Agreement, (4) payments [reserved], (5) to satisfy indemnity and other obligations under acquisition or other agreements and (6) amounts that would otherwise be permitted to be paid directly by Holdings or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (v)5.15;
(C) the proceeds of which shall be used by Holdings (or any Parent Entity) a direct or indirect parent of the Borrower to pay franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence and auditing fees and expensescorporate or other legal existence;
(D) [reserved];
(E) the proceeds of which shall be used by any Parent Entity to finance any Investment that made by Holdings or a direct or indirect parent of the Borrower that, if made by the Borrower, would be permitted to be made by Holdings or a Restricted Subsidiary pursuant to Section 6.04; provided that (1A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2B) Holdings or such Parent Entity direct or indirect parent of the Borrower shall, immediately following the closing thereof, cause (x1) all property acquired (whether assets or Equity InterestsInterests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to Holdings the Borrower or any its Restricted Subsidiary (any in no event shall any such contribution increase the Available Amount) Subsidiaries or (y2) the Person formed or acquired to merge into or amalgamate or consolidate with Holdings the Borrower or any of the Restricted Subsidiary Subsidiaries to the extent such merger merger, amalgamation or consolidation is permitted by in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.13 5.11 and 5.145.12;
(E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or a direct or indirect parent of the Borrower to pay) (1) fees and expenses related to any actual or proposed equity or debt offering not prohibited by this Agreement and (2) advisory, refinancing, transaction and exit fees and expenses attributable to the business of the Borrower and the Restricted Subsidiaries;
(F) the proceeds of which shall be used to pay customary salary, bonus, severance bonus and other benefits payable to current or former directors, officers, members of management, managers, consultants, independent contractors or officers and employees of Holdings, Borrower Holdings or any Parent Entity direct or indirect parent of the Borrower to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrower and/or and the Restricted Subsidiaries;; and
(G) the proceeds of which shall be used by Holdings (or any Parent Entity) to pay (i) fees and expenses related to any successful or unsuccessful equity issuance or offering or debt issuance, incurrence or offering, disposition or acquisition, Investment or other transaction make payments permitted by this Agreement clause (b)(iv) and (iib)(v) public company costs; and
(H) the proceeds of which shall be used for the payment of insurance premiums to the extent attributable to any Parent Entity, Holdings, the Borrower and its subsidiariesSection 6.07;
(viii) in addition to the foregoing Restricted Payments Payments, so long as, as of the most recently ended Test Period, the Total Net Leverage Ratio is equal to or less than 3.00 to 1.00, the Borrower may make additional Restricted Payments, in an aggregate amount not to exceed the sum of (A) the Available Amount that is Not Otherwise Applied as in effect immediately prior to the time of making of such Restricted Payment Payment, plus (B) the Available Equity Amount that is Not Otherwise Applied as in effect immediately prior to the time of making of such Restricted Payment; provided that any amounts included in the definition of “Available Amount” may only be used for Restricted Payments so long as (x) no Specified Event of Default has shall have occurred and is be continuing (or would occur after giving Pro Forma Effect to such action) and (y) where at the time of declaration of such Restricted Payment is funded from the Growth Amount, the Borrower is in compliance with the Financial Covenants (determined on a Pro Forma Basis)Payment;
(ix) redemptions in whole or in part of any of its Equity Interests for another class of its Qualified Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Qualified Equity Interests (and in no event shall such contribution or issuance so utilized increase the Available Amount)Interests; provided provided, that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(x) [reserved]payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units;
(xi) payments to Holdings may make Restricted Payments or any Holdings Parent to any Parent Entity permit it to enable such Parent Entity to (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment)) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xii) Restricted Payments to fund the payment of regularly scheduled dividends and repurchases on Holdings’ Equity Interests, in an aggregate amount per annum not to exceed the greater of (x) $50,000,000 in any fiscal year, with unused amounts in any fiscal year being carried over to the succeeding fiscal year, and (y) 6.0% of market capitalization;
(xiii) payments made or expected to be made by Holdings, any Holdings Parent, the Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or Permitted Transfereespermitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiii) [Reserved];
(xiv) additional the declaration and payment of a Restricted Payments; provided that after giving effect Payment to Holdings on account of Holdings’ common stock (or the payment by the Borrower to Holdings or any Holdings Parent) to fund redemptions or share repurchases of such company’s common stock or a payment of dividends on such company’s common stock, in any fiscal year of the Borrower in an amount not to exceed the sum of (x) 7.0% per annum of the net cash proceeds of a public offering of common stock received by or contributed to the Borrower or any Subsidiary Loan Party and (y) 7.0% of the Market Capitalization of Holdings or such Holdings Parent;
(xv) 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 a Qualified Securitization Facility;
(xvi) Restricted Payments in an amount not to exceed the sum of (I) the greater of (A) $55,000,000 and (B) 40% of Consolidated EBITDA for the Test Period then last ended at the time of making such Restricted Payment plus (II) unused amounts available to make prepayments, redemptions, repurchases, defeasances and other payments of Junior Financing pursuant to Section 6.07(b)(iv)(A) (it being understood that the usage of such amounts for Restricted Payments under this clause (xvi) shall reduce the amounts available for prepayments, redemptions, repurchases, defeasances and other payments in respect of Junior Financing under such Section 6.07(b)(iv)(A)) plus (III) unused amounts available to make Investments pursuant to Section 6.04(bb) (it being understood that the usage for such amounts for Restricted Payments under this clause (xvi) shall reduce the amount available for Investments under such Section 6.04(bb));
(xvii) to the extent constituting Restricted Payments, the Borrower and the Restricted Subsidiaries may consummate (1) transactions permitted pursuant to Section 6.03 and (2) make Investments permitted under Section 6.04;
(xviii) any Restricted Subsidiary may make a Restricted Payment in connection with the acquisition of additional Equity Interests in such Restricted Subsidiary from minority shareholders to the extent such acquisition would have been permitted (and to the extent so permitted shall constitute such Investment) by the parent company of such Restricted Subsidiary pursuant to Section 6.04; and
(xix) [reserved].
(b) The Borrower will not, and will not permit any Restricted Subsidiary to, make any voluntary prepayment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior Financing constituting Material Indebtedness (other than to the extent of any Retained Declined Proceeds applied in compliance with Section 2.11(e)), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such Junior Financing, except:
(i) payment of regularly scheduled interest and principal payments, mandatory offers to repay, repurchase or redeem, mandatory prepayments of principal premium and interest, and payment of fees, expenses and indemnification obligations, with respect to such Junior Financing, other than payments in respect of any Junior Financing prohibited by the subordination provisions thereof;
(ii) refinancings, supplements, substitutions, extensions, restructurings, exchanges or renewals of Indebtedness to the extent permitted by Section 6.01 and fees and expenses in connection therewith;
(iii) the conversion of any Junior Financing to Equity Interests (other than Disqualified Equity Interests) of the Borrower, Holdings or any Holdings Parent, and any payment that is intended to prevent any Junior Financing from being treated as an “applicable high yield discount obligation” within the meaning of Section 163(i)(1) of the Code;
(iv) so long as on a Pro Forma Basis, Basis for the most recently ended Test Period the Total Net Leverage Ratio is less than or equal to 2.75:1.00 2.50 to 1.00, prepayments, redemptions, repurchases, defeasances and there is no continuing Event other payments in respect of Default on Junior Financing prior to their scheduled maturity in an aggregate amount, not to exceed the date sum of declaration;
(xv) [reserved];
(xvi) [reserved];
(xvii) Restricted Payments related to settlement of Holdings’ defined benefit pension plan in the United Kingdom;
(xviii) [reserved]; and
(xix) additional Restricted Payments; provided that (A) an amount at the time of making any such Restricted Payments shall not exceed the greater of $50,000,000 prepayment, redemption, repurchase, defeasance or other payment and 25.0% of Consolidated EBITDA for the most recently ended Test Period and (B) there is no continuing Specified Event of Default on the date of declaration.together with any other prepayments, r
Appears in 1 contract
Sources: Credit Agreement (Gogo Inc.)
Restricted Payments; Certain Payments of Indebtedness. (a) Holdings No Loan Party will, or will not, nor will it permit any Restricted Subsidiary of its subsidiaries 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 prior to the Tranche B Maturity Date, except (i) Holdings may declare and pay dividends with respect to its Equity Interests payable solely in Equity Interests of Holdings that do not require (or permit the holder of such Equity Interest to require) any payments or other distribution (whether in cash, securities or other property) to the holder of such Equity Interests prior to the Tranche B Maturity Date, (ii) Loan Parties (other than Holdings) that are wholly-owned subsidiaries of Holdings may declare and pay dividends ratably with respect to their Equity Interests, (iii) provided no Event of Default is occurring or would result therefrom, Restricted Payments to repurchase Equity Interests in Holdings (or any Parent) from retired, deceased or terminated employees or directors (including their Heirs) of any Parent, Holdings or any of its subsidiaries in an amount not to exceed $1,000,000 in any fiscal year and $5,000,000 in the aggregate, (iv) Restricted Payments to repurchase Equity Interests in Holdings (or any Parent) from retired, deceased or terminated employees or directors (including their Heirs) of any Parent, Holdings or any of its subsidiaries, to the extent such Restricted Payments constitute Indebtedness that is not secured and is subordinated to the Obligations on terms reasonably acceptable to the Administrative Agent; provided that no more than $5,000,000 in aggregate principal amount of such Indebtedness may be outstanding at any time, (v) any Restricted Payment made pursuant to the Acquisition Documents, (vi) Restricted Payments to any Parent for the maintenance of its corporate existence and compliance with applicable law or accounting, legal, public relations, investor relations, financial or management activities (including the employment of employees, agents, accountants, consultants, bankers, advisors or other professionals in connection with any of the foregoing) in an amount not to exceed $1,500,000 per year, (vii) any Loan Party may issue Equity Interests that do not require (or permit the holder of such Equity Interest to require) any payments or other distributions (whether in cash, securities or other property) to the holder of such Equity Interests prior to the Tranche B Maturity Date, to the extent such issuance is in connection with a Permitted Acquisition or a transaction permitted by Section 6.05(j), (viii) any Loan Party may make any payments related to an Earnout, (ix) the payments permitted under Section 6.09(d) shall be permitted to be made, (x) so long as no Event of Default shall have occurred and be continuing or would result therefrom, the Loan Parties may make any other Restricted Payments not to exceed $1,000,000, in the aggregate, in any fiscal year of Holdings and $5,000,000 in the aggregate during the term of this Agreement; provided that any amount not utilized in a previous fiscal year may be utilized in the immediately succeeding (but no other) fiscal year and (xi) the payment by Holdings to any Parent of proceeds from the exercise of stock options of Holdings, so long as such stock options shall have been issued and outstanding on or before the Effective Date.
(b) No Loan Party will, or will permit any of its subsidiaries 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 other than the Obligations as a result of any asset sale, change of control or similar event 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 such Indebtedness as a result of any asset sale, change of control or similar event, except:
(i) each Restricted Subsidiary may make Restricted Payments to Holdings or any Restricted Subsidiary (and, payment of regularly scheduled interest and principal payments as and when due in the case respect of any such Subsidiary that is not a wholly-owned Subsidiary, Indebtedness to each other owner of Equity Interests of such Subsidiary ratably based on their relative ownership interests of the relevant class of Equity Interests);extent permitted by Section 6.01; and
(ii) [reserved];
(iii) [reserved];
(iv) [reserved];
(v) repurchases of Equity Interests in Holdings or any Parent Entity (or make Restricted Payments to allow repurchases of Equity Interest in Holdings any Parent Entity) deemed to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price refinancings of such stock options or warrants or other incentive interests;
(vi) Holdings may redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted stock, stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) or make Restricted Payments to allow any of its Parent Entities to so redeem, retire, acquire or repurchase their Equity Interests (or any options, warrants, restricted stock, stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests), in each case, held by current or former officers, managers, consultants, directors, employees, independent contractors or other service providers (or their respective spouses, former spouses, domestic partners, successors, executors, administrators, heirs, legatees or distributees) of Holdings or any Parent Entity thereof and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment or service of, or breach of restrictive covenants by, any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, stock subscription or equity incentive award agreement, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that, the aggregate amount of Restricted Payments permitted by this clause (vi) after the Closing Date shall not exceed the greater of $10,000,000 and 5.0% of Consolidated EBITDA for the most recently ended Test Period, in any fiscal year, with unused amounts in any fiscal year being carried over to succeeding fiscal years, so long as the aggregate amount of Restricted Payments permitted by this clause (vi) in any fiscal year shall not exceed the greater of $20,000,000 and 10.0% of Consolidated EBITDA for the most recently ended Test Period, in the aggregate, plus all net cash proceeds obtained from any key-man life insurance policies received during such fiscal year (without giving effect to the foregoing proviso);
(vii) Holdings may make Restricted Payments in cash to any Parent Entity:
(A) for any taxable period for which Holdings and/or any of its Subsidiaries is a member of a consolidated, combined or similar income or similar tax group (a “Tax Group”) of which a Parent Entity is the common parent to pay the consolidated, combined or similar income or similar taxes, as applicable, of such Tax Group that are attributable to the taxable income of Holdings and/or its applicable Subsidiaries (as applicable), net of any payment already made by Holdings or its Subsidiaries in respect of such Taxes; provided that (1) Restricted Payments pursuant to this subclause (A) shall not exceed the amount of Taxes that Holdings would have paid if Holdings and/or such Subsidiaries were a stand-alone taxpayer or stand-alone Tax Group for all relevant taxable periods after the Closing Date, (2) Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only Indebtedness to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to any Loan Party and (3) with respect to any taxable period (or portion thereof) ending prior to the date hereof, any distribution otherwise permitted under this clause (A) shall be permitted only to the extent such distribution relates to a tax payable after the date hereof;
(B) the proceeds of which shall be used by such Parent Entity to pay (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties), that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of Holdings (or any parent thereof) attributable to the ownership or operations of any Parent Entity, Holdings and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by the Borrower or any Restricted Subsidiary and (y) otherwise permitted to be paid by Holdings and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (v);
(C) the proceeds of which shall be used by Holdings (or any Parent Entity) to pay franchise and similar Taxes, other fees and expenses, required to maintain its organizational existence and auditing fees and expenses;
(D) [reserved];
(E) the proceeds of which shall be used by any Parent Entity to finance any Investment that would be permitted to be made by Holdings or a Restricted Subsidiary pursuant to Section 6.04; provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) such Parent Entity shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests) to be contributed to Holdings or any Restricted Subsidiary (any in no event shall any such contribution increase the Available Amount) or (y) the Person formed or acquired to merge into or consolidate with Holdings or any Restricted Subsidiary to the extent such merger or consolidation is permitted by Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.13 and 5.14;
(F) the proceeds of which shall be used to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, consultants, independent contractors or employees of Holdings, Borrower or any Parent Entity to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, Borrower and/or the Restricted Subsidiaries;
(G) the proceeds of which shall be used by Holdings (or any Parent Entity) to pay (i) fees and expenses related to any successful or unsuccessful equity issuance or offering or debt issuance, incurrence or offering, disposition or acquisition, Investment or other transaction permitted by this Agreement and (ii) public company costs; and
(H) the proceeds of which shall be used for the payment of insurance premiums to the extent attributable to any Parent Entity, Holdings, the Borrower and its subsidiaries;
(viii) Restricted Payments in an aggregate amount not to exceed the Available Amount that is Not Otherwise Applied as in effect immediately prior to the time of making of such Restricted Payment so long as (x) no Event of Default has occurred and is continuing (or would occur after giving Pro Forma Effect to such action) and (y) where such Restricted Payment is funded from the Growth Amount, the Borrower is in compliance with the Financial Covenants (determined on a Pro Forma Basis);
(ix) redemptions in whole or in part of any of its Equity Interests for another class of its Qualified Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Qualified Equity Interests (and in no event shall such contribution or issuance so utilized increase the Available Amount); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(x) [reserved];
(xi) Holdings may make Restricted Payments to any Parent Entity to enable such Parent Entity to pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment);
(xii) Restricted Payments to fund the payment of regularly scheduled dividends and repurchases on Holdings’ Equity Interests, in an aggregate amount per annum not to exceed the greater of (x) $50,000,000 in any fiscal year, with unused amounts in any fiscal year being carried over to the succeeding fiscal year, and (y) 6.0% of market capitalization;
(xiii) payments made by Holdings or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment on a Pro Forma Basis, the Total Net Leverage Ratio is less than or equal to 2.75:1.00 and there is no continuing Event of Default on the date of declaration;
(xv) [reserved];
(xvi) [reserved];
(xvii) Restricted Payments related to settlement of Holdings’ defined benefit pension plan in the United Kingdom;
(xviii) [reserved]; and
(xix) additional Restricted Payments; provided that (A) such Restricted Payments shall not exceed the greater of $50,000,000 and 25.0% of Consolidated EBITDA for the most recently ended Test Period and (B) there is no continuing Specified Event of Default on the date of declaration6.01.
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (add) Holdings None of Parent or any Subsidiary will not, nor will it permit any Restricted Subsidiary to, pay declare or make, directly or indirectly, any Restricted Payment, exceptor incur any obligation (contingent or otherwise) to do so, except that:
(i) each Restricted any Subsidiary may declare and pay dividends or make Restricted Payments other distributions with respect to Holdings or any Restricted Subsidiary (andits Equity Interests, in each case ratably to the case holders of any such Subsidiary that is not a wholly-owned Subsidiary, to each other owner of Equity Interests of such Subsidiary ratably based (or if not ratably, on their relative ownership interests of a basis more favorable to Parent and the relevant class of Equity InterestsLoan Parties);
(ii) [reserved]Parent may declare and pay dividends with respect to its Equity Interests payable solely in shares of Qualified Equity Interests of Parent;
(iii) [reserved]Parent may repurchase, purchase, acquire, cancel or retire for value Equity Interests of Parent from present or former employees, officers, directors or consultants (or their estates or beneficiaries under their estates) of Parent or any Subsidiary upon the death, disability, retirement or termination of employment or service of such employees, officers, directors or consultants, or to the extent required, pursuant to employee benefit plans, employment agreements, stock purchase agreements or stock purchase plans, or other benefit plans; provided that the aggregate amount of Restricted Payments made pursuant to this Section 6.08(a)(iii) shall not exceed $5,000,000 in any fiscal year;
(iv) [reserved]Parent may make cash payments in lieu of the issuance of fractional shares representing insignificant interests in Parent in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Equity Interests in Parent;
(v) repurchases of Parent may acquire Equity Interests in Holdings or any of Parent Entity (or make Restricted Payments to allow repurchases of Equity Interest in Holdings any Parent Entity) deemed to occur upon the exercise of stock options or warrants or other incentive interests for such Equity Interests of Parent if such Equity Interests represent a portion of the exercise price of such stock options or warrants in connection with tax withholding obligations arising in connection with the exercise of options by, or other incentive intereststhe vesting of restricted Equity Interests held by, any current or former director, officer or employee of Parent or its Subsidiaries;
(vi) Holdings Parent may redeem, acquire, retire convert or repurchase its exchange any Equity Interests (of Parent for or any options, warrants, restricted stock, stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) or make Restricted Payments to allow any of its Parent Entities to so redeem, retire, acquire or repurchase their into Qualified Equity Interests (or any options, warrants, restricted stock, stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests), in each case, held by current or former officers, managers, consultants, directors, employees, independent contractors or other service providers (or their respective spouses, former spouses, domestic partners, successors, executors, administrators, heirs, legatees or distributees) of Holdings or any Parent Entity thereof and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment or service of, or breach of restrictive covenants by, any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, stock subscription or equity incentive award agreement, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that, the aggregate amount of Restricted Payments permitted by this clause (vi) after the Closing Date shall not exceed the greater of $10,000,000 and 5.0% of Consolidated EBITDA for the most recently ended Test Period, in any fiscal year, with unused amounts in any fiscal year being carried over to succeeding fiscal years, so long as the aggregate amount of Restricted Payments permitted by this clause (vi) in any fiscal year shall not exceed the greater of $20,000,000 and 10.0% of Consolidated EBITDA for the most recently ended Test Period, in the aggregate, plus all net cash proceeds obtained from any key-man life insurance policies received during such fiscal year (without giving effect to the foregoing proviso)Parent;
(vii) Holdings Parent or any Subsidiary may on any date make Restricted Payments in cash to any Parent Entity:
(A) for any taxable period for which Holdings and/or any of its Subsidiaries is a member of a consolidated, combined or similar income or similar tax group (a “Tax Group”) of which a Parent Entity is the common parent to pay the consolidated, combined or similar income or similar taxes, as applicable, of such Tax Group that are attributable an amount equal to the taxable income of Holdings and/or its applicable Subsidiaries (as applicable)Available Amount on such date; provided, net of any payment already made by Holdings or its Subsidiaries in respect of such Taxes; provided however, that (1) Restricted Payments pursuant to this subclause (A) shall not exceed the amount of Taxes that Holdings would have paid if Holdings and/or such Subsidiaries were a stand-alone taxpayer or stand-alone Tax Group for all relevant taxable periods after the Closing Date, (2) Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to any Loan Party and (3) other than with respect to any taxable period (or portion thereof) ending prior to the date hereof, any distribution otherwise permitted under this clause (A) shall be permitted only to the extent such distribution relates to a tax payable after the date hereof;
(B) the proceeds of which shall be used by such Parent Entity to pay (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties), that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of Holdings (or any parent thereof) attributable to the ownership or operations of any Parent Entity, Holdings and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by the Borrower or any Restricted Subsidiary and (y) otherwise permitted to be paid by Holdings and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (v);
(C) the proceeds of which shall be used by Holdings (or any Parent Entity) to pay franchise and similar Taxes, other fees and expenses, required to maintain its organizational existence and auditing fees and expenses;
(D) [reserved];
(E) the proceeds of which shall be used by any Parent Entity to finance any Investment that would be permitted to be made by Holdings or a Restricted Subsidiary pursuant to Section 6.04; provided that (1) such Restricted Payment shall be made substantially concurrently with solely using the closing of such Investment and (2Starter Basket) such Parent Entity shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests) to be contributed to Holdings or any Restricted Subsidiary (any in no event shall any such contribution increase the Available Amount) or (y) the Person formed or acquired to merge into or consolidate with Holdings or any Restricted Subsidiary to the extent such merger or consolidation is permitted by Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.13 and 5.14;
(F) the proceeds of which shall be used to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, consultants, independent contractors or employees of Holdings, Borrower or any Parent Entity to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, Borrower and/or the Restricted Subsidiaries;
(G) the proceeds of which shall be used by Holdings (or any Parent Entity) to pay (i) fees and expenses related to any successful or unsuccessful equity issuance or offering or debt issuance, incurrence or offering, disposition or acquisition, Investment or other transaction permitted by this Agreement and (ii) public company costs; and
(H) the proceeds of which shall be used for the payment of insurance premiums to the extent attributable to any Parent Entity, Holdings, the Borrower and its subsidiaries;
(viii) Restricted Payments in an aggregate amount not to exceed the Available Amount that is Not Otherwise Applied as in effect immediately prior to at the time of the making of such Restricted Payment so long as Payments and immediately after giving effect to such Restricted Payments made in reliance on this subclause (vii), (x) no Event of Default has shall have occurred and is be continuing (or would occur after giving Pro Forma Effect to such action) result therefrom and (y) where the Total Net Leverage Ratio on the date of such Restricted Payment is funded from the Growth AmountPayments, the Borrower is in compliance with the Financial Covenants (determined calculated on a Pro Forma BasisBasis to give effect to any such Restricted Payments, is not in excess of the level that is 0.25 to 1.00 less than the then-applicable financial maintenance covenant level set forth in Section 6.13;
(viii) any Subsidiary may repurchase its Equity Interests held by minority shareholders or interest holders in a Permitted Acquisition or another transaction expressly permitted by Section 6.04 (other than Section 6.04(u) (it being understood that for purposes of Section 6.04, Parent shall be deemed the purchaser of such Equity Interests and such repurchase shall constitute an Investment by Parent in a Person that is not a Subsidiary in the amount of such purchase unless such Subsidiary becomes a Loan Party in connection with such repurchase);
(ix) redemptions in whole or in part of any of its Equity Interests for another class of its Qualified Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Qualified Equity Interests (and in no event shall such contribution or issuance so utilized increase the Available Amount); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed therebyextent such Investment constitutes a Restricted Payment, Parent and its Subsidiaries may enter into any Investment expressly permitted by Section 6.04 (other than Section 6.04(u));
(x) [reserved]additional Restricted Payments; provided that the Total Net Leverage Ratio immediately after giving effect to any such Restricted Payment, calculated on a Pro Forma Basis at the time such Restricted Payment is made, is not in excess of 2.00 to 1.00; provided, further, that at the time any such Restricted Payment is made pursuant to this clause (x), no Event of Default shall have occurred and be continuing or would result therefrom;
(xi) Holdings Parent may make Restricted Payments pay regularly scheduled quarterly cash dividends to any Parent Entity to enable such Parent Entity to pay cash in lieu of fractional Equity Interests in connection its shareholders consistent with any dividend, split or combination thereof its past practice or any Permitted Acquisition (or other similar Investment);
(xii) Restricted Payments to fund the payment of regularly scheduled dividends and repurchases on Holdings’ Equity Interests, Payment in an aggregate amount per annum not to exceed the greater of (xA) $50,000,000 in any fiscal year, with unused amounts in any fiscal year being carried over to the succeeding fiscal year, 40,000,000 and (yB) 6.0% $1.00 per share of market capitalization;
(xiii) payments made by Holdings or any Restricted Subsidiary in respect the total issued and outstanding shares of withholding or similar taxes payable upon exercise of common Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment on a Pro Forma Basis, the Total Net Leverage Ratio is less than or equal to 2.75:1.00 and there is no continuing Event of Default Parent on the date of declaration;
(xv) [reserved];
(xvi) [reserved];
(xvii) the declaration of a Restricted Payments related Payment; provided that such per share amount shall be adjusted to settlement give effect to any stock split or issuance on account of Holdings’ defined benefit pension plan in the United Kingdom;
(xviii) [reserved]equity for no consideration effected; and
(xixxii) additional Restricted Payments; provided that (A) such Restricted Payments shall in an aggregate principal amount not to exceed the greater of $50,000,000 and 25.0% of Consolidated EBITDA for the most recently ended Test Period and (B) there is no continuing Specified Event of Default on the date of declaration55,000,000.
Appears in 1 contract
Sources: Credit Agreement (NICE Ltd.)
Restricted Payments; Certain Payments of Indebtedness. (a) Holdings will not, nor will it permit any Restricted Subsidiary to, pay Declare or make, directly or indirectly, any Restricted Payment, except:
(i) each Restricted Subsidiary may make Restricted Payments to Holdings the Borrower or any Restricted other Subsidiary (and, of the Borrower; provided that in the case of any such Restricted Payment by a Subsidiary that is not a wholly-owned SubsidiaryWholly Owned Subsidiary of the Borrower, such Restricted Payment is made to the Borrower, any Subsidiary and to each other owner of Equity Interests of such Subsidiary ratably based on their relative ownership interests of the relevant class of Equity Interests);
(ii) [reserved]the Borrower and each Subsidiary may declare and make dividend payments or other distributions payable solely in the Qualified Equity Interests of such Person;
(iii) [reserved];
(iv) [reserved];
(v) repurchases of Equity Interests in Holdings the Borrower or any Parent Entity (or make Restricted Payments to allow repurchases of Equity Interest in Holdings any Parent Entity) deemed to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price of such stock options or warrants or other incentive interests;
(vi) Holdings may redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted stock, stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) or make Restricted Payments to allow any of its Parent Entities to so redeem, retire, acquire or repurchase their Equity Interests (or any options, warrants, restricted stock, stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests), in each case, held by current or former officers, managers, consultants, directors, employees, independent contractors or other service providers (or their respective spouses, former spouses, domestic partners, successors, executors, administrators, heirs, legatees or distributees) of Holdings or any Parent Entity thereof and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment or service of, or breach of restrictive covenants by, any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, stock subscription or equity incentive award agreement, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that, the aggregate amount of Restricted Payments permitted by this clause (vi) after the Closing Date shall not exceed the greater of $10,000,000 and 5.0% of Consolidated EBITDA for the most recently ended Test Period, in any fiscal year, with unused amounts in any fiscal year being carried over to succeeding fiscal years, so long as the aggregate amount of Restricted Payments permitted by this clause (vi) in any fiscal year shall not exceed the greater of $20,000,000 and 10.0% of Consolidated EBITDA for the most recently ended Test Period, in the aggregate, plus all net cash proceeds obtained from any key-man life insurance policies received during such fiscal year (without giving effect to the foregoing proviso);
(vii) Holdings may make Restricted Payments in cash to any Parent Entity:
(A) for any taxable period for which Holdings and/or any of its Subsidiaries is a member of a consolidated, combined or similar income or similar tax group (a “Tax Group”) of which a Parent Entity is the common parent to pay the consolidated, combined or similar income or similar taxes, as applicable, of such Tax Group that are attributable to the taxable income of Holdings and/or its applicable Subsidiaries (as applicable), net of any payment already made by Holdings or its Subsidiaries in respect of such Taxes; provided that (1) Restricted Payments pursuant to this subclause (A) shall not exceed the amount of Taxes that Holdings would have paid if Holdings and/or such Subsidiaries were a stand-alone taxpayer or stand-alone Tax Group for all relevant taxable periods after the Closing Date, (2) Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to any Loan Party and (3) with respect to any taxable period (or portion thereof) ending prior to the date hereof, any distribution otherwise permitted under this clause (A) shall be permitted only to the extent such distribution relates to a tax payable after the date hereof;
(B) the proceeds of which shall be used by such Parent Entity to pay (1) its operating expenses incurred Subsidiary in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties), that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of Holdings (or any parent thereof) attributable to the ownership or operations of any Parent Entity, Holdings and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by the Borrower or any Restricted Subsidiary and (y) otherwise permitted to be paid by Holdings and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (v);
(C) the proceeds of which shall be used by Holdings (or any Parent Entity) to pay franchise and similar Taxes, other fees and expenses, required to maintain its organizational existence and auditing fees and expenses;
(D) [reserved];
(E) the proceeds of which shall be used by any Parent Entity to finance any Investment that would be permitted to be made by Holdings or a Restricted Subsidiary pursuant to Section 6.04; provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) such Parent Entity shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests) to be contributed to Holdings or any Restricted Subsidiary (any in no event shall any such contribution increase the Available Amount) or (y) the Person formed or acquired to merge into or consolidate with Holdings or any Restricted Subsidiary to the extent such merger or consolidation is permitted by Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.13 and 5.14;
(F) the proceeds of which shall be used to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, consultants, independent contractors or employees of Holdings, Borrower or any Parent Entity to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, Borrower and/or the Restricted Subsidiaries;
(G) the proceeds of which shall be used by Holdings (or any Parent Entity) to pay (i) fees and expenses related to any successful or unsuccessful equity issuance or offering or debt issuance, incurrence or offering, disposition or acquisition, Investment or other transaction permitted by this Agreement and (ii) public company costs; and
(H) the proceeds of which shall be used for the payment of insurance premiums to the extent attributable to any Parent Entity, Holdings, the Borrower and its subsidiaries;
(viii) Restricted Payments in an aggregate amount not to exceed the Available Amount that is Not Otherwise Applied as in effect immediately prior to the time of making of such Restricted Payment so long as (x) no Event of Default has occurred and is continuing (or would occur after giving Pro Forma Effect to such action) and (y) where such Restricted Payment is funded from the Growth Amount, the Borrower is in compliance with the Financial Covenants (determined on a Pro Forma Basis);
(ix) redemptions in whole or in part of any of its Equity Interests for another class of its Qualified Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Qualified Equity Interests (and in no event shall such contribution or issuance so utilized increase the Available Amount); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(x) [reserved];
(xi) Holdings may make Restricted Payments to any Parent Entity to enable such Parent Entity to pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment);
(xii) Restricted Payments to fund the payment of regularly scheduled dividends and repurchases on Holdings’ Equity Interests, in an aggregate amount per annum not to exceed the greater of (x) $50,000,000 in any fiscal year, with unused amounts in any fiscal year being carried over to the succeeding fiscal year, and (y) 6.0% of market capitalization;
(xiii) payments made by Holdings or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment on a Pro Forma Basis, the Total Net Leverage Ratio is less than or equal to 2.75:1.00 and there is no continuing Event of Default on the date of declaration;
(xv) [reserved];
(xvi) [reserved];
(xvii) Restricted Payments related to settlement of Holdings’ defined benefit pension plan in the United Kingdom;
(xviii) [reserved]warrants; and
(xixiv) additional Restricted Paymentsthe Borrower or any of its Subsidiaries may pay for the repurchase, retirement or other acquisition or retirement for value of Equity Interests of the Borrower held by any future, present or former employee, director or officer (or any successors, executors, administrators, heirs, legatees or distributees of any of the foregoing) of the Borrower or any of its Subsidiaries upon the death, disability, retirement or termination of employment of any such Person or otherwise pursuant to any employee or management stock option plan; provided that the aggregate amount of payments made by the Borrower and its Subsidiaries for the purposes provided under this Section 6.06(iv) shall not exceed $1,000,000.
(b) Issue, sell or otherwise dispose of any class or series of Equity Interests that, by its terms or by the terms of any security into which it is convertible or exchangeable, is, or upon the happening of an event or passage of time would be, (i) convertible or exchangeable into Indebtedness or (ii) required to be redeemed or repurchased, including at the option of the holder, in whole or in part, or has, or upon the happening of an event or passage of time would have, a redemption or similar payment due.
(c) Prepay, redeem, purchase, defease, cancel or otherwise satisfy prior to the scheduled maturity thereof in any manner or make any payment or violate any subordination terms in any respect, in each case, of the Second Lien Notes and/or any other Indebtedness that is subordinated to, or secured on terms that are junior in right of payment to the Obligations, except (i) so long as no Default has occurred and is continuing, regularly scheduled cash interest payments and payments of fees, expenses and indemnification obligations in respect of such Indebtedness, in each case when due and in amounts not to exceed the amounts required to be paid with respect thereto, (ii) the repayment of intercompany Indebtedness to the extent that the amount of such payment is made to (1) a Loan Party or (2) to a Subsidiary that is not a Loan Party, to the extent that the amount of such payment is promptly thereafter paid as a dividend or is otherwise distributed to a Loan Party and (iii) as part of a Permitted Refinancing.
(d) Amend, supplement or otherwise modify, or permit the amendment, supplement or other modification of, (a) the terms of any Indebtedness that is subordinated to, or secured on terms that are junior in right of payment to the Obligations or any Material Indebtedness in any manner that could reasonably be expected to be material adverse to the rights or interests of an Agent, the Issuing Banks or the Lenders, or (b) any term of the Second Lien Notes or any Permitted Refinancing thereof if the effect thereof on such Indebtedness (i) is materially adverse to the rights or interests of an Agent, the Issuing Banks or the Lenders, (ii) is otherwise prohibited by the terms of any subordination or intercreditor agreement applicable thereto or (iii) has the effect of (A) shortening the maturity of such Restricted Payments shall not exceed Indebtedness to a date which is prior to 180 days after the greater Revolving Maturity Date under clause (a) of $50,000,000 and 25.0% of Consolidated EBITDA for the most recently ended Test Period and definition thereof, (B) there is no continuing Specified Event of Default on shortening the date scheduled for any principal payment or increasing the amount of declarationany required principal payment in excess of an amount to be agreed (other than paid-in-kind interest), or (C) increasing the amount of any mandatory prepayment required thereunder which is payable prior to the indefeasible payment in full in cash of all Obligations and the expiration or termination of all Letters of Credit (other than Letters of Credit which have been Cash Collateralized), or add a requirement for any additional mandatory prepayment thereunder, in the case of this clause (iii).
Appears in 1 contract
Sources: Credit Agreement (Lmi Aerospace Inc)
Restricted Payments; Certain Payments of Indebtedness. (a) Holdings The Borrower will not, nor and will it not permit any Restricted Subsidiary of its Subsidiaries to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, except:
(i) each Restricted Subsidiary may make Restricted Payments to Holdings the Borrower or any Restricted Subsidiary (and, other Subsidiary; provided that in the case of any such Restricted Payment by a Subsidiary that is not a wholly-owned SubsidiaryWholly Owned Subsidiary of the Borrower, such Restricted Payment is made to the Borrower and/or any Subsidiary and to each other owner of Equity Interests of such Subsidiary ratably based on their relative ownership interests of the relevant class of Equity Interests);
(ii) [reserved]the Borrower and each Subsidiary may declare and make dividend payments or other distributions payable solely in the Equity Interests of such Person;
(iii) [reserved]Restricted Payments made on or substantially contemporaneously with the Effective Date to consummate the Transactions, including to finance the payment of Transaction Costs;
(iv) [reserved];
(v) repurchases of Equity Interests in Holdings the Borrower or any Parent Entity (or make Restricted Payments to allow repurchases of Equity Interest in Holdings any Parent Entity) Subsidiary deemed to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price or withholding taxes payable in connection with the exercise of such stock options or warrants or other incentive interests;
(viv) Holdings may Restricted Payments used to redeem, acquire, retire retire, repurchase or repurchase its settle the Borrower’s Equity Interests (or any options, warrants, restricted stock, stock or stock appreciation rights or other equity-linked interests similar securities issued with respect to any of such Equity Interests) held directly or make Restricted Payments to allow any of its Parent Entities to so redeem, retire, acquire or repurchase their Equity Interests (or any options, warrants, restricted stock, stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests), in each case, held indirectly by current or former officers, managers, consultants, directorsmembers of the Board of Directors, employees, employees or independent contractors or other service providers (or their respective spouses, former spouses, domestic partners, successors, executors, administrators, heirs, legatees or distributees) of Holdings the Lead Borrower (or any Parent Entity thereof direct or indirect parent thereof), and its Subsidiaries (in each case, other than the Restricted Subsidiariesexecutive management (i.e., the CEO, the CFO, any executive vice presidents and any similar executive management positions)), upon the death, disability, retirement or termination of employment or service of, or breach of restrictive covenants by, any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, stock subscription or equity incentive award agreement, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that, the agreement in an aggregate amount of Restricted Payments permitted by this clause (vi) after the Closing Effective Date shall not to exceed the greater of $10,000,000 and 5.0% of Consolidated EBITDA for the most recently ended Test Period, in any fiscal year, year of the Lead Borrower with unused amounts in any fiscal year being carried over solely to the next succeeding fiscal years; provided that such amount in any fiscal year may be increased by (1) an amount not to exceed the cash proceeds of key man life insurance policies received by the Borrower or the Subsidiaries after the Effective Date, so long as or (2) the amount of any bona fide cash bonuses otherwise payable to members of the Board of Directors, consultants, officers, employees, managers or independent contractors the Borrower or any Subsidiary that are foregone in return for the receipt of Equity Interests, the fair market value of which is equal to or less than the amount of such cash bonuses, which, if not used in any year, may be carried forward solely to the next subsequent fiscal year; provided further that cancellation of Indebtedness owning to the Borrower or any Subsidiary from members of the Board of Directors, consultants, officers, employees, managers or independent contractors (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of the Borrower or any Subsidiary in connection with a repurchase of Equity Interests of the Borrower will not be deemed to constitute a Restricted Payment for purposes of this Section 6.07 or any other provisions of this Agreement.
(vi) [reserved];
(vii) in addition to the foregoing Restricted Payments, the Borrower may make additional Restricted Payments, in an aggregate amount, when taken together with the aggregate amount of loans and advances previously made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (vi) in any fiscal year shall vii), not to exceed the greater sum of $20,000,000 and 10.0% of Consolidated EBITDA for the most recently ended Test Period, in the aggregate, plus all net cash proceeds obtained from any key-man life insurance policies received during such fiscal year (without giving effect to the foregoing proviso);
(vii) Holdings may make Restricted Payments in cash to any Parent Entity:
(A) for any taxable period for which Holdings and/or any of its Subsidiaries is a member of a consolidated, combined or similar income or similar tax group (a “Tax Group”) of which a Parent Entity is the common parent to pay the consolidated, combined or similar income or similar taxes, as applicable, of such Tax Group that are attributable to the taxable income of Holdings and/or its applicable Subsidiaries (as applicable), net of any payment already made by Holdings or its Subsidiaries in respect of such Taxes; provided that (1) Restricted Payments pursuant to this subclause (A) shall not exceed the amount of Taxes that Holdings would have paid if Holdings and/or such Subsidiaries were a stand-alone taxpayer or stand-alone Tax Group for all relevant taxable periods after the Closing Date, (2) Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to any Loan Party and (3) with respect to any taxable period (or portion thereof) ending prior to the date hereof, any distribution otherwise permitted under this clause (A) shall be permitted only to the extent such distribution relates to a tax payable after the date hereof;
(B) the proceeds of which shall be used by such Parent Entity to pay (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties), that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of Holdings (or any parent thereof) attributable to the ownership or operations of any Parent Entity, Holdings and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by the Borrower or any Restricted Subsidiary and (y) otherwise permitted to be paid by Holdings and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (v);
(C) the proceeds of which shall be used by Holdings (or any Parent Entity) to pay franchise and similar Taxes, other fees and expenses, required to maintain its organizational existence and auditing fees and expenses;
(D) [reserved];
(E) the proceeds of which shall be used by any Parent Entity to finance any Investment that would be permitted to be made by Holdings or a Restricted Subsidiary pursuant to Section 6.04; provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) such Parent Entity shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests) to be contributed to Holdings or any Restricted Subsidiary (any in no event shall any such contribution increase the Available Amount) or (y) the Person formed or acquired to merge into or consolidate with Holdings or any Restricted Subsidiary to the extent such merger or consolidation is permitted by Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.13 and 5.14;
(F) the proceeds of which shall be used to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, consultants, independent contractors or employees of Holdings, Borrower or any Parent Entity to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, Borrower and/or the Restricted Subsidiaries;
(G) the proceeds of which shall be used by Holdings (or any Parent Entity) to pay (i) fees and expenses related to any successful or unsuccessful equity issuance or offering or debt issuance, incurrence or offering, disposition or acquisition, Investment or other transaction permitted by this Agreement and (ii) public company costs; and
(H) the proceeds of which shall be used for the payment of insurance premiums to the extent attributable to any Parent Entity, Holdings, the Borrower and its subsidiaries;
(viii) Restricted Payments in an aggregate amount not to exceed the Available Amount that is Not Otherwise Applied as in effect immediately prior to the time of making of such Restricted Payment, plus (B) the Available Equity Amount that is Not Otherwise Applied as in effect immediately prior to the time of making of such Restricted Payment; provided that any Restricted Payment so long as made in reliance on preceding clause (A) shall be subject to, (x) no Event of Default has having occurred and is be continuing or resulting therefrom (or would occur tested at the time of declaration of such Restricted Payment) and (y) before and after giving Pro Forma Effect to such action) and (y) where such Restricted Payment is funded from the Growth AmountPayment, the Borrower is in compliance with the Financial Covenants (determined on a Pro Forma Basis, the Total Net Leverage Ratio being less than or equal to 3.06 to 1.00 as of the end of the most recently ended Test Period (tested at the time of declaration of such Restricted Payment);
(ixviii) redemptions in whole or in part of any of its Equity Interests for another class of its Qualified Equity Interests or with proceeds from substantially concurrent equity contributions contributions;
(ix) payments made or issuances expected to be made in respect of new Qualified withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests (in consideration of such payments including deemed repurchases in connection with the exercise of stock options and in no event shall such contribution or issuance so utilized increase the Available Amount); provided that such new Equity Interests contain terms vesting of restricted stock and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed therebyrestricted stock units;
(x) [reserved];
(xi) Holdings may make Restricted Payments to any Parent Entity to enable such Parent Entity to pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment)) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xii) Restricted Payments to fund the payment of regularly scheduled dividends and repurchases on Holdings’ Equity Interests, in an aggregate amount per annum not to exceed the greater of (x) $50,000,000 in any fiscal year, with unused amounts in any fiscal year being carried over to the succeeding fiscal year, and (y) 6.0% of market capitalization;
(xiiixi) payments made or expected to be made by Holdings the Borrower or any Restricted Subsidiary in respect of withholding or similar taxes Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or Permitted Transfereespermitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xii) [Reserved];
(xiii) [Reserved];
(xiv) [Reserved];
(xv) additional Restricted Payments in an amount not to exceed $120,000,000; provided that after giving effect to such Restricted Payment no Event of Default exists or would result therefrom;
(xvi) [Reserved]; and
(xvii) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Net Leverage Ratio is equal to or less than or equal 2.81 to 2.75:1.00 and there is no continuing Event of Default on the date of declaration;
(xv) [reserved];
(xvi) [reserved];
(xvii) Restricted Payments related to settlement of Holdings’ defined benefit pension plan in the United Kingdom;
(xviii) [reserved]; and
(xix) additional Restricted Payments; provided that (A) such Restricted Payments shall not exceed the greater of $50,000,000 and 25.0% of Consolidated EBITDA for the most recently ended Test Period 1.00 and (B) there is no continuing Specified Event of Default on the date of declarationexists or would result therefrom.
Appears in 1 contract
Sources: First Lien Credit Agreement (Franchise Group, Inc.)
Restricted Payments; Certain Payments of Indebtedness. (a) Holdings None of the Company or any Subsidiary will not, nor will it permit any Restricted Subsidiary to, pay declare or make, directly or indirectly, any Restricted Payment, exceptor incur any obligation (contingent or otherwise) to do so, except that:
(i) each Restricted any Subsidiary may declare and pay dividends or make Restricted Payments other distributions with respect to Holdings or any Restricted Subsidiary (andits Equity Interests, in each case ratably to the case holders of any such Subsidiary that is not a wholly-owned Subsidiary, to each other owner of Equity Interests of such Subsidiary ratably based (or if not ratably, on their relative ownership interests of a basis more favorable to the relevant class of Equity InterestsCompany and the Loan Parties);
(ii) [reserved]the Company may declare and pay dividends with respect to its Equity Interests payable solely in shares of Qualified Equity Interests of the Company;
(iii) [reserved]the Company may repurchase, purchase, acquire, cancel or retire for value Equity Interests of the Company from present or former employees, officers, directors or consultants (or their estates or beneficiaries under their estates) of the Company or any Subsidiary upon the death, disability, retirement or termination of employment or service of such employees, officers, directors or consultants, or to the extent required, pursuant to employee benefit plans, employment agreements, stock purchase agreements or stock purchase plans, or other benefit plans; provided that the aggregate amount of Restricted Payments made pursuant to this Section 6.08(a)(iii) shall not exceed $5,000,000 in any fiscal year;
(iv) [reserved]the Company may make cash payments in lieu of the issuance of fractional shares representing insignificant interests in the Company in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Equity Interests in the Company;
(v) repurchases of the Company may acquire Equity Interests in Holdings or any Parent Entity (or make Restricted Payments to allow repurchases of Equity Interest in Holdings any Parent Entity) deemed to occur the Company upon the exercise of stock options or warrants or other incentive interests for such Equity Interests of the Company if such Equity Interests represent a portion of the exercise price of such stock options or warrants in connection with tax withholding obligations arising in connection with the exercise of options by, or other incentive intereststhe vesting of restricted Equity Interests held by, any current or former director, officer or employee of the Company or its Subsidiaries;
(vi) Holdings the Company may redeem, acquire, retire convert or repurchase its exchange any Equity Interests (of the Company for or any options, warrants, restricted stock, stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) or make Restricted Payments to allow any of its Parent Entities to so redeem, retire, acquire or repurchase their into Qualified Equity Interests (or any options, warrants, restricted stock, stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests), in each case, held by current or former officers, managers, consultants, directors, employees, independent contractors or other service providers (or their respective spouses, former spouses, domestic partners, successors, executors, administrators, heirs, legatees or distributees) of Holdings or any Parent Entity thereof and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment or service of, or breach of restrictive covenants by, any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, stock subscription or equity incentive award agreement, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that, the aggregate amount of Restricted Payments permitted by this clause (vi) after the Closing Date shall not exceed the greater of $10,000,000 and 5.0% of Consolidated EBITDA for the most recently ended Test Period, in any fiscal year, with unused amounts in any fiscal year being carried over to succeeding fiscal years, so long as the aggregate amount of Restricted Payments permitted by this clause (vi) in any fiscal year shall not exceed the greater of $20,000,000 and 10.0% of Consolidated EBITDA for the most recently ended Test Period, in the aggregate, plus all net cash proceeds obtained from any key-man life insurance policies received during such fiscal year (without giving effect to the foregoing proviso)Company;
(vii) Holdings any Receivables Entity may make Restricted Payments in cash to any Parent Entity:
(A) for any taxable period for which Holdings and/or any of its Subsidiaries is a member of a consolidated, combined declare and pay dividends or similar income or similar tax group (a “Tax Group”) of which a Parent Entity is the common parent to pay the consolidated, combined or similar income or similar taxes, as applicable, of such Tax Group that are attributable other distributions to the taxable income of Holdings and/or its applicable Subsidiaries (as applicable), net of any payment already made by Holdings or its Subsidiaries in respect of such Taxes; provided that (1) Restricted Payments pursuant to this subclause (A) shall not exceed the amount of Taxes that Holdings would have paid if Holdings and/or such Subsidiaries were a stand-alone taxpayer or stand-alone Tax Group for all relevant taxable periods after the Closing Date, (2) Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to any Loan Party and (3) with respect to any taxable period (or portion thereof) ending prior to the date hereof, any distribution otherwise permitted under this clause (A) shall be permitted only to the extent such distribution relates to a tax payable after the date hereof;
(B) the proceeds of which shall be used by such Parent Entity to pay (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties), that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of Holdings (Company or any parent wholly owned Subsidiary thereof) attributable to the ownership or operations of any Parent Entity, Holdings and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by the Borrower or any Restricted Subsidiary and (y) otherwise permitted to be paid by Holdings and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (v);
(C) the proceeds of which shall be used by Holdings (or any Parent Entity) to pay franchise and similar Taxes, other fees and expenses, required to maintain its organizational existence and auditing fees and expenses;
(D) [reserved];
(E) the proceeds of which shall be used by any Parent Entity to finance any Investment that would be permitted to be made by Holdings or a Restricted Subsidiary pursuant to Section 6.04; provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) such Parent Entity shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests) to be contributed to Holdings or any Restricted Subsidiary (any in no event shall any such contribution increase the Available Amount) or (y) the Person formed or acquired to merge into or consolidate with Holdings or any Restricted Subsidiary to the extent such merger or consolidation is permitted by Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.13 and 5.14;
(F) the proceeds of which shall be used to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, consultants, independent contractors or employees of Holdings, Borrower or any Parent Entity to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, Borrower and/or the Restricted Subsidiaries;
(G) the proceeds of which shall be used by Holdings (or any Parent Entity) to pay (i) fees and expenses related to any successful or unsuccessful equity issuance or offering or debt issuance, incurrence or offering, disposition or acquisition, Investment or other transaction permitted by this Agreement and (ii) public company costs; and
(H) the proceeds of which shall be used for the payment of insurance premiums to the extent attributable to any Parent Entity, Holdings, the Borrower and its subsidiaries;
(viii) Restricted Payments any Subsidiary may repurchase its Equity Interests held by minority shareholders or interest holders in a Permitted Acquisition or another transaction expressly permitted by Section 6.04 (other than Section 6.04(u) (it being understood that for purposes of Section 6.04, the Company shall be deemed the purchaser of such Equity Interests and such repurchase shall constitute an aggregate amount not to exceed Investment by the Available Amount Company in a Person that is Not Otherwise Applied as not a Subsidiary in effect immediately prior to the time of making amount of such Restricted Payment so long as (x) no Event of Default has occurred and is continuing (or would occur after giving Pro Forma Effect to purchase unless such action) and (y) where Subsidiary becomes a Loan Party in connection with such Restricted Payment is funded from the Growth Amount, the Borrower is in compliance with the Financial Covenants (determined on a Pro Forma Basisrepurchase);
(ix) redemptions in whole or in part of any of its Equity Interests for another class of its Qualified Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Qualified Equity Interests (and in no event shall such contribution or issuance so utilized increase the Available Amount); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in extent such Investment constitutes a Restricted Payment, the Equity Interests redeemed therebyCompany and its Subsidiaries may enter into any Investment expressly permitted by Section 6.04 (other than Section 6.04(u));
(x) [reserved]additional Restricted Payments; provided that the Total Leverage Ratio immediately after giving effect to any such Restricted Payment, calculated on a Pro Forma Basis at the time such Restricted Payment is made, is not in excess of 2.75 to 1.00; provided, further, that at the time any such Restricted Payment is made pursuant to this clause (x), no Event of Default shall have occurred and be continuing or would result therefrom;
(xi) Holdings the Company may make Restricted Payments pay regularly scheduled quarterly cash dividends to any Parent Entity to enable such Parent Entity to pay cash in lieu of fractional Equity Interests in connection its shareholders consistent with any dividend, split or combination thereof its past practice or any Permitted Acquisition (or other similar Investment);
(xii) Restricted Payments to fund the payment of regularly scheduled dividends and repurchases on Holdings’ Equity Interests, Payment in an aggregate amount per annum not to exceed the greater of (xA) $50,000,000 in any fiscal year, with unused amounts in any fiscal year being carried over to the succeeding fiscal year, and (yB) 6.0% $1.00 per share of market capitalization;
(xiii) payments made by Holdings or any Restricted Subsidiary in respect the total issued and outstanding shares of withholding or similar taxes payable upon exercise of common Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment on a Pro Forma Basis, the Total Net Leverage Ratio is less than or equal to 2.75:1.00 and there is no continuing Event of Default Company on the date of declarationthe declaration of a Restricted Payment; provided that such per share amount shall be adjusted to give effect to any stock split or issuance on account of equity for no consideration effected; and
(xii) additional Restricted Payments in an aggregate principal amount not to exceed $75,000,000.
(b) None of the Company or any Subsidiary will 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 (i) any Subordinated Indebtedness that is subordinated to the payment of the Obligations or (ii) other Indebtedness that is required pursuant to the Loan Documents to not mature later than the Latest Maturity Date at the time of incurrence thereof (Indebtedness described in the foregoing clauses (i) and (ii), “Restricted Indebtedness”), or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, defeasance, cancelation or termination of such Restricted Indebtedness, except:
(i) regularly scheduled interest and principal payments as and when due in respect of such Indebtedness, other than payments prohibited by the subordination provisions thereof;
(xvii) [reserved]refinancings of such Indebtedness with the proceeds of Refinancing Indebtedness permitted in respect thereof under Section 6.01;
(xviiii) [reserved]payments of or in respect of such Indebtedness made solely with Qualified Equity Interests in the Company or the conversion of such Indebtedness into Qualified Equity Interests of the Company;
(xviiiv) Restricted Payments related prepayments of intercompany Indebtedness permitted hereby owed by the Company or any Subsidiary to settlement of Holdings’ defined benefit pension plan in the United KingdomCompany or any Subsidiary, other than prepayments prohibited by the subordination provisions governing such Indebtedness;
(xviiiv) [reservedIntentionally Omitted]; and
(xixvi) additional Restricted Paymentsthe Company may on any date make payments of or in respect of any such Indebtedness in an unlimited amount; provided that the Total Leverage Ratio immediately after giving effect to any such payment, calculated on a Pro Forma Basis at the time such payment is made, is not in excess of 2.75 to 1.00; provided, further, that at the time any such payment is made pursuant to this clause (A) such Restricted Payments shall not exceed the greater of $50,000,000 and 25.0% of Consolidated EBITDA for the most recently ended Test Period and (B) there is vi), no continuing Specified Event of Default on the date of declarationshall have occurred and be continuing or would result therefrom.
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) Holdings None of the Company or any Subsidiary will not, nor will it permit any Restricted Subsidiary to, pay declare or make, directly or indirectly, any Restricted Payment, exceptor incur any obligation (contingent or otherwise) to do so, except that:
(i) each Restricted any Subsidiary may declare and pay dividends or make Restricted Payments other distributions with respect to Holdings or any Restricted Subsidiary (andits Equity Interests, in each case ratably to the case holders of any such Subsidiary that is not a wholly-owned Subsidiary, to each other owner of Equity Interests of such Subsidiary ratably based (or if not ratably, on their relative ownership interests of a basis more favorable to the relevant class of Equity InterestsCompany and the Loan Parties);
(ii) [reserved]the Company may declare and pay dividends with respect to its Equity Interests payable solely in shares of Qualified Equity Interests of the Company;
(iii) [reserved]the Company may repurchase, purchase, acquire, cancel or retire for value Equity Interests of the Company from present or former employees, officers, directors or consultants (or their estates or beneficiaries under their estates) of the Company or any Subsidiary upon the death, disability, retirement or termination of employment or service of such employees, officers, directors or consultants, or to the extent required, pursuant to employee benefit plans, employment agreements, stock purchase agreements or stock purchase plans, or other benefit plans; provided that the aggregate amount of Restricted Payments made pursuant to this Section 6.08(a)(iii) shall not exceed $5,000,000 in any fiscal year;
(iv) [reserved]the Company may make cash payments in lieu of the issuance of fractional shares representing insignificant interests in the Company in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Equity Interests in the Company;
(v) repurchases of the Company may acquire Equity Interests in Holdings or any Parent Entity (or make Restricted Payments to allow repurchases of Equity Interest in Holdings any Parent Entity) deemed to occur the Company upon the exercise of stock options or warrants or other incentive interests for such Equity Interests of the Company if such Equity Interests represent a portion of the exercise price of such stock options or warrants in connection with tax withholding obligations arising in connection with the exercise of options by, or other incentive intereststhe vesting of restricted Equity Interests held by, any current or former director, officer or employee of the Company or its Subsidiaries;
(vi) Holdings the Company may redeem, acquire, retire convert or repurchase its exchange any Equity Interests (of the Company for or any options, warrants, restricted stock, stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) or make Restricted Payments to allow any of its Parent Entities to so redeem, retire, acquire or repurchase their into Qualified Equity Interests (or any options, warrants, restricted stock, stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests), in each case, held by current or former officers, managers, consultants, directors, employees, independent contractors or other service providers (or their respective spouses, former spouses, domestic partners, successors, executors, administrators, heirs, legatees or distributees) of Holdings or any Parent Entity thereof and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment or service of, or breach of restrictive covenants by, any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, stock subscription or equity incentive award agreement, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that, the aggregate amount of Restricted Payments permitted by this clause (vi) after the Closing Date shall not exceed the greater of $10,000,000 and 5.0% of Consolidated EBITDA for the most recently ended Test Period, in any fiscal year, with unused amounts in any fiscal year being carried over to succeeding fiscal years, so long as the aggregate amount of Restricted Payments permitted by this clause (vi) in any fiscal year shall not exceed the greater of $20,000,000 and 10.0% of Consolidated EBITDA for the most recently ended Test Period, in the aggregate, plus all net cash proceeds obtained from any key-man life insurance policies received during such fiscal year (without giving effect to the foregoing proviso)Company;
(vii) Holdings so long as no Default shall have occurred and be continuing, the Company may on any date make Restricted Payments in cash to any Parent Entity:
(A) for any taxable period for which Holdings and/or any an amount not in excess of its Subsidiaries is a member of a consolidated, combined or similar income or similar tax group (a “Tax Group”) of which a Parent Entity is the common parent to pay the consolidated, combined or similar income or similar taxes, as applicable, of such Tax Group that are attributable to the taxable income of Holdings and/or its applicable Subsidiaries (as applicable), net of any payment already made by Holdings or its Subsidiaries in respect of such Taxes; provided that (1) Restricted Payments pursuant to this subclause (A) shall not exceed the amount of Taxes that Holdings would have paid if Holdings and/or Qualifying Equity Proceeds available on such Subsidiaries were a stand-alone taxpayer or stand-alone Tax Group for all relevant taxable periods after the Closing Date, (2) Restricted Payments under this subclause (A) in respect of any Taxes attributable date and not previously applied to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to any Loan Party and (3) with respect to any taxable period (or portion thereof) ending prior to the date hereof, any distribution otherwise permitted under this clause (A) shall be permitted only to the extent such distribution relates to a tax payable after the date hereof;
(B) the proceeds of which shall be used by such Parent Entity to pay (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties), that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of Holdings (or any parent thereof) attributable to the ownership or operations of any Parent Entity, Holdings and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by the Borrower or any Restricted Subsidiary and (y) otherwise permitted to be paid by Holdings and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (v);
(C) the proceeds of which shall be used by Holdings (or any Parent Entity) to pay franchise and similar Taxes, other fees and expenses, required to maintain its organizational existence and auditing fees and expenses;
(D) [reserved];
(E) the proceeds of which shall be used by any Parent Entity to finance any Investment that would be permitted to be made by Holdings or a Restricted Subsidiary pursuant to Section 6.04; provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) such Parent Entity shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests) to be contributed to Holdings or any Restricted Subsidiary (any in no event shall any such contribution increase the Available Amount) or (y) the Person formed or acquired to merge into or consolidate with Holdings or any Restricted Subsidiary to the extent such merger or consolidation is permitted by Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.13 and 5.14;
(F) the proceeds of which shall be used to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, consultants, independent contractors or employees of Holdings, Borrower or any Parent Entity to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, Borrower and/or the Restricted Subsidiaries;
(G) the proceeds of which shall be used by Holdings (or any Parent Entity) to pay (i) fees and expenses related to any successful or unsuccessful equity issuance or offering or debt issuance, incurrence or offering, disposition or acquisition, Investment or other transaction permitted by this Agreement and (ii) public company costs; and
(H) the proceeds of which shall be used for the payment of insurance premiums to the extent attributable to any Parent Entity, Holdings, the Borrower and its subsidiariesSpecified Uses;
(viii) so long as no Default shall have occurred and be continuing or would result therefrom, the Company may on any date make Restricted Payments in an aggregate amount not equal to exceed (A)$15,000,000 plus (B) the Available Amount on such date; provided, however, that is Not Otherwise Applied as in effect immediately prior to at the time of the making of such Restricted Payment so long as (x) no Event of Default has occurred Payments and is continuing (or would occur after giving Pro Forma Effect to such action) and (y) where such Restricted Payment is funded from the Growth Amount, the Borrower is in compliance with the Financial Covenants (determined on a Pro Forma Basis);
(ix) redemptions in whole or in part of any of its Equity Interests for another class of its Qualified Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Qualified Equity Interests (and in no event shall such contribution or issuance so utilized increase the Available Amount); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(x) [reserved];
(xi) Holdings may make Restricted Payments to any Parent Entity to enable such Parent Entity to pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment);
(xii) Restricted Payments to fund the payment of regularly scheduled dividends and repurchases on Holdings’ Equity Interests, in an aggregate amount per annum not to exceed the greater of (x) $50,000,000 in any fiscal year, with unused amounts in any fiscal year being carried over to the succeeding fiscal year, and (y) 6.0% of market capitalization;
(xiii) payments made by Holdings or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiv) additional Restricted Payments; provided that immediately after giving effect to such Restricted Payment Payments made in reliance on subclause (viii)(B), the Leverage Ratio on such date, calculated on a Pro Forma BasisBasis to give effect to any such Restricted Payment, is not in excess of 2.00 to 1.00;
(ix) any Subsidiary may repurchase its Equity Interests held by minority shareholders or interest holders in a Permitted Acquisition or another transaction permitted by Section 6.04(w) or (x) (it being understood that for purposes of Section 6.04, the Total Net Leverage Ratio Borrower shall be deemed the purchaser of such Equity Interests and such repurchase shall constitute an Investment by the Borrower in a Person that is less than or equal to 2.75:1.00 and there is no continuing Event not a Subsidiary in the amount of Default on such purchase unless such Subsidiary becomes a Loan Party in connection with such repurchase);
(x) so long as, at the date of declaration;
(xv) [reserved];
(xvi) [reserved];
(xvii) Restricted Payments related declaration thereof, no Default shall have occurred and be continuing or would result therefrom, the Company may repurchase or redeem its Equity Interests from its equity holders in an amount not to settlement of Holdings’ defined benefit pension plan in the United Kingdom;
(xviii) [reserved]exceed $5,000,000; and
(xixxi) additional the Company may make Restricted Payments within 60 days after the date of declaration thereof, if at the date of declaration of such Restricted Payments; provided that (A) , such Restricted Payments shall not exceed would have been permitted pursuant to another clause of this Section 6.08(a).
(b) None of the greater Company or any Subsidiary will make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of $50,000,000 or in respect of principal of or interest on any Subordinated Indebtedness that is required pursuant to Section 6.01 to be subordinated to the payment of the Obligations, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, defeasance, cancelation or termination of such Subordinated Indebtedness, except:
(i) regularly scheduled interest and 25.0% principal payments as and when due in respect of Consolidated EBITDA for such Subordinated Indebtedness, other than payments prohibited by the most recently ended Test Period and subordination provisions thereof; (Bii) there is no continuing Specified Event refinancings of Default on such Subordinated Indebtedness with the date proceeds of declaration.Refinancing Indebtedness permitted in respect thereof under Section 6.01;
Appears in 1 contract
Sources: Credit Agreement (Orbotech LTD)
Restricted Payments; Certain Payments of Indebtedness. (a) Holdings The Borrower will not, nor and will it not permit any Restricted Subsidiary of its Subsidiaries to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, except:
(i) each Restricted Subsidiary may make Restricted Payments to Holdings the Borrower or any Restricted Subsidiary (and, other Subsidiary; provided that in the case of any such Restricted Payment by a Subsidiary that is not a wholly-owned SubsidiaryWholly Owned Subsidiary of the Borrower, such Restricted Payment is made to the Borrower and/or any Subsidiary and to each other owner of Equity Interests of such Subsidiary ratably based on their relative ownership interests of the relevant class of Equity Interests);
(ii) [reserved]the Borrower and each Subsidiary may declare and make dividend payments or other distributions payable solely in the Equity Interests of such Person;
(iii) [reserved]Restricted Payments made on or substantially contemporaneously with the Effective Date to consummate the Transactions, including to finance the payment of Transaction Costs;
(iv) [reserved];
(v) repurchases of Equity Interests in Holdings the Borrower or any Parent Entity (or make Restricted Payments to allow repurchases of Equity Interest in Holdings any Parent Entity) Subsidiary deemed to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price or withholding taxes payable in connection with the exercise of such stock options or warrants or other incentive interests;
(viv) Holdings may Restricted Payments used to redeem, acquire, retire retire, repurchase or repurchase its settle the Borrower’s Equity Interests (or any options, warrants, restricted stock, stock or stock appreciation rights or other equity-linked interests similar securities issued with respect to any of such Equity Interests) held directly or make Restricted Payments to allow any of its Parent Entities to so redeem, retire, acquire or repurchase their Equity Interests (or any options, warrants, restricted stock, stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests), in each case, held indirectly by current or former officers, managers, consultants, directorsmembers of the Board of Directors, employees, employees or independent contractors or other service providers (or their respective spouses, former spouses, domestic partners, successors, executors, administrators, heirs, legatees or distributees) of Holdings the Lead Borrower (or any Parent Entity thereof direct or indirect parent thereof), and its Subsidiaries (in each case, other than the Restricted Subsidiariesexecutive management (i.e., the CEO, the CFO, any executive vice presidents and any similar executive management positions)), upon the death, disability, retirement or termination of employment or service of, or breach of restrictive covenants by, any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, stock subscription or equity incentive award agreement, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that, the agreement in an aggregate amount of Restricted Payments permitted by this clause (vi) after the Closing Effective Date shall not to exceed the greater of $10,000,000 and 5.0% of Consolidated EBITDA for the most recently ended Test Period, in any fiscal year, year of the Lead Borrower with unused amounts in any fiscal year being carried over solely to the next succeeding fiscal years; provided that such amount in any fiscal year may be increased by (1) an amount not to exceed the cash proceeds of key man life insurance policies received by the Borrower or the Subsidiaries after the Effective Date, so long as or (2) the amount of any bona fide cash bonuses otherwise payable to members of the Board of Directors, consultants, officers, employees, managers or independent contractors the Borrower or any Subsidiary that are foregone in return for the receipt of Equity Interests, the fair market value of which is equal to or less than the amount of such cash bonuses, which, if not used in any year, may be carried forward solely to the next subsequent fiscal year; provided further that cancellation of Indebtedness owning to the Borrower or any Subsidiary from members of the Board of Directors, consultants, officers, employees, managers or independent contractors (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of the Borrower or any Subsidiary in connection with a repurchase of Equity Interests of the Borrower will not be deemed to constitute a Restricted Payment for purposes of this Section 6.07 or any other provisions of this Agreement.
(vi) [reserved];
(vii) in addition to the foregoing Restricted Payments, the Borrower may make additional Restricted Payments, in an aggregate amount, when taken together with the aggregate amount of loans and advances previously made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (vi) in any fiscal year shall vii), not to exceed the greater sum of $20,000,000 and 10.0% of Consolidated EBITDA for the most recently ended Test Period, in the aggregate, plus all net cash proceeds obtained from any key-man life insurance policies received during such fiscal year (without giving effect to the foregoing proviso);
(vii) Holdings may make Restricted Payments in cash to any Parent Entity:
(A) for any taxable period for which Holdings and/or any of its Subsidiaries is a member of a consolidated, combined or similar income or similar tax group (a “Tax Group”) of which a Parent Entity is the common parent to pay the consolidated, combined or similar income or similar taxes, as applicable, of such Tax Group that are attributable to the taxable income of Holdings and/or its applicable Subsidiaries (as applicable), net of any payment already made by Holdings or its Subsidiaries in respect of such Taxes; provided that (1) Restricted Payments pursuant to this subclause (A) shall not exceed the amount of Taxes that Holdings would have paid if Holdings and/or such Subsidiaries were a stand-alone taxpayer or stand-alone Tax Group for all relevant taxable periods after the Closing Date, (2) Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to any Loan Party and (3) with respect to any taxable period (or portion thereof) ending prior to the date hereof, any distribution otherwise permitted under this clause (A) shall be permitted only to the extent such distribution relates to a tax payable after the date hereof;
(B) the proceeds of which shall be used by such Parent Entity to pay (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties), that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of Holdings (or any parent thereof) attributable to the ownership or operations of any Parent Entity, Holdings and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by the Borrower or any Restricted Subsidiary and (y) otherwise permitted to be paid by Holdings and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (v);
(C) the proceeds of which shall be used by Holdings (or any Parent Entity) to pay franchise and similar Taxes, other fees and expenses, required to maintain its organizational existence and auditing fees and expenses;
(D) [reserved];
(E) the proceeds of which shall be used by any Parent Entity to finance any Investment that would be permitted to be made by Holdings or a Restricted Subsidiary pursuant to Section 6.04; provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) such Parent Entity shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests) to be contributed to Holdings or any Restricted Subsidiary (any in no event shall any such contribution increase the Available Amount) or (y) the Person formed or acquired to merge into or consolidate with Holdings or any Restricted Subsidiary to the extent such merger or consolidation is permitted by Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.13 and 5.14;
(F) the proceeds of which shall be used to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, consultants, independent contractors or employees of Holdings, Borrower or any Parent Entity to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, Borrower and/or the Restricted Subsidiaries;
(G) the proceeds of which shall be used by Holdings (or any Parent Entity) to pay (i) fees and expenses related to any successful or unsuccessful equity issuance or offering or debt issuance, incurrence or offering, disposition or acquisition, Investment or other transaction permitted by this Agreement and (ii) public company costs; and
(H) the proceeds of which shall be used for the payment of insurance premiums to the extent attributable to any Parent Entity, Holdings, the Borrower and its subsidiaries;
(viii) Restricted Payments in an aggregate amount not to exceed the Available Amount that is Not Otherwise Applied as in effect immediately prior to the time of making of such Restricted Payment, plus (B) the Available Equity Amount that is Not Otherwise Applied as in effect immediately prior to the time of making of such Restricted Payment; provided that any Restricted Payment so long as made in reliance on preceding clause (A) shall be subject to, (x) no Event of Default has having occurred and is be continuing or resulting therefrom (or would occur tested at the time of declaration of such Restricted Payment) and (y) before and after giving Pro Forma Effect to such action) and (y) where such Restricted Payment is funded from the Growth AmountPayment, the Borrower is in compliance with the Financial Covenants (determined on a Pro Forma Basis, the Total Net Leverage Ratio being less than or equal to 3.06 to 1.00 as of the end of the most recently ended Test Period (tested at the time of declaration of such Restricted Payment);
(ixviii) redemptions in whole or in part of any of its Equity Interests for another class of its Qualified Equity Interests or with proceeds from substantially concurrent equity contributions contributions;
(ix) payments made or issuances expected to be made in respect of new Qualified withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests (in consideration of such payments including deemed repurchases in connection with the exercise of stock options and in no event shall such contribution or issuance so utilized increase the Available Amount); provided that such new Equity Interests contain terms vesting of restricted stock and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed therebyrestricted stock units;
(x) [reserved];
(xi) Holdings may make Restricted Payments to any Parent Entity to enable such Parent Entity to pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment)) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xii) Restricted Payments to fund the payment of regularly scheduled dividends and repurchases on Holdings’ Equity Interests, in an aggregate amount per annum not to exceed the greater of (x) $50,000,000 in any fiscal year, with unused amounts in any fiscal year being carried over to the succeeding fiscal year, and (y) 6.0% of market capitalization;
(xiiixi) payments made or expected to be made by Holdings the Borrower or any Restricted Subsidiary in respect of withholding or similar taxes Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or Permitted Transfereespermitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xii) [Reserved];
(xiii) [Reserved];
(xiv) [Reserved];
(xv) additional Restricted Payments in an amount not to exceed $120,000,000; provided that after giving effect to such Restricted Payment no Event of Default exists or would result therefrom;
(xvi) [Reserved]; and
(xvii) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Net Leverage Ratio is equal to or less than or equal 2.81 to 2.75:1.00 1.00 and there is (B) no continuing Event of Default exists or would result therefrom.
(b) The Borrower will not, and will not permit any of its Subsidiaries 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 Junior Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the date purchase, redemption, retirement, acquisition, cancellation or termination of declarationany Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoing, in each case, except:
(i) payment of regularly scheduled interest and principal payments, mandatory offers to repay, repurchase or redeem, mandatory prepayments of principal, premium and interest, and payment of fees, expenses and indemnification obligations, with respect to such Junior Financing, other than payments in respect of any Junior Financing prohibited by the subordination provisions thereof;
(xvii) [reserved]refinancings of Indebtedness to the extent permitted by Section 6.01;
(xvi1) [reserved]the conversion of any Junior Financing to Equity Interests (other than Disqualified Equity Interests) of the Borrower and (2) any payment that is intended to prevent any Junior Financing from being treated as an “applicable high yield discount obligation” within the meaning of Section 163(i)(1) of the Code;
(xviiiv) Restricted Payments related prepayments, redemptions, purchases, defeasances and other payments in respect of any Junior Financing; provided that after giving effect to settlement such prepayments, redemptions, purchases, defeasances or other payments (A) on a Pro Forma Basis, the Total Net Leverage Ratio is equal to or less than 2.81 to 1.00 and (B) no Event of Holdings’ defined benefit pension plan in the United KingdomDefault exists or would result therefrom;
(xviiiv) [reserved]; andpayments made in connection with, or in order to consummate, the Transactions;
(xixvi) additional Restricted Payments; provided that (A) such Restricted Payments shall prepayments, redemptions, purchases, defeasances and other payments in respect of any Junior Financing in an aggregate amount not to exceed the greater of $50,000,000 80,000,000 and 25.0% of Consolidated EBITDA on a Pro Forma Basis for the most recently ended Test Period and plus (B) there the amount of Restricted Payments that may be made pursuant to Section 6.07(a)(xv) at such time;
(vii) additional prepayments, redemptions, purchases, defeasances and other payments in respect of any Junior Financing; provided that the aggregate amount of such prepayments, redemptions, purchases, defeasances and other payments made in reliance on this clause (vii), shall not exceed the sum of (A) the Available Amount that is Not Otherwise Applied as in effect immediately prior to the time of making of such prepayments, redemptions, purchases, defeasances and other payments, plus (B) the Available Equity Amount that is Not Otherwise Applied as in effect immediately prior to the time of making of such prepayments, redemptions, purchases, defeasances and other payments; provided that any prepayments, redemptions, purchases, defeasances and other payments made in reliance on preceding clause (A) shall be subject to, before and after giving Pro Forma Effect to such prepayments, redemptions, purchases, defeasances and other payments, the Total Net Leverage Ratio being less than or equal to 3.06 to 1.00 as of the end of the most recently ended Test Period (tested at the time of distribution or delivery of any irrevocable notice of prepayment, redemption, repurchase or defeasance, as applicable, in respect thereof);
(viii) the prepayment of any Junior Financing owed to the Borrower or a Subsidiary or the prepayment of any Permitted Refinancing of such Indebtedness with the proceeds of any other Junior Financing; provided that (i) no continuing Specified Loan Party shall make any prepayment of any Junior Financing owed to any Subsidiary that is not a Loan Party pursuant to this clause (viii); and (ii) prior to Payment in Full of Badcock Obligations, neither the Borrower nor any Subsidiary (other than Badcock) shall make any prepayment of any Junior Financing owed to Badcock pursuant to this clause (viii);
(ix) prepayments, redemptions, purchases, defeasances and other payments in respect of any Junior Financing within one year of the scheduled maturity of such Junior Financing; provided, that after giving effect to such prepayments, redemptions, purchases, defeasances and other payments, no Event of Default on under paragraph (a), (b), (h) or (i) of Section 7.01 exists or would result therefrom.; and
(x) payments, prepayments, purchases and defeasance of any Indebtedness under the date of declarationBadcock Second Lien Credit Agreement in accordance with the terms thereof.
Appears in 1 contract
Sources: First Lien Credit Agreement (Franchise Group, Inc.)
Restricted Payments; Certain Payments of Indebtedness. (a) Holdings will notNo Loan Party will, nor will it permit any Restricted Subsidiary to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, except:
(i) each Restricted Subsidiary of Holdings and the Company may declare and pay dividends or make other distributions with respect to its Equity Interests payable solely in additional shares of its Equity Interests (other than Disqualified Equity Interests not permitted by Section 6.01);
(ii) Subsidiaries may declare and pay dividends or make other distributions ratably with respect to their Equity Interests;
(iii) the Company and its Subsidiaries may make Restricted Payments to Holdings or any Restricted Subsidiary (and, in the case of any such Subsidiary that is not a wholly-owned Subsidiary, to each other owner of Equity Interests of such Subsidiary ratably based on their relative ownership interests of the relevant class of Equity Interests);
(ii) [reserved];
(iii) [reserved];
(iv) [reserved];
(v) repurchases of Equity Interests in and Holdings or any Parent Entity (or may make Restricted Payments to allow repurchases any direct or indirect parent thereof) the proceeds of Equity Interest in Holdings any Parent Entity) deemed which are used to occur upon exercise of stock options purchase, retire, redeem or warrants or other incentive interests if such otherwise acquire the Equity Interests represent a portion of Holdings (or of any such direct or indirect parent of Holdings) or of the exercise price Company (following a Qualified Public Offering of such stock options or warrants or other incentive interests;
the Company) (vi) Holdings may redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted stock, including related stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interestssimilar securities) or make Restricted Payments to allow any of its Parent Entities to so redeem, retire, acquire or repurchase their Equity Interests (or any options, warrants, restricted stock, stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests), in each case, held by current then present or former officers, managersdirectors, consultants, directorsofficers or employees of Holdings (or of any such direct or indirect parent), employees, independent contractors the Company or any of the Subsidiaries or by any stock option plan or other service providers (or their respective spouses, former spouses, domestic partners, successors, executors, administrators, heirs, legatees or distributees) of Holdings or any Parent Entity thereof and the Restricted Subsidiaries, benefit plan upon the such Person’s death, disability, retirement or termination of employment or service of, or breach under the terms of restrictive covenants by, any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, stock subscription or equity incentive award agreement, employment termination agreement plan or any other employment agreements agreement under which such shares of stock or equity holders’ agreementrelated rights were issued; provided that, that the aggregate amount of Restricted Payments permitted by such purchases, redemptions or other acquisitions under this clause (via)(iii) after the Closing Date shall not exceed the greater of $10,000,000 and 5.0% of Consolidated EBITDA for the most recently ended Test Period, in any fiscal year, with unused amounts in any fiscal year being carried over to succeeding fiscal years, so long as $5,000,000 (plus the aggregate amount of Restricted Payments net proceeds (x) received by Holdings during such calendar year from sales of Equity Interests of Holdings to directors, consultants, officers or employees of Holdings, the Company or any Subsidiary in connection with permitted by this clause employee compensation and incentive arrangements and (viy) in any fiscal year shall not exceed the greater of $20,000,000 and 10.0% of Consolidated EBITDA for the most recently ended Test Period, in the aggregate, plus all net cash proceeds obtained from any key-man life insurance policies received during such fiscal year (without giving effect to the foregoing provisocalendar year);
(viiiv) Holdings may make Restricted Payments in non-cash to any Parent Entity:
(A) for any taxable period for which Holdings and/or any of its Subsidiaries is a member of a consolidated, combined or similar income or similar tax group (a “Tax Group”) of which a Parent Entity is the common parent to pay the consolidated, combined or similar income or similar taxes, as applicable, of such Tax Group that are attributable to the taxable income of Holdings and/or its applicable Subsidiaries (as applicable), net of any payment already made by Holdings or its Subsidiaries in respect of such Taxes; provided that (1) Restricted Payments pursuant to this subclause (A) shall not exceed the amount of Taxes that Holdings would have paid if Holdings and/or such Subsidiaries were a stand-alone taxpayer or stand-alone Tax Group for all relevant taxable periods after the Closing Date, (2) Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to any Loan Party and (3) with respect to any taxable period (or portion thereof) ending prior to the date hereof, any distribution otherwise permitted under this clause (A) shall be permitted only to the extent such distribution relates to a tax payable after the date hereof;
(B) the proceeds of which shall be used by such Parent Entity to pay (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties), that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of Holdings (or any parent thereof) attributable to the ownership or operations of any Parent Entity, Holdings and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by the Borrower or any Restricted Subsidiary and (y) otherwise permitted to be paid by Holdings and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (v);
(C) the proceeds of which shall be used by Holdings (or any Parent Entity) to pay franchise and similar Taxes, other fees and expenses, required to maintain its organizational existence and auditing fees and expenses;
(D) [reserved];
(E) the proceeds of which shall be used by any Parent Entity to finance any Investment that would be permitted to be made by Holdings or a Restricted Subsidiary pursuant to Section 6.04; provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) such Parent Entity shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests) to be contributed to Holdings or any Restricted Subsidiary (any in no event shall any such contribution increase the Available Amount) or (y) the Person formed or acquired to merge into or consolidate with Holdings or any Restricted Subsidiary to the extent such merger or consolidation is permitted by Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.13 and 5.14;
(F) the proceeds of which shall be used to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, consultants, independent contractors or employees of Holdings, Borrower or any Parent Entity to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, Borrower and/or the Restricted Subsidiaries;
(G) the proceeds of which shall be used by Holdings (or any Parent Entity) to pay (i) fees and expenses related to any successful or unsuccessful equity issuance or offering or debt issuance, incurrence or offering, disposition or acquisition, Investment or other transaction permitted by this Agreement and (ii) public company costs; and
(H) the proceeds of which shall be used for the payment of insurance premiums to the extent attributable to any Parent Entity, Holdings, the Borrower and its subsidiaries;
(viii) Restricted Payments in an aggregate amount not to exceed the Available Amount that is Not Otherwise Applied as in effect immediately prior to the time of making of such Restricted Payment so long as (x) no Event of Default has occurred and is continuing (or would occur after giving Pro Forma Effect to such action) and (y) where such Restricted Payment is funded from the Growth Amount, the Borrower is in compliance with the Financial Covenants (determined on a Pro Forma Basis);
(ix) redemptions in whole or in part of any of its Equity Interests for another class of its Qualified Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Qualified Equity Interests (and in no event shall such contribution or issuance so utilized increase the Available Amount); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(x) [reserved];
(xi) Holdings may make Restricted Payments to any Parent Entity to enable such Parent Entity to pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment);
(xii) Restricted Payments to fund the payment of regularly scheduled dividends and repurchases on Holdings’ Equity Interests, in an aggregate amount per annum not to exceed the greater of (x) $50,000,000 in any fiscal year, with unused amounts in any fiscal year being carried over to the succeeding fiscal year, and (y) 6.0% of market capitalization;
(xiii) payments made by Holdings or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxeswarrants;
(xivv) additional the Company and its Subsidiaries may make Restricted PaymentsPayments to Holdings (x) in an amount (together with loans or advances made pursuant to Section 6.04(n)) not to exceed $1,500,000 in any fiscal year, to the extent necessary to pay (or allow any direct or indirect parent of Holdings to pay) its general corporate and overhead expenses incurred by Holdings (or any direct or indirect parent thereof) in the ordinary course of business, plus the amount of any reasonable and customary indemnification claims made by any director or officer of Holdings (or any direct or indirect parent thereof), (y) 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 (z) in an amount necessary to pay the Tax liabilities of Holdings (or any such direct or indirect parent) attributable to (or arising as a result of) the operations of the Company and its Subsidiaries; provided provided, however, that after giving effect to such Restricted Payment on a Pro Forma Basisin the case of clause (z), the Total Net Leverage Ratio is less than or equal amount of such dividends shall not exceed the amount that the Company and its Subsidiaries would be required to 2.75:1.00 pay in respect of Federal, state and there is no continuing Event of Default on local taxes and any other taxes were the date of declarationCompany and the Subsidiaries to pay such taxes as stand-alone taxpayers;
(xvvi) [reservedReserved];
(xvivii) [reserved]to the extent constituting Restricted Payments, Holdings, the Company and its Subsidiaries may enter into and consummate transactions expressly permitted by any provision of Section 6.03 or 6.09 (other than Section 6.09(e));
(xviiviii) the Company and its Subsidiaries may make Restricted Payments related to settlement of Holdings’ defined benefit pension plan in the United Kingdom;
Holdings to finance any investment permitted to be made pursuant to Section 6.04 (xviiiother than Section 6.04(m)) [reserved]; and
(xix) additional Restricted Payments; provided that (A) such Restricted Payments Payment shall not exceed be made substantially concurrently with the greater closing of $50,000,000 and 25.0% of Consolidated EBITDA for the most recently ended Test Period such investment and (B) there Holdings shall, immediately following the closing thereof, cause (i) all property acquired (whether assets or Equity Interests) to be contributed to the Company or its Subsidiaries or (ii) the merger (to the extent permitted in Section 6.03) of the Person formed or acquired into the Company or its Subsidiaries in order to consummate such Permitted Acquisition;
(ix) Holdings may make Restricted Payments with the proceeds of the issuance of Indebtedness of Holdings permitted by Section 6.01 (other than (x) Section 6.01(c) and (y) any such Indebtedness Guaranteed by or secured directly or indirectly by the assets of the Company or any of its Subsidiaries);
(x) in addition to the foregoing Restricted Payments, Holdings and the Company may make additional Restricted Payments provided that each of the Payment Conditions is satisfied;
(xi) the distribution, as a dividend or otherwise (and the declaration of such dividend), of shares of capital stock of, or Indebtedness owed to the Company or a Subsidiary by, any Unrestricted Subsidiary so designated on the date hereof; and
(xii) other Restricted Payments by Holdings and the Company which, together with investments, loans and advances made pursuant to Section 6.04(w) and Restricted Debt Payments made pursuant to Section 6.08(b)(x), do not exceed $30,000,000 in the aggregate; provided that, at the time such Restricted Payments are made and after giving effect thereto, no continuing Specified Liquidity Event or Event of Default exists or has occurred and is continuing.
(b) No Loan Party will, nor will it permit any 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, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the date purchase, redemption, retirement, acquisition, cancellation or termination of declaration.any Indebtedness (collectively, “Restricted Debt Payments”), except:
(i) payment of Indebtedness under the Loan Documents, other than prepayments of principal and interest on any Incremental Term Loans (except to the extent otherwise permitted by Section 6.08(b)(xi) below) or the last sentence of Section 2.10(a));
(ii) payment of Indebtedness under the Existing Credit Agreement in connection with the fulfillment of the conditions to the Effective Date hereunder;
(iii) payment of regularly scheduled interest and principal payments as and when due in respect of any Indebtedness, other than payments in respect of the Subordinated Indebtedness prohibited by the subordination provisions thereof;
(iv) refinancings of Indebtedness to the extent permitted by Section 6.01;
(v) payment of secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness so long as such sale is permitted by Section 6.05 (other than sales, transfers and dispositions under Section 6.05(j) the proceeds of which are to be applied to payments of secured Indebtedness, which sales, transfers and dispositions are not otherwise permitted under Section 6.05));
(vi) payment of Indebtedness in exchange for or with proceeds of any substantially contemporaneous issuance of Qualified Equity Interests or substantially contemporaneous capital contribution in respect of Qualified Equity Interests of Holdings;
(vii) payment of Indebtedness under the Senior Secured Term Loan Facility or any Term Loan Pari Passu Obligations (or any extensions, renewals or replacements thereof permitted under Section 6.01(g) and Section 6.02(x)), with the net cash proceeds of any sale, transfer or other disposition of any Term Loan First Lien Collateral (as defined in the Intercreditor Agreement), or, in the case of any such extensions, renewals or replacements or any Term Loan Pari Passu Obligations, any property or assets in respect of which the security interest of the lenders thereunder has priority over the security interest of the Agent, for the benefit of the Secured Parties, in such property or assets, pursuant to the Intercreditor Agreement or another intercreditor agreement in form and substance reasonably satisfactory to the Agent that is no less favorable to the Secured Parties than the Intercreditor Agreement;
(viii) mandatory prepayments of Indebtedness under Section 2.09 of the Senior Secured Term Facility Credit Agreement (or any successor section thereof, or under any comparable provision in any instrument governing any Term Loan Pari Passu Obligations or any extension, renewal or replacement thereof or of the Senior Secured Term Loan Facility, in each case permitted under Section 6.01(g), pursuant to which mandatory prepayments of Indebtedness thereunder determined by reference to Excess Cash Flow (as defined in the Senior Secured Term Facility Credit Agreement or as defined substantially similarly in all material respects in any such other instrument) are required to be made), in amounts required under, and in accordance with, the Senior Secured Term Facility Credit Agreement or such other instrument (in the case of any such other instrument, in amounts no greater in any material respect than those required under the Senior Secured Term Facility Credit Agreement);
(ix) other Restricted Debt Payments, provided that each of the Payment Conditions is satisfied (it being understood and agreed that, if an irrevocable notice or contractual obligation is given in, made or arises in respect of any Restricted Debt Payment, the foregoing conditions only need to be satisfied at the time of the giving of such irrevocable notice or entering into (or effectiveness of) any such contractual obligation);
(x) other Restricted Debt Payments which, together with any investments, loans or advances made pursuant to Section 6.04(w) and Restricted Payments made pursuant to Section 6.08(a)(xii), do not exceed $30,000,000 in the aggregate; provided that, at the time such Restricted Debt Payments are made and after giving effect thereto, no Liquidity Event or Event of Default exists or has occurred and is continuing;
(xi) Restricted Debt Payments in respect of Incremental Term Loans, provided that, at the time such Restricted Debt Payments are made and after giving effect thereto, (A) the Term Loan Prepayment Conditions are satisfied, or (B) such Restricted Debt Payments are permitted under clause (ix) or (x) of this Section 6.08(b); and
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) Holdings will not, nor will it permit any Restricted Subsidiary to, pay or make, directly or indirectly, any Restricted Payment, except:
(i) each Restricted Subsidiary may make Restricted Payments to Holdings the Borrower or any Restricted Subsidiary (other than a Restricted Subsidiary that is a Holding Company) (and, in the case of any such Subsidiary that is not a wholly-owned Subsidiary, to each other owner of Equity Interests of such Subsidiary ratably based on their relative ownership interests of the relevant class of Equity Interests);
(ii) [reservedReserved];
(iii) [reservedReserved];
(iv) [reservedReserved];
(v) repurchases of Equity Interests in Holdings or any Parent Entity (or make Restricted Payments to allow repurchases of Equity Interest in Holdings any Parent Entity) deemed to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price of such stock options or warrants or other incentive interests;
(vi) Holdings may redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted stock, stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) or make Restricted Payments to allow any of its Parent Entities to so redeem, retire, acquire or repurchase their Equity Interests (or any options, warrants, restricted stock, stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests), in each case, held by current or former officers, managers, consultants, directors, employees, independent contractors or other service providers (or their respective spouses, former spouses, domestic partners, successors, executors, administrators, heirs, legatees or distributees) of Holdings or any Parent Entity thereof and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment or service of, or breach of restrictive covenants by, any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, stock subscription or equity incentive award agreement, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that, the aggregate amount of Restricted Payments permitted by this clause (vi) after the Closing Date Date, together with the aggregate amount of loans and advances to any Parent Entity previously made pursuant to Section 6.04(n) in lieu of Restricted Payments permitted by this clause (vi), shall not exceed the greater of $10,000,000 and 5.0% of Consolidated EBITDA for the most recently ended Test Period, 40,000,000 in any fiscal year, year with unused amounts in any fiscal year being carried over to succeeding fiscal years, so long as the aggregate amount of Restricted Payments permitted by this clause (vi) in any fiscal year shall not exceed the greater of $20,000,000 and 10.0% of Consolidated EBITDA for the most recently ended Test Period, in the aggregate, years plus all net cash proceeds obtained from any key-man life insurance policies received during such fiscal year (without giving effect to the foregoing proviso);
(vii) Holdings may make Restricted Payments in cash to any Parent Entity:
(A) for the proceeds of which shall be used by such Parent Entity to pay Taxes of Holdings, any taxable period for which other Subsidiary of Holdings and/or or any group that includes Holdings, the Borrower or any other Subsidiary of its Subsidiaries is a member of the Borrower and that files Taxes on a consolidated, combined combined, affiliated, unitary or similar income or similar tax group (a “Tax Group”) of which a Parent Entity is the common parent to pay the consolidatedbasis, combined or similar income or similar taxes, as applicable, of such Tax Group that are in each case attributable to the taxable income of Holdings and/or and its applicable Subsidiaries (as applicable)Subsidiaries, net of any payment already made by Holdings or its Subsidiaries in respect of such Taxes; provided that (1) Restricted Payments pursuant to this subclause (A) shall not exceed the amount of Taxes that Holdings would have paid if Holdings and/or such and its Subsidiaries were a stand-alone taxpayer or stand-alone Tax Group for all relevant taxable periods after the Closing Datetax group, (2) reduced by any payment made by Holdings or its Subsidiaries; and provided further that Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings or any Loan Party and (3) with respect to any taxable period (or portion thereof) ending prior to the date hereof, any distribution otherwise permitted under this clause (A) shall be permitted only to the extent such distribution relates to a tax payable after the date hereofRestricted Subsidiary;
(B) the proceeds of which shall be used by such Parent Entity to pay (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties), that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of Holdings (or any parent thereof) attributable to the ownership or operations of any Parent Entity, Holdings and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by the Borrower or any Restricted Subsidiary and (y) otherwise permitted to be paid by Holdings and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (v);
(C) the proceeds of which shall be used by Holdings (or any Parent Entity) to pay franchise and similar Taxes, other fees and expenses, required to maintain its organizational existence and auditing fees and expenses;
(D) [reservedReserved];
(E) the proceeds of which shall be used by any Parent Entity to finance any Investment that would be permitted to be made by Holdings or a Restricted Subsidiary pursuant to Section 6.046.04 (other than Section 6.04(n)); provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) such Parent Entity shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests) to be contributed to Holdings or any Restricted Subsidiary (any in no event shall any such contribution increase the Available Amount) or (y) the Person formed or acquired to merge into or consolidate with Holdings or any Restricted Subsidiary to the extent such merger or consolidation is permitted by Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections Section 5.13 and 5.14;
(F) the proceeds of which shall be used to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, consultants, independent contractors or employees of Holdings, Borrower Holdings or any Parent Entity to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, Borrower and/or Holdings and the Restricted Subsidiaries;
(G) the proceeds of which shall be used by Holdings (or any Parent Entity) to pay (i) fees and expenses related to any successful or unsuccessful equity issuance or offering or debt issuance, incurrence or offering, disposition or acquisition, Investment or other transaction permitted by this Agreement and (ii) public company costsPublic Company Costs; and
(H) the proceeds of which shall be used for the payment of insurance premiums to the extent attributable to any Parent Entity, Holdings, the Borrower and its subsidiaries;
(viii) Restricted Payments in an aggregate amount not to exceed the Available Amount that is Not Otherwise Applied as in effect immediately prior to the time of making of such Restricted Payment so long as (x) no Event of Default has occurred and is continuing (or would occur after giving Pro Forma Effect to such action) and (y) the Total Net Leverage Ratio on a Pro Forma Basis is less than or equal to 4.75:1.00, provided that where such Restricted Payment is funded from the Growth Amount, the Borrower is in compliance with the Financial Covenants (determined Total Net Leverage Ratio, on a Pro Forma Basis), is less than or equal to 4.25:1.00;
(ix) redemptions in whole or in part of any of its Equity Interests for another class of its Qualified Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Qualified Equity Interests (and in no event shall such contribution or issuance so utilized increase the Available Amount); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(x) [reservedReserved];
(xi) Holdings the Borrower may make Restricted Payments to any Parent Entity to enable such Parent Entity to pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment);
(xii) following the consummation of a Public Offering after the Closing Date, the payment of Restricted Payments to any direct Parent Entity of Holdings to fund the payment of regularly scheduled regular dividends and repurchases on Holdings’ such company’s Equity Interests, in an aggregate amount per annum not to exceed 6.0 % per annum of the greater aggregate amount of (x) $50,000,000 in proceeds from such Public Offering received by, or contributed to Holdings, the Borrower or any fiscal year, with unused amounts in any fiscal year being carried over to the succeeding fiscal year, and (y) 6.0% of market capitalizationRestricted Subsidiary;
(xiii) payments made by Holdings or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment on a Pro Forma Basis, the Total Net Leverage Ratio is less than or equal to 2.75:1.00 3.25:1.00 and there is no continuing Event of Default on the date of declaration;
(xv) [reservedReserved];
(xvi) [reserved]any Restricted Subsidiary may make Restricted Payments to Holdingsany Holding Company, the proceeds of which are applied by Holdingssuch Holding Company to satisfy any payment obligations owing under the Cristal PurchaseAcquisition Agreement;
(xvii) Restricted Payments related to settlement of Holdings’ defined benefit pension plan in the United Kingdom[Reserved];
(xviii) [reserved]Holdings may make Restricted Payments to holders of the common stock of Holdings or any Parent Entity in an amount equal to (a) $40,000,000 per annum plus (b) in any fiscal quarter, up to $0.25 per share for each such fiscal quarter (as such amount shall be appropriately adjusted for any stock, splits, stock dividends, reverse stock splits, stock consolidations and similar transactions provided that the amount permitted to be paid under this clause (xviii) in any fiscal year, or, in the case of clause (b), fiscal quarter may be increased by an amount equal to the difference (if positive) between the permitted amount in a preceding fiscal year or, in the case of clause (b), fiscal quarter and the amount actually used or applied by Holdings during such relevant period; and
(xix) additional Restricted Payments; provided that (A) such Restricted Payments shall not exceed the greater of $50,000,000 175,000,000 and 25.020.0% of Consolidated EBITDA for the most recently ended Test Period and (B) there is no continuing Specified Event of Default on the date of declaration.
(b) Holdings will not, nor will it permit any Restricted Subsidiary to, make or pay, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any (x) Subordinated Indebtedness, (y) Indebtedness secured by a Lien that is junior to the Lien securing the Secured Obligations or (z) unsecured Indebtedness that is incurred or assumed pursuant to a basket set forth in Section 6.01(a) that requires such Indebtedness to have a maturity or Weighted Average Life to Maturity no shorter or earlier than that of the Term Loans, in each case that constitutes Material Indebtedness (collectively, “Junior Debt”), or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such Junior Debt, in each case, on or prior to date that occurs earlier than one year prior to the scheduled maturity date thereof (collectively, “Restricted Debt Payments”), except:
(i) payment of regularly scheduled interest and principal payments, payments of fees, expenses and indemnification obligations when due in respect of any Indebtedness, other than payments in respect of any Junior Debt prohibited by the subordination provisions thereof;
(ii) refinancings or exchanges of Junior Debt with proceeds of Permitted Refinancing Indebtedness that constitutes the same category of Junior Debt, which matures no earlier than the Junior Debt being refinanced or exchanged, in each case, to the extent such Indebtedness is permitted to be incurred under Section 6.01;
(iii) (1) the conversion of any Junior Debt to or payments with Equity Interests (other than Disqualified Equity Interests) of Holdings or any of its direct or indirect parent companies and (2) mandatory redemptions of Disqualified Equity Interests;
(iv) prepayments, redemptions, purchases, defeasances and other payments or distributions in respect of Junior Debt prior to their scheduled maturity in an aggregate amount not to exceed the Available Amount that is Not Otherwise Applied as in effect immediately prior to the time of making of such Restricted Debt Payment, so long as (x) no Event of Default has occurred and is continuing (or would occur after giving Pro Forma Effect to such action) and (y) the Total Net Leverage Ratio on a Pro Forma Basis is less than or equal to 4.75:1.00, provided that where such Restricted Debt Payment is funded from the Growth Amount, the Total Net Leverage Ratio, on a Pro Forma Basis, is less than or equal to 4.25:1.00;
(v) prepayments, redemptions, purchases, defeasances and other payments in respect of Junior Debt prior to their scheduled maturity; provided that after giving effect to such prepayment, redemption, purchase, defeasance or other payment (A) on a Pro Forma Basis, the Total Net Leverage Ratio is less than or equal to 3.75:1.00 as of the end of the most recently ended Test Period as of such time and (B) there is no continuing Event of Default;
(vi) [Reserved]prepayments, redemptions, purchases, defeasances and other payments or distributions in respect of Subordinated Indebtedness owing (x) by any Holding Company to any other Holding Company and (y) by any Restricted Subsidiary to any Loan Party (other than to a Holding Company, unless such payment is made in connection with the consummation of the Cristal Acquisition), in each case other than any such prepayments, redemptions, purchases, defeasances and other payments or distributions that are prohibited by the subordination provisions in respect thereof;
(vii) [Reserved]
(viii) payments as part of an applicable high yield discount obligation or AHYDO catch-up payment.
(c) Holdings will not, nor will it permit any Restricted Subsidiary to, amend or modify its Organizational Documents or any documentation governing any Junior Debt, in each case if the effect of such amendment or modification (when taken as a whole) is materially adverse to the Lenders. Notwithstanding anything herein to the contrary, the foregoing provisions of this Section 6.08 will not prohibit the payment of any Restricted Payment or the consummation of any irrevocable redemption, purchase, defeasance or other payment within 60 days after the date of declaration of such Restricted Payment or the giving of irrevocable notice of such redemption, purchase, defeasance or other payment, as applicable, if at the date of declaration or the giving of such notice such payment would have complied with the provisions of this Agreement.
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) i. Holdings and the Borrower will not, nor will it they permit any Restricted Subsidiary to, pay or make, directly or indirectly, any Restricted Payment, except:
(i) 1. each Restricted Subsidiary may make Restricted Payments to Holdings or any other Restricted Subsidiary (and, in the case of any such Restricted Subsidiary that is not a whollyWholly-owned Owned Subsidiary, to each other owner of Equity Interests of such Restricted Subsidiary ratably based on their relative ownership interests of the relevant class of Equity Interests);
2. to the extent constituting a Restricted Payment, Holdings and the Borrower may consummate any transaction permitted by Section 6.03 (iiother than clause (g) thereof) and Section 6.04 (other than Section 6.04(n), (q), (t) and (u));
3. [reserved];
(iii) [reserved];
(iv) [reserved];
(v) 4. repurchases of Equity Interests in Holdings or any Parent Entity (or make Restricted Payments to allow repurchases of Equity Interest in Holdings any Parent Entity) deemed to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price of such stock options or warrants or other incentive interests;
(vi) 5. Holdings and the Borrower may redeem, acquire, retire retire, repurchase, or repurchase its make distributions with respect to their Equity Interests (or any options, warrants, restricted stock, stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) or make Restricted Payments to allow any of its Parent Entities to so redeem, retire, acquire or repurchase their Equity Interests (or any options, warrants, restricted stock, stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests), in each case, held by current or former officers, managers, consultants, directors, employees, independent contractors or other service providers (or their respective spouses, former spouses, domestic partners, successors, executors, administrators, heirs, legatees or distributees) of Holdings or any Parent Entity thereof and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment or service of, or breach of restrictive covenants by, any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, profits interest plan, restricted stock award agreements, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, stock subscription or equity incentive award agreement, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that, the aggregate amount of Restricted Payments permitted by this clause (viv) after the Closing Effective Date shall not exceed the greater of $10,000,000 and 5.0% of Consolidated EBITDA for the most recently ended Test Period, 20,000,000 in any fiscal year, year with unused amounts in any fiscal year being carried over to succeeding fiscal years, so long as the aggregate amount years subject to a maximum of Restricted Payments permitted by this clause (vi) $30,000,000 in any fiscal year shall not exceed the greater of $20,000,000 and 10.0% of Consolidated EBITDA for the most recently ended Test Period, in the aggregate, plus all net cash proceeds obtained from any key-man life insurance policies received during such fiscal year (without giving effect to the foregoing following proviso);
(vii) Holdings 6. the Borrower may make Restricted Payments in cash to any Parent Entity:
(A) for any taxable period for which Holdings and/or any of its Subsidiaries is a member of a consolidated, combined or similar income or similar tax group (a “Tax Group”) of which a Parent Entity is the common parent to pay the consolidated, combined or similar income or similar taxes, as applicable, of such Tax Group that are attributable to the taxable income of Holdings and/or its applicable Subsidiaries (as applicable), net of any payment already made by Holdings or its Subsidiaries in respect of such Taxes; provided that (1) Restricted Payments pursuant to this subclause (A) shall not exceed the amount of Taxes that Holdings would have paid if Holdings and/or such Subsidiaries were a stand-alone taxpayer or stand-alone Tax Group for all relevant taxable periods after the Closing Date, (2) Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to any Loan Party and (3) with respect to any taxable period (or portion thereof) ending prior to the date hereof, any distribution otherwise permitted under this clause (A) shall be permitted only to the extent such distribution relates to a tax payable after the date hereof;
(B) the proceeds of which shall be used by such Parent Entity to pay (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties), that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of Holdings (or any parent thereof) attributable to the ownership or operations of any Parent Entity, Holdings and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by the Borrower or any Restricted Subsidiary and (y) otherwise permitted to be paid by Holdings and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (v);
(C) the proceeds of which shall be used by Holdings (or any Parent Entity) to pay franchise and similar Taxes, other fees and expenses, required to maintain its organizational existence and auditing fees and expenses;
(D) [reserved];
(E) the proceeds of which shall be used by any Parent Entity to finance any Investment that would be permitted to be made by Holdings or a Restricted Subsidiary pursuant to Section 6.04; provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) such Parent Entity shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests) to be contributed to Holdings or any Restricted Subsidiary (any in no event shall any such contribution increase the Available Amount) or (y) the Person formed or acquired to merge into or consolidate with Holdings or any Restricted Subsidiary to the extent such merger or consolidation is permitted by Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.13 and 5.14;
(F) the proceeds of which shall be used to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, consultants, independent contractors or employees of Holdings, Borrower or any Parent Entity to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, Borrower and/or the Restricted Subsidiaries;
(G) the proceeds of which shall be used by Holdings (or any Parent Entity) to pay (i) fees and expenses related to any successful or unsuccessful equity issuance or offering or debt issuance, incurrence or offering, disposition or acquisition, Investment or other transaction permitted by this Agreement and (ii) public company costs; and
(H) the proceeds of which shall be used for the payment of insurance premiums to the extent attributable to any Parent Entity, Holdings, the Borrower and its subsidiaries;
(viii) additional Restricted Payments in an aggregate amount not to exceed the sum of (A) the Restricted Payment Amount at such time, plus (B) the Available Amount that is Not Otherwise Applied as in effect immediately prior to the time of making of such Restricted Payment so long as as, with respect to this clause (xB), (i) no Event of Default has occurred and is continuing (or would occur after upon giving Pro Forma Effect to such action) and (yii) where upon giving effect to such Restricted Payment is funded from the Growth Amount, the Borrower is in compliance with the Financial Covenants (determined action on a Pro Forma Basis), the Total Net Leverage Ratio does not exceed the level that is 0.25x below the Total Net Leverage Ratio required by the Financial Maintenance Covenant as in effect as of the end of the most recently ended Test Period, plus (C) the Available Equity Amount that is Not Otherwise Applied as in effect immediately prior to the time of making of such Restricted Payment;
(ix) 7. redemptions in whole or in part of any of its Equity Interests for another class of its Qualified Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Qualified Equity Interests (and in no event shall such contribution or issuance so utilized increase the Available Equity Amount); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(x) [reserved]8. payments made or expected to be made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units;
(xi) Holdings 9. the Borrower may make Restricted Payments to any Parent Entity to enable such Parent Entity to (A) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment)) and (B) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xii) 10. Restricted Payments to fund the payment of regularly scheduled regular dividends and repurchases on Holdings’ Equity Interests, in an aggregate amount per annum not to exceed the greater of (x) $50,000,000 in any fiscal year, with unused amounts in any fiscal year being carried over to the succeeding fiscal year, and (y) 6.0% per annum of market capitalizationthe aggregate amount of proceeds from any public offering received by, or contributed to, Holdings or any Restricted Subsidiary on or following the date of this Agreement; provided that on the date of declaration of any such dividend, after giving effect to such dividend, there is no continuing Event of Default;
(xiii) 11. payments made by Holdings or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of stock options or warrants in respect of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiv) 12. additional unlimited Restricted Payments; provided that after upon giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Net Leverage Ratio is no greater than 3.25:1.00 and the Interest Coverage Ratio is no less than or equal to 2.75:1.00 and there is no continuing Event of Default on the date of declaration;
(xv) [reserved];
(xvi) [reserved];
(xvii) Restricted Payments related to settlement of Holdings’ defined benefit pension plan in the United Kingdom;
(xviii) [reserved]; and
(xix) additional Restricted Payments; provided that (A) such Restricted Payments shall not exceed the greater of $50,000,000 and 25.0% of Consolidated EBITDA for the most recently ended Test Period 3.00:1.00 and (B) there is no continuing Specified Event of Default Default;
13. Restricted Payments constituting or otherwise made in connection with or relating to any Tax Restructuring; and
14. the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings or any Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries the primary assets of which are Cash Equivalents).
ii. Holdings and the Borrower will not, nor will they permit any Restricted Subsidiary to, make or pay, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on (x) any Subordinated Indebtedness or (y) Indebtedness which is unsecured or secured on a junior basis to the Liens securing the Secured Obligations, in the case of each of (x) and (y), that constitutes Material Indebtedness (“Restricted Debt”), or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such Restricted Debt, in each case, on or prior to date that occurs earlier than one year prior to the scheduled maturity date thereof (collectively, “Restricted Debt Payments”), except:
1. payment of declaration.regularly scheduled interest and principal payments, payments of fees, expenses and indemnification obligations when due in respect of any Indebtedness, other than payments in respect of any Restricted Debt prohibited by the subordination provisions thereof;
2. (1) refinancings or exchanges of Restricted Debt with proceeds of Permitted Refinancing Indebtedness or other Restricted Debt, which matures no earlier than the Restricted Debt being refinanced or exchanged, in each case, to the extent such Indebtedness is permitted to be incurred under Section 6.01 and (2) refinancings of Restricted Debt assumed in accordance with Section 6.01(a)(vii) in connection with a Permitted Acquisition or similar Investment permitted under this Agreement;
3. (1) the conversion of any Restricted Debt to or payments with Equity Interests (other than Disqualified Equity Interests) of Holdings and (2) mandatory redemptions of Disqualified Equity Interests;
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) Holdings The Borrower will not, nor and will it not permit any Restricted Subsidiary of its Subsidiaries to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, except:
(i) each Restricted Subsidiary may make Restricted Payments to Holdings the Borrower or any Restricted Subsidiary (and, other Subsidiary; provided that in the case of any such Restricted Payment by a Subsidiary that is not a wholly-owned SubsidiaryWholly Owned Subsidiary of the Borrower, such Restricted Payment is made to the Borrower and/or any Subsidiary and to each other owner of Equity Interests of such Subsidiary ratably based on their relative ownership interests of the relevant class of Equity Interests);
(ii) [reserved]the Borrower and each Subsidiary may declare and make dividend payments or other distributions payable solely in the Equity Interests of such Person;
(iii) [reserved]Restricted Payments made on or substantially contemporaneously with the Effective Date to consummate the Transactions, including to finance the payment of Transaction Costs;
(iv) [reserved];
(v) repurchases of Equity Interests in Holdings the Borrower or any Parent Entity (or make Restricted Payments to allow repurchases of Equity Interest in Holdings any Parent Entity) Subsidiary deemed to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price or withholding taxes payable in connection with the exercise of such stock options or warrants or other incentive interests;
(viv) Holdings may Restricted Payments used to redeem, acquire, retire retire, repurchase or repurchase its settle the Borrower’s Equity Interests (or any options, warrants, restricted stock, stock or stock appreciation rights or other equity-linked interests similar securities issued with respect to any of such Equity Interests) held directly or make Restricted Payments to allow any of its Parent Entities to so redeem, retire, acquire or repurchase their Equity Interests (or any options, warrants, restricted stock, stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests), in each case, held indirectly by current or former officers, managers, consultants, directorsmembers of the Board of Directors, employees, employees or independent contractors or other service providers (or their respective spouses, former spouses, domestic partners, successors, executors, administrators, heirs, legatees or distributees) of Holdings the Lead Borrower (or any Parent Entity thereof direct or indirect parent thereof), and its Subsidiaries (in each case, other than the Restricted Subsidiariesexecutive management (i.e., the CEO, the CFO, any executive vice presidents and any similar executive management positions)), upon the death, disability, retirement or termination of employment or service of, or breach of restrictive covenants by, any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, stock subscription or equity incentive award agreement, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that, the agreement in an aggregate amount of Restricted Payments permitted by this clause (vi) after the Closing Effective Date shall not to exceed the greater of $10,000,000 and 5.0% of Consolidated EBITDA for the most recently ended Test Period, 11,500,000 in any fiscal year, year of the Lead Borrower with unused amounts in any fiscal year being carried over solely to the next succeeding fiscal years; provided that such amount in any fiscal year may be increased by (1) an amount not to exceed the cash proceeds of key man life insurance policies received by the Borrower or the Subsidiaries after the Effective Date, so long as or (2) the amount of any bona fide cash bonuses otherwise payable to members of the Board of Directors, consultants, officers, employees, managers or independent contractors the Borrower or any Subsidiary that are foregone in return for the receipt of Equity Interests, the fair market value of which is equal to or less than the amount of such cash bonuses, which, if not used in any year, may be carried forward solely to the next subsequent fiscal year; provided further that cancellation of Indebtedness owning to the Borrower or any Subsidiary from members of the Board of Directors, consultants, officers, employees, managers or independent contractors (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of the Borrower or any Subsidiary in connection with a repurchase of Equity Interests of the Borrower will not be deemed to constitute a Restricted Payment for purposes of this Section 6.07 or any other provisions of this Agreement.
(vi) [reserved];
(vii) in addition to the foregoing Restricted Payments, the Borrower may make additional Restricted Payments, in an aggregate amount, when taken together with the aggregate amount of loans and advances previously made pursuant to Section 6.04(m) in lieu of Restricted Payments permitted by this clause (vi) in any fiscal year shall vii), not to exceed the greater sum of $20,000,000 and 10.0% of Consolidated EBITDA for the most recently ended Test Period, in the aggregate, plus all net cash proceeds obtained from any key-man life insurance policies received during such fiscal year (without giving effect to the foregoing proviso);
(vii) Holdings may make Restricted Payments in cash to any Parent Entity:
(A) for any taxable period for which Holdings and/or any of its Subsidiaries is a member of a consolidated, combined or similar income or similar tax group (a “Tax Group”) of which a Parent Entity is the common parent to pay the consolidated, combined or similar income or similar taxes, as applicable, of such Tax Group that are attributable to the taxable income of Holdings and/or its applicable Subsidiaries (as applicable), net of any payment already made by Holdings or its Subsidiaries in respect of such Taxes; provided that (1) Restricted Payments pursuant to this subclause (A) shall not exceed the amount of Taxes that Holdings would have paid if Holdings and/or such Subsidiaries were a stand-alone taxpayer or stand-alone Tax Group for all relevant taxable periods after the Closing Date, (2) Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to any Loan Party and (3) with respect to any taxable period (or portion thereof) ending prior to the date hereof, any distribution otherwise permitted under this clause (A) shall be permitted only to the extent such distribution relates to a tax payable after the date hereof;
(B) the proceeds of which shall be used by such Parent Entity to pay (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties), that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of Holdings (or any parent thereof) attributable to the ownership or operations of any Parent Entity, Holdings and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by the Borrower or any Restricted Subsidiary and (y) otherwise permitted to be paid by Holdings and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (v);
(C) the proceeds of which shall be used by Holdings (or any Parent Entity) to pay franchise and similar Taxes, other fees and expenses, required to maintain its organizational existence and auditing fees and expenses;
(D) [reserved];
(E) the proceeds of which shall be used by any Parent Entity to finance any Investment that would be permitted to be made by Holdings or a Restricted Subsidiary pursuant to Section 6.04; provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) such Parent Entity shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests) to be contributed to Holdings or any Restricted Subsidiary (any in no event shall any such contribution increase the Available Amount) or (y) the Person formed or acquired to merge into or consolidate with Holdings or any Restricted Subsidiary to the extent such merger or consolidation is permitted by Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.13 and 5.14;
(F) the proceeds of which shall be used to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, consultants, independent contractors or employees of Holdings, Borrower or any Parent Entity to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, Borrower and/or the Restricted Subsidiaries;
(G) the proceeds of which shall be used by Holdings (or any Parent Entity) to pay (i) fees and expenses related to any successful or unsuccessful equity issuance or offering or debt issuance, incurrence or offering, disposition or acquisition, Investment or other transaction permitted by this Agreement and (ii) public company costs; and
(H) the proceeds of which shall be used for the payment of insurance premiums to the extent attributable to any Parent Entity, Holdings, the Borrower and its subsidiaries;
(viii) Restricted Payments in an aggregate amount not to exceed the Available Amount that is Not Otherwise Applied as in effect immediately prior to the time of making of such Restricted Payment, plus (B) the Available Equity Amount that is Not Otherwise Applied as in effect immediately prior to the time of making of such Restricted Payment; provided that any Restricted Payment so long as made in reliance on preceding clause (A) shall be subject to, (x) no Event of Default has having occurred and is be continuing or resulting therefrom (or would occur tested at the time of declaration of such Restricted Payment) and (y) before and after giving Pro Forma Effect to such action) and (y) where such Restricted Payment is funded from the Growth AmountPayment, the Borrower is in compliance with the Financial Covenants (determined on a Pro Forma Basis, the Total Net Leverage Ratio being less than or equal to 3.21 to 1.00 as of the end of the most recently ended Test Period (tested at the time of declaration of such Restricted Payment);
(ixviii) redemptions in whole or in part of any of its Equity Interests for another class of its Qualified Equity Interests or with proceeds from substantially concurrent equity contributions contributions;
(ix) payments made or issuances expected to be made in respect of new Qualified withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests (in consideration of such payments including deemed repurchases in connection with the exercise of stock options and in no event shall such contribution or issuance so utilized increase the Available Amount); provided that such new Equity Interests contain terms vesting of restricted stock and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed therebyrestricted stock units;
(x) [reserved];
(xi) Holdings may make Restricted Payments to any Parent Entity to enable such Parent Entity to pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment)) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xii) Restricted Payments to fund the payment of regularly scheduled dividends and repurchases on Holdings’ Equity Interests, in an aggregate amount per annum not to exceed the greater of (x) $50,000,000 in any fiscal year, with unused amounts in any fiscal year being carried over to the succeeding fiscal year, and (y) 6.0% of market capitalization;
(xiiixi) payments made or expected to be made by Holdings the Borrower or any Restricted Subsidiary in respect of withholding or similar taxes Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or Permitted Transfereespermitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xii) [Reserved];
(xiii) [Reserved];
(xiv) [Reserved];
(xv) additional Restricted PaymentsPayments in an amount not to exceed $138,000,000; provided that after giving effect to such Restricted Payment no Event of Default exists or would result therefrom;
(xvi) [Reserved]; and
(xvii) additional Restricted Payments (other than Restricted Payments of Equity Interests of any Wholly Owned Subsidiary); provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Net Leverage Ratio is equal to or less than or equal 2.96 to 2.75:1.00 1.00 and there is (B) no continuing Event of Default exists or would result therefrom.
(b) The Borrower will not, and will not permit any of its Subsidiaries 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 Junior Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the date purchase, redemption, retirement, acquisition, cancellation or termination of declarationany Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoing, in each case, except:
(i) payment of regularly scheduled interest and principal payments, mandatory offers to repay, repurchase or redeem, mandatory prepayments of principal, premium and interest, and payment of fees, expenses and indemnification obligations, with respect to such Junior Financing, other than payments in respect of any Junior Financing prohibited by the subordination provisions thereof;
(xvii) [reserved]refinancings of Indebtedness to the extent permitted by Section 6.01;
(xvi1) [reserved]the conversion of any Junior Financing to Equity Interests (other than Disqualified Equity Interests) of the Borrower and (2) any payment that is intended to prevent any Junior Financing from being treated as an “applicable high yield discount obligation” within the meaning of Section 163(i)(1) of the Code;
(xviiiv) Restricted Payments related prepayments, redemptions, purchases, defeasances and other payments in respect of any Junior Financing; provided that after giving effect to settlement such prepayments, redemptions, purchases, defeasances or other payments (A) on a Pro Forma Basis, the Total Net Leverage Ratio is equal to or less than 2.96 to 1.00 and (B) no Event of Holdings’ defined benefit pension plan in the United KingdomDefault exists or would result therefrom;
(xviiiv) [reserved]; andpayments made in connection with, or in order to consummate, the Transactions;
(xixvi) additional Restricted Payments; provided that (A) such Restricted Payments shall prepayments, redemptions, purchases, defeasances and other payments in respect of any Junior Financing in an aggregate amount not to exceed the greater of $50,000,000 92,000,000 and 25.028.75% of Consolidated EBITDA on a Pro Forma Basis for the most recently ended Test Period plus (B) the amount of Restricted Payments that may be made pursuant to Section 6.07(a)(xv) at such time;
(vii) additional prepayments, redemptions, purchases, defeasances and other payments in respect of any Junior Financing; provided that the aggregate amount of such prepayments, redemptions, purchases, defeasances and other payments made in reliance on this clause (vii), shall not exceed the sum of (A) the Available Amount that is Not Otherwise Applied as in effect immediately prior to the time of making of such prepayments, redemptions, purchases, defeasances and other payments, plus (B) the Available Equity Amount that is Not Otherwise Applied as in effect immediately prior to the time of making of such prepayments, redemptions, purchases, defeasances and other payments; provided that any prepayments, redemptions, purchases, defeasances and other payments made in reliance on preceding clause (A) shall be subject to, before and after giving Pro Forma Effect to such prepayments, redemptions, purchases, defeasances and other payments, the Total Net Leverage Ratio being less than or equal to 3.21 to 1.00 as of the end of the most recently ended Test Period (tested at the time of distribution or delivery of any irrevocable notice of prepayment, redemption, repurchase or defeasance, as applicable, in respect thereof);
(viii) the prepayment of any Junior Financing owed to the Borrower or a Subsidiary or the prepayment of any Permitted Refinancing of such Indebtedness with the proceeds of any other Junior Financing; provided that (A) no Loan Party shall make any prepayment of any Junior Financing owed to any Subsidiary that is not a Loan Party pursuant to this clause (viii) and (B) there is prior to Payment in Full of Badcock Obligations, neither the Borrower nor any Subsidiary (other than Badcock) shall make any prepayment of any Junior Financing owed to Badcock pursuant to this clause (viii); and
(ix) prepayments, redemptions, purchases, defeasances and other payments in respect of any Junior Financing within one year of the scheduled maturity of such Junior Financing; provided, that after giving effect to such prepayments, redemptions, purchases, defeasances and other payments, no continuing Specified Event of Default on the date under paragraph (a), (b), (h) or (i) of declarationSection 7.01 exists or would result therefrom.
Appears in 1 contract
Sources: Second Lien Credit Agreement (Franchise Group, Inc.)
Restricted Payments; Certain Payments of Indebtedness. (a) Holdings will not, nor will it permit any Restricted Subsidiary to, pay or make, directly or indirectly, any Restricted Payment, except:
(i) each Restricted Subsidiary may make Restricted Payments to Holdings or any Restricted Subsidiary (and, in the case of any such Subsidiary that is not a wholly-owned Subsidiary, to each other owner of Equity Interests of such Subsidiary ratably based on their relative ownership interests of the relevant class of Equity Interests);
(ii) [reserved];
(iii) [reserved];
(iv) [reserved];
(v) repurchases of Equity Interests in Holdings or any Parent Entity (or make Restricted Payments to allow repurchases of Equity Interest in Holdings any Parent Entity) deemed to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price of such stock options or warrants or other incentive interests;
(vi) Holdings may redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted stock, stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) or make Restricted Payments to allow any of its Parent Entities to so redeem, retire, acquire or repurchase their Equity Interests (or any options, warrants, restricted stock, stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests), in each case, held by current or former officers, managers, consultants, directors, employees, independent contractors or other service providers (or their respective spouses, former spouses, domestic partners, successors, executors, administrators, heirs, legatees or distributees) of Holdings or any Parent Entity thereof and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment or service of, or breach of restrictive covenants by, any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, stock subscription or equity incentive award agreement, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that, the aggregate amount of Restricted Payments permitted by this clause (vi) after the Closing Date shall not exceed the greater of $10,000,000 and 5.0% of Consolidated EBITDA for the most recently ended Test Period, in any fiscal year, with unused amounts in any fiscal year being carried over to succeeding fiscal years, so long as the aggregate amount of Restricted Payments permitted by this clause (vi) in any fiscal year shall not exceed the greater of $20,000,000 and 10.0% of Consolidated EBITDA for the most recently ended Test Period, in the aggregate, plus all net cash proceeds obtained from any key-man life insurance policies received during such fiscal year (without giving effect to the foregoing proviso);
(vii) Holdings may make Restricted Payments in cash to any Parent Entity:
(A) for any taxable period for which Holdings and/or any of its Subsidiaries is a member of a consolidated, combined or similar income or similar tax group (a “Tax Group”) of which a Parent Entity is the common parent to pay the consolidated, combined or similar income or similar taxes, as applicable, of such Tax Group that are attributable to the taxable income of Holdings and/or its applicable Subsidiaries (as applicable), net of any payment already made by Holdings or its Subsidiaries in respect of such Taxes; provided that (1) Restricted Payments pursuant to this subclause (A) shall not exceed the amount of Taxes that Holdings would have paid if Holdings and/or such Subsidiaries were a stand-alone taxpayer or stand-alone Tax Group for all relevant taxable periods after the Closing Date, (2) Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to any Loan Party and (3) with respect to any taxable period (or portion thereof) ending prior to the date hereof, any distribution otherwise permitted under this clause (A) shall be permitted only to the extent such distribution relates to a tax payable after the date hereof;
(B) the proceeds of which shall be used by such Parent Entity to pay (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties), that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of Holdings (or any parent thereof) attributable to the ownership or operations of any Parent Entity, Holdings and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by the Borrower or any Restricted Subsidiary and (y) otherwise permitted to be paid by Holdings and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (v);
(C) the proceeds of which shall be used by Holdings (or any Parent Entity) to pay franchise and similar Taxes, other fees and expenses, required to maintain its organizational existence and auditing fees and expenses;
(D) [reserved];
(E) the proceeds of which shall be used by any Parent Entity to finance any Investment that would be permitted to be made by Holdings or a Restricted Subsidiary pursuant to Section 6.04; provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) such Parent Entity shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests) to be contributed to Holdings or any Restricted Subsidiary (any in no event shall any such contribution increase the Available Amount) or (y) the Person formed or acquired to merge into or consolidate with Holdings or any Restricted Subsidiary to the extent such merger or consolidation is permitted by Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.13 and 5.14;
(F) the proceeds of which shall be used to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, consultants, independent contractors or employees of Holdings, Borrower or any Parent Entity to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, Borrower and/or the Restricted Subsidiaries;
(G) the proceeds of which shall be used by Holdings (or any Parent Entity) to pay (i) fees and expenses related to any successful or unsuccessful equity issuance or offering or debt issuance, incurrence or offering, disposition or acquisition, Investment or other transaction permitted by this Agreement and (ii) public company costs; and
(H) the proceeds of which shall be used for the payment of insurance premiums to the extent attributable to any Parent Entity, Holdings, the Borrower and its subsidiaries;
(viii) Restricted Payments in an aggregate amount not to exceed the Available Amount that is Not Otherwise Applied as in effect immediately prior to the time of making of such Restricted Payment so long as (x) no Event of Default has occurred and is continuing (or would occur after giving Pro Forma Effect to such action) and (y) where such Restricted Payment is funded from the Growth Amount, the Borrower is in compliance with the Financial Covenants (determined on a Pro Forma Basis);
(ix) redemptions in whole or in part of any of its Equity Interests for another class of its Qualified Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Qualified Equity Interests (and in no event shall such contribution or issuance so utilized increase the Available Amount); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(x) [reserved];
(xi) Holdings may make Restricted Payments to any Parent Entity to enable such Parent Entity to pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment);
(xii) Restricted Payments to fund the payment of regularly scheduled dividends and repurchases on Holdings’ Equity Interests, in an aggregate amount per annum not to exceed the greater of (x) $50,000,000 in any fiscal year, with unused amounts in any fiscal year being carried over to the succeeding fiscal year, and (y) 6.0% of market capitalization;
(xiii) payments made by Holdings or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiv) additional Restricted Payments; provided that after giving effect to such Restricted Payment on a Pro Forma Basis, the Total Net Leverage Ratio is less than or equal to 2.75:1.00 and there is no continuing Event of Default on the date of declaration;
(xv) [reserved];
(xvi) [reserved];
(xvii) Restricted Payments related to settlement of Holdings’ defined benefit pension plan in the United Kingdom;
(xviii) [reserved]; and
(xix) additional Restricted Payments; provided that (A) such Restricted Payments shall not exceed the greater of $50,000,000 and 25.0% of Consolidated EBITDA for the most recently ended Test Period and (B) there is no continuing Specified Event of Default on the date of declaration.
(b) Holdings will not, nor will it permit any Restricted Subsidiary to, make or pay, directly or indirectly, any voluntary payment or other distribution (whether in cash, securities or other property) of or in respect of principal of Junior Debt, or any voluntary 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 such Junior Debt, in each case, on or prior to date that occurs earlier than one year prior to the scheduled maturity date thereof (collectively, “Restricted Debt Payments”), except:
(i) [reserved];
(ii) refinancings or exchanges of Junior Debt with proceeds of any Permitted Refinancing, in each case, to the extent such Indebtedness is permitted to be incurred under Section 6.01;
(1) the conversion of any Junior Debt to, or payments with, Equity Interests (other than Disqualified Equity Interests unless permitted to be incurred under Section 6.01) of Holdings or any of its direct or indirect parent companies and (2) mandatory redemptions of Disqualified Equity Interests;
(iv) prepayments, redemptions, purchases, defeasances and other payments or distributions in respect of Junior Debt prior to their scheduled maturity in an aggregate amount not to exceed the Available Amount that is Not Otherwise Applied as in effect immediately prior to the time of making of such Restricted Debt Payment, so long as (x) no Event of Default has occurred and is continuing (or would occur after giving Pro Forma Effect to such action) and (y) if such Restricted Debt Payment is funded from the Growth Amount, the Borrower is in compliance with the Financial Covenants (determined on a Pro Forma Basis);
(v) prepayments, redemptions, purchases, defeasances and other payments in respect of Junior Debt prior to their scheduled maturity; provided that after giving effect to such prepayment, redemption, purchase, defeasance or other payment on a Pro Forma Basis, the Total Net Leverage Ratio is less than or equal to 2.75:1.00 as of the end of the most recently ended Test Period as of such time;
(vi) subject to the terms of the Global Intercompany Note, prepayments, redemptions, purchases, defeasances and other payments or distributions in respect of Junior Debt owing by Holdings or any Restricted Subsidiary to Holdings or any Restricted Subsidiary;
(vii) additional Restricted Debt Payments; provided that (A) such Restricted Debt Payments shall not exceed the greater of $50,000,000 and 25.0% of Consolidated EBITDA for the most recently ended Test Period and (B) there is no continuing Specified Event of Default on the date of declaration; and
(viii) regularly scheduled interest and principal payments as and when due (including any payments as part of an applicable high yield discount obligation or AHYDO catch-up payment).
(c) Holdings will not, nor will it permit any Restricted Subsidiary to, amend or modify its Organizational Documents or any documentation governing any Junior Debt, in each case if the effect of such amendment or modification (when taken as a whole) is materially adverse to the Lenders. Notwithstanding anything herein to the contrary, the foregoing provisions of this Section 6.08 will not prohibit the payment of any Restricted Payment or the consummation of any irrevocable redemption, purchase, defeasance or other payment within 60 days after the date of declaration of such Restricted Payment or the giving of irrevocable notice of such redemption, purchase, defeasance or other payment, as applicable, if at the date of declaration or the giving of such notice such payment would have complied with the provisions of this Agreement.
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) Holdings and the Borrower will not, nor will it they permit any Restricted Subsidiary to, pay or make, directly or indirectly, any Restricted Payment, except:
(i) each Restricted Subsidiary may make Restricted Payments to Holdings or any other Restricted Subsidiary (and, in the case of any such Restricted Subsidiary that is not a wholly-owned Subsidiary, to each other owner of Equity Interests of such Restricted Subsidiary ratably based on their relative ownership interests of the relevant class of Equity Interests);
(ii) [reserved]to the extent constituting a Restricted Payment, Holdings and the Borrower may consummate any transaction permitted by Section 6.03 (other than clause (i) thereof) and Section 6.04 (other than Section 6.04(n), (q), (t) and (u));
(iii) [reserved]Holdings and the Restricted Subsidiaries may make Restricted Payments in connection with any Permitted Receivables Financing;
(iv) [reserved];
(v) repurchases of Equity Interests in Holdings or any Parent Entity (or make Restricted Payments to allow repurchases of Equity Interest in Holdings any Parent Entity) deemed to occur upon exercise of stock options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price of such stock options or warrants or other incentive interests;
(vi) Holdings and the Borrower may redeem, acquire, retire retire, repurchase, or repurchase its make distributions with respect to, their Equity Interests (or any options, warrants, restricted stock, stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) or make Restricted Payments to allow any of its Parent Entities to so redeem, retire, acquire or repurchase their Equity Interests (or any options, warrants, restricted stock, stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests), in each case, held by current or former officers, managers, consultants, directors, employees, independent contractors or other service providers (or their respective spouses, former spouses, domestic partners, successors, executors, administrators, heirs, legatees or distributees) of Holdings or any Parent Entity thereof CEH and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment or service of, or breach of restrictive covenants by, any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, profits interest plan, restricted stock award agreements, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, stock subscription or equity incentive award agreement, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that, the aggregate amount of Restricted Payments permitted by this clause (vi) after the Closing Effective Date shall not exceed the greater of $10,000,000 and 5.0% of Consolidated EBITDA for the most recently ended Test Period, 15,000,000 in any fiscal year, year with unused amounts in any fiscal year being carried over to succeeding fiscal years, so long as the aggregate amount years subject to a maximum of Restricted Payments permitted by this clause (vi) $25,000,000 in any fiscal year shall not exceed the greater of $20,000,000 and 10.0% of Consolidated EBITDA for the most recently ended Test Period, in the aggregate, plus all net cash proceeds obtained from any key-man life insurance policies received during such fiscal year (without giving effect to the foregoing following proviso);
(vii) Holdings may make Restricted Payments in cash to any Parent Entity, the proceeds of which shall be used by such Parent Entity to pay or finance:
(A) for its Taxes or Taxes of Holdings, any taxable period for which Subsidiary or any group that includes Holdings and/or or any of its Subsidiaries is a member of Subsidiary and that files Taxes on a consolidated, combined combined, affiliated, unitary or similar income or similar tax group (a “Tax Group”) of which a Parent Entity is the common parent to pay the consolidatedbasis, combined or similar income or similar taxes, as applicable, of such Tax Group that are in each case attributable to the taxable income of Holdings and/or its and the Subsidiaries, and computed at the highest applicable Subsidiaries (as applicable)combined federal, state, and local marginal tax rate net of any payment already made by Holdings or its Subsidiaries in respect of such Taxes; provided that (1) Restricted Payments pursuant to this subclause clause (Avii) shall not exceed the amount of Taxes that Holdings would have paid if Holdings and/or such and the Subsidiaries were a stand-alone taxpayer or stand-alone Tax Group for all relevant taxable periods after the Closing Date, (2) tax group; and provided further that a Restricted Payments Payment under this subclause clause (Avii) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that (1) such Unrestricted Subsidiaries have made cash payments for such purpose to Holdings or any Loan Party and Restricted Subsidiary or (32) with respect to any taxable period (or portion thereof) ending prior to the date hereof, any distribution otherwise such Restricted Payment constitutes an Investment permitted under this clause (A) shall be permitted only to the extent such distribution relates to a tax payable after the date hereof;by Section 6.04; or
(B) the proceeds of which shall be used by such Parent Entity to pay (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties), that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of Holdings (or any parent thereof) attributable to the ownership or operations of any Parent Entity, Holdings and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by the Borrower or any Restricted Subsidiary and (y) otherwise permitted to be paid by Holdings and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (v);
(C) the proceeds of which shall be used by Holdings (or any Parent Entity) to pay franchise and similar Taxes, and other fees and expenses, required to maintain its organizational existence and auditing fees and expenses;
(D) [reserved];
(E) the proceeds of which shall be used by any Parent Entity to finance any Investment that would be permitted to be made by Holdings or a Restricted Subsidiary pursuant to Section 6.04; provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) such Parent Entity shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests) to be contributed to Holdings or any Restricted Subsidiary (any in no event shall any such contribution increase the Available Amount) or (y) the Person formed or acquired to merge into or consolidate with Holdings or any Restricted Subsidiary to the extent such merger or consolidation is permitted by Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.13 and 5.14;
(F) the proceeds of which shall be used to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, consultants, independent contractors or employees of Holdings, Borrower or any Parent Entity to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, Borrower and/or the Restricted Subsidiaries;
(G) the proceeds of which shall be used by Holdings (or any Parent Entity) to pay (i) fees and expenses related to any successful or unsuccessful equity issuance or offering or debt issuance, incurrence or offering, disposition or acquisition, Investment or other transaction permitted by this Agreement and (ii) public company costs; and
(H) the proceeds of which shall be used for the payment of insurance premiums to the extent attributable to any Parent Entity, Holdings, the Borrower and its subsidiariesexistence;
(viii) the Borrower may make additional Restricted Payments in an aggregate amount not to exceed the sum of (A) the Restricted Payment Amount at such time, plus (B) the Available Amount that is Not Otherwise Applied as in effect immediately prior to the time of making of such Restricted Payment so long as as, with respect to this clause (xB), (i) no Event of Default has occurred and is continuing (or would occur after giving Pro Forma Effect to such action) and (yii) where after giving effect to such Restricted Payment is funded from the Growth Amount, the Borrower is in compliance with the Financial Covenants (determined action on a Pro Forma Basis), the First Lien Net Leverage Ratio does not exceed the level that is 0.25x below the First Lien Net Leverage Ratio required by the Financial Maintenance Covenant as in effect for the most recent Test Period, plus (C) the Available Equity Amount that is Not Otherwise Applied as in effect immediately prior to the time of making of such Restricted Payment;
(ix) redemptions in whole or in part of any of its Equity Interests for another class of its Qualified Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Qualified Equity Interests (and in no event shall such contribution or issuance so utilized increase the Available Equity Amount); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(x) [reserved]payments made or expected to made in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options and the vesting of restricted stock and restricted stock units;
(xi) Holdings the Borrower may make Restricted Payments to any Parent Entity to enable such Parent Entity to (A) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment)) and (B) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xii) Restricted Payments to fund the payment of regularly scheduled regular dividends and repurchases on Holdings’ Equity Interests, in an aggregate amount per annum not to exceed the greater of (x) $50,000,000 in any fiscal year, with unused amounts in any fiscal year being carried over to the succeeding fiscal year, and (y) 6.0% per annum of market capitalizationthe aggregate amount of proceeds from any public offering received by, or contributed to, Holdings or any Restricted Subsidiary on or following the date of this Agreement; provided that on the date of declaration of any such dividend, after giving effect to such dividend, there is no continuing Event of Default;
(xiii) payments made by Holdings or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiv) additional unlimited Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total First Lien Net Leverage Ratio is less no greater than or equal to 2.75:1.00 2.00:1.00 and (B) there is no continuing Event of Default on the date of declarationDefault;
(xv) [reserved]Restricted Payments constituting or otherwise made in connection with or relating to any Tax Restructuring;
(xvi) [reserved];; and
(xvii) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings or any Restricted Payments related Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are Cash Equivalents).
(b) Holdings and the Borrower will not, nor will they permit any Restricted Subsidiary to, make or pay, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on (x) any Subordinated Indebtedness or (y) Indebtedness which is unsecured or secured on a junior basis to settlement of Holdings’ defined benefit pension plan the Liens securing the Secured Obligations, in the United Kingdomcase of each of (x) and (y), that constitutes Material Indebtedness (“Restricted Debt”), or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such Restricted Debt, in each case, on or prior to date that occurs earlier than one year prior to the scheduled maturity date thereof (collectively, “Restricted Debt Payments”), except:
(i) payment of regularly scheduled interest and principal payments, payments of fees, expenses and indemnification obligations when due in respect of any Indebtedness, other than payments in respect of any Restricted Debt prohibited by the subordination provisions thereof;
(xviiiii) [reserved]; and(1) refinancings or exchanges of Restricted Debt with proceeds of Permitted Refinancing Indebtedness or other Restricted Debt, which matures no earlier than the Restricted Debt being refinanced or exchanged, in each case, to the extent such Indebtedness is permitted to be incurred under Section 6.01 and (2) refinancings of Restricted Debt assumed in accordance with Section 6.01(a)(vii) in connection with a Permitted Acquisition or similar Investment permitted under this Agreement;
(xixiii) (1) the conversion of any Restricted Debt to or payments with Equity Interests (other than Disqualified Equity Interests) of Holdings and (2) mandatory redemptions of Disqualified Equity Interests);
(iv) prepayments, redemptions, purchases, defeasances and other payments or distributions in respect of Restricted Debt prior to their scheduled maturity in an aggregate amount not to exceed the sum of (A)(i) the Restricted Debt Payment Amount that the Borrower elects to apply pursuant to this clause (i), plus (ii) an amount not to exceed the portion, if any, of the Restricted Payment Amount that the Borrower elects to apply pursuant to this clause (ii), plus (B) the Available Amount that is Not Otherwise Applied as in effect immediately prior to the time of making of such Restricted Debt Payment, so long as, with respect to this clause (B), (i) no Event of Default has occurred and is continuing (or would occur after giving Pro Forma Effect to such action) and (ii) after giving effect to such action on a Pro Forma Basis, the First Lien Net Leverage Ratio does not exceed the level that is 0.25x below the First Lien Net Leverage Ratio required by the Financial Maintenance Covenant as in effect for the most recent Test Period, plus (C) the Available Equity Amount that is Not Otherwise Applied as in effect immediately prior to the time of making of such Restricted Debt Payment;
(v) additional unlimited prepayments, redemptions, purchases, defeasances and other payments in respect of Restricted PaymentsDebt prior to their scheduled maturity; provided that that, after giving effect to such prepayment, redemption, purchase, defeasance or other payment (A) such Restricted Payments shall on a Pro Forma Basis, the First Lien Net Leverage Ratio does not exceed the greater of $50,000,000 and 25.0% of Consolidated EBITDA for the most recently ended Test Period 2.25:1.00 and (B) there is no continuing Specified Event of Default on Default;
(vi) [reserved];
(vii) to the extent constituting a Restricted Debt Payment, payment-in-kind interest with respect to any Indebtedness that is permitted under Section 6.01; and
(viii) payments as part of an applicable high yield discount obligation or AHYDO catch-up payment.
(c) Holdings and the Borrower will not, nor will they permit any Restricted Subsidiary to, amend or modify any documentation governing any Restricted Debt, in each case if the effect of such amendment or modification (when taken as a whole) is materially adverse to the Lenders. Notwithstanding anything herein to the contrary, the foregoing provisions of this Section 6.08 will not prohibit the payment of any Restricted Payment or the consummation of any irrevocable redemption, purchase, defeasance or other payment within 60 days after the date of declarationdeclaration of such Restricted Payment or the giving of irrevocable notice of such redemption, purchase, defeasance or other payment, as applicable, if at the date of declaration or the giving of such notice such payment would have complied with the provisions of this Agreement.
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) Holdings will shall not, nor will it and shall not permit the Borrower or any Restricted Subsidiary of its Subsidiaries to, pay or make, directly or indirectly, any Restricted Payment, exceptexcept that:
(i) each Restricted Subsidiary so long as no Event of Default shall have occurred and be continuing at the time of the declaration thereof, Holdings may make Restricted Payments in an aggregate amount not to Holdings or any Restricted Subsidiary (and, in the case of any such Subsidiary that is not a wholly-owned Subsidiary, to each other owner of Equity Interests of such Subsidiary ratably based on their relative ownership interests of the relevant class of Equity Interests)exceed $2,000,000;
(ii) [reserved];
(iii) [reserved]Holdings may pay Restricted Payments payable solely in its Qualified Capital Stock;
(iv) [reserved]any Subsidiary of the 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);
(v) repurchases Holdings and/or any Subsidiary of Equity Interests in Holdings may purchase common stock or any Parent Entity (or make Restricted Payments to allow repurchases of Equity Interest in Holdings any Parent Entity) deemed to occur upon exercise of common stock options or warrants or other incentive interests if such Equity Interests represent a portion of the exercise price of such stock options or warrants or other incentive interests;
(vi) Holdings may redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted stock, stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) or make Restricted Payments to allow any of its Parent Entities to so redeem, retire, acquire or repurchase their Equity Interests (or any options, warrants, restricted stock, stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests), in each case, held by current from present or former officers, managers, consultants, directors, employees, independent contractors or other service providers (or their respective spouses, former spouses, domestic partners, successors, executors, administrators, heirs, legatees or distributees) of Holdings or any Parent Entity thereof and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment or service of, or breach of restrictive covenants by, any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, stock subscription or equity incentive award agreement, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that, the aggregate amount of Restricted Payments permitted by this clause (vi) after the Closing Date shall not exceed the greater of $10,000,000 and 5.0% of Consolidated EBITDA for the most recently ended Test Period, in any fiscal year, with unused amounts in any fiscal year being carried over to succeeding fiscal years, so long as the aggregate amount of Restricted Payments permitted by this clause (vi) in any fiscal year shall not exceed the greater of $20,000,000 and 10.0% of Consolidated EBITDA for the most recently ended Test Period, in the aggregate, plus all net cash proceeds obtained from any key-man life insurance policies received during such fiscal year (without giving effect to the foregoing proviso);
(vii) Holdings may make Restricted Payments in cash to any Parent Entity:
(A) for any taxable period for which Holdings and/or any of its Subsidiaries is a member of a consolidated, combined or similar income or similar tax group (a “Tax Group”) of which a Parent Entity is the common parent to pay the consolidated, combined or similar income or similar taxes, as applicable, of such Tax Group that are attributable to the taxable income of Holdings and/or its applicable Subsidiaries (as applicable), net of any payment already made by Holdings or its Subsidiaries in respect of such Taxes; provided that (1) Restricted Payments pursuant to this subclause (A) shall not exceed the amount of Taxes that Holdings would have paid if Holdings and/or such Subsidiaries were a stand-alone taxpayer or stand-alone Tax Group for all relevant taxable periods after the Closing Date, (2) Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to any Loan Party and (3) with respect to any taxable period (or portion thereof) ending prior to the date hereof, any distribution otherwise permitted under this clause (A) shall be permitted only to the extent such distribution relates to a tax payable after the date hereof;
(B) the proceeds of which shall be used by such Parent Entity to pay (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties), that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of Holdings (or any parent thereof) attributable to Subsidiary upon the ownership death, disability or operations termination of any Parent Entity, Holdings and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by the Borrower or any Restricted Subsidiary and (y) otherwise permitted to be paid by Holdings and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (v);
(C) the proceeds of which shall be used by Holdings (or any Parent Entity) to pay franchise and similar Taxes, other fees and expenses, required to maintain its organizational existence and auditing fees and expenses;
(D) [reserved];
(E) the proceeds of which shall be used by any Parent Entity to finance any Investment that would be permitted to be made by Holdings or a Restricted Subsidiary pursuant to Section 6.04; provided that (1) such Restricted Payment shall be made substantially concurrently with the closing 50 employment of such Investment and (2) such Parent Entity shallofficer, immediately following the closing thereofdirector, cause (x) all property acquired (whether assets or Equity Interests) to be contributed to Holdings employee or any Restricted Subsidiary (any in no event shall any such contribution increase the Available Amount) or (y) the Person formed or acquired to merge into or consolidate with Holdings or any Restricted Subsidiary to the extent such merger or consolidation is permitted by Section 6.03) in order to consummate such Investmentconsultant, in each case in accordance with the requirements of Sections 5.13 and 5.14;
(F) the proceeds of which shall be used to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, consultants, independent contractors or employees of Holdings, Borrower or any Parent Entity to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, Borrower and/or the Restricted Subsidiaries;
(G) the proceeds of which shall be used by Holdings (or any Parent Entity) to pay (i) fees and expenses related to any successful or unsuccessful equity issuance or offering or debt issuance, incurrence or offering, disposition or acquisition, Investment or other transaction permitted by this Agreement and (ii) public company costs; and
(H) the proceeds of which shall be used for the payment of insurance premiums to the extent attributable to any Parent Entity, Holdings, the Borrower and its subsidiaries;
(viii) Restricted Payments in an aggregate amount not to exceed the Available Amount that is Not Otherwise Applied as $2,000,000 in effect immediately prior to the time of making of such Restricted Payment so long as any twelve (x12) no Event of Default has occurred and is continuing (or would occur after giving Pro Forma Effect to such action) and (y) where such Restricted Payment is funded from the Growth Amount, the Borrower is in compliance with the Financial Covenants (determined on a Pro Forma Basis)month period;
(ixvi) redemptions in whole Holdings and/or any Subsidiary of Holdings may purchase, redeem or in part otherwise acquire Capital Stock issued by it with the proceeds received from the substantially concurrent issue of any of its Equity Interests for another class new shares of its Qualified Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Qualified Equity Interests (and in no event shall such contribution or issuance so utilized increase the Available Amount); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed therebyCapital Stock;
(x) [reserved];
(xivii) Holdings and/or any Subsidiary of Holdings may (i) make Restricted Payments to any Parent Entity to enable such Parent Entity to pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment);
(xii) Restricted Payments to fund the payment of regularly scheduled dividends and repurchases on Holdings’ Equity Interests, in an aggregate amount per annum not to exceed the greater of (x) $50,000,000 in any fiscal year, with unused amounts in any fiscal year being carried over to the succeeding fiscal year, and (y) 6.0% of market capitalization;
(xiii) payments made by Holdings or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or Permitted Transferees) and any repurchases of Equity Interests Capital Stock deemed to occur upon exercise of stock options or warrants if such Equity Interests represent repurchased Capital Stock represents a portion of the exercise price of such options or warrants warrants, and (ii) make repurchases of Capital Stock deemed to occur upon the withholding of a portion of the Capital Stock issued, granted or required withholding awarded to a current or similar taxesformer officer, director, employee or consultant to pay for the taxes payable by such Person upon such issuance, grant or award (or upon vesting thereof);
(xivviii) additional Restricted Payments; provided that after giving effect to such Restricted Payment on a Pro Forma BasisHoldings may pay Cash in lieu of the issuance of fractional shares in connection with the exercise of options, warrants or similar instruments or the Total Net Leverage Ratio is less than or equal to 2.75:1.00 and there is no continuing Event conversion of Default on the date Capital Stock of declarationHoldings;
(xvix) [reserved];
(xvi) [reserved];
(xvii) Borrower may make Restricted Payments related to settlement Holdings in an amount sufficient to enable Holdings to pay obligations incurred by Holdings in the ordinary course of business, including payment of Taxes on behalf of the consolidated group of Holdings and its Subsidiaries, payment of costs and expenses incurred in connection with the ongoing operation and administration of Holdings’ defined benefit pension plan in , and the United Kingdom;
(xviii) [reserved]payment of costs or expenses incurred by Holdings on behalf of any Subsidiary of Holdings; and
(xixx) additional Borrower may make Restricted Payments to the extent constituting “Tax Distributions”, as defined in Borrower’s limited liability company agreement, as in effect from time to time.
(b) 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; provided that ”), except:
(i) the purchase, defeasance, redemption, repurchase, repayment or other acquisition or retirement of any Junior Debt made by exchange for, or out of the proceeds of the substantially concurrent 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 payments prohibited by the subordination provisions thereof (if any));
(A) such Restricted Payments shall not exceed payments with respect to intercompany Indebtedness by or among Holdings, Borrower, and/or their Subsidiaries permitted under Section 6.01, subject to the greater of $50,000,000 and 25.0% of Consolidated EBITDA for the most recently ended Test Period and payment subordination provisions applicable thereto; and
(B) there is so long as no continuing Specified Event of Default on exists at the date time of declarationdelivery of notice with respect thereof or would result therefrom, additional Restricted Debt Payments in an aggregate amount not to exceed $2,000,000; and;
(iv) the conversion thereof to Capital Stock (other than Disqualified Capital Stock) of Holdings and the payment of Cash in lieu of fractional shares in connection therewith.
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) Holdings None of Parent or any Subsidiary will not, nor will it permit any Restricted Subsidiary to, pay declare or make, directly or indirectly, any Restricted Payment, exceptor incur any obligation (contingent or otherwise) to do so, except that:
(i) each Restricted any Subsidiary may declare and pay dividends or make Restricted Payments other distributions with respect to Holdings or any Restricted Subsidiary (andits Equity Interests, in each case ratably to the case holders of any such Subsidiary that is not a wholly-owned Subsidiary, to each other owner of Equity Interests of such Subsidiary ratably based (or if not ratably, on their relative ownership interests of a basis more favorable to Parent and the relevant class of Equity InterestsLoan Parties);
(ii) [reserved]Parent may declare and pay dividends with respect to its Equity Interests payable solely in shares of Qualified Equity Interests of Parent;
(iii) [reserved]Parent may repurchase, purchase, acquire, cancel or retire for value Equity Interests of Parent from present or former employees, officers, directors or consultants (or their estates or beneficiaries under their estates) of Parent or any Subsidiary upon the death, disability, retirement or termination of employment or service of such employees, officers, directors or consultants, or to the extent required, pursuant to employee benefit plans, employment agreements, stock purchase agreements or stock purchase plans, or other benefit plans; provided that the aggregate amount of Restricted Payments made pursuant to this Section 6.08(a)(iii) shall not exceed $5,000,000 in any fiscal year;
(iv) [reserved]Parent may make cash payments in lieu of the issuance of fractional shares representing insignificant interests in Parent in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Equity Interests in Parent;
(v) repurchases of Parent may acquire Equity Interests in Holdings or any of Parent Entity (or make Restricted Payments to allow repurchases of Equity Interest in Holdings any Parent Entity) deemed to occur upon the exercise of stock options or warrants or other incentive interests for such Equity Interests of Parent if such Equity Interests represent a portion of the exercise price of such stock options or warrants in connection with tax withholding obligations arising in connection with the exercise of options by, or other incentive intereststhe vesting of restricted Equity Interests held by, any current or former director, officer or employee of Parent or its Subsidiaries;
(vi) Holdings Parent may redeem, acquire, retire convert or repurchase its exchange any Equity Interests (of Parent for or any options, warrants, restricted stock, stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests) or make Restricted Payments to allow any of its Parent Entities to so redeem, retire, acquire or repurchase their into Qualified Equity Interests (or any options, warrants, restricted stock, stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests), in each case, held by current or former officers, managers, consultants, directors, employees, independent contractors or other service providers (or their respective spouses, former spouses, domestic partners, successors, executors, administrators, heirs, legatees or distributees) of Holdings or any Parent Entity thereof and the Restricted Subsidiaries, upon the death, disability, retirement or termination of employment or service of, or breach of restrictive covenants by, any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, stock subscription or equity incentive award agreement, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that, the aggregate amount of Restricted Payments permitted by this clause (vi) after the Closing Date shall not exceed the greater of $10,000,000 and 5.0% of Consolidated EBITDA for the most recently ended Test Period, in any fiscal year, with unused amounts in any fiscal year being carried over to succeeding fiscal years, so long as the aggregate amount of Restricted Payments permitted by this clause (vi) in any fiscal year shall not exceed the greater of $20,000,000 and 10.0% of Consolidated EBITDA for the most recently ended Test Period, in the aggregate, plus all net cash proceeds obtained from any key-man life insurance policies received during such fiscal year (without giving effect to the foregoing proviso)Parent;
(vii) Holdings Parent or any Subsidiary may on any date make Restricted Payments in cash to any Parent Entity:
(A) for any taxable period for which Holdings and/or any of its Subsidiaries is a member of a consolidated, combined or similar income or similar tax group (a “Tax Group”) of which a Parent Entity is the common parent to pay the consolidated, combined or similar income or similar taxes, as applicable, of such Tax Group that are attributable an amount equal to the taxable income of Holdings and/or its applicable Subsidiaries (as applicable)Available Amount on such date; provided, net of any payment already made by Holdings or its Subsidiaries in respect of such Taxes; provided however, that (1) Restricted Payments pursuant to this subclause (A) shall not exceed the amount of Taxes that Holdings would have paid if Holdings and/or such Subsidiaries were a stand-alone taxpayer or stand-alone Tax Group for all relevant taxable periods after the Closing Date, (2) Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to any Loan Party and (3) other than with respect to any taxable period (or portion thereof) ending prior to the date hereof, any distribution otherwise permitted under this clause (A) shall be permitted only to the extent such distribution relates to a tax payable after the date hereof;
(B) the proceeds of which shall be used by such Parent Entity to pay (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties), that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of Holdings (or any parent thereof) attributable to the ownership or operations of any Parent Entity, Holdings and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by the Borrower or any Restricted Subsidiary and (y) otherwise permitted to be paid by Holdings and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (v);
(C) the proceeds of which shall be used by Holdings (or any Parent Entity) to pay franchise and similar Taxes, other fees and expenses, required to maintain its organizational existence and auditing fees and expenses;
(D) [reserved];
(E) the proceeds of which shall be used by any Parent Entity to finance any Investment that would be permitted to be made by Holdings or a Restricted Subsidiary pursuant to Section 6.04; provided that (1) such Restricted Payment shall be made substantially concurrently with solely using the closing of such Investment and (2Starter Basket) such Parent Entity shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests) to be contributed to Holdings or any Restricted Subsidiary (any in no event shall any such contribution increase the Available Amount) or (y) the Person formed or acquired to merge into or consolidate with Holdings or any Restricted Subsidiary to the extent such merger or consolidation is permitted by Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.13 and 5.14;
(F) the proceeds of which shall be used to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, consultants, independent contractors or employees of Holdings, Borrower or any Parent Entity to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, Borrower and/or the Restricted Subsidiaries;
(G) the proceeds of which shall be used by Holdings (or any Parent Entity) to pay (i) fees and expenses related to any successful or unsuccessful equity issuance or offering or debt issuance, incurrence or offering, disposition or acquisition, Investment or other transaction permitted by this Agreement and (ii) public company costs; and
(H) the proceeds of which shall be used for the payment of insurance premiums to the extent attributable to any Parent Entity, Holdings, the Borrower and its subsidiaries;
(viii) Restricted Payments in an aggregate amount not to exceed the Available Amount that is Not Otherwise Applied as in effect immediately prior to at the time of the making of such Restricted Payment so long as Payments and immediately after giving effect to such Restricted Payments made in reliance on this subclause (vii), (x) no Event of Default has shall have occurred and is be continuing (or would occur after giving Pro Forma Effect to such action) result therefrom and (y) where the Total Net Leverage Ratio on the date of such Restricted Payment is funded from the Growth AmountPayments, the Borrower is in compliance with the Financial Covenants (determined calculated on a Pro Forma BasisBasis to give effect to any such Restricted Payments, is not in excess of the level that is 0.25 to 1.00 less than the then-applicable financial maintenance covenant level set forth in Section 6.13;
(viii) any Subsidiary may repurchase its Equity Interests held by minority shareholders or interest holders in a Permitted Acquisition or another transaction expressly permitted by Section 6.04 (other than Section 6.04(u) (it being understood that for purposes of Section 6.04, Parent shall be deemed the purchaser of such Equity Interests and such repurchase shall constitute an Investment by Parent in a Person that is not a Subsidiary in the amount of such purchase unless such Subsidiary becomes a Loan Party in connection with such repurchase);
(ix) redemptions in whole or in part of any of its Equity Interests for another class of its Qualified Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Qualified Equity Interests (and in no event shall such contribution or issuance so utilized increase the Available Amount); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed therebyextent such Investment constitutes a Restricted Payment, Parent and its Subsidiaries may enter into any Investment expressly permitted by Section 6.04 (other than Section 6.04(u));
(x) [reserved]additional Restricted Payments; provided that the Total Net Leverage Ratio immediately after giving effect to any such Restricted Payment, calculated on a Pro Forma Basis at the time such Restricted Payment is made, is not in excess of 2.00 to 1.00; provided, further, that at the time any such Restricted Payment is made pursuant to this clause (x), no Event of Default shall have occurred and be continuing or would result therefrom;
(xi) Holdings Parent may make Restricted Payments pay regularly scheduled quarterly cash dividends to any Parent Entity to enable such Parent Entity to pay cash in lieu of fractional Equity Interests in connection its shareholders consistent with any dividend, split or combination thereof its past practice or any Permitted Acquisition (or other similar Investment);
(xii) Restricted Payments to fund the payment of regularly scheduled dividends and repurchases on Holdings’ Equity Interests, Payment in an aggregate amount per annum not to exceed the greater of (xA) $50,000,000 40,000,000 and (B) $1.00 per share of the total issued and outstanding shares of common Equity Interests of Parent on the date of the declaration of a Restricted Payment; provided that such per share amount shall be adjusted to give effect to any stock split or issuance on account of equity for no consideration effected; and
(xii) additional Restricted Payments in an aggregate principal amount not to exceed $55,000,000.
(b) None of Parent or any fiscal yearSubsidiary will make or agree to pay or make, with unused amounts 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 (i) any fiscal year being carried over Subordinated Indebtedness that is subordinated to the succeeding fiscal year, payment of the Obligations or (ii) other Indebtedness that is required pursuant to the Loan Documents to not mature later than the Latest Maturity Date at the time of incurrence thereof (Indebtedness described in the foregoing clauses (i) and (yii), “Restricted Indebtedness”), or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, defeasance, cancelation or termination of such Restricted Indebtedness, except:
(i) 6.0% regularly scheduled interest and principal payments as and when due in respect of market capitalizationsuch Indebtedness, other than payments prohibited by the subordination provisions thereof;
(xiiiii) refinancings of such Indebtedness with the proceeds of Refinancing Indebtedness permitted in respect thereof under Section 6.01;
(iii) payments made by Holdings of or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of such Indebtedness made solely with Qualified Equity Interests by any future, present in Parent or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or Permitted Transferees) and any repurchases the conversion of such Indebtedness into Qualified Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxesParent;
(xiviv) additional Restricted Paymentsprepayments of intercompany Indebtedness permitted hereby owed by Parent or any Subsidiary to Parent or any Subsidiary, other than prepayments prohibited by the subordination provisions governing such Indebtedness;
(v) Parent or any Subsidiary may on any date make payments of or in respect of any such Indebtedness in an amount equal to the Available Amount on such date; provided provided, however, that (other than with respect to any such payments made solely using the Starter Basket) at the time of the making of such payments and immediately after giving effect to such Restricted Payment on a Pro Forma Basispayments, (x) no Event of Default shall have occurred and be continuing or would result therefrom and (y) the Total Net Leverage Ratio is less than or equal to 2.75:1.00 and there is no continuing Event of Default on the date of declaration;
(xv) [reserved];
(xvi) [reserved];
(xvii) Restricted Payments related such payments, calculated on a Pro Forma Basis to settlement give effect to any such payments, is not in excess of Holdings’ defined benefit pension plan the level that is 0.25 to 1.00 less than the then-applicable financial maintenance covenant level set forth in the United Kingdom;
(xviii) [reserved]Section 6.13; and
(xixvi) additional Restricted PaymentsParent may on any date make payments of or in respect of any such Indebtedness in an unlimited amount; provided that the Total Net Leverage Ratio immediately after giving effect to any such payment, calculated on a Pro Forma Basis at the time such payment is made, is not in excess of 2.00 to 1.00; provided, further, that at the time any such payment is made pursuant to this clause (A) such Restricted Payments shall not exceed the greater of $50,000,000 and 25.0% of Consolidated EBITDA for the most recently ended Test Period and (B) there is vi), no continuing Specified Event of Default on the date of declarationshall have occurred and be continuing or would result therefrom.
Appears in 1 contract
Sources: Credit Agreement (NICE Ltd.)
Restricted Payments; Certain Payments of Indebtedness. (a) Holdings will notNo Loan Party will, nor will it permit any Restricted Subsidiary to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, except:
(i) each Restricted Subsidiary of Holdings and the Company may declare and pay dividends or make other distributions with respect to its Equity Interests payable solely in additional shares of its Equity Interests (other than Disqualified Equity Interests not permitted by Section 6.01);
(ii) Subsidiaries may declare and pay dividends or make other distributions ratably with respect to their Equity Interests;
(iii) the Company and its Subsidiaries may make Restricted Payments to Holdings or any Restricted Subsidiary (and, in the case of any such Subsidiary that is not a wholly-owned Subsidiary, to each other owner of Equity Interests of such Subsidiary ratably based on their relative ownership interests of the relevant class of Equity Interests);
(ii) [reserved];
(iii) [reserved];
(iv) [reserved];
(v) repurchases of Equity Interests in and Holdings or any Parent Entity (or may make Restricted Payments to allow repurchases any direct or indirect parent thereof) the proceeds of Equity Interest in Holdings any Parent Entity) deemed which are used to occur upon exercise of stock options purchase, retire, redeem or warrants or other incentive interests if such otherwise acquire the Equity Interests represent a portion of Holdings (or of any such direct or indirect parent of Holdings) or of the exercise price Company (following a Qualified Public Offering of such stock options or warrants or other incentive interests;
the Company) (vi) Holdings may redeem, acquire, retire or repurchase its Equity Interests (or any options, warrants, restricted stock, including related stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interestssimilar securities) or make Restricted Payments to allow any of its Parent Entities to so redeem, retire, acquire or repurchase their Equity Interests (or any options, warrants, restricted stock, stock appreciation rights or other equity-linked interests issued with respect to any of such Equity Interests), in each case, held by current then present or former officers, managersdirectors, consultants, directorsofficers or employees of Holdings (or of any such direct or indirect parent), employees, independent contractors the Company or any of the Subsidiaries or by any stock option plan or other service providers (or their respective spouses, former spouses, domestic partners, successors, executors, administrators, heirs, legatees or distributees) of Holdings or any Parent Entity thereof and the Restricted Subsidiaries, benefit plan upon the such Person’s death, disability, retirement or termination of employment or service of, or breach under the terms of restrictive covenants by, any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, stock subscription or equity incentive award agreement, employment termination agreement plan or any other employment agreements agreement under which such shares of stock or equity holders’ agreementrelated rights were issued; provided that, that the aggregate amount of Restricted Payments permitted by such purchases, redemptions or other acquisitions under this clause (via)(iii) after the Closing Date shall not exceed the greater of $10,000,000 and 5.0% of Consolidated EBITDA for the most recently ended Test Period, in any fiscal year, with unused amounts in any fiscal year being carried over to succeeding fiscal years, so long as $5,000,000 (plus the aggregate amount of Restricted Payments net proceeds (x) received by Holdings during such calendar year from sales of Equity Interests of Holdings to directors, consultants, officers or employees of Holdings, the Company or any Subsidiary in connection with permitted by this clause employee compensation and incentive arrangements and (viy) in any fiscal year shall not exceed the greater of $20,000,000 and 10.0% of Consolidated EBITDA for the most recently ended Test Period, in the aggregate, plus all net cash proceeds obtained from any key-man life insurance policies received during such fiscal year (without giving effect to the foregoing provisocalendar year);
(viiiv) Holdings may make Restricted Payments in non-cash to any Parent Entity:
(A) for any taxable period for which Holdings and/or any of its Subsidiaries is a member of a consolidated, combined or similar income or similar tax group (a “Tax Group”) of which a Parent Entity is the common parent to pay the consolidated, combined or similar income or similar taxes, as applicable, of such Tax Group that are attributable to the taxable income of Holdings and/or its applicable Subsidiaries (as applicable), net of any payment already made by Holdings or its Subsidiaries in respect of such Taxes; provided that (1) Restricted Payments pursuant to this subclause (A) shall not exceed the amount of Taxes that Holdings would have paid if Holdings and/or such Subsidiaries were a stand-alone taxpayer or stand-alone Tax Group for all relevant taxable periods after the Closing Date, (2) Restricted Payments under this subclause (A) in respect of any Taxes attributable to the income of any Unrestricted Subsidiaries of Holdings may be made only to the extent that such Unrestricted Subsidiaries have made cash payments for such purpose to any Loan Party and (3) with respect to any taxable period (or portion thereof) ending prior to the date hereof, any distribution otherwise permitted under this clause (A) shall be permitted only to the extent such distribution relates to a tax payable after the date hereof;
(B) the proceeds of which shall be used by such Parent Entity to pay (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting, tax reporting and similar expenses payable to third parties), that are reasonable and customary and incurred in the ordinary course of business, (2) any reasonable and customary indemnification claims made by directors, officers, members of management, managers, employees or consultants of Holdings (or any parent thereof) attributable to the ownership or operations of any Parent Entity, Holdings and the Restricted Subsidiaries, (3) fees and expenses (x) due and payable by the Borrower or any Restricted Subsidiary and (y) otherwise permitted to be paid by Holdings and the Restricted Subsidiaries under this Agreement and (4) payments that would otherwise be permitted to be paid directly by Holdings or the Restricted Subsidiaries pursuant to Section 6.09(iii) or (v);
(C) the proceeds of which shall be used by Holdings (or any Parent Entity) to pay franchise and similar Taxes, other fees and expenses, required to maintain its organizational existence and auditing fees and expenses;
(D) [reserved];
(E) the proceeds of which shall be used by any Parent Entity to finance any Investment that would be permitted to be made by Holdings or a Restricted Subsidiary pursuant to Section 6.04; provided that (1) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (2) such Parent Entity shall, immediately following the closing thereof, cause (x) all property acquired (whether assets or Equity Interests) to be contributed to Holdings or any Restricted Subsidiary (any in no event shall any such contribution increase the Available Amount) or (y) the Person formed or acquired to merge into or consolidate with Holdings or any Restricted Subsidiary to the extent such merger or consolidation is permitted by Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.13 and 5.14;
(F) the proceeds of which shall be used to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management, managers, consultants, independent contractors or employees of Holdings, Borrower or any Parent Entity to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, Borrower and/or the Restricted Subsidiaries;
(G) the proceeds of which shall be used by Holdings (or any Parent Entity) to pay (i) fees and expenses related to any successful or unsuccessful equity issuance or offering or debt issuance, incurrence or offering, disposition or acquisition, Investment or other transaction permitted by this Agreement and (ii) public company costs; and
(H) the proceeds of which shall be used for the payment of insurance premiums to the extent attributable to any Parent Entity, Holdings, the Borrower and its subsidiaries;
(viii) Restricted Payments in an aggregate amount not to exceed the Available Amount that is Not Otherwise Applied as in effect immediately prior to the time of making of such Restricted Payment so long as (x) no Event of Default has occurred and is continuing (or would occur after giving Pro Forma Effect to such action) and (y) where such Restricted Payment is funded from the Growth Amount, the Borrower is in compliance with the Financial Covenants (determined on a Pro Forma Basis);
(ix) redemptions in whole or in part of any of its Equity Interests for another class of its Qualified Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Qualified Equity Interests (and in no event shall such contribution or issuance so utilized increase the Available Amount); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(x) [reserved];
(xi) Holdings may make Restricted Payments to any Parent Entity to enable such Parent Entity to pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment);
(xii) Restricted Payments to fund the payment of regularly scheduled dividends and repurchases on Holdings’ Equity Interests, in an aggregate amount per annum not to exceed the greater of (x) $50,000,000 in any fiscal year, with unused amounts in any fiscal year being carried over to the succeeding fiscal year, and (y) 6.0% of market capitalization;
(xiii) payments made by Holdings or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or Permitted Transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxeswarrants;
(xivv) additional the Company and its Subsidiaries may make Restricted PaymentsPayments to Holdings (x) in an amount (together with loans or advances made pursuant to Section 6.04(n)) not to exceed $1,500,000 in any fiscal year, to the extent necessary to pay (or allow any direct or indirect parent of Holdings to pay) its general corporate and overhead expenses incurred by Holdings (or any direct or indirect parent thereof) in the ordinary course of business, plus the amount of any reasonable and customary indemnification claims made by any director or officer of Holdings (or any direct or indirect parent thereof), (y) 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 (z) in an amount necessary to pay the Tax liabilities of Holdings (or any such direct or indirect parent) attributable to (or arising as a result of) the operations of the Company and its Subsidiaries; provided provided, however, that after giving effect to such Restricted Payment on a Pro Forma Basisin the case of clause (z), the Total Net Leverage Ratio is less than or equal amount of such dividends shall not exceed the amount that the Company and its Subsidiaries would be required to 2.75:1.00 pay in respect of Federal, state and there is no continuing Event of Default on local taxes and any other taxes were the date of declarationCompany and the Subsidiaries to pay such taxes as stand-alone taxpayers;
(xvvi) [reservedReserved];
(xvivii) [reserved]to the extent constituting Restricted Payments, Holdings, the Company and its Subsidiaries may enter into and consummate transactions expressly permitted by any provision of Section 6.03 or 6.09 (other than Section 6.09(e));
(xviiviii) the Company and its Subsidiaries may make Restricted Payments related to settlement of Holdings’ defined benefit pension plan in the United Kingdom;
Holdings to finance any investment permitted to be made pursuant to Section 6.04 (xviiiother than Section 6.04(m)) [reserved]; and
(xix) additional Restricted Payments; provided that (A) such Restricted Payments Payment shall not exceed be made substantially concurrently with the greater closing of $50,000,000 and 25.0% of Consolidated EBITDA for the most recently ended Test Period such investment and (B) there Holdings shall, immediately following the closing thereof, cause (i) all property acquired (whether assets or Equity Interests) to be contributed to the Company or its Subsidiaries or (ii) the merger (to the extent permitted in Section 6.03) of the Person formed or acquired into the Company or its Subsidiaries in order to consummate such Permitted Acquisition;
(ix) Holdings may make Restricted Payments with the proceeds of the issuance of Indebtedness of Holdings permitted by Section 6.01 (other than (x) Section 6.01(c) and (y) any such Indebtedness Guaranteed by or secured directly or indirectly by the assets of the Company or any of its Subsidiaries);
(x) in addition to the foregoing Restricted Payments, Holdings and the Company may make additional Restricted Payments provided that each of the Payment Conditions is satisfied;
(xi) the distribution, as a dividend or otherwise (and the declaration of such dividend), of shares of capital stock of, or Indebtedness owed to the Company or a Subsidiary by, any Unrestricted Subsidiary so designated on the date hereof; and
(xii) other Restricted Payments by Holdings and the Company which, together with investments, loans and advances made pursuant to Section 6.04(w) and Restricted Debt Payments made pursuant to Section 6.08(b)(x), do not exceed $30,000,000 in the aggregate after the Second Amended Effective Date; provided that, at the time such Restricted Payments are made and after giving effect thereto, no continuing Specified Liquidity Event or Event of Default exists or has occurred and is continuing.
(b) No Loan Party will, nor will it permit any 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, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the date purchase, redemption, retirement, acquisition, cancellation or termination of declarationany Indebtedness (collectively, “Restricted Debt Payments”), except:
(i) payment of Indebtedness under the Loan Documents, other than prepayments of principal and interest on any Incremental Term Loans (except to the extent otherwise permitted by Section 6.08(b)(xi) below) or the last sentence of Section 2.10(a));
(ii) payment of Indebtedness under the Existing Credit Agreement in connection with the fulfillment of the conditions to the Second Amended Effective Date hereunder;
(iii) payment of regularly scheduled interest and principal payments as and when due in respect of any Indebtedness, other than payments in respect of the Subordinated Indebtedness prohibited by the subordination provisions thereof;
(iv) refinancings of Indebtedness to the extent permitted by Section 6.01;
(v) payment of secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness so long as such sale is permitted by Section 6.05 (other than sales, transfers and dispositions under Section 6.05(j) the proceeds of which are to be applied to payments of secured Indebtedness, which sales, transfers and dispositions are not otherwise permitted under Section 6.05));
(vi) payment of Indebtedness in exchange for or with proceeds of any substantially contemporaneous issuance of Qualified Equity Interests or substantially contemporaneous capital contribution in respect of Qualified Equity Interests of Holdings;
(vii) payment of Indebtedness under the Senior Secured Term Loan Facility or any Term Loan Pari Passu Obligations (or any extensions, renewals or replacements thereof permitted under Section 6.01(g) and Section 6.02(x)), with the net cash proceeds of any sale, transfer or other disposition of any Term Loan First Lien Collateral (as defined in the Intercreditor Agreement), or, in the case of any such extensions, renewals or replacements or any Term Loan Pari Passu Obligations, any property or assets in respect of which the security interest of the lenders thereunder has priority over the security interest of the Agent, for the benefit of the Secured Parties, in such property or assets, pursuant to the Intercreditor Agreement or another intercreditor agreement in form and substance reasonably satisfactory to the Agent that is no less favorable to the Secured Parties than the Intercreditor Agreement;
(viii) mandatory prepayments of Indebtedness under Section 2.09 of the Senior Secured Term Facility Credit Agreement (or any successor section thereof, or under any comparable provision in any instrument governing any Term Loan Pari Passu Obligations or any extension, renewal or replacement thereof or of the Senior Secured Term Loan Facility, in each case permitted under Section 6.01(g), pursuant to which mandatory prepayments of Indebtedness thereunder determined by reference to Excess Cash Flow (as defined in the Senior Secured Term Facility Credit Agreement or as defined substantially similarly in all material respects in any such other instrument) are required to be made), in amounts required under, and in accordance with, the Senior Secured Term Facility Credit Agreement or such other instrument (in the case of any such other instrument, in amounts no greater in any material respect than those required under the Senior Secured Term Facility Credit Agreement);
(ix) other Restricted Debt Payments, provided that each of the Payment Conditions is satisfied (it being understood and agreed that, if an irrevocable notice or contractual obligation is given in, made or arises in respect of any Restricted Debt Payment, the foregoing conditions only need to be satisfied at the time of the giving of such irrevocable notice or entering into (or effectiveness of) any such contractual obligation);
(x) other Restricted Debt Payments which, together with any investments, loans or advances made pursuant to Section 6.04(w) and Restricted Payments made pursuant to Section 6.08(a)(xii), do not exceed $30,000,000 in the aggregate after the Second Amended Effective Date; provided that, at the time such Restricted Debt Payments are made and after giving effect thereto, no Liquidity Event or Event of Default exists or has occurred and is continuing;
(xi) Restricted Debt Payments in respect of Incremental Term Loans, provided that, at the time such Restricted Debt Payments are made and after giving effect thereto, (A) the Term Loan Prepayment Conditions are satisfied, or (B) such Restricted Debt Payments are permitted under clause (ix) or (x) of this Section 6.08(b); and
(xii) Restricted Debt Payments consisting of the repurchase of Existing Notes in exchange for, or with the proceeds of, (A) Incremental Term Loans or (B) other Indebtedness of any Loan Party incurred pursuant to Section 6.01(k)(ii), 6.01(l) or 6.01(w) substantially simultaneously with such repurchase or exchange.
Appears in 1 contract